The following discussion and analysis should be read together with our condensed
consolidated financial statements and notes to those statements included
elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial
statements and notes to those statements included in our 2021 Annual Report on
Form 10-K in order to understand factors, such as charges and credits, financing
transactions and changes in tax regulations, which may impact comparability from
period to period.

We provide a broad range of manufactured products and services to customers in
the energy, industrial and military sectors through our Offshore/Manufactured
Products, Well Site Services and Downhole Technologies segments. Demand for our
products and services is cyclical and substantially dependent upon activity
levels in the oil and gas industry, particularly our customers' willingness to
invest capital in the exploration for and development of crude oil and natural
gas reserves. Our customers' capital spending programs are generally based on
their cash flows and their outlook for near-term and long-term commodity prices,
making demand for our products and services sensitive to expectations regarding
future crude oil and natural gas prices, as well as economic growth, commodity
demand and estimates of resource production and regulatory pressures related to
environmental, social and governance ("ESG") considerations.


The spot price of Brent crude oil averaged $101 per barrel during the third
quarter of 2022, an increase of 37% from the third quarter 2021 average. The
higher commodity price environment was driven by declines in crude oil supplies,
concerns over sanctions resulting from the Russian invasion of Ukraine on
February 24, 2022, increased demand as the global effects of the COVID-19
pandemic moderated and slower crude oil production growth due to reduced
investments by operators globally in recent years. However, crude oil prices
decreased toward the end of the third quarter of 2022 from the highs reported in
the second quarter of 2022 in response to, among other things, the growing risk
of a global recession, which raises concerns over future demand destruction.

Brent and West Texas Intermediate ("WTI") crude oil and natural gas pricing
trends were as follows:

                                               Average Price(1) for quarter ended                               Average Price(1)
                                                                                                                 for year ended
      Year                 March 31             June 30            September 30           December 31             December 31

Crude Brent (per barrel)

      2022              $    100.87          $   113.84          $      100.71          $           -          $        105.00
      2021                    61.04               68.98                  73.51                  79.61                    70.86
WTI Crude (per bbl)
      2022              $     95.18          $   108.83          $       93.06          $           -          $         98.96
      2021                    58.09               66.19                  70.58                  77.33                    68.14

Henry Hub Natural Gas (by MMBtu)

      2022              $      4.67          $     7.50          $        8.03          $           -          $          6.74
      2021                     3.50                2.95                   4.35                   4.75                     3.90


(1) Source: United States Energy Information Administration (cash price).


On October 21, 2022, Brent crude oil, WTI crude oil and natural gas spot prices
closed at $91.82 per barrel, $85.47 per barrel and $4.45 per MMBtu,
respectively. Additionally, as presented in more detail below, the U.S. drilling
rig count reported on October 21, 2022 was 771 rigs - slightly above the third
quarter 2022 average.

In January 2022, we finalized the exit of certain underperforming service offerings within our Well Site Services segment. These service offerings generated revenues of $15.0 million in the first nine months of 2021.

During the first quarter of 2022, we recorded bad debt expense of $0.8 million
related to receivables from Russia-based customers of the Offshore/Manufactured
Products segment. As of September 30, 2022, we had no remaining material balance
sheet exposure related to Russia.

In April of 2022, our Offshore/Manufactured Products segment acquired E-Flow
Control Holdings Limited ("E-Flow"), a U.K.-based global provider of fully
integrated handling, control, monitoring and instrumentation solutions. E-Flow,
founded in 1988, provides a broad range of engineering, design, manufacturing,
installation and commissioning services to its customers in the energy industry.
The purchase price of $8.1 million (net of cash acquired) was funded with cash

As further discussed in Note 12, "Commitments and Contingencies," on June 28,
2022, we fully settled our disputes with the seller (the "GEO Seller") of
GEODynamics, Inc. ("GEODynamics"), which we acquired in 2018, including the full
and final settlement of all amounts due under the GEO Note (as defined below).
Pursuant to the settlement agreement, on July 1, 2022, we paid the GEO Seller
$10.0 million in cash and issued approximately 1.9 million shares of our common
stock (having a market value of $10.3 million).

In August 2022, our Offshore/Manufactured segment settled an ongoing litigation against certain service providers in exchange for a full cash amount $6.9 million. As part of this settlement, the Company recorded a gain of $6.1 million in the third quarter of 2022.


