Overview



The following discussion should be read in conjunction with "Selected Financial
Data" and the consolidated financial statements included elsewhere in this
document. See also "Forward-Looking Statements" on page 2. Discussions of
year-to-year comparisons of 2019 and 2018 and 2018 items that are not included
in this Form 10-K can be found in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in Part II, Item 7 on our Annual
report on Form 10-K for the year ended December 31, 2019, which Item is
incorporated herein by reference.

RPC, Inc. ("RPC") provides a broad range of specialized oilfield services
primarily to independent and major oilfield companies engaged in exploration,
production and development of oil and gas properties throughout the United
States, including the southwest, mid-continent, Gulf of Mexico, Rocky Mountain
and Appalachian regions, and in selected international markets. The Company's
revenues and profits are generated by providing equipment and services to
customers who operate oil and gas properties and invest capital to drill new
wells and enhance production or perform maintenance on existing wells.

Our key business and financial strategies are:

- To focus our management resources on and invest our capital in equipment and


   geographic markets that we believe will earn high returns on capital.

- To maintain a flexible cost structure that can respond quickly to volatile

industry conditions and business activity levels.

- To maintain capital strength sufficient to allow us to remain a going concern

and maintain our operational strength during protracted industry downturns.

- To maintain an efficient, low-cost capital structure which includes an

appropriate use of debt financing.

To optimize asset utilization with the goal of increasing revenues and

- generating leverage of direct and overhead costs, balanced against increasingly

high maintenance requirements and low financial returns experienced during

times of low customer pricing for our services.

- To deliver product and services to our customers safely.

- To secure adequate sources of supplies of raw materials used in our operations.

- To maintain and selectively increase market share.

To maximize stockholder return by optimizing the balance between cash invested

- in the Company's productive assets, the payment of dividends to stockholders,

and the repurchase of our common stock on the open market.

- To align the interests of our management and stockholders.


In assessing the outcomes of these strategies and RPC's financial condition and
operating performance, management generally reviews periodic forecast data,
monthly actual results, and other similar information. We also consider trends
related to certain key financial data, including revenues, utilization of our
equipment and personnel, maintenance and repair expenses, pricing for our
services and equipment, profit margins, selling, general and administrative
expenses, cash flows and the return on our invested capital. Additionally, we
compare our trends to those of our peers. We continuously monitor factors that
impact current and expected customer activity levels, such as the price of oil
and natural gas, changes in pricing for our services and equipment and
utilization of our equipment and personnel. Our financial results are affected
by geopolitical factors such as political instability in the petroleum-producing
regions of the world, overall economic conditions and weather in the United
States, the prices of oil and natural gas, and our customers' drilling and
production activities.

The oil and gas industry experienced an unprecedented disruption during 2020 due
to the substantial decline in global demand for oil caused by the combined
impact of the OPEC disputes and COVID-19 pandemic that has continued throughout
2020. The pandemic has significantly impacted the economic conditions in the
United States, as federal, state and local governments have reacted to the
public health crisis, creating significant uncertainties in the United States,
as well as the global economy. RPC continued our regular operations during the
period since we function as an essential infrastructure business in the energy
sector under

                                       19



guidance issued by the Department of Homeland Security. However, in response to
the pandemic, RPC instituted strict procedures to assess employee health and
safety while in our facilities or on operational locations.

Current industry conditions are characterized by oil prices which fell from a
cyclical peak of $75 per barrel in the fourth quarter of 2018 to less than $20
per barrel in the second quarter of 2020. In response to this significant
decrease in the price of oil, the drilling rig count fell from 1,083 in the
fourth quarter of 2018 to 244 in the third quarter of 2020. Also, monthly U.S.
well completions fell from a cyclical peak of 1,371 in the second quarter of
2018 to 292 in the second quarter of 2020. Early in the first quarter of 2021,
the price of oil had recovered to approximately $56 per barrel, and both the
drilling rig count and well completions had increased as well. One catalyst for
the decrease in the price of oil during 2020 relates to the significant decrease
in global oil demand resulting from the COVID-19 pandemic. In late 2019, the
global oil supply and demand were in equilibrium. By the second quarter of 2020,
however, global oil demand had fallen by approximately 16 percent, while supply
had only fallen by approximately nine percent. The tremendous decline in oil
prices, drilling and well completions during 2020 resulted from this sudden and
unpredicted decrease in demand.

