0001680247False2023Q312/31http://fasb.org/us-gaap/2023#ServiceMemberhttp://fasb.org/us-gaap/2023#ServiceMember1P1Y0M0D00016802472023-01-012023-09-300001680247dei:FormerAddressMember2023-01-012023-09-3000016802472023-10-30xbrli:shares00016802472023-09-30iso4217:USD00016802472022-12-31iso4217:USDxbrli:shares00016802472022-01-012022-09-3000016802472023-07-012023-09-3000016802472022-07-012022-09-300001680247us-gaap:CommonStockMember2022-12-310001680247us-gaap:AdditionalPaidInCapitalMember2022-12-310001680247us-gaap:RetainedEarningsMember2022-12-310001680247us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-3100016802472023-01-012023-03-310001680247us-gaap:CommonStockMember2023-01-012023-03-310001680247us-gaap:RetainedEarningsMember2023-01-012023-03-310001680247us-gaap:CommonStockMember2023-03-310001680247us-gaap:AdditionalPaidInCapitalMember2023-03-310001680247us-gaap:RetainedEarningsMember2023-03-3100016802472023-03-310001680247us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-3000016802472023-04-012023-06-300001680247us-gaap:CommonStockMember2023-04-012023-06-300001680247us-gaap:RetainedEarningsMember2023-04-012023-06-300001680247us-gaap:CommonStockMember2023-06-300001680247us-gaap:AdditionalPaidInCapitalMember2023-06-300001680247us-gaap:RetainedEarningsMember2023-06-3000016802472023-06-300001680247us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001680247us-gaap:CommonStockMember2023-07-012023-09-300001680247us-gaap:RetainedEarningsMember2023-07-012023-09-300001680247us-gaap:CommonStockMember2023-09-300001680247us-gaap:AdditionalPaidInCapitalMember2023-09-300001680247us-gaap:RetainedEarningsMember2023-09-300001680247us-gaap:CommonStockMember2021-12-310001680247us-gaap:AdditionalPaidInCapitalMember2021-12-310001680247us-gaap:RetainedEarningsMember2021-12-3100016802472021-12-310001680247us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-3100016802472022-01-012022-03-310001680247us-gaap:CommonStockMember2022-01-012022-03-310001680247us-gaap:RetainedEarningsMember2022-01-012022-03-310001680247us-gaap:CommonStockMember2022-03-310001680247us-gaap:AdditionalPaidInCapitalMember2022-03-310001680247us-gaap:RetainedEarningsMember2022-03-3100016802472022-03-310001680247us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-3000016802472022-04-012022-06-300001680247us-gaap:CommonStockMember2022-04-012022-06-300001680247us-gaap:RetainedEarningsMember2022-04-012022-06-300001680247us-gaap:CommonStockMember2022-06-300001680247us-gaap:AdditionalPaidInCapitalMember2022-06-300001680247us-gaap:RetainedEarningsMember2022-06-3000016802472022-06-300001680247us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001680247us-gaap:CommonStockMember2022-07-012022-09-300001680247us-gaap:RetainedEarningsMember2022-07-012022-09-300001680247us-gaap:CommonStockMember2022-09-300001680247us-gaap:AdditionalPaidInCapitalMember2022-09-300001680247us-gaap:RetainedEarningsMember2022-09-3000016802472022-09-30pump:segment00016802472023-10-012023-09-300001680247pump:PowerEndsMember2023-09-300001680247pump:PowerEndsMember2022-12-310001680247pump:HydraulicFracturingUnitsMember2023-09-300001680247pump:HydraulicFracturingUnitsMember2022-12-310001680247us-gaap:ServiceLifeMember2023-07-012023-09-300001680247us-gaap:ServiceLifeMember2023-01-012023-09-300001680247us-gaap:ServiceLifeMemberus-gaap:RetainedEarningsMember2023-07-012023-09-300001680247us-gaap:ServiceLifeMemberus-gaap:RetainedEarningsMember2023-01-012023-09-300001680247us-gaap:DiscontinuedOperationsDisposedOfByMeansOtherThanSaleMember2022-07-012022-09-300001680247us-gaap:DiscontinuedOperationsDisposedOfByMeansOtherThanSaleMember2022-01-012022-09-300001680247us-gaap:CostOfSalesMember2023-07-012023-09-300001680247us-gaap:CostOfSalesMember2022-07-012022-09-300001680247us-gaap:CostOfSalesMember2023-01-012023-09-300001680247us-gaap:CostOfSalesMember2022-01-012022-09-300001680247us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-300001680247us-gaap:GeneralAndAdministrativeExpenseMember2022-07-012022-09-300001680247us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-300001680247us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-09-300001680247pump:SilvertipCompletionServicesOperatingLLCMember2022-11-01xbrli:pure0001680247pump:SilvertipCompletionServicesOperatingLLCMember2022-11-012022-11-010001680247us-gaap:TrademarksAndTradeNamesMemberpump:SilvertipCompletionServicesOperatingLLCMember2022-11-012022-11-010001680247us-gaap:CustomerRelationshipsMemberpump:SilvertipCompletionServicesOperatingLLCMember2022-11-012022-11-010001680247pump:SilvertipCompletionServicesOperatingLLCMembersrt:MinimumMember2023-09-300001680247srt:MaximumMemberpump:SilvertipCompletionServicesOperatingLLCMember2023-09-300001680247pump:SilvertipCompletionServicesOperatingLLCMember2023-01-012023-09-300001680247us-gaap:FairValueMeasurementsRecurringMember2023-09-300001680247us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001680247us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001680247us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001680247us-gaap:FairValueMeasurementsRecurringMember2023-01-012023-09-300001680247us-gaap:FairValueMeasurementsRecurringMember2022-12-310001680247us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001680247us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001680247us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001680247us-gaap:FairValueMeasurementsRecurringMember2022-01-012022-12-310001680247pump:StepEnergyServicesMember2022-09-010001680247us-gaap:TrademarksAndTradeNamesMember2023-09-300001680247us-gaap:TrademarksAndTradeNamesMember2022-12-310001680247us-gaap:CustomerRelationshipsMember2023-09-300001680247us-gaap:CustomerRelationshipsMember2022-12-310001680247us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMember2022-04-300001680247us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMembersrt:MinimumMember2022-04-012022-04-300001680247srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMember2022-04-012022-04-300001680247us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMember2022-04-012022-04-300001680247us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMember2023-06-020001680247us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMembersrt:MinimumMember2023-06-022023-06-020001680247srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMember2023-06-022023-06-0200016802472023-06-020001680247srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMember2023-06-020001680247us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMember2023-09-300001680247us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMember2023-01-012023-09-300001680247us-gaap:RevolvingCreditFacilityMemberpump:SOFRLoansMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMembersrt:MinimumMember2023-06-022023-06-020001680247srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberpump:SOFRLoansMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMember2023-06-022023-06-020001680247us-gaap:RevolvingCreditFacilityMemberpump:BaseRateLoansMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMembersrt:MinimumMember2023-06-022023-06-020001680247srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberpump:BaseRateLoansMemberus-gaap:LineOfCreditMemberpump:ABLFacilityMember2023-06-022023-06-020001680247us-gaap:LineOfCreditMemberpump:ABLFacilityMember2023-09-300001680247us-gaap:LineOfCreditMemberpump:ABLFacilityMember2022-12-310001680247pump:CoiledTubingAssetsDivestitureMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2022-09-012022-09-010001680247pump:CoiledTubingAssetsDivestitureMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-01-012023-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:HydraulicFracturingSegmentMemberpump:ServiceConcentrationRiskMember2023-07-012023-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:HydraulicFracturingSegmentMemberpump:ServiceConcentrationRiskMember2022-07-012022-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:HydraulicFracturingSegmentMemberpump:ServiceConcentrationRiskMember2023-01-012023-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:HydraulicFracturingSegmentMemberpump:ServiceConcentrationRiskMember2022-01-012022-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:CementingSegmentMemberpump:ServiceConcentrationRiskMember2023-07-012023-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:CementingSegmentMemberpump:ServiceConcentrationRiskMember2022-07-012022-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:CementingSegmentMemberpump:ServiceConcentrationRiskMember2023-01-012023-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:CementingSegmentMemberpump:ServiceConcentrationRiskMember2022-01-012022-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:WirelineOperatingSegmentMemberpump:ServiceConcentrationRiskMember2023-07-012023-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:WirelineOperatingSegmentMemberpump:ServiceConcentrationRiskMember2022-07-012022-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:WirelineOperatingSegmentMemberpump:ServiceConcentrationRiskMember2023-01-012023-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:WirelineOperatingSegmentMemberpump:ServiceConcentrationRiskMember2022-01-012022-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:CompletionServicesMemberpump:ServiceConcentrationRiskMember2023-07-012023-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:CompletionServicesMemberpump:ServiceConcentrationRiskMember2022-07-012022-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:CompletionServicesMemberpump:ServiceConcentrationRiskMember2023-01-012023-09-300001680247us-gaap:RevenueFromContractWithCustomerProductAndServiceBenchmarkMemberpump:CompletionServicesMemberpump:ServiceConcentrationRiskMember2022-01-012022-09-300001680247us-gaap:OperatingSegmentsMemberpump:CompletionServicesMember2023-07-012023-09-300001680247us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2023-07-012023-09-300001680247us-gaap:OperatingSegmentsMember2023-07-012023-09-300001680247us-gaap:OperatingSegmentsMemberpump:CompletionServicesMember2023-09-300001680247us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2023-09-300001680247us-gaap:OperatingSegmentsMember2023-09-300001680247us-gaap:OperatingSegmentsMemberpump:CompletionServicesMember2022-07-012022-09-300001680247us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2022-07-012022-09-300001680247us-gaap:OperatingSegmentsMember2022-07-012022-09-300001680247us-gaap:OperatingSegmentsMemberpump:CompletionServicesMember2022-09-300001680247us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2022-09-300001680247us-gaap:OperatingSegmentsMember2022-09-300001680247us-gaap:OperatingSegmentsMemberpump:CompletionServicesMember2023-01-012023-09-300001680247us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2023-01-012023-09-300001680247us-gaap:OperatingSegmentsMember2023-01-012023-09-300001680247us-gaap:OperatingSegmentsMemberpump:CompletionServicesMember2022-01-012022-09-300001680247us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2022-01-012022-09-300001680247us-gaap:OperatingSegmentsMember2022-01-012022-09-300001680247pump:CompletionServicesMember2023-07-012023-09-300001680247us-gaap:AllOtherSegmentsMember2023-07-012023-09-300001680247pump:CompletionServicesMember2022-07-012022-09-300001680247us-gaap:AllOtherSegmentsMember2022-07-012022-09-300001680247us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001680247us-gaap:EmployeeStockOptionMember2022-07-012022-09-300001680247us-gaap:PerformanceSharesMember2023-07-012023-09-300001680247us-gaap:PerformanceSharesMember2022-07-012022-09-300001680247us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001680247us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001680247us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001680247us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001680247us-gaap:PerformanceSharesMember2023-01-012023-09-300001680247us-gaap:PerformanceSharesMember2022-01-012022-09-300001680247us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001680247us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001680247us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001680247us-gaap:EmployeeStockOptionMember2022-07-012022-09-300001680247us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001680247us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001680247us-gaap:PerformanceSharesMember2023-07-012023-09-300001680247us-gaap:PerformanceSharesMember2022-07-012022-09-300001680247us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001680247us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001680247us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001680247us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001680247us-gaap:PerformanceSharesMember2023-01-012023-09-300001680247us-gaap:PerformanceSharesMember2022-01-012022-09-3000016802472023-05-170001680247us-gaap:RestrictedStockUnitsRSUMemberpump:AR2020IncentivePlanMember2023-01-012023-09-300001680247us-gaap:RestrictedStockUnitsRSUMemberpump:EmployeesAndOfficersMemberpump:AR2020IncentivePlanMember2023-01-012023-09-300001680247srt:DirectorMemberus-gaap:RestrictedStockUnitsRSUMemberpump:AR2020IncentivePlanMember2023-01-012023-09-300001680247us-gaap:RestrictedStockUnitsRSUMemberpump:AR2020IncentivePlanMember2023-09-300001680247us-gaap:RestrictedStockUnitsRSUMember2022-12-310001680247us-gaap:RestrictedStockUnitsRSUMember2023-09-300001680247us-gaap:PerformanceSharesMemberpump:AR2020IncentivePlanMember2023-09-300001680247pump:A2020Memberus-gaap:PerformanceSharesMember2022-12-310001680247pump:A2020Memberus-gaap:PerformanceSharesMember2023-01-012023-09-300001680247pump:A2020Memberus-gaap:PerformanceSharesMember2023-09-300001680247pump:A2021Memberus-gaap:PerformanceSharesMember2022-12-310001680247pump:A2021Memberus-gaap:PerformanceSharesMember2023-01-012023-09-300001680247pump:A2021Memberus-gaap:PerformanceSharesMember2023-09-300001680247us-gaap:PerformanceSharesMemberpump:A2022Member2022-12-310001680247us-gaap:PerformanceSharesMemberpump:A2022Member2023-01-012023-09-300001680247us-gaap:PerformanceSharesMemberpump:A2022Member2023-09-300001680247pump:A2023Memberus-gaap:PerformanceSharesMember2022-12-310001680247pump:A2023Memberus-gaap:PerformanceSharesMember2023-01-012023-09-300001680247pump:A2023Memberus-gaap:PerformanceSharesMember2023-09-300001680247us-gaap:PerformanceSharesMember2022-12-310001680247us-gaap:PerformanceSharesMember2023-09-300001680247pump:AR2020IncentivePlanMember2023-01-012023-09-300001680247pump:AR2020IncentivePlanMember2022-01-012022-09-300001680247pump:AR2020IncentivePlanMember2023-09-300001680247srt:DirectorMemberpump:OperationsAndMaintenanceYardsLeasingArrangementsMember2023-09-30pump:property0001680247srt:DirectorMemberpump:PropertyOneMemberpump:OperationsAndMaintenanceYardsLeasingArrangementsMember2023-01-012023-09-300001680247srt:DirectorMemberpump:OperationsAndMaintenanceYardsLeasingArrangementsMemberpump:PropertyTwoMember2023-01-012023-09-300001680247srt:DirectorMemberpump:PropertyThreeMemberpump:OperationsAndMaintenanceYardsLeasingArrangementsMember2023-01-012023-09-300001680247srt:DirectorMemberpump:PropertyFourMemberpump:OperationsAndMaintenanceYardsLeasingArrangementsMember2023-01-012023-09-300001680247srt:DirectorMemberpump:OperationsAndMaintenanceYardsLeasingArrangementsMemberpump:PropertyFiveMember2023-01-012023-09-300001680247us-gaap:RelatedPartyMemberpump:PioneerPressurePumpingAcquisitionMember2018-12-312018-12-310001680247us-gaap:RelatedPartyMemberpump:PioneerPressurePumpingAcquisitionMember2022-03-30pump:fleet0001680247us-gaap:RelatedPartyMemberpump:PioneerPressurePumpingAcquisitionMember2023-03-310001680247us-gaap:RelatedPartyMemberpump:PioneerPressurePumpingAcquisitionMember2022-10-31pump:agreement0001680247us-gaap:RelatedPartyMemberpump:PioneerPressurePumpingAcquisitionMember2023-07-012023-09-300001680247us-gaap:RelatedPartyMemberpump:PioneerPressurePumpingAcquisitionMember2022-07-012022-09-300001680247us-gaap:RelatedPartyMemberpump:PioneerPressurePumpingAcquisitionMember2023-01-012023-09-300001680247us-gaap:RelatedPartyMemberpump:PioneerPressurePumpingAcquisitionMember2022-01-012022-09-300001680247us-gaap:RelatedPartyMemberpump:PioneerPressurePumpingAcquisitionMember2023-09-300001680247us-gaap:RelatedPartyMemberpump:PioneerPressurePumpingAcquisitionMember2022-12-310001680247us-gaap:RelatedPartyMember2022-12-310001680247pump:RealEstateLeaseMember2013-03-310001680247pump:RealEstateLeaseMember2023-01-012023-09-300001680247pump:RealEstateLeaseMember2022-01-012022-09-300001680247pump:MaintenanceFacilityLeaseMember2023-09-300001680247pump:MaintenanceFacilityLeaseMember2023-01-012023-09-300001680247pump:MaintenanceFacilityLeaseMember2022-01-012022-09-30pump:period0001680247pump:ElectricFleetLeasesMember2022-12-310001680247pump:ElectricFleetLeasesMember2022-08-31utr:hp0001680247pump:ElectricFleetOneLeaseMember2023-01-012023-09-300001680247pump:ElectricFleetOneLeaseMember2023-09-300001680247pump:RealEstateTwoLeaseMember2022-10-310001680247pump:RealEstateTwoLeaseMember2023-01-012023-09-30pump:lease_renewal_option0001680247pump:RealEstateTwoLeaseMember2023-09-30pump:lease0001680247pump:SilvertipOneLeaseMember2022-11-010001680247pump:RealEstateTwoLeaseMember2022-11-010001680247pump:SilvertipOneLeaseMember2023-09-300001680247pump:SilvertipOneLeaseMember2023-01-012023-09-300001680247pump:SilvertipTwoLeaseMember2023-01-012023-09-300001680247pump:SilvertipTwoLeaseMember2023-09-300001680247pump:SilvertipLeaseThreeMember2023-03-310001680247pump:SilvertipLeaseThreeMember2023-01-012023-09-300001680247pump:SilvertipLeaseThreeMember2023-09-300001680247pump:SilvertipOfficeLeaseMember2023-06-010001680247pump:SilvertipOfficeLeaseMember2023-01-012023-09-300001680247pump:SilvertipOfficeLeaseMember2023-09-300001680247pump:CorporateOfficeLeaseMember2023-08-310001680247pump:CorporateOfficeLeaseMember2023-01-012023-09-300001680247pump:CorporateOfficeLeaseMember2023-09-300001680247pump:PowerEquipmentLeaseMember2023-01-310001680247pump:PowerEquipmentLeaseMember2023-01-012023-09-300001680247pump:PowerEquipmentLeaseMember2023-09-300001680247pump:MaintenanceFacilityLeaseMember2022-09-300001680247pump:ElectricFleetLeasesMember2023-01-012023-09-300001680247pump:ABLFacilityMember2023-01-012023-09-300001680247us-gaap:SubsequentEventMemberpump:ElectricFleetOneLeaseMember2023-10-310001680247us-gaap:SubsequentEventMemberpump:PowerEquipmentLeaseMember2023-10-31

