Ranger Energy Services, Inc. (Form: 10-Q, Received: 05/10/2018 07:06:39)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10‑Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-38183

RANGER ENERGY SERVICES, INC.

(Exact name of registrant as specified in its charter)

Delaware	81‑5449572
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

800 Gessner Street, Suite 1000

Houston, Texas 77024

(Address of principal executive offices) (Zip Code)

(713) 935‑8900

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒	(Do not check if a smaller reporting company)	Smaller reporting company ☐
Emerging growth company☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No ☒

As of May 1, 2018, the registrant had 8,900,792 shares of Class A common stock and 6,866,154 shares of Class B Common Stock outstanding.

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RANGER ENERGY SERVICES, INC.

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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Interim Condensed Consolidated Balance Sheets		2
Unaudited Interim Condensed Consolidated Statements of Operations		3
Unaudited Interim Condensed Consolidated Statements of Cash Flows		4
Notes to Unaudited Interim Condensed Consolidated Financial Statements		5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 3. Quantitative and Qualitative Disclosures About Market Risk		32
Item 4. Controls and Procedures		32

PART II – OTHER INFORMATION
Item 1. Legal Proceedings		33
Item 1A. Risk Factors		33
Item 6. Exhibits		33

SIGNATURES		35

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PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

RANGER ENERGY SERVICES, INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share amounts)


	March 31,		December 31,
	2018		2017
Assets
Current assets
Cash and cash equivalents	$	1.1	$	5.3
Accounts receivable, net		38.5		32.1
Unbilled revenues		5.2		6.0
Prepaid expenses and other current assets		6.5		5.7
Assets held for sale		0.6		0.6
Total current assets		51.9		49.7
Property, plant and equipment, net		199.9		189.2
Goodwill		—		9.0
Intangible assets, net		10.6		10.8
Other assets		0.1		1.0
Total assets	$	262.5	$	259.7

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	34.5	$	32.0
Accrued expenses		13.9		11.6
Capital lease obligations, current portion		1.3		8.0
Long-term debt, current portion		7.0		1.3
Total current liabilities		56.7		52.9
Capital lease obligations, less current portion		1.9		1.5
Long-term debt, less current portion		14.9		5.8
Other long-term liabilities		3.6		3.8
Total liabilities		77.1		64.0

Commitments and contingencies (Note 16)

Stockholders' equity
Preferred stock, $0.01 per share; 50,000,000 shares authorized, no shares issued or outstanding as of March 31, 2018 and December 31, 2017		—		—
Class A Common Stock, $0.01 par value, 100,000,000 shares authorized, 8,447,178 shares issued and outstanding as of March 31, 2018 and 8,413,178 shares issued and outstanding as of December 31, 2017		0.1		0.1
Class B Common Stock, $0.01 par value, 100,000,000 shares authorized, 6,866,154 shares issued and outstanding as of March 31, 2018 and December 31, 2017		0.1		0.1
Accumulated deficit		(12.5)		(6.6)
Additional paid-in capital		110.1		110.1
Total stockholders' equity		97.8		103.7
Non-controlling interest		87.6		92.0
Total stockholders' equity		185.4		195.7
Total liabilities and stockholders' equity	$	262.5	$	259.7

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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RANGER ENERGY SERVICES, INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)


	Three Months Ended
	March 31,
	2018		2017
Revenues
Well Services	$	59.7	$	27.3
Processing Solutions		2.9		1.8
Total revenues		62.6		29.1

Operating expenses
Cost of services (exclusive of depreciation and amortization shown separately):
Well Services		49.9		23.2
Processing Solutions		1.4		0.7
Total cost of services		51.3		23.9
General and administrative		7.0		7.3
Depreciation and amortization		6.1		3.6
Impairment of goodwill		9.0		—
Total operating expenses		73.4		34.8

Operating loss		(10.8)		(5.7)

Other expenses
Interest expense, net		(0.4)		(0.5)
Total other expenses		(0.4)		(0.5)
Loss before income tax expense		(11.2)		(6.2)
Tax benefit		0.9		—
Net loss		(10.3)		(6.2)
Less: Net loss attributable to the Predecessor		—		(6.2)
Less: Net loss attributable to non-controlling interests		(4.6)		—
Net loss attributable to Ranger Energy Services, Inc.		(5.7)		—

Loss per common share
Basic	$	(0.68)		—
Diluted	$	(0.68)		—
Weighted average common shares outstanding
Basic		8,423,445		—
Diluted		8,423,445		—

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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RANGER ENERGY SERVICES, INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)


	Three months ended
	March 31,
	2018		2017
Cash Flows from Operating Activities
Net loss	$	(10.3)	$	(6.2)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		6.1		3.6
Bad debt expense		0.1		0.1
Impairment of goodwill		9.0		—
Equity based compensation		0.2		0.4
Loss on sale of property, plant and equipment		0.7		—
Changes in operating assets and liabilities, net of effect of acquisitions
Accounts receivable		(6.5)		(7.2)
Unbilled revenue		0.7		(0.5)
Prepaid expenses and other current assets		(0.8)		(0.1)
Other assets		0.1		(0.8)
Accounts payable		(1.2)		1.9
Accounts payable - related party		—		(2.4)
Accrued expenses		1.0		4.5
Other long-term liabilities		(0.2)		(0.1)
Net cash used in operating activities		(1.1)		(6.8)