RPC believes that oil production in the United States has also become an
increasingly important determinant of global oil prices, because the United
States has grown to be the world's largest producer of oil and is more flexible
in its ability to increase or decrease drilling and production activities
rapidly than the state-owned oil companies which comprise OPEC membership.
During the past several years, improving drilling and completion activity have
caused U.S. domestic oil production to continue to rise to a record production
level in December 2019. Since that time, U.S. oil production has declined due to
lower drilling and completion activity, but it remains historically high, and as
of the most recent monthly reported statistics, was 30 percent higher than the
cyclical low production recorded during the third quarter of 2016. We believe
that continued high U.S. oil production is a catalyst for lower oil prices
during the near term. Customer activities directed towards natural gas drilling
and production have been weak for several years because of the high production
of shale-directed natural gas wells, the high amount of natural gas production
associated with oil-directed shale wells in the U.S. domestic market, and
relatively constant consumption of natural gas in the United States. One of
these factors has been mitigated by the decline in oil-directed drilling. In
addition, weather in the United States during the first quarter of 2021 is
colder than during the comparable period in 2020. As a result, the price of
natural gas has recovered from a low of $1.63 per Mcf during the second quarter
of 2020 to $2.96 per Mcf early in the first quarter of 2021. While current
natural gas prices are higher than at the recent cyclical trough, we believe
that they are still too low to encourage our customers to conduct increased
levels of exploration and production activities directed exclusively towards
natural gas.

In 2020, the Company's strategy of utilizing equipment in unconventional basins
has continued. During 2020, we made capital expenditures totaling $65.1 million,
a decrease of $185.6 compared to the prior year. Capital expenditures during
2020 were primarily for new revenue-producing equipment and capitalized
maintenance of our existing equipment, as well as upgrades of selected pressure
pumping equipment for dual-fuel capability.

Revenues during 2020 totaled $598.3 million, a decrease of 51.1 percent compared
to 2019 primarily as a result of lower activity levels and lower pricing for
most of our service lines caused by a steep decline in oil and gas prices due to
COVID-19. Cost of revenues decreased $438.9 million in 2020 compared to the
prior year primarily due to lower materials and supplies expenses and employment
costs consistent with lower activity levels and as a result of RPC's expense
reduction initiatives. As a percentage of revenues, cost of revenues increased
to 80.4 percent in 2020 compared to 75.2 percent in 2019.

Selling, general and administrative expenses as a percentage of revenues
increased to 20.7 percent in 2020 compared to 13.8 percent in 2019, primarily
due to lower revenues, partially offset by personnel headcount decreases and
other reductions.

Impairment and other charges were $217.5 million in 2020. These charges were
comprised primarily of the total amount by which several of our asset groups'
carrying amounts exceeded their fair value partly due to the pandemic related
demand reductions, a non-cash pension settlement loss, costs to finalize the
disposal of our former sand facility and employee severance costs.

Loss before income taxes was $309.4 million for 2020 compared to loss before
income taxes of $113.1 million in 2019. Net loss for 2020 was $212.2 million, or
$1.00 loss per share compared to net loss of $87.1 million, or $0.41 loss per
share in 2019.

Cash flows from operating activities decreased to $78.0 million in 2020 compared
to $209.1 million in 2019 primarily due to lower earnings, partially offset by
favorable changes in working capital. As of December 31, 2020, there were no
outstanding borrowings under our credit facility.

Outlook


Drilling activity in the U.S. domestic oilfields, as measured by the rotary
drilling rig count, reached a cyclical peak of 1,083 during the fourth quarter
of 2018. Between the fourth quarter of 2018 and the third quarter of 2020,

the
drilling rig count fell by 77

                                       20



percent. During the third quarter of 2020, the U.S. domestic drilling rig count
reached the lowest level recorded up to that time. The principal catalyst for
this steep rig count decline was the decrease in the price of oil in the world
markets resulting from the decline in global oil demand associated with the
COVID-19 pandemic which began in the first quarter of 2020. RPC monitors rig
count efficiencies and well completion trends because the majority of our
services are directed toward well completions. Improvements in drilling rig
efficiencies have increased the number of potential well completions for a given
drilling rig count; therefore, the statistics regarding well completions are
more meaningful indicators of the outlook for RPC's activity levels and
revenues. Annual well completions during 2018 increased by approximately 25
percent compared to 2017, and by approximately five percent in 2019 compared to
2018. Well completions in 2020 decreased by approximately 49 percent compared to
2019. Although the price of oil and well completions increased in the fourth
quarter of 2020, we believe that U.S. oilfield well completion activity will
remain weak during the near term because of continued low oil prices and
projections of depressed industry activity.

