Sustainability Linked Credit Facility

2022 Sustainability Report

Sustainability-Linked Credit Facility Update

In the first quarter of 2022, Select closed on a $270 million Sustainability-Linked Credit Facility, a first of its kind facility in the energy services industry. Under the Sustainability-Linked Credit Facility, the interest rate margin and the facility fee rates for the facility are subject to upward or downward adjustments based on Select’s performance of specified sustainability targets and thresholds with respect to (i) total recordable incident rate (“TRIR”), as the Employee Health and Safety Metric, and (ii) barrels of produced water recycled at fixed facilities owned or operated by Select, as the Water Stewardship Metric. By setting key metrics by which we can both be held accountable to and execute on, we believe we can generate better long-term value for our stakeholders. In representation of our commitment to leading health and safety performance as well as water sustainability practices, Select meaningfully surpassed the KPI threshold and target levels for both TRIR and recycled produced water as outlined in our Sustainability-Linked Credit Facility during 2022. In doing so, Select is reinforcing both its mission of water stewardship and employee health and safety.

As the first company in the energy services sector to enter into a sustainability-linked credit facility, we hope to encourage other companies to follow suit. The specific goals that we have committed to, as well as the updated performance against these metrics for 2022, are outlined below. Select’s 2022 performance against the threshold and target levels for the key sustainability metrics was reviewed by Grant Thornton LLP, an independent certified public accounting firm, based on limited assurance standards established by the AICPA. Grant Thornton’s 2022 letter of limited assurance with regards to the key sustainability metrics can be found on page 52 of this report.

Total Recordable Incident Rate

Total Recordable Incident Rate (TRIR) for full-time employees, regular part time, temporary employees, and non-employee contractors (collectively, “employees”)

Select’s employees are the heart of what we do, and their safety and our team’s well-being is our first priority. All of our employees are trained in best-in-class worksite safety procedures as well as how to work safely with certified, properly maintained equipment. We believe that our customers select their operational partners based in part on the quality of their safety performance, compliance records and environmental, health and safety culture. We will continue to make investments to maintain our market leadership in this area.

The target is to achieve performance that is lower than the product of (i) the three-year trailing average of the following subsectors classifications as reported by the Bureau of Labor Statistics: Support Activities for Oil and Gas operations, Chemical Manufacturing, Truck Transportation, & Administrative and Support Services and (ii) 0.75 (1.21 Target for the year ended December 31, 2022).


Barrels of Recycled Produced Water

As a leader in the water solutions industry, Select places the utmost importance on safe, environmentally responsible management of oilfield water throughout the lifecycle of a well. Additionally, we believe that responsibly managing water resources through our operations to help conserve and protect the environment in the communities in which we operate benefits all stakeholders.

The treatment and recycling of water significantly reduces the need for utilizing scarce fresh water or other groundwater sources by Select customers and reduces the need for wastewater disposal via injection wells. We have invested in, and will continue to invest in, various technologies as well as permanent and semi-permanent infrastructure to support the continued increase of produced water recycling as part of our operations.

The criteria establishes certain growth targets and thresholds for increasing the total barrels of produced water that Select recycles based upon the objective to more than double the total recycled volumes by 2025 relative to its 2021 baseline volumes. As can be seen in our 2022 performance, Select has significantly outpaced our recycling commitments, driven by significant customer demand growth supporting a number of new organic projects as well as our recent acquisition of Breakwater Energy Partners, a leading provider of commercial recycling solutions in the Permian Basin.

1, 2 Pro forma adjusted for full year contribution of recent Breakwater acquisition, which closed on November 1, 2022, and other related operations