Cash Flows from Investing Activities
Purchase of property, plant and equipment		(8.2)		(7.3)
Proceeds from sale of property, plant and equipment		1.2		—
Acquisitions, net of cash received		(4.0)		—
Net cash used in investing activities		(11.0)		(7.3)

Cash Flows from Financing Activities
Borrowings under line of credit agreement		15.6		—
Payments on long-term debt		—		(0.8)
Borrowings on related party debt		—		11.2
Principal payments on capital lease obligations		(7.7)		(0.1)
Contributions from parent		—		4.0
Restricted cash		—		0.2
Net cash provided by financing activities		7.9		14.5

(Decrease) Increase in Cash and Cash equivalents		(4.2)		0.4
Cash and Cash Equivalents, Beginning of Year		5.3		1.6
Cash and Cash Equivalents, End of Year	$	1.1	$	2.0

Supplemental Cash Flows Information
Interest paid	$	(0.2)	$	(0.5)
Supplemental Disclosure of Noncash Investing and Financing Activity
Non-cash capital expenditures	$	(5.0)	$	(4.5)
Non-cash additions to fixed assets through capital lease financing	$	(1.3)	$	(7.1)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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RANGER ENERGY SERVICES, INC.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND BUSINESS OPERATION S

Organization

Ranger Energy Services, LLC (“Ranger Services”) was, through Ranger Energy Holdings, LLC (“Ranger Holdings”), formed by CSL Capital Management, LLC (“CSL”) in June 2014 as a provider of high‑spec well service rigs and associated services. Torrent Energy Services, LLC (“Torrent Services” and together with Ranger Services, the “Predecessor Companies”) was, through Torrent Energy Holdings, LLC (“Torrent Holdings”), acquired by CSL in September 2014 as a provider of proprietary, modular equipment for the processing of natural gas. In June 2016, CSL indirectly acquired substantially all of the assets of Magna Energy Services, LLC (“Magna”), a provider of well services and wireline services, which it contributed to Ranger Services in September 2016. In October 2016, Ranger Services acquired substantially all of the assets of Bayou Workover Services, LLC (“Bayou”), an owner and operator of high‑spec well service rigs. These condensed consolidated financial statements included in this quarterly report present (i) prior to August 16, 2017, the historical financial information of Ranger Services, Torrent Services, Magna and Bayou (collectively, the “Predecessor”), and (ii) subsequent to August 16, 2017, the historical information of Ranger Energy Services, Inc. (“Ranger” or the “Company”).

Ranger was incorporated as a Delaware corporation in February 2017. In conjunction with Ranger’s initial public offering (the “Offering”) of class A common stock, par value $0.01 per share (“Class A Common Stock”), which closed on August 16, 2017 and the corporate reorganization described below, Ranger is a holding company, the sole material assets of which consist of membership interests in RNGR Energy Services, LLC a Delaware limited liability company (“Ranger LLC”). Ranger LLC owns all of the outstanding equity interests in Ranger Services and Torrent Services, the subsidiaries through which it operates its assets. Through the consummation of the corporate reorganization, Ranger LLC is the sole managing member of Ranger Services and Torrent Services, and is responsible for all operational, management and administrative decisions relating to Ranger Services and Torrent Services’ business and consolidates the financial results of Ranger Services and Torrent Services and their subsidiaries.

Reorganization

On August 10, 2017, Ranger Services, entered into a Master Reorganization Agreement (the “Master Reorganization Agreement”) with, among others, Ranger LLC, Ranger Holdings, Ranger Energy Holdings II, LLC, a Delaware limited liability company (“Ranger Holdings II”), Torrent Holdings, and Torrent Energy Holdings II, LLC, a Delaware limited liability company (“Torrent Holdings II” and, together with Ranger Holdings, Ranger Holdings II and Torrent Holdings, the “Existing Owners”).

Subject to the terms and conditions set forth in the Master Reorganization Agreement, the parties thereto effected a series of restructuring transactions in connection with the Offering of Class A Common Stock, as a result of which:

(i) Ranger Holdings II and Torrent Holdings II contributed certain of the equity interests in the Predecessor Companies, respectively, to the Company in exchange for an aggregate of 1,683,386 shares of Class A Common Stock and an aggregate of $3.0 million to be paid to CSL Energy Holdings I, LLC, a Delaware limited liability company, and CSL Energy Holdings II, LLC, a Delaware limited liability company, on or prior to the 18-month anniversary of the consummation of the Offering in, at the Company’s option, cash, shares of Class A Common Stock (with such shares to be valued based on the greater of the initial public offering price of the Class A Common Stock in the Offering and a 30-day volume-weighted average price) or a combination thereof, and the Company contributed such equity interests to Ranger LLC in exchange for 1,638,386 units in Ranger LLC (“Ranger Units”);

(ii) Ranger Holdings and Torrent Holdings contributed the remaining membership interests in the Predecessor Companies to Ranger LLC in exchange for 5,621,491 units in Ranger Units and 5,621,491 shares of the Company’s Class B Common Stock, par value $0.01 per share (“Class B Common Stock” and together with the Class A Common Stock, “Common Stock”), which the Company initially issued and contributed to Ranger LLC;

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(iii) the Company contributed all of the net proceeds received by it in the Offering to Ranger LLC in exchange for 5,862,069 Ranger Units;

(iv) Ranger LLC distributed to each of Ranger Holdings and Torrent Holdings one share of Class B Common Stock received pursuant to (ii) above for each Ranger Unit such Existing Owner held; and

(v) as consideration for the termination of certain loan agreements, the Company issued 567,895 shares of Class A Common Stock (in connection with which Ranger LLC issued 567,895 Ranger Units to the Company) and Ranger LLC issued an aggregate of 1,244,663 Ranger Units (and distributed a corresponding number of shares of Class B Common Stock) to the lenders thereof.