For the transition period from                      to                     

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

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit 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.

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  ☒

The number of the registrant’s common shares, par value $0.001 per share, outstanding at October 30, 2023, was 110,237,703.

This Quarterly Report on Form 10-Q (this "Form 10-Q") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical facts contained in this Form 10-Q are forward-looking statements. Forward-looking statements are all statements other than statements of historical facts, and give our expectations or forecasts of future events as of the effective date of this Form 10-Q. Words such as "may," "could," "plan," "project," "budget," "predict," "pursue," "target," "seek," "objective," "believe," "expect," "anticipate," "intend," "estimate," "will," "should" and similar expressions are generally used to identify forward-looking statements. These statements include, but are not limited to statements about our business strategy, industry, future profitability, future capital expenditures, our fleet conversion strategy and our share repurchase program. Such statements are subject to risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those implied or projected by the forward-looking statements. Factors that could cause our actual results to differ materially from those contemplated by such forward-looking statements include:

•changes in general economic and geopolitical conditions, including increasing interest rates, the rate of inflation and a potential economic recession;

•central bank policy actions, bank failures and associated liquidity risks and other factors;

•the severity and duration of any world events and armed conflict, including the Russia-Ukraine war, conflicts in the Israel-Gaza region and associated repercussions to supply and demand for oil and gas and the economy generally;

•the actions taken by the members of the Organization of the Petroleum Exporting Countries ("OPEC") and Russia (together with OPEC and other allied producing countries, "OPEC+") with respect to oil production levels and announcements of potential changes in such levels, including the ability of the OPEC+ countries to agree on and comply with supply limitations;

•actions taken by the Biden Administration, such as executive orders or new regulations, that may negatively impact the future production of oil and natural gas in the United States and may adversely affect our future operations;

•the level of production and resulting market prices for crude oil, natural gas and other hydrocarbons;

•the effects of existing and future laws and governmental regulations (or the interpretation thereof) on us, our suppliers and our customers;

•cost increases and supply chain constraints related to our services;

•competitive conditions in our industry;