The current and projected prices of oil, natural gas and natural gas liquids are
important catalysts for U.S. domestic drilling activity. Following the trough of
the most recent oilfield downturn in the second quarter of 2020, the price of
oil has risen by more than 100 percent early in the first quarter of 2021
compared to the average price of oil in the second quarter of 2020. The price of
natural gas has risen by approximately 94 percent during the same time period,
due to steady demand for natural gas and normal seasonal demand in the first
quarter of 2021. Following a low price of $0.23 per gallon in the first quarter
of 2020, the price of benchmark natural gas liquids has risen to $0.87 per
gallon early in the first quarter of 2021, an increase of almost 300 percent.
The price increases in these commodities during the past three quarters are
encouraging, and RPC believes that they have encouraged our customers to
increase drilling and completion activities. We remain cautious, however,
because we do not believe that current commodity prices are sufficiently high to
encourage our customers to increase their drilling and production activities to
previous cyclical peak levels.

The majority of the U.S. domestic rig count remains directed towards oil. Early
in the first quarter of 2021, approximately 77 percent of the U.S. domestic rig
count was directed towards oil, a decrease compared with approximately 85
percent during the same period in the prior year. We believe that oil-directed
drilling will remain the majority of domestic drilling, and that natural
gas-directed drilling will remain a low percentage of U.S. domestic drilling in
the near term. We believe that this relationship will continue due to relatively
low prices for natural gas, high production from existing natural gas wells, and
industry projections of limited increases in domestic natural gas demand during
the near term.

We continue to monitor the market for our services and the competitive
environment. An increasingly important factor impacting the demand for our
services is the growing efficiency with which oilfield completion crews are
providing services. We began to observe this in 2018, and we believe that this
higher efficiency has contributed to the oversupplied nature of our market. In
addition, the U.S. domestic rig count began to decline during the first quarter
of 2019, and by the beginning of the second quarter of 2020 had fallen to the
lowest level ever recorded. Combined with the long-term trend of increased
efficiency, the U.S. domestic rig count decline has caused significant decreases
in activity levels and pricing for our services.

RPC expanded its fleet of revenue-producing equipment in 2019, while also
retiring older equipment which could no longer function effectively in
service-intensive operating environments. We continue to upgrade our existing
equipment to operate using multiple fuel sources and to take advantage of
advances in technology and data collection. However, we do not plan meaningfully
to increase our fleet capacity either through purchases of new equipment or
bringing idled equipment into service until the projected financial returns for
such an investment are justified. Our consistent response to the near-term
potential of lower activity levels and pricing has been to undertake moderate
fleet expansions which we believe will allow us to maintain a strong balance
sheet, while also positioning RPC for long-term growth and strong financial
returns.

In connection with the preparation of our financial statements for the quarter
ended March 31, 2020, the Company recorded long-lived asset impairment and other
charges of $205.5 million. See Note 3 of the consolidated financial statements
for a discussion of the changes in our industry resulting in these charges. In
addition, we are aware that our customers have been forced to conduct their
operations with little or no access to outside capital for the first time in
many years, and we anticipate that this aspect of exploration and production
financing will remain in place for the foreseeable future, thereby impacting the
volume of future drilling and completion of new wells.

                                       21



Results of Operations


Years Ended December 31,                               2020           2019           2018
(in thousands except per share amounts and
industry data)

Consolidated revenues                               $   598,302    $ 1,222,409    $ 1,721,005
Revenues by business segment:
Technical                                           $   556,488    $ 1,145,554    $ 1,647,213
Support                                             $    41,814    $    76,855         73,792

Consolidated operating (loss) profit                $ (309,635)    $ (114,288)    $   210,030
Operating (loss) profit by business segment:
Technical                                           $  (82,525)    $  (32,993)    $   216,703
Support                                                 (6,714)         10,016          4,612
Corporate expenses                                     (12,426)       (12,745)       (14,629)
Impairment and other charges (1)(2)                   (217,493)       (82,273)              -
Gain on disposition of assets, net                  $     9,523    $

3,707 $ 3,344



Net (loss) income                                   $ (212,192)    $  (87,111)    $   175,402
(Loss) Earnings per share - diluted                 $    (1.00)    $    (0.41)    $      0.82
Percentage of cost of revenues to revenues                   80 %           75 %           69 %
Percentage of selling, general and
administrative expenses to revenues                          21 %           14 %           10 %
Percentage of depreciation and amortization
expenses to revenues                                         16 %           14 %           10 %
Effective income tax rate                                  31.4 %         23.0 %         20.7 %
Average U.S. domestic rig count                             436            943          1,032
Average natural gas price (per thousand cubic
feet (mcf))                                         $      2.03    $      2.57    $      3.18
Average oil price (per barrel)                      $     39.50    $     56.90    $     65.02

Amount in 2020 represents $212,292 related to technical services, $4,660 (1) related to pension settlement loss and the remainder related to corporate

expenses.