The foregoing transactions were undertaken in reliance on an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof. As a result of these transactions, Ranger LLC became a subsidiary of the Company and the Predecessor Companies became wholly owned subsidiaries of Ranger LLC.

Initial Public Offering

On August 16, 2017, the Company completed the Offering of 5,862,069 shares of its Class A Common Stock. The gross proceeds of the Offering to the Company, based on a public offering price of $14.50 per share, were $85.0 million, which resulted in net proceeds to the Company of $77.0 million, after deducting $4.2 million of underwriting discounts and commissions and $3.9 million of costs related to the Offering. These net proceeds were used to pay off the remainder of its long term debt of $10.4 million, fund $45.2 million for the cash portion of the ESCO Acquisition and pay $0.7 million for cash bonuses to certain employees. The remaining $20.7 million of net proceeds were used to fund capital expenditures and general business expenses.

Business

The Company is one of the largest providers of high‑spec well service rigs and associated services in the United States, with a focus on technically demanding unconventional horizontal well completion and production operations. The Company’s high‑spec well service rigs facilitate operations throughout the lifecycle of a well, including (i) well completion support, such as milling out composite plugs used during hydraulic fracturing; (ii) workover, including retrieval and replacement of existing production tubing; (iii) well maintenance, including replacement of downhole artificial lift components; and (iv) decommissioning, such as plugging and abandonment operations. The Company also provides rental equipment, including well control packages, hydraulic catwalks and other equipment that are often deployed with its well service rigs. In addition to its core well service rig operations, the Company offers a suite of complementary services, including wireline, snubbing, well testing, fluid management and well service-related equipment rentals. In addition, the Company owns and operates a fleet of proprietary, modular natural gas processing equipment that processes rich natural gas streams at the wellhead or central gathering points. The Company has operations in most of the active oil and natural gas basins in the United States, including the Permian Basin, the Denver‑Julesburg Basin, the Bakken Shale, the Eagle Ford Shale, the Haynesville Shale, the Gulf Coast and the SCOOP and STACK plays.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The condensed balance sheet as of December 31, 2017 has been derived from audited financial statements, and the unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and the Securities and Exchange Commission’s (the “SEC”) instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly certain notes and other information have been condensed or omitted. The unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the results of operations for the interim periods. These interim financial statements, should be read in conjunction with the consolidated financial statements and related notes for the years ended December 31, 2017 and 2016, included in the Annual Report filed on Form 10-K for the year ended December 31, 2017 (the “Annual Report”) filed with the SEC on

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March 13, 2018. Interim results for the periods presented may not be indicative of results that will be realized for future periods.

Financial statements for periods prior to the Offering on August 16, 2017, represent the combined consolidated financial statements of the Predecessor. Financial statements for periods subsequent to the Offering reflect the consolidated financial statements of the Company.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in Note 2 of the consolidated financial statements for the years ended December 31, 2017 and 2016 included in the Annual Report filed with the SEC on March 13, 2018. There have been no changes in such policies or the application of such policies during the three months ended March 31, 2018 except as discussed in Note 3 – Revenue from Contracts with Customers.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management uses historical and other pertinent information to determine these estimates. Actual results could differ from such estimates. Areas where critical accounting estimates are made by management include:

Depreciation and amortization of property, plant and equipment and intangible assets;

Impairment of property, plant and equipment, goodwill and intangible assets;

Allowance for doubtful accounts;

Fair value of assets acquired and liabilities assumed in an acquisition; and

Equity‑based compensation.

Emerging Growth Company status

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The Company will remain an emerging growth company until the earlier of (1) the last day of its fiscal year (a) following the fifth anniversary of the completion of the Offering, (b) in which its total annual gross revenue of at least $1.07 billion, or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of the Company’s common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of its most recently completed second fiscal quarter, and (2) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. The Company has irrevocably opted out of the extended transition period and, as a result, the Company will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

New Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016‑02, Leases, amending the current accounting for leases. Under the new provisions, all lessees will report a right‑of‑use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. All other leases will fall into one of two categories: (i) a financing lease or (ii) an operating lease. Lessor accounting remains substantially unchanged with the exception that no leases entered into after the effective date will be classified as leveraged leases. For sale leaseback transactions, a sale will only be recognized if the criteria in the new revenue recognition standard are met. ASU 2016‑02 is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period, using a modified retrospective approach. Early adoption is permitted. The Company is in the initial stages of evaluating the effect of the standard on the consolidated financial statements.

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In June 2016, the FASB issued ASU 2016‑13, Financial Instruments—Credit Losses . The amendments in ASU 2016‑13 require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. In addition, ASU 2016‑13 amends the accounting for credit losses on available‑for‑sale debt securities and purchased financial assets with credit deterioration. The amendment is effective for public entities for annual reporting periods beginning after December 15, 2019, however early application is permitted for reporting periods beginning after December 15, 2018. The Company doesn’t expect this to have a material impact to its consolidated financial statements.