•our ability to attract and retain employees;

•changes in the long-term supply of, and demand for, oil and natural gas;

•actions taken by our customers, suppliers, competitors and third-party operators and the possible loss of customers or work to our competitors;

•technological changes, including lower emissions oilfield services equipment and similar advancements;

•changes in the availability and cost of capital;

•our ability to successfully implement our business plan, including execution of potential mergers and acquisitions;

•large or multiple customer defaults, including defaults resulting from actual or potential insolvencies;

•the effects of consolidation on our customers or competitors;

•the price and availability of debt and equity financing (including increasing interest rates) for us and our customers;

•our ability to complete growth projects on time and on budget;

•increases in tax rates or types of taxes enacted that specifically impact E&P and related operations resulting in changes in the amount of taxes owed by us;

•regulatory and related policy actions intended by federal, state and/or local governments to reduce fossil fuel use and associated carbon emissions, or to drive the substitution of renewable forms of energy for oil and gas, may over time reduce demand for oil and gas and therefore the demand for our services;

•new or expanded regulations that materially limit our customers’ access to federal and state lands for oil and gas development, thereby reducing demand for our services in the affected areas;

•growing demand for electric vehicles that result in reduced demand for gasoline and therefore the demand for our services;

•our ability to successfully implement technological developments and enhancements, including our new Tier IV DGB dual-fuel and FORCESM electric-powered hydraulic fracturing equipment, and other lower-emissions equipment we may acquire or that may be sought by our customers;

•the projected timing, purchase price and number of shares purchased under our share repurchase program, the sources of funds under the repurchase program and the impacts of the repurchase program;

•operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control, such as fires, which risks may be self-insured, or may not be fully covered under our insurance programs;

•exposure to cyber-security events which could cause operational disruptions or reputational harm;

•acts of terrorism, war or political or civil unrest in the United States or elsewhere; and

•the effects of current and future litigation.

Whether actual results and developments will conform with our expectations and predictions contained in forward-looking statements is subject to a number of risks and uncertainties which could cause actual results to differ materially from such expectations and predictions, including, without limitation, in addition to those specified in the text surrounding such statements, the risks described under Part II, Item 1A, "Risk Factors" in this Form 10-Q and elsewhere throughout this report, the risks described under Part I, Item 1A, "Risk Factors" in our Form 10-K for the year ended December 31, 2022, filed with the SEC (the "Form 10-K") and elsewhere throughout that report, and other risks, many of which are beyond our control.

Readers are cautioned not to place undue reliance on our forward-looking statements, which are made as of the date of this Form 10-Q. We do not undertake, and expressly disclaim, any duty to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable securities laws. Investors are also advised to carefully review and consider the various risks and other disclosures discussed in our SEC reports, including the risk factors described in the Form 10-K.

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets:

			Nine Months Ended September 30,
			2023						2022
Summary of cash, cash equivalents and restricted cash
Cash and cash equivalents			$	54,330					$	43,208
Restricted cash			—						—
Total cash, cash equivalents and restricted cash — End of period			$	54,330					$	43,208

The accompanying condensed consolidated financial statements of ProPetro Holding Corp. and its subsidiaries (the "Company," "we," "us" or "our") have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission ("SEC") for interim financial information and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP") for annual financial statements. Those adjustments (which consisted of normal recurring accruals) that are, in the opinion of management, necessary for a fair presentation of the results of the interim periods have been made. Results of operations for such interim periods are not necessarily indicative of the results of operations for a full year due to changes in market conditions and other factors. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2022, included in our Form 10-K filed with the SEC (our "Form 10-K").

The Company’s services are sold based upon contracts with customers. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The following is a description of the principal activities, aggregated into one reportable segment—"Completion Services," from which the Company generates its revenue and an "All Other" category.

Completion Services — Completion Services consists of downhole pumping services, which include hydraulic fracturing, cementing and wireline operations.

Hydraulic fracturing is an oil well completion technique, which is part of the overall well completion process. It is a well-stimulation technique intended to optimize hydrocarbon flow paths during the completion phase of shale wellbores. The process involves the injection of water, sand and chemicals under high pressure into shale formations. Our hydraulic fracturing contracts with our customers have one performance obligation, which is the contracted total stages, satisfied over time. We recognize revenue over time using a progress output, unit-of-work performed method, which is based on the agreed fixed transaction price and actual stages completed. We believe that recognizing revenue based on actual stages completed accurately depicts how our hydraulic fracturing services are transferred to our customers over time. In addition, certain of our hydraulic fracturing equipment may be entitled to reservation fee charges if a customer were to reserve committed hydraulic fracturing equipment. The Company recognizes revenue related to reservation fee charges on a daily basis as the performance obligations are met.

Acidizing, which is part of our hydraulic fracturing operating segment, involves a well-stimulation technique where acid or similar chemicals are injected under pressure into formations to form or expand fissures. Our acidizing contracts have one performance obligation, satisfied at a point-in-time, upon completion of the contracted service or sale of the acid or chemical when control is transferred to the customer. Jobs for these services are typically short term in nature, with most jobs completed in less than a day. We recognize acidizing revenue at a point-in-time, upon completion of the performance obligation.

Our cementing services use pressure pumping equipment to deliver a slurry of liquid cement that is pumped down a well between the casing and the borehole. Our cementing contracts have one performance obligation, satisfied at a point-in-time, upon completion of the contracted service when control is transferred to the customer. Jobs for these services are typically short term in nature, with most jobs completed in less than a day. We recognize cementing revenue at a point-in-time, upon completion of the performance obligation.

Wireline services (including pumpdown) are oil well completion techniques, which are part of the well completion process. Our wireline services utilize equipment with a drum of wireline to deploy perforating guns in the well to perforate the casing, cement, and formation. Once the well is perforated, the well can be fractured. Pumpdown utilizes pressure pumping equipment to pump water into the well to deploy perforating guns attached to wireline through the lateral section of a well. Our wireline contracts with our customers have one performance obligation, which is the contracted total stages, satisfied over time. We recognize revenue over time using a progress output, unit-of-work performed method, which is based on the agreed fixed transaction price and actual stages completed. We believe that recognizing revenue based on actual stages completed accurately depicts how our wireline services are transferred to our customers over time. In addition, certain of our wireline equipment is entitled to daily equipment charges while the equipment is on the customer’s locations. The Company recognizes revenue related to daily equipment charges on a daily basis as the performance obligations are met.

The transaction price for each performance obligation for all our completion services is fixed per our contracts with our customers.

All Other— All Other consisted of coiled tubing services, which are complementary downhole well completion/remedial services. The performance obligation for these services had a fixed transaction price which was satisfied at a point-in-time upon completion of the service when control was transferred to the customer. Accordingly, we recognized revenue at a point-in-time, upon completion of the service and transfer of control to the customer. Effective September 1, 2022, we shut down our coiled tubing operations, and disposed of all our coiled tubing assets.

Our restricted cash relates to cash advances received from a customer in connection with our contract with the customer to provide FORCESM electric-powered hydraulic fracturing equipment and services. The restricted cash will be used to pay for contractually agreed upon expenditures. The cash advances from the customer will be credited towards the customer’s invoice as our revenue performance obligations are met over the contract period. Our restricted cash balances as of September 30, 2023 and December 31, 2022, were $0 and $10.0 million, respectively.

The cash advances received represent contract liabilities in connection with the performance of certain completion services. The cash advance (contract liability) balances, which are included in accrued and other current liabilities in our condensed consolidated balance sheets, were $20.5 million and $10.0 million as of September 30, 2023 and December 31, 2022, respectively. During the nine months ended September 30, 2023, we recognized revenue of $4.2 million from the cash advance amount outstanding at the beginning of the period.

Accounts receivable are stated at the amount billed and billable to customers. At September 30, 2023 and December 31, 2022, accrued revenue (unbilled receivable) included as part of our accounts receivable was $78.6 million and $51.9 million, respectively. At September 30, 2023, the transaction price allocated to the remaining performance obligation for our partially completed hydraulic fracturing and wireline operations was $40.9 million, which is expected to be completed and recognized as revenue within one month following the current period balance sheet date.

As of September 30, 2023, the Company had $0.2 million allowance for credit losses. Our allowance for credit losses is based on the evaluation of both our historic collection experience and the economic outlook for the oil and gas industry. We evaluated the historic loss experience on our accounts receivable and also separately considered customers with receivable balances that may be negatively impacted by current or future economic developments and market conditions. While the Company has not experienced significant credit losses in the past and has not yet seen material adverse changes to the payment patterns of its customers, the Company cannot predict with any certainty the degree to which the impacts of depressed economic activities, including the potential impact of periodically adjusted borrowing base limits, level of hedged production, or unforeseen well shut-downs may affect the ability of its customers to timely pay receivables when due. Accordingly, in future periods, the Company may revise its estimates of expected credit losses.

The table below shows a summary of allowance for credit losses during the nine months ended September 30, 2023:

Certain reclassifications have been made to prior period amounts to conform to the current period presentation. These reclassifications had no effect on our balance sheet, operating and net income (loss) or cash flows from operating, investing and financing activities.

Current trends in hydraulic fracturing equipment operating conditions such as larger pads, changes to job design and increased pumping hours per day have resulted in shorter useful lives for certain critical components that are included in our property and equipment assets. These recent trends necessitated a review of useful lives of our critical components like fluid ends, power ends, hydraulic fracturing units and other components in the first quarter of 2023. We determined that the estimated useful life of fluid ends is now less than one year, resulting in our determination that costs associated with the replacement of these components will no longer be capitalized, but instead recorded in inventories and amortized to cost of services over their estimated useful life. We have also shortened the estimated useful lives of power ends to two years from five years and hydraulic fracturing units to ten years from fifteen years. This change in accounting estimates was made effective January 1, 2023 and accounted for prospectively. The net effect of this change for the three and nine months ended September 30, 2023 was a $2.8 million and $10.0 million decrease in net income, or $0.02 and $0.09 per basic and diluted share, respectively.

Additionally, in connection with the review of our power ends estimated useful life, effective January 1, 2023, we are accelerating the depreciation of the remaining book value of power ends that prematurely fail. In 2022, we wrote off the remaining book value of prematurely failed and disposed of power ends to loss on disposal of assets. The amounts included in depreciation in connection with premature failure of power ends during the three and nine months ended September 30, 2023 were $8.4 million and $32.7 million, respectively. Furthermore, to conform to current period presentation, we have reclassified the amounts relating to premature failure of power ends previously included in loss on disposal of assets to depreciation expense for prior periods. The amounts reclassified were $11.2 million and $26.8 million, which relate to the three and nine months ended September 30, 2022, respectively.