(2) Amount in 2019 represents $80,263 related to technical services and $2,010

related to corporate expenses.

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019



Revenues. Revenues in 2020 decreased $624.1 million or 51.1 percent compared to
2019 primarily due to the substantial decline in global demand for oil caused by
the combined impact of the OPEC disputes and COVID-19 pandemic. The Technical
Services segment revenues in 2020 decreased $589.1 million or 51.4 percent
compared to the prior year. The decrease is due primarily to lower activity
levels and lower pricing within most of our service lines as compared to the
prior year. The Support Services segment revenues in 2020 decreased $35.0
million or 45.6 percent compared to 2019 due primarily to lower activity levels
and pricing in the rental tools service line, which is the largest service line
within this segment. Technical Services reported an operating loss of $82.5
million during 2020 compared to a loss of $33.0 million in the prior year, while
Support Services reported an operating loss of $6.7 million in 2020 compared to
income of $10.0 million in the prior year. The average price of oil decreased
30.6 percent and the average price of natural gas decreased 20.9 percent during
2020 compared to the prior year. The average domestic rig count during 2020 was
53.8 percent lower than 2019. International revenues, which decreased from $64.6
million in 2019 to $35.9 million in 2020, were six percent of consolidated
revenues in 2020 compared to five percent 2019. International revenues decreased
in 2020 primarily due to lower customer activity levels in Argentina, and
Canada, partially offset by higher activity in Algeria compared to the prior
year. Our international revenues are impacted by the timing of project
initiation and their ultimate duration.

Cost of revenues. Cost of revenues in 2020 was $480.7 million compared to $919.6
million in 2019, a decrease of 47.7 percent primarily due to lower materials and
supplies expenses and employment costs consistent with lower activity levels and
as a result of RPC's personnel headcount decreases and other expense reduction
initiatives. As a percentage of revenues, cost of revenues increased to 80.4
percent in 2020 compared to 75.2 percent in 2019 primarily due to lower pricing
and the negative leverage of certain fixed expenses over significantly lower
revenues.

Selling, general and administrative expenses. Selling, general and
administrative expenses decreased to $123.7 million in 2020 compared to $168.1
million in 2019. These expenses decreased due to lower employment costs,
primarily the result of personnel headcount decreases and other cost reduction
initiatives during the year. Selling, general and administrative expenses as a
percentage of revenues increased to 20.7 percent of revenues in 2020 compared to
13.8 percent of revenues in 2019 due to the negative leverage of lower revenues
over primarily fixed expenses.

                                       22

Depreciation and amortization. Depreciation and amortization were $95.5 million in 2020, a decrease of $74.9 million, compared to $170.4 million in 2019. Depreciation and amortization decreased significantly because of the asset impairment charges recorded during the first quarter of 2020.



Impairment and other charges. Impairment and other charges were $217.5 million
in 2020 compared to $82.3 million in 2019. Impairment and other charges in 2020
is comprised primarily of the total amount by which several of our asset groups'
carrying amounts exceed their fair value, a non-cash pension settlement loss,
costs to finalize the disposal of our former sand facility and employee
severance costs. Impairment and other charges for 2019 was comprised primarily
of equipment disposals, closing operating locations and employee severance.

Gain on disposition of assets, net. Gain on disposition of assets, net was $9.5
million in 2020 compared to $3.7 million in 2019. The gain on disposition of
assets, net is generally comprised of gains or losses related to various
property and equipment dispositions or sales to customers of lost or damaged
rental equipment.

Other income (expense), net. Other income, net was $0.1 million in 2020 compared to other expense, net of $0.4 million in 2019.


Interest expense and interest income. Interest expense was $0.4 million in 2020
compared to $0.3 million in 2019. Interest expense in 2020 and 2019 principally
consists of fees on the unused portion of the credit facility. Interest income
decreased to $0.5 million in 2020 compared to $1.9 million in 2019 due to lower
interest rates earned on cash balances.

Income tax benefit.  Income tax benefit was $97.2 million in 2020, compared to
$26.0 million income tax benefit for the same period in 2019. The effective tax
rate was 31.4 percent for 2020 compared to a 23.0 percent effective tax rate for
2019. The effective tax rate in 2020 reflects the benefit of the CARES Act
allowing tax loss carrybacks including the beneficial revaluation of our 2019
net operating losses and the recording of our 2020 net operating losses both at
35 percent.