In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments . ASU 2016‑15 reduces diversity in practice in how certain transactions are classified in the statement of cash flows. The guidance addresses specific cash flow issues for which current GAAP is either unclear or does not include specific guidance. ASU 2016‑15 is effective for annual and interim periods beginning after December 15, 2017. The Company adopted the new guidance on the effective date of January 1, 2018 and noted no material impact on the consolidated financial statements of cash flows.

In January 2017, the FASB issued ASU 2017‑04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . ASU 2017‑04 eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The ASU is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. The Company adopted for our annual and interim goodwill impairment testing as of January 1, 2018. The ASU impacted how the Company tests goodwill for impairment as it eliminates the second step of the goodwill impairment test thus effectively calculating impairment loss based on the difference between the carrying value and estimated fair value of the reporting units.

NOTE 3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Effective January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective method. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaborative arrangements and financial instruments. Under ASC 606, an entity recognizes revenue when it transfers control of the promised goods or services to its customer, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. If control transfers to the customer over time, an entity selects a method to measure progress that is consistent with the objective of depicting its performance. The provisions of ASC 606 were applied to contracts not completed at January 1, 2018. There was no impact upon adoption of ASC 606. As a result no disclosure of the impact for each financial statement line items is applicable.

In determining the appropriate amount of revenue to be recognized as the Company fulfills the obligations under the its contracts with customers, the following steps must be performed at contract inception: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Well Services segment consists primarily of maintenance services, workover services, completion services and plugging and abandonment services. These services are based on mutually agreed upon pricing with the customer prior to the services being performed, and given the nature of the services, do not include any warranty and right of return. Pricing for these services are by the hour or by the day when services are performed and are based on the nature of the specific job, with consideration for the extent of equipment, labor, and consumables needed for the job. Accordingly, the hourly and daily pricing is considered to be variable consideration.

The Processing Solutions segment consists primarily of equipment rentals, operations and maintenance services and mobilization services. These services are based on mutually agreed upon pricing with the customer prior to the services being performed, and given the nature of the services, do not include any warranty and right of return. Pricing for equipment rentals is based on fixed monthly service fees whereas pricing for operations and maintenance services and mobilization services are by the hour or by the day when services are performed and are based on the nature of the specific job, with consideration for the extent of equipment, labor, and consumables needed for the job. Accordingly, the hourly and daily pricing is considered to be variable consideration.

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We satisfy our performance obligation over time as the services are performed. The Company believes the output method is a reasonable measure of progress for the satisfaction of our performance obligations, which are satisfied over time, as it provides a faithful depiction of (1) our performance toward complete satisfaction of the performance obligation under the contract and (2) the value transferred to the customer of the services performed under the contract. The Company has elected the right to invoice practical expedient for recognizing revenue. The Company invoices customers upon completion of the specified services and collection generally occurs within the payment terms agreed with customers. Accordingly, there is no financing component to our arrangements with customers.

Taxes assessed on well services and processing solutions revenue transactions are presented on a net basis included within the consolidated statements of operations and therefore are excluded from revenues.

Disaggregated Revenue

The following table summarizes our disaggregated revenues for the three months ended March 31, 2018 and 2017 (in millions):


	March 31,		March 31,
	2018		2017

Well Services revenue
Workover rigs revenue	$	37.6	$	21.8
Other well services revenue		22.1		5.5
Total Well Services revenue		59.7		27.3
Processing Solutions revenue		2.9		1.8
Total Revenue	$	62.6	$	29.1

Contract Balances

Contract assets representing the Company’s rights to consideration for work completed but not billed amounted to $5.2 million as of March 31, 2018 and $6.0 million as of December 31, 2017, respectively. Substantially all of the unbilled trade receivables as of December 31, 2017 were invoiced during the three months ended March 31, 2018.

The Company does not have any contract liabilities included in the consolidated balance sheet as of March 31, 2018 and December 31, 2017.

NOTE 4. ACQUISITIONS

ESCO Acquisition

On August 16, 2017, Ranger LLC acquired 49 high-spec well service rigs, certain ancillary equipment and certain of its liabilities (the “ESCO Acquisition”). In connection with the closing of the Offering on August 16, 2017, the Company closed on the ESCO Acquisition for total consideration of $59.7 million, consisting of $47.7 million in cash, $7.0 million in secured seller notes and $5.0 million in shares of Ranger’s Class A Common Stock based on the initial public offering price of $14.50 per share.

The ESCO Acquisition assets were primarily engaged in the completion, repair and workover of oil and gas wells for its customers. The ESCO Acquisition is being accounted for as a business combination. Goodwill is recorded in conjunction with the ESCO Acquisition as the total purchase consideration exceeded the approximated fair value of assets acquired and liabilities assumed.

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The following information below represents the purchase price allocation related to the ESCO Acquisition (in millions):


Purchase price
Cash	$	47.7
Seller's notes		7.0
Equity issued		5.0
Total purchase price	$	59.7
Purchase price allocation
Accounts receivable	$	6.6
Property, plant and equipment		45.9
Intangible assets		2.2
Other assets		0.3
Total assets acquired		55.0
Accounts payable		(0.5)
Accrued expenses		(2.2)
Total liabilities assumed		(2.7)
Goodwill		7.4
Allocated purchase price	$	59.7

The following is supplemental pro-forma revenue, operating loss, and net loss had the ESCO Acquisition occurred as of January 1, 2017. (in millions):


	Three Months Ended March 31,
	2018			2017
Supplemental Pro Forma:
Revenue		$	62.6		$	38.2
Operating Loss		$	(10.8)		$	(7.5)
Net Loss		$	(10.3)		$	(8.0)

The supplemental pro forma revenue, operating loss, and net loss are presented for informational purposes only and may not necessarily reflect the future results of operations of the Company or what the results of operations would have been had the Company owned and operated the ESCO Acquisition assets since January 1, 2017.