Current and expected future pricing for WTI crude oil, along with expectations
regarding the regulatory environment in the regions that we operate in, are
factors that will continue to influence our customers' willingness to invest
capital in their businesses. Expectations for the longer-term price for Brent
crude oil will continue to influence our customers' spending related to global
offshore drilling and development and, thus, a significant portion of the
activity of our Offshore/Manufactured Products segment.

Crude oil prices and levels of demand for crude oil are likely to remain highly
volatile due to numerous factors, including geopolitical conflicts (such as the
direction and outcome of Russia's invasion of Ukraine), social unrest and
tensions; sanctions; the perceived risk of a global economic recession; global
uncertainties related to the COVID-19 pandemic; domestic or international crude
oil production; changes in governmental rules and regulations; the willingness
of operators to invest capital in the exploration for and development of
resources; use of alternative fuels; improved vehicle fuel efficiency; a more
sustained movement to electric vehicles; and the potential for ongoing
supply/demand imbalances. Capital investment by our customers recently reached a
15-year low due to these factors and the desire to generate sustainable cash

Customer spending in the natural gas shale plays has been limited due to
technological advancements that have led to significant amounts of natural gas
being produced from prolific basins in the Northeastern United States and from
associated gas produced from the drilling and completion of unconventional oil
wells in the United States.

U.S. drilling, completion and production activity and, in turn, our financial
results, are sensitive to near-term fluctuations in commodity prices,
particularly WTI crude oil prices, given the short-term, call-out nature of our
U.S. operations.

Our Offshore/Manufactured Products segment provides technology-driven,
highly-engineered products and services for offshore oil and natural gas
production systems and facilities globally, as well as certain products and
services to the offshore and land-based drilling and completion markets. This
segment also produces a variety of products for use in industrial, military and
other applications outside the traditional energy industry. This segment is
particularly influenced by global spending on deepwater drilling and production,
which is primarily driven by our customers' longer-term commodity demand
forecasts and outlook for crude oil and natural gas prices. Approximately 41% of
Offshore/Manufactured Products segment sales in the first nine months of 2022
were driven by our customers' capital spending for products used in exploratory
and developmental drilling, greenfield offshore production infrastructure, and
subsea pipeline tie-in and repair system applications, along with upgraded
equipment for existing offshore drilling rigs and other vessels (referred to
herein as "project-driven products"). Deepwater oil and gas development projects
typically involve significant capital investments and multi-year development
plans. Such projects are generally undertaken by larger exploration, field
development and production companies (primarily


international oil companies and state-run national oil companies) using
relatively conservative crude oil and natural gas pricing assumptions. Given the
long lead times associated with field development, we believe some of these
deepwater projects, once approved for development, are generally less
susceptible to change based on short-term fluctuations in the price of crude oil
and natural gas.

Backlog reported by our Offshore/Manufactured Products segment increased to
$258 million as of September 30, 2022 from $249 million as of September 30,
2021. Bookings totaled $283 million in the first nine months of 2022, yielding a
book-to-bill ratio of 1.0x. The following table sets forth backlog as of the
dates indicated (in millions).
                                                   Backlog as of
                  Year      March 31       June 30       September 30       December 31
                  2022     $     265      $    241      $         258      $          -
                  2021           226           214                249               260
                  2020           267           235                227               219

Our Well Site Services segment provides completion services and, to a much
lesser extent, land drilling services, in the United States (including the Gulf
of Mexico) and the rest of the world. U.S. drilling and completion activity and,
in turn, our Well Site Services results, are sensitive to near-term fluctuations
in commodity prices, particularly WTI crude oil prices, given the short-term,
call-out nature of its operations. We primarily supply equipment and service
personnel utilized in the completion of and initial production from new and
recompleted wells in our U.S. operations, which are dependent primarily upon the
level and complexity of drilling, completion and workover activity in our areas
of operations. Well intensity and complexity have increased with the continuing
transition to multi-well pads, the drilling of longer lateral wells and
increased downhole pressures, along with the increased number of frac stages
completed in horizontal wells.

Our Downhole Technologies segment provides oil and gas perforation systems,
downhole tools and services in support of completion, intervention, wireline and
well abandonment operations. This segment designs, manufactures and markets its
consumable engineered products to oilfield service as well as exploration and
production companies. Product and service offerings for this segment include
innovations in perforation technology through patented and proprietary systems
combined with advanced modeling and analysis tools. This expertise has led to
the optimization of perforation hole size, depth, and quality of tunnels, which
are key factors for maximizing the effectiveness of hydraulic fracturing.
Additional offerings include proprietary frac plug and toe valve products, which
are focused on zonal isolation for hydraulic fracturing of horizontal wells, and
a broad range of consumable products, such as setting tools and bridge plugs,
that are used in completion, intervention and decommissioning applications.
Demand drivers for the Downhole Technologies segment include continued trends
toward longer lateral lengths, increased frac stages and more perforation
clusters to target increased unconventional well productivity, which requires
ongoing technological and product developments.