Net loss and diluted loss per share. Net loss was $212.2 million in 2020, or
$1.00 loss per diluted share, compared to net loss of $87.1 million in 2019, or
$0.41 earnings per diluted share. This increase in loss per share was due to
lower profitability as average shares outstanding was essentially unchanged.

Liquidity and Capital Resources

Cash and Cash Flows



The Company's cash and cash equivalents were $84.5 million as of December 31,
2020, $50.0 million as of December 31, 2019 and $116.3 million as of December
31, 2018.

The following table sets forth the historical cash flows for the years ended
December 31:


                                                          (in thousands)
                                                2020          2019           2018

Net cash provided by operating activities $ 77,958 $ 209,141 $

389,009

Net cash used for investing activities (42,659) (235,788) (219,727) Net cash used for financing activities

            (826)       (39,592)      (144,070)





Cash provided by operating activities for 2020 decreased by $131.2 million
compared to the prior year. This decrease is due primarily to an increase in net
loss of $125.1 million partially offset by favorable changes in working capital
during 2020, coupled with non-cash impairment charges of $211.0 million. The net
favorable change in working capital is due primarily to favorable changes of
$80.8 million in accounts receivable and $18.1 million in inventories, partially
offset by unfavorable changes of $9.1 million in accounts payable and $58.8
million in income taxes receivable/(payable), (net).

Cash used for investing activities for 2020 decreased by $193.1 million compared
to 2019, primarily because of a reduction in capital expenditures in response to
lower industry activity levels, coupled with an increase in proceeds from the
sale of assets.

Cash used for financing activities for 2020 decreased by $38.8 million primarily
as a result of lower dividends paid to common stockholders as well as lower cost
of repurchases of the Company's shares both on the open market and for taxes
related to the vesting of restricted shares. There were no dividends paid to
common stockholders in 2020.

                                       23

Financial Condition and Liquidity



The Company's financial condition as of December 31, 2020 remains strong. We
believe the liquidity provided by our existing cash and cash equivalents and our
overall strong capitalization will provide sufficient liquidity to meet our
requirements for at least the next twelve months. The Company's decisions about
the amount of cash to be used for investing and financing activities are
influenced by our capital position, and the expected amount of cash to be
provided by operations. RPC does not expect to need our revolving credit
facility to meet these liquidity requirements.

The Company currently has a $100 million revolving credit facility that matures
in October 2023, as recently amended. The facility contains customary terms and
conditions, including restrictions on indebtedness, dividend payments, business
combinations and other related items. On September 25, 2020, the Company further
amended the revolving credit facility. Among other matters, the amendment (1)
reduced the maximum amount available for borrowing from $125 million to $100
million, (2) decreased the minimum tangible net worth covenant level from not
less than $600 million to not less than $400 million, and (3) increased the
margin spreads and commitment fees payable by 37.5 and 5 basis points,
respectively, at each pricing level of the applicable rate without any changes
to the leverage ratios used to calculate such spreads. As of December 31, 2020,
RPC had no outstanding borrowings under the revolving credit facility, and
letters of credit outstanding relating to self-insurance programs and contract
bids totaled $19.8 million; therefore, a total of $80.2 million of the facility
was available. The Company was in compliance with the credit facility financial
covenants as of December 31, 2020. For additional information with respect to
RPC's facility, see Note 9 of the consolidated financial statements included in
this report and which is incorporated herein by reference.

Cash Requirements



Capital expenditures were $65.1 million in 2020, and we currently expect capital
expenditures to be approximately $56 million in 2021. We expect that a majority
of these expenditures in 2021 will be directed mostly towards capitalized
maintenance of our existing equipment, as well as upgrades of selected pressure
pumping equipment for dual-fuel capability. The actual amount of capital
expenditures will depend primarily on equipment maintenance requirements,
expansion opportunities, and equipment delivery schedules.

The Company has ongoing sales and use tax audits in various jurisdictions
subject to varying interpretations of statutes. The Company has recorded the
exposure from these audits to the extent issues are resolved or can be
reasonably estimated. There are issues that could result in unfavorable outcomes
that cannot be currently estimated.

The Company's Retirement Income Plan, a multiple employer trusteed defined
benefit pension plan, provides monthly benefits upon normal retirement at age 65
or early retirement at 591/2 to eligible employees. During, 2020, the Company
made a cash contribution of $4,450,000 to the plan but does not currently expect
to make any contributions to the plan during 2021.