The Company reported revenue during the three months ended March 31, 2018 that included $9.6 million generated from the assets acquired in connection with the ESCO Acquisition.

MVCI Acquisition

On January 31, 2018, the Company closed on the acquisition of MVCI Energy Services (“MVCI Acquisition”) for total consideration of $4.0 million in cash. The MVCI Acquisition assets were primarily engaged in well testing services for its customers. The MVCI Acquisition is being accounted for as a business combination. The Company is currently in the process of evaluating the preliminary purchase allocation. The Pro forma results of operations for the MVCI Acquisition is not presented because the pro forma effects, individually and in the aggregate, are not material to the Company’s consolidated results of operations.

NOTE 5. ASSETS HELD FOR SALE

The Company has decided to market and sell non‑core rental fleet assets. The units consist of wedge units which are classified as held for sale due to the fact that they are specifically identified, and management has a plan for their sale in their present condition to occur in the next year. The wedge units are recorded on the consolidated financial statement with a balance of $0.6 million and are classified as held for sale. The available for sale assets are recorded at the units’ carrying amount, which approximates fair value less costs to sell, and are no longer depreciated.

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NOTE 6. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment include the following (in millions):


	Estimated
	Useful Life	March 31,		December 31,
	(years)	2018		2017
Machinery and equipment	5 - 30	$	3.7	$	3.7
Vehicles	3 - 5		2.7		2.6
Mechanical refrigeration units	30		17.2		17.1
NGL storage tanks	15		4.3		4.3
Workover rigs	5 - 20		188.7		174.9
Other property, plant and equipment	3 - 30		14.1		12.0
Property, plant and equipment			230.7		214.6
Less: accumulated depreciation			(30.8)		(25.4)
Property, plant and equipment, net		$	199.9	$	189.2

Depreciation expense was $5.9 million and $3.5 million for the three months ended March 31, 2018 and 2017, respectively.

NOTE 7. GOODWILL AND INTANGIBLE ASSETS

Goodwill was $9.0 million as of December 31, 2017. During the three months ended March 31, 2018 the Company identified a triggering event as it relates to goodwill as a result of a sustained decrease in stock price of the Company. As a result, the Company performed a quantitative impairment test which yielded an impairment charge. The Company recorded an impairment of goodwill of $9.0 million. As of March 31, 2018 there is no goodwill on the Company's consolidated balance sheet.

During the quarter ended March 31, 2018, the Company had nonrecurring fair value measurements related to the impairment of goodwill. The fair values were determined through the use of a blended market and income approach, which represent Level 3 measurements within the fair value hierarchy.

Definite lived intangible assets are comprised of the following (in millions):


	Estimated
	Useful Life	March 31,		December 31,
	(years)	2018		2017
Tradenames	3	$	0.1	$	0.1
Customer relationships	10 - 18		11.4		11.4
Less: accumulated amortization			(0.9)		(0.7)
Intangible assets, net		$	10.6	$	10.8

Amortization expense was $0.2 and $0.1 million for the three months ended March 31, 2018 and 2017, respectively. Amortization expense for the future periods is expected to be as follows (in millions):


For the period ending March 31,	Amount
2018	$	0.6
2019		0.8
2020		0.7
2021		0.7
2022		0.7
Thereafter		7.1
	$	10.6

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comparing the carrying value of its long-lived assets to the estimating future undiscounted cash flows of their reporting units and concluded they were not impaired.

NOTE 8. ACCRUED EXPENSES

Accrued expenses include the following (in millions):


	March 31,		December 31,
	2018		2017
Accrued payables	$	6.6	$	4.8
Accrued payroll		4.9		2.9
Accrued taxes		1.3		1.4
Accrued insurance		1.1		2.5
Accrued expenses	$	13.9	$	11.6

NOTE 9. CAPITAL LEASES

The Company leases certain assets under capital leases which expire at various dates through 2022. The assets and liabilities under capital leases are recorded at the lower of present value of the minimum lease payments or the fair value of the assets. The assets are amortized over the shorter of the estimated useful lives or over the lease term. Amortization expense of assets under capital leases was $0.4 million and $0.2 million for the three months ended March 31, 2018 and 2017, respectively.

Aggregate future minimum lease payments under capital leases are as follows (in millions):


For the period ending March 31,	Total
2018	$	1.3
2019		1.3
2020		1.0
2021		0.1
2022		—
Total future minimum lease payments		3.7
Less: amount representing interest		(0.5)
Present value of future minimum lease payments		3.2
Less: current portion of capital lease obligations		(1.3)
Total capital lease obligations, less current portion	$	1.9

NOTE 10. LONG‑TERM DEBT

Long‑term debt consists of the following (in millions):


	March 31,		December 31,
	2018		2017
Other long-term debt	$	7.0	$	7.0
Revolver		14.9		0.1
Current portion of long-term debt		(7.0)		(1.3)
Long term-debt, less current portion	$	14.9	$	5.8

In connection with the Offering and the ESCO Acquisition the Company issued $7.0 million of seller’s notes as partial consideration for the ESCO Acquisition. These notes include a note for $1.2 million due on August 16, 2018 and a note for $5.8 million due on February 16, 2019. Both of these notes bear interest at 5.0% payable quarterly until their respective maturity dates.