Depreciation and amortization comprised of the following:

All shares of common stock repurchased through the Company's share repurchase program are retired upon repurchase. The Company accounts for the purchase price of repurchased common stock in excess of par value ($0.001 per share of common stock) as a reduction of additional paid-in capital, and will continue to do so until additional paid-in capital is reduced to zero. Thereafter, any excess purchase price will be recorded as a reduction of retained earnings.

There were no recently issued Accounting Standards Updates ("ASU") by the Financial Accounting Standards Board ("FASB") that are expected to have a material impact on our condensed consolidated financial statements.

On November 1, 2022 (the "Silvertip Acquisition Date"), the Company entered into a purchase and sale agreement with New Silvertip Holdco, LLC, pursuant to which the Company acquired 100% of the outstanding limited liability company interests of Silvertip Completion Services Operating, LLC ("Silvertip"), a wireline services company in the Permian Basin, in exchange for total consideration of $148.1 million (the "Silvertip Purchase Price") consisting of 10.1 million shares of our common stock valued at $106.7 million, $30.0 million of cash, the payoff of $7.2 million of assumed debt, and the payment of $4.1 million of certain closing and transaction costs (the "Silvertip Acquisition").

The Silvertip Acquisition positions the Company as a more integrated completions-focused oilfield services provider headquartered in the Permian Basin.

The Company accounted for the Silvertip Acquisition using the acquisition method of accounting. The Silvertip Purchase Price was allocated to the major categories of assets acquired and liabilities assumed based upon their estimated fair value at the Silvertip Acquisition Date. The estimated fair values of certain assets and liabilities, including accounts receivable, require significant judgments and estimates. The measurements of assets acquired and liabilities assumed, are based on inputs that are not observable in the market and thus represent Level 3 inputs.

The following table summarizes the fair value of the consideration transferred in the Silvertip Acquisition and the Silvertip Purchase Price to the fair value of the assets acquired and liabilities assumed (which are included within the accompanying condensed consolidated balance sheets) as of the Silvertip Acquisition Date:

(1)Remaining useful lives ranging from less than one to 22 years.

(2)Definite-lived intangible assets with amortization period of 10 years.

The goodwill arising from the Silvertip Acquisition is attributable to the expected operational synergies resulting from our integrated service offerings. The goodwill arising from the Silvertip Acquisition has been allocated to our wireline operations and is included in our wireline operating segment.

Fair value ("FV") is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches and establishes a hierarchy for inputs used in measuring fair value that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used, when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions other market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the observability of inputs as follows:

Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.

Level 2 — Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The fair values of cash, cash equivalents and restricted cash, accounts receivable, accounts payable, accrued and other current liabilities, and long-term debt are estimated to be approximately equivalent to carrying amounts as of September 30, 2023 and December 31, 2022 and have been excluded from the table below.

Assets measured at fair value on a recurring basis are set forth below:

Short-term investment— On September 1, 2022, the Company received 2.6 million common shares of STEP Energy Services Ltd. ("STEP") with an estimated fair value of $11.8 million as part of the consideration for the sale of our coiled tubing assets to STEP. The shares were treated as an investment in equity securities measured at fair value using Level 1 inputs based on observable prices on the Toronto Stock Exchange and are shown under current assets in our condensed consolidated balance sheets. As of September 30, 2023, the fair value of the short-term investment was estimated at $8.2 million. The fluctuation in stock price resulted in an unrealized gain of $1.8 million for the three months ended September 30, 2023 and an unrealized loss of $2.1 million for the nine months ended September 30, 2023. Included in the unrealized gain for the three months ended September 30, 2023 and the unrealized loss for the nine months ended September 30, 2023 was a loss of $0.2 million and $0.1 million resulting from non-cash foreign currency translation during the three and nine months ended September 30, 2023, respectively. The unrealized loss resulting from stock price fluctuation and the unrealized gain resulting from non-cash foreign currency translation are included in other income (expense) in our condensed consolidated statements of operations. The Company is restricted from selling, transferring or assigning more than 0.9 million shares in any one calendar month.

Certain assets and liabilities are measured at fair value on a nonrecurring basis. These items are not measured at fair value on an ongoing basis but may be subject to fair value adjustments in certain circumstances. These assets and liabilities include those acquired through the Silvertip Acquisition, which are required to be measured at fair value on the acquisition date according to the FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations.

Whenever events or circumstances indicate that the carrying value of long-lived assets may not be recoverable, the Company reviews the carrying values of long‑lived assets, such as property and equipment and other assets to determine if they are recoverable. If any long‑lived assets are determined to be unrecoverable, an impairment expense is recorded in the period. No impairment of property and equipment was recorded during the nine months ended September 30, 2023. We recorded impairment expense of approximately $57.5 million during the nine months ended September 30, 2022.

As of September 30, 2023 and December 31, 2022, our goodwill carrying value was $23.6 million and $23.6 million, respectively. There were no additions to goodwill during the three and nine months ended September 30, 2023 and 2022. The wireline operating segment is the only segment with goodwill at September 30, 2023 and December 31, 2022. There were no goodwill impairment losses during the three and nine months ended September 30, 2023 and 2022. We conducted our annual impairment test of goodwill in accordance with ASC 850, Intangibles—Goodwill and Other, as of December 31, 2022 and determined that no impairment to the carrying value of goodwill for our reporting unit (wireline operating segment) was required.

Intangible assets consist of customer relationships and trademark/trade name. Intangible assets are amortized on a straight‑line basis with a useful life of ten years. Amortization expense included in net income for the three and nine months ended September 30, 2023 was $1.4 million and $4.2 million, respectively. There was no amortization expense during the three and nine months ended September 30, 2022. The Company’s intangible assets subject to amortization consisted of the following:

The average amortization period for our remaining intangible assets is approximately 9.1 years. Estimated remaining amortization expense for each of the subsequent fiscal years is expected to be as follows:

Effective June 2, 2023, the Company entered into an amendment to its amended and restated revolving credit facility (the revolving credit facility, as amended and restated in April 2022, as amended in June 2023 and as may be amended further, "ABL Credit Facility"). The amendment increased the borrowing capacity under the ABL Credit Facility to $225.0 million (subject to the Borrowing Base (as defined below) limit), and extended the maturity date to June 2, 2028. The ABL Credit Facility has a borrowing base of the sum of 85% to 90% of monthly eligible accounts receivable and 80% of eligible unbilled accounts (up to a maximum of 25% of the Borrowing Base) less customary reserves (the "Borrowing Base"), in each case, depending on the credit ratings of our accounts receivable counterparties, as redetermined monthly. The Borrowing Base as of September 30, 2023, was approximately $176.3 million. The ABL Credit Facility includes a springing fixed charge coverage ratio to apply when excess availability is less than the greater of (i) 10% of the lesser of the facility size or the Borrowing Base or (ii) $15.0 million. Under the ABL Credit Facility we are required to comply, subject to certain exceptions and materiality qualifiers, with certain customary affirmative and negative covenants, including, but not limited to, covenants pertaining to our ability to incur liens or indebtedness, changes in the nature of our business, mergers and other fundamental changes, disposal of assets, investments and restricted payments, amendments to our organizational documents or accounting policies, prepayments of certain debt, dividends, transactions with affiliates, and certain other activities. Borrowings under the ABL Credit Facility are secured by a first priority lien and security interest in substantially all assets of the Company.

Borrowings under the ABL Credit Facility accrue interest based on a three-tier pricing grid tied to availability, and we may elect for loans to be based on either the Secured Overnight Financing Rate ("SOFR") or the base rate, plus the applicable margin, which ranges from 1.75% to 2.25% for SOFR loans and 0.75% to 1.25% for base rate loans. For the nine months ended September 30, 2023, the weighted average interest rate on our outstanding borrowings under the ABL Credit Facility was 6.51%.

The loan origination costs relating to the ABL Credit Facility are classified as an asset in the condensed consolidated balance sheets. As of September 30, 2023 and December 31, 2022, we had borrowings outstanding under our ABL Credit Facility of $45.0 million and $30.0 million, respectively.

The Company currently has three operating segments for which discrete financial information is readily available: hydraulic fracturing (inclusive of acidizing), cementing and wireline. These operating segments represent how the Chief Operating Decision Maker evaluates performance and allocates resources.

On September 1, 2022, the Company shut down its coiled tubing operations and disposed of its coiled tubing assets to STEP as part of a strategic repositioning, and recorded a loss on disposal of $13.8 million. The divestiture of our coiled tubing assets did not qualify for presentation and disclosure as discontinued operations, and accordingly, we have recorded the resulting loss from the disposal as part of our loss on disposal of assets in our condensed consolidated statement of operations. Following the divestiture of our coiled tubing operations, which were historically included in the "All Other" category, and the Silvertip Acquisition, which resulted in our new wireline operations in 2022, we have three operating segments. All three remaining operating segments are now aggregated into Completion Services, which is our only reportable segment.

In accordance with ASC 280—Segment Reporting, the Company has one reportable segment (Completion Services) comprised of the hydraulic fracturing, cementing and wireline operating segments. The Silvertip Acquisition which resulted in the addition of a new wireline operating segment, and the disposal of our coiled tubing operations (previously included in the "All Other" category), collectively resulted in a change to the structure and composition of our reportable segment and "All Other" category. Our previous Pressure Pumping reportable segment is now renamed "Completion Services" because of the inclusion of the new wireline completion services. In addition, we have reclassified all our corporate overhead costs (inclusive of income taxes and interest expense) previously included in the "All Other" category to the Completion Services reportable segment. As a result of the change in the structure and composition of our reportable segment, we have reclassified the presentation of our segment disclosure for the three and nine months ended September 30, 2022 to include corporate costs in our Completion Services reportable segment to make this period comparable to the three and nine months ended September 30, 2023. Total corporate administrative expense for the three and nine months ended September 30, 2023 was $25.4 million and $77.7 million, respectively. Total corporate administrative expense for the three and nine months ended September 30, 2022 was $20.4 million and $45.4 million, respectively.

