ProPetro Holding Corp

00#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Our business is subject to varying degrees of risk and uncertainty. Investors should consider the risks and uncertainties summarized below, as well as the risks and uncertainties discussed in Part I, Item 1A. Risk Factors of this Annual Report. Additional risks not presently known to us or that we currently deem immaterial may also affect us. If any of these risks occur, our business, financial condition or results of operations could be materially and adversely affected.

Our business is subject to the following principal risks and uncertainties:

Risks Inherent in Our Business and Industry

Our business and financial performance depends on the historically cyclical oil and natural gas industry and particularly on the level of capital spending of exploration and production (EP)EP companies within the United States and in the Permian Basin, and a decline in prices for oil and natural gas may cause fluctuation in operating results or otherwise have an adverse effect on our revenue, cash flows, profitability and growth.

The cyclical nature of tMany of our power generation services involve long sales cycles.

Our PROPWRSM business line exposes us to the oil significant risks and natural gas industry may cause our operating uncertainties associated with establishment of a new line of business, and such business line may not achieve the results to fluctuwe anticipate.

The majority of our operations are located in the Permian Basin, making us vulnerable to risks associated with operating in one major geographic area.

The Inflation Reduction Act of 2022 (IRA 2022) could accelerate the transition to a low carbon economy and could impoNew technology may cause new costs on our customers operations.

Our business may be adversely affected by a deterioration in general economic conditions or a weakening of the broader energy industryus to be less competitive.

Our operations require substantial capital and we may be unable to obtain needed capital or financing on satisfactory terms, or at all, which could limit our ability to grow.

Concerns over general economic, business or industry conditions may have a material adverse effect on our results of operations, liquidity and financial condition.

Our indebtedness and liquidity needs could restrict our operations and adversely affect our financial condition.

Restrictions in our ABL Credit Facility (as defined herein)current and any future financing agreements may limit our ability to finance future operations or capital needs or capitalize on potential acquisitions and other business opportunities.

We may record losses or impairment charges related to goodwill and long-lived assets, including intangible assets.

Our operations are subject to unforeseen interruptions and hazards inherent in the oil and natural gas industry, for which we may not be adequately insured and which could cause us to lose customers and substantial revenue.

A terrorist attack, armed conflict or political or civil unrest could harm our business.

We may be subject to claims for personal injury and property damage, which could materially affect our financial condition and results of operations.

We are suare subject to cyber security risks. A cyber incident could occur and result in information theft, data corruption, operational disruption ans, reputational harm and/or financial loss.

We may grow throughpursue acquisitions and/or , internal expansions or other strategic transactions, and our failure to properly plan and manage such growth may adversely affect our performance.

We may be adversely affected by the effects of inflation.

Risks Related to Customers, Suppliers and Competition

Reliance upon a few large customers may adversely affect our revenue and operating results.

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We expect to face significant competition that may cause uin the future as to loshe market share, aobile and competition in oumodular power industry has intensified as a result of evolves.

Our customer s may not consolidation and industry downturntinue to outsource their power generation needs.

We are exposed to the credit risk of our customers, and any material nonpayment or nonperformance by our customers could adversely affect our business, results of operations and financial conditions.

Our business depends upon the ability to obtain specialized equipment, parts and key raw materials, including sand and chemicalspower generation assets, balance of plant components, power distribution equipment and associated ancillary equipment, from thirdparty suppliers, and w. We may be vulnerable to dsupply chain disruptions, delayed deliveries and future price increases.

, which could adversely impact our ability to provide our services.

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We may be requiredunable to pay feadapt our power generation technologies to certain of our smeet increasing customer needs and suppliers (the Sand Suppliers) bpower loads, which could result in increased on minimum volumes under long-term contracts regardless of actual volumes receivedowntime of our power generation offering and disruptions to the power supply to our customers.

Distributed power generation services in some applications compete with access to the grid.

Risks Related to Employees

We rely on a few key employees whose absence or loss could adversely affect our business.

If we are unable to employ a sufficient number of skilled and qualified workers, our capacity and profitability could be diminished and our growth potential could be impaired.

Risks Related to Regulatory Matters

We are subject to environmental laws and regulations, and future compliance, claims, and liabilities relating to such matters may have a material adverse effect on our results of operations, financial position or cash flows.

Our and our customers operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs, limit the areas in which oil and natural gas production may occur, and reduce demand for the products and services we provide.

Federal and state legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays.

Increased attention to environmental, social and governance (ESG) matters, conserving trucking regulation measures, commercial developments may increase our costs and technological advances couldnegatively impact our reduce demand for oil and natural gas and our servicesults of operations.

Certain of our completion services, particularly our hydraulic fracturing services, are substantially dependent on the availability of water. Restrictions on our or our customers ability to obtain water may have an adverse effect on our financial condition, results of operations and cash flows.

Risks Related to our Tax Matters

Our ability to use our net operating loss carryforwards (NOLs) may be limited.

Changes to applicable tax laws and regulations or exposure to additional tax liabilities could adversely affect our operating results and cash flows.

Risks Inherent to an Investment in our Common Stock

We are subject to certain requirements of Section 404 of the Sarbanes-Oxley Act (Section 404). If we or our auditors identify and report material weaknesses in internal controls over financial reporting, our investors may lose confidence in our reported information, and our stock price may be negatively affected.

Certain provisions of our certificate of incorporation, and bylaws, as well as Delaware law, may discourage acquisition bids or merger proposals, which may adversely affect the market price of our common stock.

Our certificate of incorporation designates the Court of Chancery of the State of Delawarebusiness could be negatively affected as the sole and exclusive forum for certain types of a result of the actions and proceedings that may be initiated by our of activist shareholders, which could limit our shareholders ability to pursue actions in another judicial forum for disputes with us or our dir.

The market price of our common stock is subjectors, officers, employees or agents to volatility.

There may be future sales or other dilution of our equity, which may adversely affect the market price of our common stock.

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PART I