On August 16, 2017, in connection with the Offering, Ranger entered into a $50.0 million senior revolving credit facility (the “Credit Facility”)by and among certain of Ranger’s subsidiaries, as borrowers, each of the lenders

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party thereto and Wells Fargo Bank, N.A., as administrative agent (the “Administrative Agent”). The Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the value of the Company’s eligible accounts receivable less certain reserves.

The Credit Facility permits extensions of credit up to the lesser of $50.0 million and a borrowing base that is determined by calculating the amount equal to the sum of (i) 85% of the Eligible Accounts (as defined in the Credit Facility), less the amount, if any, of the Dilution Reserve (as defined in the Credit Facility), minus (ii) the aggregate amount of Reserves (as defined in the Credit Facility), if any, established by the Administrative Agent from time to time pursuant to the Credit Facility. The borrowing base is calculated on a monthly basis pursuant to a borrowing base certificate delivered by the Company to the Administrative Agent.

Borrowings under the Credit Facility bear interest, at the Company’s election, at either the (a) one-, two-, three- or six-month LIBOR or (b) the greatest of (i) the federal funds rate plus ½%, (ii) the one-month LIBOR plus 1% and (iii) the Administrative Agent’s prime rate (the “Base Rate”), in each case plus an applicable margin, and interest shall be payable monthly in arrears. The applicable margin for LIBOR loans ranges from 1.50% to 2.00% and the applicable margin for Base Rate loans ranges from 0.50% to 1.00%, in each case, depending on the Company’s average excess availability under the Credit Facility. The applicable margin for LIBOR loans are 1.50% and the applicable margin for Base Rate loans are 0.50% until August 31, 2018. During the continuance of a bankruptcy event of default, automatically and during the continuance of any other default, upon the Administrative Agent’s or the required lenders’ election, all outstanding amounts under the Credit Facility bears interest at 2.00% plus the otherwise applicable interest rate. The Credit Facility is scheduled to mature on August 16, 2022.

In addition, the Credit Facility restricts the Company’s ability to make distributions on, or redeem or repurchase, its equity interests, except for certain distributions, including distributions of cash so long as, both at the time of the distribution and after giving effect to the distribution, no default exists under the Credit Facility and either (a) excess availability at all times during the preceding 90 consecutive days, on a pro forma basis and after giving effect to such distribution, is not less than the greater of (1) 22.5% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (2) $10.0 million or (b) if the fixed charge coverage ratio is at least 1.0x on a pro forma basis, excess availability at all times during the preceding 90 consecutive days, on a pro forma basis and after giving effect to such distribution, is not less than the greater of (1) 17.5% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (2) $7.0 million. If the foregoing threshold under clause (b) is met, the Company may not make such distributions (but may make certain other distributions, including under clause (a) above) prior to the earlier of the date that is (a) 12 months from closing or (b) the date that the Company’s fixed charge coverage ratio is at least 1.0x for two consecutive quarters. The Credit Facility generally permits the Company to make distributions required under the Tax Receivable Agreement, but a ‘‘Change of Control’’ under the Tax Receivable Agreement constitutes an event of default under the Credit Facility, and the Credit Facility does not permit the Company to make payments under the Tax Receivable Agreement upon acceleration of its obligations thereunder unless no event of default exists or would result therefrom and the Company has been in compliance with the fixed charge coverage ratio for the most recent 12-month period on a pro forma basis. The Credit Facility also requires the Company to maintain a fixed charge coverage ratio of at least 1.0x if the Company’s liquidity is less than $10.0 million until the Company’s liquidity is at least $10.0 million for 30 consecutive days. The Company is not be subject to a fixed charge coverage ratio if it has no drawings under the Credit Facility and has at least $20.0 million of qualified cash.

The Credit Facility contains events of default customary for facilities of this nature, including, but not limited, to:

events of default resulting from the Company’s failure or the failure of any guarantors to comply with covenants and financial ratios;

the occurrence of a change of control;

the institution of insolvency or similar proceedings against the Company or any guarantor; and

the occurrence of a default under any other material indebtedness the Company or any guarantor may have.

Upon the occurrence and during the continuation of an event of default, subject to the terms and conditions of the Credit Facility, the lenders are able to declare any outstanding principal of the Credit Facility debt, together with accrued and unpaid interest, to be immediately due and payable and exercise other remedies.

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As of March 31, 2018, the Company has borrowed $15.6 million under the Credit Facility. The Company has a total borrowing capacity of approximately $31.7 million under the Credit Facility, with approximately $16.1 available as of March 31, 2018. The Company is in compliance with the Credit Facility covenants as of March 31, 2018.

The Company capitalized fees of $0.7 million associated with the Credit Facility described above, which are included on the unaudited interim condensed consolidated balance sheets as a discount to the long term debt, and will amortize these fees over the life of the Credit Facility. Unamortized debt issuance costs as of March 31, 2018 totals $0.7 million.