A breakout of our Completion Services revenue by operating segment for the three and nine months ended September 30, 2023 and 2022 is presented below:

The Company manages and assesses the performance of the reportable segment by its adjusted EBITDA (earnings before other income (expense), interest expense, income taxes, depreciation and amortization, stock-based compensation expense, retention bonuses, severance and related expense, impairment expense, (gain)/loss on disposal of assets and other unusual or nonrecurring expenses or (income)).

A reconciliation from segment level financial information to the consolidated statements of operations is provided in the table below; inter-segment revenues are not material and not shown separately (in thousands):

(1)Includes unrealized gain on short-term investment of $1.8 million for the three months ended September 30, 2023 and unrealized loss on short-term investment of $2.1 million for the nine months ended September 30, 2023.

(2)Other general and administrative expense, (net of reimbursement from insurance carriers) primarily relates to nonrecurring professional fees paid to external consultants in connection with our audit committee review, SEC investigation, shareholder litigation, legal settlement to a vendor and other legal matters, net of insurance recoveries. During the three and nine months ended September 30, 2023, we received reimbursement of approximately $0.1 million and $0.4 million, respectively, from our insurance carriers in connection with the SEC investigation and shareholder litigation. During the three and nine months ended September 30, 2022, we received reimbursement of approximately $3.4 million and $6.9 million, respectively, from our insurance carriers in connection with the SEC investigation and shareholder litigation. See "Note 13 - Commitments and Contingencies—Contingent Liabilities—Legal Matters" for further information.

(3)Includes unrealized loss on short-term investment of $3.3 million and non cash income of $2.7 million from fixed asset inventory received as part of a settlement of warranty claims with an equipment manufacturer.

(4)Includes a $10.7 million net tax refund (net of advisory fees) received in March 2022 from the Texas Comptroller of Public Accounts in connection with limited sales, excise and use tax audit of the period July 1, 2015 through December 31, 2018.

Basic net income (loss) per common share is computed by dividing the net income (loss) relevant to the common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share uses the same net income divided by the sum of the weighted average number of shares of common stock outstanding during the period, plus dilutive effects of options, performance and restricted stock units outstanding during the period calculated using the treasury method and the potential dilutive effects of preferred stocks (if any) calculated using the if-converted method.

The table below shows the calculations for the three and nine months ended September 30, 2023 and 2022 (in thousands, except for per share data):

As shown in the table below, the following stock options, restricted stock units and performance stock units have not been included in the calculation of diluted income per common share for the three and nine months ended September 30, 2023 and 2022 because they will be anti-dilutive to the calculation of diluted net income per common share:

On May 17, 2023, the Company's board of directors (the "Board") authorized and the Company announced a share repurchase program that allows the Company to repurchase up to $100 million of the Company's common stock beginning immediately and continuing through and including May 31, 2024. The shares may be repurchased from time to time in open market transactions, block trades, accelerated share repurchases, privately negotiated transactions, derivative transactions or otherwise, certain of which may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Exchange Act, in compliance with applicable state and federal securities laws. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including management's assessment of the intrinsic value of the Company's common stock, the market price of the Company's common stock, general market and economic conditions, available liquidity, compliance with the Company's debt and other agreements, applicable legal requirements, and other considerations. The Company is not obligated to purchase any shares under the repurchase program, and the program may be suspended, modified, or discontinued at any time without prior notice. The Company expects to fund the repurchases using cash on hand and expected free cash flow to be generated through May 2024. The Inflation Reduction Act of 2022 (the "IRA 2022") provides for, among other things, the imposition of a new 1% U.S. federal excise tax on certain repurchases of stock by publicly traded U.S. corporations such as us after December 31, 2022. Accordingly, the excise tax will apply to our share repurchase program in 2023 and in subsequent taxable years.

All shares of common stock repurchased under the share repurchase program are canceled and retired upon repurchase. The Company accounts for the purchase price of repurchased shares of common stock in excess of par value ($0.001 per share of common stock) as a reduction of additional-paid-in capital, and will continue to do so until additional paid-in-capital is reduced to zero. Thereafter, any excess purchase price will be recorded as a reduction of retained earnings. During the three months ended September 30, 2023, the Company paid an aggregate of $18.8 million, an average price per share of $9.93 including commissions, for share repurchases under the share repurchase program. The Company has accrued $0.3 million in respect of the IRA 2022 repurchase excise tax as of September 30, 2023. As of September 30, 2023, $63.7 million remained authorized for future repurchases of common stock under the repurchase program.

There were no new stock option grants during the nine months ended September 30, 2023. As of September 30, 2023, there was no aggregate intrinsic value for our outstanding or exercisable stock options because the closing stock price as of September 30, 2023 was below the cost to exercise these options. No stock options were exercised during the nine months ended September 30, 2023. The weighted average remaining contractual term for the outstanding and exercisable stock options as of September 30, 2023 was approximately 3.4 years.

A summary of the stock option activity for the nine months ended September 30, 2023 is presented below (in thousands, except for weighted average price):

On May 11, 2023, the Company's stockholders approved the Amended and Restated ProPetro Holding Corp. 2020 Long Term Incentive Plan (the "A&R 2020 Incentive Plan"), which had been previously approved by the Board and replaced the ProPetro Holding Corp. 2020 Long Term Incentive Plan.

During the nine months ended September 30, 2023, we granted 1,081,010 restricted stock units ("RSUs") to employees, officers and directors pursuant to the A&R 2020 Incentive Plan, which generally vest ratably over a three-year vesting period, in the case of awards to employees and officers, and generally vest in full after one year, in the case of awards to directors. RSUs are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases to be an employee or director of the Company prior to vesting of the award. Each RSU represents the right to receive one share of common stock. The grant date fair value of the RSUs is based on the closing share price of our common stock on the date of grant. As of September 30, 2023, the total unrecognized compensation expense for all RSUs was approximately $11.9 million, and is expected to be recognized over a weighted average period of approximately 1.8 years.

The following table summarizes RSUs activity during the nine months ended September 30, 2023 (in thousands, except for fair value):

During the nine months ended September 30, 2023, we granted 454,788 performance share units ("PSUs") to certain key employees and officers as new awards under the A&R 2020 Incentive Plan. Each PSU earned represents the right to receive either one share of common stock or, as determined by the A&R 2020 Incentive Plan administrator in its sole discretion, a cash amount equal to fair market value of one share of common stock or amount of cash on the day immediately preceding the settlement date. The actual number of shares of common stock that may be issued under the PSUs ranges from 0% up to a maximum of 200% of the target number of PSUs granted to the participant, based on our total shareholder return ("TSR") relative to a designated peer group, generally at the end of a three year period. In addition to the TSR conditions, vesting of the PSUs is generally subject to the recipient’s continued employment through the end of the applicable performance period. Compensation expense is recorded ratably over the corresponding requisite service period. The grant date fair value of PSUs is determined using a Monte Carlo probability model. Grant recipients do not have any shareholder rights until performance relative to the peer group has been determined following the completion of the performance period and shares have been issued.

The following table summarizes information about PSUs activity during the nine months ended September 30, 2023 (in thousands, except for weighted average fair value):

The total stock-based compensation expense for the nine months ended September 30, 2023 and 2022 for all stock awards was $10.6 million and $18.1 million, respectively, and the associated tax benefit related thereto was $2.2 million and $3.8 million, respectively. The total unrecognized stock-based compensation expense as of September 30, 2023 was approximately $19.9 million, and is expected to be recognized over a weighted average period of approximately 1.5 years.

The Company rents three yards from an entity in which a director of the Company has an equity interest, and the total annual rent expense for each of the three yards was approximately $0.03 million, $0.1 million and $0.1 million, respectively. The Company previously rented two yards from this entity and incurred rent expense of $0.02 million and $0.1 million, respectively during the nine months ended September 30, 2023.

On December 31, 2018, we consummated the purchase of certain pressure pumping assets and real property from Pioneer Natural Resources USA, Inc. ("Pioneer") and Pioneer Pumping Services (the "Pioneer Pressure Pumping Acquisition"). In connection with the Pioneer Pressure Pumping Acquisition, Pioneer received 16.6 million shares of our common stock and approximately $110.0 million in cash. In October 2023, Pioneer entered into a merger agreement with Exxon Mobil Corporation. On March 31, 2022, we entered into an amended and restated pressure pumping services agreement (the "A&R Pressure Pumping Services Agreement"), which was initially entered into in connection with the Pioneer Pressure Pumping Acquisition. The A&R Pressure Pumping Services Agreement was effective January 1, 2022 through December 31, 2022. The A&R Pressure Pumping Services Agreement reduced the number of contracted fleets from eight fleets to six fleets, modified the pressure pumping scope of work and pricing mechanism for contracted fleets, and replaced the idle fees arrangement with equipment reservation fees (the "Reservation fees"). As part of the Reservation fees arrangement, the Company was entitled to receive compensation for all eligible contracted fleets that were made available to Pioneer at the beginning of every quarter in 2022 through the term of the A&R Pressure Pumping Services Agreement.

The A&R Pressure Pumping Services Agreement expired at the conclusion of its term and was replaced by the Fleet One Agreement and Fleet Two Agreement described below.

Revenue from services provided to Pioneer (including Reservation fees) accounted for approximately $22.3 million and $100.2 million of our total revenue during the three months ended September 30, 2023 and 2022, respectively. Revenue from services provided to Pioneer (including Reservation fees) accounted for approximately $122.1 million and $338.9 million of our total revenue during the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, the total accounts receivable due from Pioneer, including estimated unbilled receivables for services we provided, amounted to approximately $8.9 million and the amount due to Pioneer was $0. As of December 31, 2022, the balance due from Pioneer for services we provided amounted to approximately $46.2 million and the amount due to Pioneer was $0.

In March 2013, we entered into a ten-year real estate lease contract (the "Real Estate One Lease") with a commencement date of April 1, 2013, as part of the expansion of our equipment yard. During the nine months ended September 30, 2023 and 2022, the Company made lease payments of approximately $0.1 million and $0.3 million, respectively. The assets and liabilities under this contract are included in our Completion Services reportable segment. In addition to the contractual lease period, the contract included an optional renewal of up to ten years, however, the Company terminated the Real Estate One Lease at the end of the term, March 1, 2023.

We accounted for our Real Estate One Lease as an operating lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term. We did not account for the land separately from the building of the Real Estate One Lease because we concluded that the accounting effect was insignificant.

