The
following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related
notes included in this Quarterly Report on Form 10-Q (“Quarterly Report”). In addition, such analysis should be read in
conjunction with the audited condensed consolidated financial statements, the related notes, and the other information included in
the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Annual Report”). The
following discussion and analysis contain forward-looking statements that reflect our future plans, estimates, beliefs and expected
performance. Please read “Cautionary Note Regarding Forward-Looking Statements” below.
National
Energy Services Reunited Corp. (the “Company,” “NESR,” “we,” “our,” “us”
or similar terms) is one of the largest oilfield services providers in the Middle East and North Africa (“MENA”) region.
The Company’s business consists primarily of upstream and midstream oilfield services with oil and natural gas companies as customers.
NESR’s revenues are primarily derived by providing production services (“Production Services”) such as hydraulic fracturing,
coiled tubing, stimulation and pumping, cementing, nitrogen services, filtration services, pipelines and industrial services, production
assurance, artificial lift services, completions and integrated production management. NESR also provides drilling and evaluation services
(“Drilling and Evaluation Services”) such as rigs and integrated services, fishing and downhole tools, thru-tubing intervention,
tubular running services, directional drilling, drilling and completion fluids, pressure control, well testing services, wireline logging
services, and slickline services. NESR has significant operations throughout the MENA region including Saudi Arabia, Oman, Kuwait, United
Arab Emirates, Iraq, Algeria, Egypt and Libya.
EXECUTIVE
OVERVIEW
Drivers
of Our Financial Condition and Results of Operations
As of the end of the three-month and six-month periods covered by this
Quarterly Report, the conflict involving the United States, Israel and Iran, and the associated volatility in Brent crude oil prices,
have not had a material adverse impact on our results of operations or financial condition. Demand for our services has remained resilient,
supported in large part by continued customer investment in Saudi Arabia, including the Jufurah unconventional field, as well as sustained
activity in certain of our other operating locations. However, the duration, scope and ultimate trajectory of the conflict remain uncertain,
and any de-escalation or further escalation of the conflict, as well as related sanctions, supply disruptions or other geopolitical developments,
could materially affect commodity prices, customer capital spending, and our results of operations and financial condition in future periods. For a full discussion
of the drivers of our financial condition and results of operations, see the section entitled “Drivers of Our Financial Condition
and Results of Operations” in Part II, Item 7 of our 2025 Annual Report.
Key
Performance Indicators
As
of the end of the three-month and six-month periods covered by this Quarterly Report, there have been no material changes regarding our
key performance indicators. The following table shows rig count (Source: Baker Hughes Published Rig Count
Data) and oil prices (Source: U.S. Energy Information Administration - Brent – Europe) as of the dates indicated. For a full discussion
of our key performance indicators, see the section entitled “Key Performance Indicators” in Part II, Item 7 of our
2025 Annual Report.
As of
June 30, 2026 December 31, 2025
Rig count:
MENA 549 565
Rest of World – outside of North America 524 500
Total International Rig Count 1,073 1,065
Brent Crude (per barrel) $ 70.46 $ 61.35
17
RESULTS
OF OPERATIONS
We
operate our business through two operating segments and report our results of operations through two reporting segments, Production Services
and Drilling and Evaluation Services, which aggregate services performed during distinct stages of a typical life-cycle of an oil well.
Production
Services. Our Production Services segment includes the results of operations from services that are generally offered and performed
during the production stage of a well’s lifecycle. These services mainly include hydraulic fracturing, coiled tubing, stimulation
and pumping, cementing, nitrogen services, filtration services, pipelines and industrial services, production assurance, artificial lift
services, completions and integrated production management. Our Production Services accounted for 63%, 63%, 62%, and 62% of our revenues
for the three-month period ended June 30, 2026, the three-month period ended June 30, 2025, the six-month period ended June 30, 2026,
and the six-month period ended June 30, 2025, respectively.
Drilling
and Evaluation Services. Our Drilling and Evaluation Services segment includes the results of operations from services that are generally
offered and performed during pre-production stages of a well’s lifecycle and related mainly to the operation of oil rigs. The services
mainly include rigs and integrated services, fishing and downhole tools, thru-tubing intervention, tubular running services, directional
drilling, drilling and completion fluids, pressure control, well testing services, wireline logging services and slickline services.
Our Drilling and Evaluation Services accounted for 37%, 37%, 38%, and 38%, of our revenues for the three-month period ended June 30,
2026, the three-month period ended June 30, 2025, the six-month period ended June 30, 2026, and the six-month period ended June 30, 2025,
respectively.
For
a full discussion of our reportable segments, see the section entitled “Business” in Part I, Item 1 of our 2025 Annual
Report.
Key
Components of Revenues and Expenses
As
of the end of the three-month and six-month periods covered by this Quarterly Report, there have been no material changes to our key
components of revenues and expenses. See the section entitled “Key Components of Revenues and Expenses” in Part II,