NOTE 11. RISK CONCENTRATIONS

Customer Concentrations

For the three months ended March 31, 2018, two customers (EOG Resources and PDC Energy—Well Services segment) accounted for approximately 21% and 7%, respectively, of the Company’s total revenues. At March 31, 2018, approximately 23% of the accounts receivable balance was due from these customers.

For the three months ended March 31, 2017, two customers (EOG Resources and PDC Energy—Well Services segment) accounted for approximately 16% and 25%, respectively, of the Company’s total revenues. At March 31, 2017, approximately 23% of the accounts receivable balance was due from these customers.

NOTE 12. EQUITY BASED COMPENSATION AND PROFIT INTERESTS AWARDS

Long-term Incentive Plan

On August 10, 2017, the board of directors adopted the Ranger Energy Services, Inc. 2017 Long-term Incentive Plan (“LTIP”) for the employees, consultants and the directors of the Company and its affiliates who perform services for the Company. The LTIP provides for potential grants of: (i) incentive stock options qualified as such under U.S. federal income tax laws; (ii) nonstatutory stock options that do not qualify as incentive stock options; (iii) stock appreciation rights; (iv) restricted stock awards; (v) restricted stock units; (vi) bonus stock; (vii) performance awards; (viii) dividend equivalents; (ix) other stock-based awards; (x) cash awards; and (xi) substitute awards. Subject to adjustment in accordance with the terms of the LTIP, 1,250,000 shares of Class A Common Stock have been reserved for issuance pursuant to awards under the LTIP. Class A Common Stock withheld to satisfy exercise prices or tax withholding obligations will be available for delivery pursuant to other awards. The LTIP will be administered by the board of directors or an alternative committee appointed by the board of directors. As of March 31, 2018 there have been 34,000 restricted shares granted under the LTIP.

During the three months ended March 31, 2018 there were 24,000 restricted shares issued. The total value at grant date was $0.2 million. During the three months ended March 31, 2018, there was less than $10,000 of amortization and $ 0.3 million of unrecognized expense.

The following table summarizes the changes in the restricted shares outstanding for the three months ended March 31, 2018:


		Weighted Average		Weighted Average
		Grant Date		Remaining
	Shares	Fair Value		Vesting Period
Outstanding at December 31, 2017	10,000		9.43	2.7 years
Granted	24,000		8.14	3.0 years
Outstanding at March 31, 2018	34,000	$	8.52	2.9 years

Well Services

The Well Services segment was 100% owned by Ranger Holdings and Ranger Services’ equity was represented by a single share class. Ranger Holdings has issued Class C and Class D units to certain key employees of Ranger

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Services as remuneration for employee services that were originally intended, at grant, to be “profit interests” with no voting rights. Certain of the units vest 33% per year over a three‑year service period and may be forfeited or repurchased by Ranger Holdings under certain circumstances as set forth in the Ranger Holdings limited liability company agreement and the individual Class C and Class D unit grant agreements. The “vesting units” are deemed equity and are measured at fair value using an option pricing model at each grant date with compensation expense recognized on a straight‑line basis over the requisite service period.

Certain of the Class C and Class D units that were granted are liability‑classified awards as they do not fully vest until a defined change of control event. The Company has not recognized a liability or recognized any compensation expense for these liability‑classified awards in the accompanying unaudited condensed consolidated financial statements since the change of control event is not probable and estimable. These units will trigger no compensation expense until amounts payable under such awards become probable and estimable.

During the three months ended March 31, 2018 and 2017, the Company recognized compensation expense of $0.2 million and $0.3 million, respectively. The total unrecognized compensation cost related to unvested awards at March 31, 2018 is $1.0 million and is expected to be recognized over the next two years.

Processing Solutions

The Processing Solutions segment was 100% owned by Torrent Holdings and Torrent Services’ equity was represented by a single share class. Torrent Holdings has issued Class B and Class C units to certain key employees of Torrent as remuneration for employee services that were originally intended, at grant, to be “profit interests” with no voting rights. Class B units have a three‑year vesting period at 25% per year, with the remaining 25% vesting upon certain events occurring. Torrent Holdings also issued Class C awards, which were fully vested at grant date when issued in 2014. Class B and Class C units are deemed to be equity‑classified.

The grant date fair value for the Class B and Class C unit awards were $0.3 million and $0.1 million, respectively. Compensation expense is recognized on a straight‑line basis over the requisite service period. During the three months ended March 31, 2018 and 2017, the Company recognized compensation expense of less than $0.1 million. The total unrecognized compensation cost related to unvested awards at March 31, 2018 is less than $0.1 million and is expected to be recognized in 2018.

NOTE 13. INCOME TAXES

The Company is a corporation and is subject to U.S. federal income tax. The tax implications of the Offering and the Company’s concurrent corporate reorganization, and the tax impact of the Company’s status as a taxable corporation subject to U.S. federal income tax have been reflected in the accompanying condensed consolidated financial statements. The effective U.S. federal income tax rate applicable to the Company for the three months ended March 31, 2018 and 2017 was 7.7% and 0.0%, respec tively . Total income tax expense for the three months ended March 31, 2018 differed from amounts computed by applying the U.S. federal statutory tax rate of 21% due primarily to state taxes and changes in the valuation allowance recorded against deferred tax assets. The Company is subject to the Texas Margin Tax that requires tax payments at a maximum statutory effective rate of 0.75% on the taxable margin of each taxable entity that does business in Texas.