As part of our expansion of our hydraulic fracturing equipment maintenance program, we entered into a two-year maintenance facility real estate lease contract (the "Maintenance Facility Lease") with a commencement date of March 14, 2022. During the nine months ended September 30, 2023 and 2022, the Company made lease payments of approximately $0.2 million and $0.2 million, respectively. In addition to the contractual lease period, the contract includes an optional renewal for three additional periods of one year each, and in management's judgment the exercise of the renewal option is not reasonably assured. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, the Maintenance Facility Lease does not contain variability in payments resulting from either an index change or rate change.

We accounted for our Maintenance Facility Lease as an operating lease. Our assumptions resulted from the existence of the right to control the use of the assets throughout the lease term. We did not account for the land separately from the building of the Maintenance Facility Lease because we concluded that the accounting effect was insignificant. As of September 30, 2023, the weighted average discount rate and remaining lease term was approximately 3.4% and 0.4 years, respectively.

In August 2022 and December 2022, we entered into equipment lease contracts (the "Electric Fleet Leases") for a duration of approximately three years each for a total of four FORCESM electric-powered hydraulic fracturing fleets with 60,000 hydraulic horsepower ("HHP") per fleet. The Electric Fleet Leases contain options to either extend each lease for up to three additional periods of one year each or purchase the equipment at the end of their initial term of approximately three years or at the end of each subsequent renewal period.

The first of these leases (the "Electric Fleet One Lease") commenced on August 23, 2023 when we received some of the equipment associated with the first FORCESM electric-powered hydraulic fracturing fleet. During the nine months ended September 30, 2023, the Company made lease payments of approximately $0.4 million on the Electric Fleet One Lease, including variable lease payments of approximately $5 thousand. During the nine months ended September 30, 2023, the Company incurred initial direct costs of approximately $7.2 million to place the leased equipment into its intended use, which are included in the right-of-use asset cost related to the Electric Fleet One Lease. The assets and liabilities under this contract are included in our Completion Services reportable segment.

In management's judgment the exercise of neither the renewal option nor the purchase option is reasonably assured. In addition to fixed rent payments, the Electric Fleet One Lease contains variable payments based on equipment usage. The Electric Fleet One Lease does not include a residual value guarantee, covenants or financial restrictions.

We accounted for the Electric Fleet One Lease as an operating lease. Our assumptions resulted from the existence of the right to control the use of the assets throughout the lease term. As of September 30, 2023, the weighted average discount rate and remaining lease term was approximately 7.14% and 3.0 years, respectively. As of September 30, 2023, we have not received some of the equipment contracted under the Electric Fleet One Lease. Since we have not taken possession of these assets and do not control them, we have not accounted for the associated right-of-use asset and lease obligation on our balance sheet as of September 30, 2023.

The Electric Fleet Leases on the remaining three FORCESM electric-powered hydraulic fracturing fleets have not yet commenced. We currently do not control the assets under these leases because they are currently being manufactured by the vendor and we have not taken possession of the assets. The delivery of the FORCESM electric-powered hydraulic fracturing fleets is as each fleet is manufactured. We currently expect to receive the remaining equipment associated with the first fleet and all equipment associated with the second fleet in the fourth quarter of 2023, and all equipment associated with the third and fourth fleets in the first half of 2024. Given that the Company has not yet taken possession of the assets under these leases, the Company has not accounted for the associated right-of-use asset and lease obligation on its balance sheet as of September 30, 2023.

In October 2022, we entered into a real estate lease contract for 5.3 years (the "Real Estate Two Lease"), with a commencement date of March 1, 2023. During the nine months ended September 30, 2023, the Company made lease payments of approximately $0.2 million. The assets and liabilities under this contract are included in our Completion Services reportable segment. In addition to the contractual lease period, the contract includes two optional renewals of one year each, and in management's judgment the exercise of the renewal option is not reasonably assured. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, the Real Estate Two Lease does not contain variability in payments resulting from either an index change or rate change.

We accounted for our Real Estate Two Lease as an operating lease. Our assumptions resulted from the existence of the right to control the use of the assets throughout the lease term. We did not account for the land separately from the building of the Real Estate Two Lease because we concluded that the accounting effect was insignificant. As of September 30, 2023, the weighted average discount rate and remaining lease term was approximately 6.3% and 4.6 years, respectively.

As part of the Silvertip Acquisition, we assumed two real estate lease contracts (the "Silvertip One Lease" and "Silvertip Two Lease," and collectively the "Silvertip Leases") with remaining terms of 4.8 years and 6.1 years, respectively, from the Silvertip Acquisition Date. During the nine months ended September 30, 2023, we extended the Silvertip One Lease for an additional 1.3 years. During the nine months ended September 30, 2023, the Company made lease payments of approximately $0.1 million and $0.2 million on the Silvertip One Lease and Silvertip Two Lease, respectively. The assets and liabilities under these contracts are recorded in our wireline operating segment within our Completion Services reportable segment. The Silvertip Leases do not have any renewal options, residual value guarantees, covenants or financial restrictions. Further, the Silvertip Leases do not contain variability in payments resulting from either an index change or rate change.

We accounted for the Silvertip One Lease and the Silvertip Two Lease as operating leases. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term. We did not account for the land separately from the building of the Silvertip Leases because we concluded that the accounting effect was insignificant. As of September 30, 2023, the weighted average discount rate and remaining lease term for the Silvertip One Lease was approximately 6.3% and 5.2 years, respectively. As of September 30, 2023, the weighted average discount rate and remaining lease term for the Silvertip Two Lease was approximately 2.1% and 5.2 years, respectively.

In March 2023, we entered into a real estate lease contract for 5.7 years (the "Silvertip Three Lease"), with a commencement date of April 1, 2023. During the nine months ended September 30, 2023, the Company made lease payments of approximately $0.1 million on the Silvertip Three Lease. The assets and liabilities under this contract are recorded in our wireline operating segment within our Completion Services reportable segment. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, the Silvertip Three Lease does not contain variability in payments resulting from either an index change or rate change.

We accounted for the Silvertip Three Lease as an operating lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term. We did not account for the land separately from the building of the Silvertip Three Lease because we concluded that the accounting effect was insignificant. As of September 30, 2023, the weighted average discount rate and remaining lease term was approximately 6.3% and 5.2 years, respectively.

On June 1, 2023, we commenced an office space lease contract for 5.0 years (the "Silvertip Office Lease"). During the nine months ended September 30, 2023, the Company made lease payments of approximately $0.1 million on the Silvertip Office Lease. The assets and liabilities under this contract are recorded in our wireline operating segment within our Completion Services reportable segment. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, the Silvertip Office Lease does not contain variability in payments resulting from either an index change or rate change.

We accounted for the Silvertip Office Lease as an operating lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term. As of September 30, 2023, the weighted average discount rate and remaining lease term was approximately 6.5% and 4.7 years, respectively.

In August 2023, in connection with the relocation of our corporate office, we entered into an office space lease contract for 2.1 years (the "Corporate Office Lease"), with a commencement date of September 8, 2023. During the nine months ended September 30, 2023, the Company made lease payments of approximately $5 thousand on the Corporate Office Lease. The assets and liabilities under this contract are recorded in our Completion Services reportable segment. In addition to the contractual lease period, the contract includes an optional renewal for 0.8 years, and in management's judgment the exercise of the renewal option is not reasonably assured. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, the Corporate Office Lease does not contain variability in payments resulting from either an index change or rate change.

We accounted for the Corporate Office Lease as an operating lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term. As of September 30, 2023, the weighted average discount rate and remaining lease term was approximately 7.1% and 2.0 years, respectively.

As of September 30, 2023, the total operating lease right-of-use asset cost was approximately $29.5 million, and accumulated amortization was approximately $3.1 million. As of December 31, 2022, our total operating lease right-of-use asset cost was approximately $4.6 million, and accumulated amortization was approximately $1.5 million.

In January 2023, we entered into a three-year equipment lease contract (the "Power Equipment Lease") for certain power generation equipment with a commencement date of August 23, 2023 when we received some of the equipment associated with this lease. During the nine months ended September 30, 2023, the Company made lease payments of approximately $1.1 million on the Power Equipment Lease. The assets and liabilities under this contract are included in our Completion Services reportable segment. In addition to the contractual lease period, the contract includes an optional renewal for one year, and in management's judgment the exercise of the renewal option is not reasonably assured. The contract does not include a residual value guarantee, covenants or financial restrictions. Further, the Power Equipment Lease does not contain variability in payments resulting from either an index change or rate change.

We accounted for the Power Equipment Lease as a finance lease. This conclusion resulted from the existence of the right to control the use of the assets throughout the lease term, the present value of lease payments being equal to or in excess of substantially all of the fair value of the underlying assets and the lease term being the major part of the remaining economic life of the underlying assets. As of September 30, 2023, the weighted average discount rate and remaining lease term was approximately 7.1% and 2.9 years, respectively.

As of September 30, 2023, the total finance lease right-of-use asset cost was approximately $27.2 million, and accumulated amortization was approximately $1.0 million. As of December 31, 2022, we had no finance lease right-of-use assets.

As of September 30, 2023, we have not received some of the equipment contracted under the Power Equipment Lease. Since we have not taken possession of these assets and do not control them, we have not accounted for the associated right-of-use asset and lease obligation on our balance sheet as of September 30, 2023.

The maturity analysis of liabilities and reconciliation to undiscounted and discounted remaining future lease payments for our leases as of September 30, 2023 are as follows:

The total cash paid for amounts included in the measurement of our operating lease liabilities during the nine months ended September 30, 2023 was approximately $1.4 million. The total cash paid for amounts included in the measurement of our finance lease liabilities during the nine months ended September 30, 2023 was approximately $0.9 million. During the nine months ended September 30, 2023, we recorded non-cash operating lease obligations totaling approximately $24.9 million arising from obtaining right-of-use assets related to our execution of the Real Estate Two Lease, the Silvertip Three Lease, the Silvertip Office Lease, the Electric Fleet One Lease and the Corporate Office Lease, and our extension of the Silvertip One Lease. During the nine months ended September 30, 2023, we recorded non-cash finance lease obligations totaling approximately $27.2 million arising from obtaining right-of-use assets related to the commencement of the Power Equipment Lease. During the nine months ended September 30, 2022, total cash paid for amounts included in the measurement of our operating lease liabilities was approximately $0.5 million. During the nine months ended September 30, 2022, we recorded a non-cash operating lease obligation of approximately $0.6 million as a result of our execution of the Maintenance Facility Lease.