Demand for our completion-related products and services within each of our
segments is highly correlated to changes in the total number of wells drilled in
the United States, total footage drilled, the number of drilled wells that are
completed and changes in the drilling rig count. The following table sets forth
a summary of the U.S. and international drilling rig count, as measured by Baker
Hughes Company, as of and for the periods indicated.
                                                                                                            Average for the
                                                                            Three Months Ended September 30,                    Nine Months Ended September 30,
                                    As of October 21, 2022                 2022                            2021                   2022                   2021
United States Rig Count:
Land - Oil                                                595                      581                            382                     543                   337
Land - Natural gas and other                              158                      160                            101                     145                    96
Offshore                                                   18                       20                             13                      18                    15
                                                          771                      761                            496                     706                   448
International Rig Count:
Land                                                                               846                            739                     802                   679
Offshore                                                                           211                            184                     201                   177
                                                                                 1,057                            923                   1,003                   856
                                                                                 1,818                          1,419                   1,709                 1,304

The WE the energy industry primarily focuses on crude oil and liquids-rich exploration and development activities in WE shale zones using horizontal drilling and completion techniques. From September 30, 2022oil drilling accounted for 79% of the total WE number of drilling rigs – the rest being largely natural gas. Due to the unprecedented decline in crude oil prices in March and April 2020, drilling and completions activities in United States collapsed – with active drilling rig


count declining from 790 rigs as of February 29, 2020 to a trough of 244 rigs as
of August 14, 2020. From this trough, the U.S. rig count has increased to 765
rigs as of September 30, 2022. As can be derived from the table above, the
average U.S. rig count for the first nine months of 2022 increased by 258 rigs,
or 58%, compared to the average for the first nine months of 2021.

We use a variety of domestically produced and imported raw materials and
component products, including steel, in the manufacture of our products. The
United States has imposed tariffs on a variety of imported products, including
steel and aluminum. In response to the U.S. tariffs on steel and aluminum, the
European Union and several other countries, including Canada and China, have
threatened and/or imposed retaliatory tariffs. In addition, in response to
Russia's invasion of Ukraine, governments in the European Union, the United
States, the United Kingdom, Switzerland and other countries have enacted
sanctions against Russia and Russian interests. The effect of these sanctions
and tariffs and the application and interpretation of existing trade agreements
and customs, anti-dumping and countervailing duty regulations continue to
evolve, and we continue to monitor these matters. If we encounter difficulty in
procuring these raw materials and component products, or if the prices we have
to pay for these products increase and we are unable to pass corresponding cost
increases on to our customers, our financial position, cash flows and results of
operations could be adversely affected. Furthermore, uncertainty with respect to
potential costs in the drilling and completion of oil and gas wells could cause
our customers to delay or cancel planned projects which, if this occurred, would
adversely affect our financial position, cash flows and results of operations.

Other factors that can affect our business and financial results include but are
not limited to: the general global economic environment; competitive pricing
pressures; public health crises; natural disasters; labor market constraints;
supply chain disruptions; inflation in wages, materials, parts, equipment and
other costs; climate-related and other regulatory changes; geopolitical
tensions; and changes in tax laws in the United States and international
markets. We continue to monitor the global economy, the prices of and demand for
crude oil and natural gas, and the resultant impact on the capital spending
plans and operations of our customers in order to plan and manage our business.

Human capital

For more information on our health and safety, diversity and other workforce
policies, please see "Part I, Item 1. Business - Human Capital" in our Annual
Report on Form 10-K for the year ended December 31, 2021.


Selected financial data

This selected financial data should be read in conjunction with our Unaudited
Condensed Consolidated Financial Statements and related notes included in
"Part I, Item 1. Financial Statements" of this Quarterly Report on Form 10-Q and
"Part II, Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations" and our Consolidated Financial Statements and related
notes included in "Part II, Item 8. Financial Statements and Supplementary Data"
of our Annual Report on Form 10-K for the year ended December 31, 2021 in order
to understand factors, such as charges, credits and financing transactions,
which may impact comparability of the selected financial data.

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