As of December 31, 2020, the Company's stock buyback program authorizes the
aggregate repurchase of up to 41,578,125 shares, including an additional
10,000,000 shares authorized for repurchase by the Board of Directors on
February 12, 2018. No shares have been purchased on the open market during the
twelve months ended December 31, 2020, and 8,248,184 shares remain available to
be repurchased under the current authorization. The Company may repurchase
outstanding common shares periodically based on market conditions and our
capital allocation strategies considering restrictions under our credit
facility. The stock buyback program does not have a predetermined expiration
date.

                                       24



Contractual Obligations

The Company's obligations and commitments that require future payments include
our credit facility, certain non-cancelable operating leases, purchase
obligations and other long-term liabilities. The following table summarizes the
Company's significant contractual obligations as of December 31, 2020:


Contractual Obligations                                       Payments due by period
                                                       Less than       1-3         3-5        More than
(in thousands)                             Total       1 year         years       years       5 years
Long-term debt obligations                $      -    $         -    $      -    $      -    $         -

Interest on long-term debt obligations           -              -           -           -              -
Capital lease obligations                        -              -           -           -              -
Operating leases (1)                        32,647          9,911      11,024       5,308          6,404
Purchase obligations (2)                       229            229           -           -              -
Other long-term liabilities (3)                976            351         433         192              -
Total contractual obligations             $ 33,852    $    10,491    $ 11,457    $  5,500    $     6,404

(1) Operating leases include agreements for various office locations, office

equipment, and certain operating equipment.

Includes agreements to purchase raw materials, goods or services that have (2) been approved and that specify all significant terms (pricing, quantity, and

timing). As part of the normal course of business the Company occasionally

enters into purchase commitments to manage its various operating needs.

Includes expected cash payments for long-term liabilities reflected on the

balance sheet where the timing of the payments is known. These amounts (3) include incentive compensation, severance costs and estimated charges related

to disposal of impaired assets. Also includes amounts related to the usage of

corporate aircraft. These amounts exclude pension obligations with uncertain

funding requirements and deferred compensation liabilities.

Fair Value Measurements


The Company's assets and liabilities measured at fair value are classified in
the fair value hierarchy (Level 1, 2 or 3) based on the inputs used for
valuation. Assets and liabilities that are traded on an exchange with a quoted
price are classified as Level 1. Assets and liabilities that are valued using
significant observable inputs in addition to quoted market prices are classified
as Level 2. The Company currently has no assets or liabilities measured on a
recurring basis that are valued using unobservable inputs and therefore no
assets or liabilities measured on a recurring basis are classified as Level 3.
For defined benefit plan and Supplemental Executive Retirement Plan ("SERP")
investments measured at net asset value, the values are computed using inputs
such as cost, discounted future cash flows, independent appraisals and market
based comparable data or on net asset values calculated by the fund when not
publicly available.

Inflation

The Company purchases its equipment and materials from suppliers who provide
competitive prices, and employs skilled workers from competitive labor markets.
If inflation in the general economy increases, the Company's costs for
equipment, materials and labor could increase as well. In addition, increases in
activity in the domestic oilfield can cause upward wage pressures in the labor
markets from which it hires employees, especially if employment in the general
economy increases. Also, activity increases can cause increases in the costs of
certain materials and key equipment components used to provide services to the
Company's customers. Beginning in 2018, prices for the raw material comprising
the Company's single largest purchase began to decline due to increased sources
of supply of the material, particularly in geographic markets located close to
the largest U.S. oil and gas basin. In addition, labor costs declined throughout
2020 due to the significant decline in oilfield activity. However, during the
fourth quarter of 2020 and early in the first quarter of 2021, the price of
labor began to rise due to increasing oilfield activity and the departure of
skilled labor from the domestic oilfield industry during 2020. Also, the prices
of raw materials used in the Company's operations began to increase because many
suppliers of these materials ceased operations. During the first quarter of
2021, the Company is attempting to pass these price increases along to our
customers, but due to the competitive nature of the oilfield services business,
there is no assurance that these efforts will be successful.

Off Balance Sheet Arrangements

The Company does not have any material off balance sheet arrangements.



                                       25

Related Party Transactions

See "NOTE 14: RELATED PARTY TRANSACTIONS" of the consolidated financial statements, which is incorporated herein by reference, for a description of related party transactions.