We elected the practical expedient option, consistent with ASC 842, to exclude leases with an initial term of twelve months or less ("short-term lease") from our balance sheet and continue to record short-term leases as a period expense.

We elected to analogize to the measurement guidance of ASC 360 to capitalize costs incurred to place a leased asset into its intended use and to present such capitalized costs as part of the related lease right-of-use asset cost as initial direct costs.

For the nine months ended September 30, 2023 and 2022, we recorded operating lease cost of approximately $1.9 million and $0.4 million, respectively, in our condensed consolidated statements of operations. For the nine months ended September 30, 2023, we recorded finance lease cost of approximately $1.2 million in our condensed consolidated statements of operations comprising of amortization of finance right-of-use asset of approximately $1.0 million and interest on finance lease liabilities of approximately $0.2 million. For the nine months ended September 30, 2022, we had no finance lease costs. For the nine months ended September 30, 2023 and 2022, we recorded variable lease cost of approximately $5 thousand and $0, respectively, in our condensed consolidated statements of operations. For the nine months ended September 30, 2023 and 2022, we recorded short-term lease cost of approximately $0.6 million and $0.6 million, respectively, in our condensed consolidated statements of operations.

We entered into certain commitments for fixed assets, consumables and services incidental to the ordinary conduct of our business, generally for quantities required for our operations and at competitive market prices. These commitments are designed to assure sources of supply and are not expected to be in excess of normal requirements. We entered into the Electric Fleet Leases, which contain options to extend the leases or purchase the equipment at the end of each lease or at the end of each subsequent renewal period. As of September 30, 2023, one of the Electric Fleet Leases commenced when the Company took possession of some of the equipment associated with the first FORCESM electric-powered hydraulic fracturing fleet. Lease payments pertaining to the remaining equipment under this lease and the remaining Electric Fleet Leases are expected to commence when the Company takes possession of the associated equipment. We currently expect to receive the remaining equipment associated with the first fleet and all equipment associated with the second fleet in the fourth quarter of 2023, and all equipment associated with the third and fourth fleets in the first half of 2024. The total estimated contractual commitment in connection with the Electric Fleet Leases excluding the cost associated with the option to purchase the equipment at the end of each lease is approximately $105.1 million. We also entered into the Power Equipment Lease. The total estimated contractual commitment in connection with the Power Equipment Lease is approximately $56.9 million.

The Company enters into purchase agreements with its sand suppliers (the "Sand Suppliers") to secure supply of sand as part of its normal course of business. The agreements with the Sand Suppliers require that the Company purchase a minimum volume of sand, based primarily on a certain percentage of our sand requirements from our customers or in certain situations based on predetermined fixed minimum volumes, otherwise certain penalties (shortfall fees) may be charged. The shortfall fee represents liquidated damages and is either a fixed percentage of the purchase price for the minimum volumes or a fixed price per ton of unpurchased volumes. Our agreements with the Sand Suppliers expire at different times prior to December 31, 2025. Our sand agreement with one of our Sand Suppliers that will expire on December 31, 2024 has a remaining take-or-pay commitment of $22.4 million. During the nine months ended September 30, 2023 and 2022, no shortfall fee was recorded.

As of September 30, 2023, the Company had issued letters of credit of approximately $6.0 million under the ABL Credit Facility in connection with the Company’s casualty insurance policy.

In September 2019, a complaint, captioned Richard Logan, Individually and On Behalf of All Others Similarly Situated, Plaintiff v. ProPetro Holding Corp., et al., (the "Logan Lawsuit"), was filed against the Company and certain of its then current and former officers and directors in the U.S. District Court for the Western District of Texas. As amended by later complaints, the Logan Lawsuit asserted claims on behalf of a putative class of shareholders who purchased the Company’s common stock between March 17, 2017 and March 13, 2020 or purchased the Company's common stock pursuant to the Company's initial public offering in March 2017. Plaintiffs alleged violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, and Sections 11 and 15 of the Securities Act of 1933 against the Company, certain former officers and current and former directors, alleging that the defendants made allegedly inaccurate or misleading statements or omissions about the Company's business, operations and prospects. On August 11, 2022, the Company entered into a settlement of the Logan Lawsuit, pursuant to which the Company's insurers have paid a cash sum into a settlement fund to be distributed to members of the putative class. On May 11, 2023, the settlement was granted final court approval.

The Company is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection of the environment. The Company cannot predict the future impact of such standards and requirements, which are subject to change and can have retroactive effectiveness. The Company continues to monitor the status of these laws and regulations. Currently, the Company has not been fined, cited or notified of any environmental violations that would have a material adverse effect upon its financial position, liquidity or capital resources. However, management does recognize that by the very nature of the Company's business, material costs could be incurred in the near term to maintain compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible regulation or liabilities, the unknown timing and extent of the corrective actions which may be required, the determination of the Company's liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification.

The Company is self-insured up to $10 million per occurrence for certain losses arising from or attributable to fire and/or explosion at the wellsites that do not have qualified fire suppression measures. No accrual was recorded in our financial statements in connection with this self-insurance strategy because the occurrence of fire and/or explosion cannot be reasonably estimated.

In 2020, the Texas Comptroller of Public Accounts (the "Comptroller") commenced a routine audit of the Company's motor vehicle and other related fuel taxes for the periods of July 2015 through December 2020. As of September 30, 2023, the audit is still ongoing and the final outcome cannot be reasonably estimated.

In May 2022, the Company received a notification from the Comptroller that it will commence a routine audit of the Company's gross receipt taxes, which typically covers up to a four-year period. As of September 30, 2023, the audit is still ongoing and the final outcome cannot be reasonably estimated.

In June 2023, the Company received confirmation from the Comptroller that it will commence a routine audit of the Company's direct payment sales tax in August 2023 for the period February 1, 2020 to December 31, 2022. As of September 30, 2023, the audit is still ongoing and the final outcome cannot be reasonably estimated.

In October 2023, we received some of the remaining equipment associated with our first FORCESM electric-powered hydraulic fracturing fleet under the Electric Fleet One Lease, resulting in the addition of non-cash operating lease obligations totaling approximately $5.6 million arising from obtaining right-of-use assets related to this equipment. In October 2023, we also received the remaining equipment associated with the Power Equipment Lease, resulting in the addition of non-cash finance lease obligations totaling approximately $25.2 million million arising from obtaining right-of-use assets related to this equipment.

The financial information, discussion and analysis that follow should be read in conjunction with our consolidated financial statements and the related notes included in the Form 10-K as well as the financial and other information included therein.

Unless otherwise indicated, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to the "Company," "we," "our," "us" or like terms refer to ProPetro Holding Corp. and its subsidiaries.

We are a leading integrated oilfield services company, located in Midland, Texas, focused on providing innovative hydraulic fracturing, wireline and other complementary oilfield completion services to leading upstream oil and gas companies engaged in the exploration and production ("E&P") of North American oil and natural gas resources. Our operations are primarily focused in the Permian Basin, where we have cultivated longstanding customer relationships with some of the region's most active and well-capitalized E&P companies. The Permian Basin is widely regarded as one of the most prolific oil-producing areas in the United States, and we believe we are one of the leading providers of completion services in the region.

Our completion services segment includes hydraulic fracturing, wireline and cementing operations. Our hydraulic fracturing operations account for the significant portion of our operations, and our hydraulic fracturing operations revenue is approximately 80.2% of our total revenues, while wireline and cementing accounts for our remaining revenues. Our total available hydraulic horsepower ("HHP") in our hydraulic fracturing operations as of September 30, 2023, was 1,354,500 HHP, which was comprised of 447,500 HHP of our Tier IV Dynamic Gas Blending ("DGB") dual-fuel equipment, 42,000 HHP of electric equipment and 865,000 HHP of conventional Tier II equipment. Our hydraulic fracturing fleets range from approximately 50,000 to 80,000 HHP depending on the job design and customer demand at the wellsite. Our equipment has been designed to handle the operating conditions commonly encountered in the Permian Basin and the region’s increasingly high-intensity well completions (including simultaneous hydraulic fracturing ("Simul-Frac"), which involves fracturing multiple wellbores at the same time), which are characterized by longer horizontal wellbores, more stages per lateral and increasing amounts of proppant per well. With the industry transition to lower emissions equipment and Simul-Frac, in addition to several other changes to our customers' job designs, we believe that our available capacity could decline if we decide to reconfigure our fleets to increase active HHP and backup HHP at wellsites. In addition, in 2021 and 2022, we committed to additional conversions of our Tier II equipment to Tier IV DGB, and purchase of new Tier IV DGB dual-fuel equipment. As such, we entered into conversion and purchase arrangements with our equipment manufacturers for a total 452,500 HHP of Tier IV DGB equipment and as of September 30, 2023, we have received 447,500 HHP of the converted and new Tier IV DGB equipment and expect to receive the remaining 5,000 HHP by the end of 2023. In 2022, we entered into three-year electric fleet leases for a total of four FORCESM electric-powered hydraulic fracturing fleets with 60,000 HHP per fleet. As of September 30, 2023, we have received 42,000 HHP of electric equipment. We currently expect to receive the remaining equipment associated with the first fleet and all equipment associated with the second fleet in the fourth quarter of 2023, and all equipment associated with the third and fourth fleets in the first half of 2024. We currently have 23 wireline units and 27 cement units.

On December 31, 2018, we consummated the purchase of certain pressure pumping assets and real property from Pioneer Natural Resources USA, Inc. ("Pioneer") and Pioneer Pumping Services (the "Pioneer Pressure Pumping Acquisition") in exchange for 16.6 million shares of our common stock and $110.0 million in cash, and concurrently entered into a pressure pumping services agreement (the "Pioneer Services Agreement") with Pioneer.

On March 31, 2022, we entered into an amended and restated pressure pumping services agreement (the "A&R Pressure Pumping Services Agreement") to replace the Pioneer Services Agreement that was entered into in connection with the Pioneer Pressure Pumping Acquisition. The A&R Pressure Pumping Services Agreement, which was effective from January 1, 2022 to December 31, 2022, reduced the number of contracted fleets from eight fleets to six fleets, modified the pressure pumping scope of work and pricing mechanism for contracted fleets, and replaced the idle fees arrangement with equipment reservation fees (the "Reservation fees"). As part of the Reservation fees arrangement, the Company was entitled to receive compensation for all eligible contracted fleets that were made available to Pioneer at the beginning of every quarter in 2022 through the term of the A&R Pressure Pumping Services Agreement. This agreement expired at the conclusion of its term and was replaced by the Fleet One Agreement and Fleet Two Agreement described below.