Critical Accounting Policies



The consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which require significant
judgment by management in selecting the appropriate assumptions for calculating
accounting estimates. These judgments are based on our historical experience,
terms of existing contracts, trends in the industry, and information available
from other outside sources, as appropriate. Senior management has discussed the
development, selection and disclosure of its critical accounting policies
requiring significant judgements and estimates with the Audit Committee of our
Board of Directors. The Company believes the following critical accounting
policies involve estimates that require a higher degree of judgment and
complexity:

Credit loss allowance for accounts receivable - Substantially all of the
Company's receivables are due from oil and gas exploration and production
companies in the United States, selected international locations and foreign,
nationally owned oil companies. Our credit loss allowance is determined using a
combination of factors to ensure that our receivables are not overstated due to
uncollectibility. Our established credit evaluation procedures seek to minimize
the amount of business we conduct with higher risk customers. Our customers'
ability to pay is directly related to their ability to generate cash flow on
their projects and is significantly affected by the volatility in the price of
oil and natural gas. Credit loss allowance for accounts receivable are recorded
in selling, general and administrative expenses. Accounts are written off
against the allowance when the Company determines that amounts are uncollectible
and recoveries of amounts previously written off are recorded when collected.
Significant recoveries will generally reduce the required provision in the
period of recovery, thereby causing credit loss allowance to fluctuate
significantly from period to period. Recoveries were insignificant in 2020, 2019
and 2018. We record specific provisions when we become aware of a customer's
inability to meet its financial obligations, such as in the case of bankruptcy
filings or deterioration in the customer's operating results or financial
position. If circumstances related to a customer changes, our estimate of the
realizability of the receivable would be further adjusted, either upward or
downward.

The estimated credit loss allowance is based on our evaluation of the overall
trends in the oil and gas industry, financial condition of our customers, our
historical write-off experience, current economic conditions, and in the case of
international customers, our judgments about the economic and political
environment of the related country and region. In addition to reserves
established for specific customers, we establish general reserves by using
different percentages depending on the age of the receivables which we adjust
periodically based on management judgment and the economic strength of our
customers. The net credit loss allowance as a percentage of revenues ranged from
0.03 percent to 0.8 percent over the last three years. Increasing or decreasing
the estimated general reserve percentages by 0.50 percentage points as of
December 31, 2020 would have resulted in a change of $3.0 million in the
recorded provision for current expected credit losses.

Insurance expenses -The Company self-insures, up to certain policy-specified
limits, certain risks related to general liability, workers' compensation,
vehicle and equipment liability. The cost of claims under these self-insurance
programs is estimated and accrued using individual case-based valuations and
statistical analysis and is based upon judgment and historical experience;
however, the ultimate cost of many of these claims may not be known for several
years. These claims are monitored and the cost estimates are revised as
developments occur relating to such claims. The Company has retained an
independent third party actuary to assist in the calculation of a range of
exposure for these claims. As of December 31, 2020, the Company estimates the
range of exposure to be from $14.9 million to $20.1 million. The Company has
recorded liabilities at December 31, 2020 of $17.3 million which represents
management's best estimate of probable loss.

Long-lived assets including goodwill - RPC carries a variety of long-lived
assets on its balance sheet including property, plant and equipment and
goodwill. Impairment is the condition that exists when the carrying amount of a
long-lived asset exceeds its fair value. Goodwill is the excess of the cost of
an acquired entity over the net of the amounts assigned to assets acquired and
liabilities assumed. The Company conducts impairment tests on goodwill annually,
during the fourth quarter, or more frequently if events or changes in
circumstances indicate an impairment may exist. In addition, the Company
conducts impairment tests on long-lived assets, other than goodwill, whenever
events or changes in circumstances indicate that the carrying value may not be
recoverable.

For the impairment testing on long-lived assets, other than goodwill, a
long-lived asset is grouped at the lowest level for which identifiable cash
flows are largely independent of the cash flows of other assets and liabilities.
Estimated future undiscounted cash flows expected to result from the use and
eventual disposition of the asset group are compared to its carrying amount. If
the undiscounted cash flows are less than the asset group's carrying amount,
then the Company is required to determine the asset group's fair value by using
a discounted cash flow analysis. This analysis is based on estimates such as
management's short-term and long-term forecast of operating performance,
including revenue growth rates and expected profitability margins, estimates of
the remaining

                                       26




useful life and service potential of the assets within the asset group, and a
discount rate based on weighted average cost of capital. An impairment loss is
measured and recorded as the amount by which the asset group's carrying amount
exceeds its fair value. Assessment of goodwill impairment is conducted at the
level of each reporting unit, which is the same as our reportable segments,
Technical Services and Support Services, comparing the estimated fair value of
each reporting unit to the reporting unit's carrying value, including goodwill.
The fair value of each reporting unit is estimated using an income approach and
a market approach. The income approach uses discounted cash flow analysis based
on management's short-term and long-term forecast of operating performance. This
analysis includes significant assumptions regarding discount rates, revenue
growth rates, expected profitability margins, forecasted capital expenditures
and the timing of expected future cash flows based on market conditions. If the
estimated fair value of a reporting unit exceeds its carrying amount, goodwill
of the reporting unit is not considered impaired. If the carrying amount of a
reporting unit exceeds its estimated fair value, an impairment loss is measured
and recorded.