Effective September 1, 2022, we disposed of our coiled tubing assets to STEP Energy Services Ltd. ("STEP") and shut down our coiled tubing operations. We received cash of approximately $2.8 million and 2.6 million common shares of STEP valued at $11.9 million as consideration. Upon the sale of our coiled tubing assets, we recorded a loss on sale of $13.8 million.

On November 1, 2022, we consummated the acquisition of all of the outstanding limited liability company interests of Silvertip Completion Services Operating, LLC ("Silvertip"), which provides wireline perforation and ancillary services solely in the Permian Basin in exchange for 10.1 million shares of our common stock valued at $106.7 million, $30.0 million of cash, the payoff of $7.2 million of assumed debt, and the payment of certain other closing and transaction costs. At September 30, 2023, we had 23 wireline units available to provide wireline perforation and ancillary services. The Silvertip Acquisition positions the Company as a more integrated and diversified completions-focused oilfield services provider headquartered in the Permian Basin.

Our competitors include many large and small oilfield services companies, including Halliburton Company, Liberty Energy Inc., Patterson-UTI Energy Inc., ProFrac Holding Corp., RPC, Inc., and a number of private and locally-oriented businesses. The markets in which we operate are highly competitive. To be successful, an oilfield services company must provide services that meet the specific needs of oil and natural gas E&P companies at competitive prices. Competitive factors impacting sales of our services are price, reputation, technical expertise, emissions profile, service and equipment design and quality, and health and safety standards. Although we believe our customers consider all of these factors, we believe price is a key factor in an E&P company's criteria in choosing a service provider. However, we have recently observed the energy industry and our customers shift to lower emissions equipment, which we believe will be an increasingly important factor in an E&P company's selection of a service provider. The transition to lower emissions equipment has been challenging for companies in the oilfield service industry because of the capital requirements. While we seek to price our services competitively, we believe many of our customers elect to work with us based on our operational efficiencies, productivity, equipment portfolio and quality, reliability, ability to manage multifaceted logistics challenges, commitment to safety and the ability of our people to handle the most complex Permian Basin well completions.

Our substantial market presence in the Permian Basin positions us well to capitalize on drilling and completion activity in the region. Primarily, our operational focus has been in the Permian Basin's Midland sub-basin, where our customers have operated. However, we have increased our operations in the Delaware sub-basin and are well-positioned to support further increases to our activity in this area in response to demand from our customers. Over time, we expect the Permian Basin's Midland and Delaware sub-basins to continue to command a disproportionate share of future North American E&P spending.

Through our Completion Services segment, which includes our hydraulic fracturing, cementing and wireline operations, we primarily provide hydraulic fracturing services to E&P companies in the Permian Basin. During the three months ended September 30, 2023, our hydraulic fracturing, cementing and wireline operations accounted for 80.2%, 7.3% and 12.5% of our total revenue, respectively. During the nine months ended September 30, 2023, our hydraulic fracturing, cementing and wireline operations accounted for 79.4%, 6.6% and 14.0% of our total revenue, respectively. Our equipment has been designed to handle Permian Basin specific operating conditions and the region's increasingly high-intensity well completions, which are characterized by longer horizontal wellbores, more frac stages per lateral and increasing amounts of proppant per well. We plan to continually reinvest in our equipment to ensure optimal performance and reliability.

Our hydraulic fracturing, wireline and cementing operations have been aggregated into one reportable segment: "Completion Services." In connection with our divestiture of our coiled tubing operations and the Silvertip Acquisition, we have revised our reportable segment presentation from Pressure Pumping to Completion Services and have restated prior periods accordingly. Our now discontinued coiled tubing, drilling and flowback operations were aggregated into the "All Other" category.

The oil and gas industry has traditionally been volatile and is characterized by a combination of long-term, short-term and cyclical trends, including domestic and international supply and demand for oil and gas, current and expected future prices for oil and gas and the perceived stability and sustainability of those prices, and capital investments of E&P companies toward their development and production of oil and gas reserves. The oil and gas industry is also impacted by general domestic and international economic conditions such as supply chain disruptions and inflation, political instability in oil producing countries, government regulations (both in the United States and internationally), levels of consumer demand, adverse weather conditions, and other factors that are beyond our control.

In October 2023, an ongoing conflict between Israel and Palestinian militants in the Israel-Gaza region has led to significant armed hostilities. The geopolitical and macroeconomic consequences of this conflict remain uncertain, and such events, or any further hostilities in the Israel-Gaza region or elsewhere, could severely impact the world economy, the demand for and price of crude oil and the oil and gas industry generally and may adversely affect our financial condition.

Similarly, the geopolitical and macroeconomic consequences of the Russian invasion of Ukraine, including the associated sanctions, and the adverse impacts of the COVID-19 pandemic in recent years have resulted in volatility in supply and demand dynamics for crude oil and associated volatility in crude oil pricing. As the global response to the COVID-19 pandemic began to wane, the demand and prices for crude oil increased from the lows experienced in 2020, with the WTI average crude oil price reaching approximately $94 per barrel in 2022, the highest average price in the prior nine years.

However, in 2023, the WTI average crude oil price declined to below $70 per barrel before rebounding to approximately $89 per barrel in September 2023 and $77 per barrel for the nine months ended in September 30, 2023. We believe that the volatility of crude oil prices in recent years has been partly driven by declines in crude oil supplies, concerns over sanctions resulting from Russia's invasion of Ukraine, slower crude oil production growth due to the lack of reinvestment in the oil and gas industry in the last two years, recent OPEC+ production cuts of approximately 1.3 million barrels per day and concerns of a potential global recession resulting from rising inflation and interest rates.

With the significant increase in global crude oil prices from 2021, including the WTI crude oil price, there has been an increase in the Permian Basin rig count from approximately 179 at the beginning of 2021 to approximately 312 at the end of September 2023, according to Baker Hughes. Following the increase in rig count and the WTI crude oil price, the oilfield service industry has experienced increased demand for its completion services, and improved pricing. However, we have recently experienced a 12% decrease in the rig count between January and September 2023 which resulted in a reduction in the demand for completion services and pressure on pricing of our services.

Sustained levels of high inflation have likewise caused the U.S. Federal Reserve and other central banks to increase interest rates, and to the extent elevated inflation remains, we may experience further cost increases for our operations, including interest rates, labor costs and equipment. We cannot predict any future trends in the rate of inflation and crude oil prices. A significant increase in or continued high levels of inflation, to the extent we are unable to timely pass-through the cost increases to our customers, or further declines in crude oil prices would negatively impact our business, financial condition and results of operations.

Government regulations and investors are encouraging the oil and gas industry, including the upstream and oilfield service companies, to transition to a lower emissions operating environment. As a result, we are working with our customers and equipment manufacturers to transition our equipment to a lower emissions profile. Currently, a number of lower emission solutions for pumping equipment, including Tier IV DGB dual-fuel, electric, direct drive gas turbine and other technologies have been developed, and we expect additional lower emission solutions will be developed in the future. We are continually evaluating these technologies and other investment and acquisition opportunities that would support our existing and new customer relationships. The transition to lower emissions equipment is quickly evolving and will be capital intensive. Over time, we may be required to convert substantially all of our conventional Tier II equipment to lower emissions equipment. We have transitioned our hydraulic fracturing equipment portfolio from approximately 10% lower emissions equipment in 2021 to approximately 35% in 2022, and expect to increase to approximately 65% by the end of the first half of 2024. To the extent any of our customers have certain expectations or requirements with respect to emissions reductions from their contractors, if we are unable to continue quickly transitioning to lower emissions equipment, the demand for our services could be adversely impacted.

If the rig count and market conditions improve, including improved pricing for our services and labor availability, and we are able to meet our customers' lower emissions equipment demands, we believe our operational and financial results will also continue to improve. If the rig count or market conditions do not improve or decline in the future, and we are unable to increase our pricing or pass-through future cost increases to our customers, there could be a material adverse impact on our business, results of operations and cash flows.

Our results of operations have historically reflected seasonal tendencies, typically in the fourth quarter, relating to the holiday season, inclement winter weather and exhaustion of our customers' annual budgets. As a result, we typically experience declines in our operating and financial results in November and December, even in a stable commodity price and operations environment.

Our management uses Adjusted EBITDA or Adjusted EBITDA margin to evaluate and analyze the performance of our various operating segments.

We view Adjusted EBITDA and Adjusted EBITDA margin as important indicators of performance. We define EBITDA as our earnings, before (i) interest expense, (ii) income taxes and (iii) depreciation and amortization. We define Adjusted EBITDA as EBITDA, plus (i) loss/(gain) on disposal of assets, (ii) stock-based compensation, and (iii) other unusual or nonrecurring (income)/expenses such as impairment charges, retention bonuses, severance, costs related to asset acquisitions, insurance recoveries, one-time professional fees and legal settlements. Adjusted EBITDA margin reflects our Adjusted EBITDA as a percentage of our revenues.

Adjusted EBITDA and Adjusted EBITDA margin are supplemental measures utilized by our management and other users of our financial statements such as investors, commercial banks, and research analysts, to assess our financial performance because it allows us and other users to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization), nonrecurring (income)/expenses and items outside the control of our management team (such as income taxes). Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools and should not be considered as an alternative to net income/(loss), operating income/(loss), cash flow from operating activities or any other measure of financial performance presented in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Adjusted EBITDA and Adjusted EBITDA margin are not financial measures presented in accordance with GAAP ("non-GAAP"), except when specifically required to be disclosed by GAAP in the financial statements. We believe that the presentation of Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors in assessing our financial condition and results of operations because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure, asset base, nonrecurring expenses (income) and items outside the control of the Company. Net income (loss) is the GAAP measure most directly comparable to Adjusted EBITDA.  Adjusted EBITDA and Adjusted EBITDA margin should not be considered as alternatives to the most directly comparable GAAP financial measure. 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 Adjusted EBITDA or Adjusted EBITDA margin in isolation or as a substitute for an analysis of our results as reported under GAAP. Because Adjusted EBITDA and Adjusted EBITDA margin 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.