During the year ended December 31, 2020, the Company recorded an asset
impairment loss totaling $205.5 million related to its long-lived asset groups,
in response to the drastic decline in oilfield drilling and completion
activities. See Note 3 of the consolidated financial statements for additional
information which is incorporated herein by reference.

Defined benefit pension plan - In 2002, the Company ceased all future benefit
accruals under the defined benefit plan, although the Company remains obligated
to provide certain employees benefits earned through March 2002. The Company
accounts for the defined benefit plan in accordance with the provisions of
Financial Accounting Standards Board (FASB) ASC 715, "Compensation - Retirement
Benefits" and engages an outside actuary to assist management in calculating its
obligations and costs. With the assistance of the actuary, the Company evaluates
the significant assumptions used on a periodic basis including the estimated
future return on plan assets, the discount rate, and other factors, and adjusts
these liabilities as necessary.

The Company chooses an expected rate of return on plan assets based on
historical results for similar allocations among asset classes, the investments
strategy, and the views of our investment advisor. Differences between the
expected long-term return on plan assets and the actual return are amortized
over future years. Therefore, the net deferral of past asset gains (losses)
ultimately affects future pension expense. The Company's assumption for the
expected return on plan assets was four percent for 2020, seven percent for 2019
and seven percent for 2018.

The discount rate reflects the current rate at which the pension liabilities
could be effectively settled at the end of the year. In estimating this rate,
the Company utilizes a yield curve approach. The approach utilizes an economic
model whereby the Company's expected benefit payments over the life of the plan
are forecasted and then compared to a portfolio of investment grade corporate
bonds that will mature at the same time that the benefit payments are due in any
given year. The economic model then calculates the one discount rate to apply to
all benefit payments over the life of the plan which will result in the same
total lump sum as the payments from the corporate bonds. A lower discount rate
increases the present value of benefit obligations. The discount rate was 2.50
percent as of December 31, 2020, 3.60 percent as of December 31, 2019 and 4.65
percent in 2018.

As set forth in Note 13 to the Company's financial statements, included among
the asset categories for the Plan's investments are fixed income securities that
include corporate bonds, mortgage-backed securities, sovereign bonds, and U.S.
Treasuries. These investments are measured at net asset value and are valued
using significant non-observable inputs which do not have a readily determinable
fair value. These valuations are subject to judgments and assumptions of the
funds which may prove to be incorrect, resulting in risks of incorrect valuation
of these investments. The Company seeks to mitigate these risks by evaluating
the appropriateness of the funds' judgments and assumptions by reviewing the
financial data included in the funds' financial statements for reasonableness.

As of December 31, 2020, the defined benefit plan was over-funded and the
recorded change within accumulated other comprehensive loss increased
stockholders' equity by $0.9 million after tax. Holding all other factors
constant, a change in the discount rate used to measure plan liabilities by 0.25
percentage points would result in a pre-tax increase or decrease of $1.1 million
to the net loss related to pension reflected in accumulated other comprehensive
loss.

The Company recognized pre-tax pension expense (income) of $5.7 million in 2020,
$0.3 million in 2019 and $(0.2) million in 2018. Pension expense during 2020,
includes $3.5 million related to the lump-sum payments to certain participants
in the Company's Retirement Income Plan. Based on the over-funded status of the
defined benefit plan as of December 31, 2020, the Company expects to recognize
pension income of $356 thousand in 2021. Holding all other factors constant, a
change in the expected long-term rate of return on plan assets by 0.50
percentage points would result in an increase or decrease in pension expense of
$189 thousand in 2021. Holding all other factors constant, a change in the
discount rate used to measure plan liabilities by 0.25 percentage points would
result in an increase or decrease in pension expense of $21 thousand in 2021.

                                       27

Recent Accounting Pronouncements


See Note 1 of the consolidated financial statements, which is incorporated
herein by reference for a description of recent accounting standards, including
the expected dates of adoption and estimated effects on results of operations
and financial condition.

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