As a result of the Offering and subsequent reorganization, the Company recorded a deferred tax asset; however, a full valuation allowance has been recorded to reduce the Company’s net deferred tax assets to an amount that is more likely than not to be realized and is based upon the uncertainty of the realization of certain federal and state deferred tax assets related to net operating loss carryforwards and other tax attributes.

NOTE 14. NON-CONTROLLING INTERESTS

The Company has ownership interests in Ranger LLC, which is consolidated within the Company’s financial statements but is not wholly owned by the Company. During the three months ended March 31, 2018, the Company reports a non-controlling interest representing the Ranger Units. Changes in the Company’s ownership interest in Ranger LLC while it retains its controlling interest are accounted for as equity transactions.

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NOTE 15. LOSS PER SHARE

Loss per share is based on the amount of loss allocated to the shareholders and the weighted average number of shares outstanding during the period for each class of common stock.

Losses related to periods prior to the reorganization and the Offering are attributable to the Predecessor. The following table presents the Company’s calculation of basic and diluted loss per share for the three months ended March 31, 2018 (dollars in millions, except share and per share amounts):


	Three Months Ended
	March 31,
	2018
Loss (numerator):
Basic:
Net loss attributable to Ranger Energy Services, Inc.	$	(5.7)
Less: Net loss attributable to Class B Common Stock		—
Net loss attributable to Class A Common Stock		(5.7)

Diluted:
Net loss attributable to Ranger Energy Services, Inc.	$	(5.7)
Less: Net loss attributable to Class B Common Stock		—
Net loss attributable to Class A Common Stock		(5.7)

Weighted average shares (denominator):
Weighted average number of shares - basic		8,423,445
Weighted average number of shares - diluted		8,423,445

Basic loss per share		$ (0.68)

Diluted loss per share		$ (0.68)

For the periods presented, the Company excluded 6.9 million shares of common stock issuable upon conversion of the Company’s Class B Common Stock in calculating diluted loss per share, as the effect was anti-dilutive.

NOTE 16. COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, the Company is involved in various legal matters arising in the normal course of business. The Company does not believe that the ultimate resolution of these currently pending matters will have a material adverse effect on its condensed consolidated financial position or results of operations.

Employee Severance

During 2017, Ranger Services terminated the employment of one of its officers. As a result, the former officer became entitled to severance payments of $0.7 million. In addition, Ranger Services severed other officers and employees. As of March 31, 2018, Ranger Services has $0.7 million of severance liability recorded in the accompanying condensed consolidated financial statements.

NOTE 17. SEGMENT REPORTING

The Company’s operations are all located in the United States and organized into two reportable segments: Well Services and Processing Solutions. The Company’s reportable segments comprise the structure used by its Chief Operating Decision Maker (“CODM”) to make key operating decisions and assess performance during the years presented in the accompanying condensed consolidated financial statements. The Company’s CODM evaluates the

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segments’ operating performance based on multiple measures including Adjusted EBITDA, rig hours and rig utilization. The following is a description of the segments:

Well Services . The Company’s well service rigs facilitate operations throughout the lifecycle of a well, including (i) well completion support; (ii) workover; (iii) well maintenance; and (iv) decommissioning. The Company provides these advanced well services to exploration & production (“E&P”) companies, particularly to those operating in unconventional oil and natural gas reservoirs and requiring technically and operationally advanced services. The Company’s well service rigs are designed to support growing U.S. horizontal well demands. In addition to its core well service rig operations, the Company offers a suite of complementary services, including wireline, snubbing, fluid management and well service-related equipment rentals.

Processing Solutions . The Company provides a range of proprietary, modular equipment for the processing of rich natural gas streams at the wellhead or central gathering points in basins where drilling and completion activity has outpaced the development of permanent processing infrastructure.

Other. The Company incurs costs, indicated as Other, that are not allocable to either of the operating segments, and includes mostly corporate general and administrative expenses as well as depreciation of office furniture and fixtures and other corporate assets. Prior to the Offering and subsequent reorganization, the Well Services and Processing Solutions were run as separate companies, therefore there were no such costs or assets

Segment information as of March 31, 2018 and December 31, 2017 and for the three months ended March 31, 2018 and 2017 is as follows (in millions):


					Processing
	Other		Well Services		Solutions		Total
			Three months ended March 31, 2018
Revenues	$	—	$	59.7	$	2.9	$	62.6
Cost of services	$	—	$	49.9	$	1.4	$	51.3
Depreciation and amortization	$	0.2	$	5.6	$	0.3	$	6.1
Impairment of goodwill	$	—	$	9.0	$	—	$	9.0
Operating income (loss)	$	(6.5)	$	(4.8)	$	0.5	$	(10.8)
Interest expense, net	$	(0.4)	$	—	$	—	$	(0.4)
Net income (loss)	$	(7.1)	$	(3.7)	$	0.5	$	(10.3)
Capital expenditures	$	—	$	10.1	$	2.2	$	12.3
			As of March 31, 2018
Property, plant and equipment	$	6.3	$	166.2	$	27.4	$	199.9
Total assets	$	6.3	$	226.3	$	29.9	$	262.5


					Processing
	Other		Well Services		Solutions		Total
			Three months ended March 31, 2017
Revenues	$	—	$	27.3	$	1.8	$	29.1
Cost of services	$	—	$	23.2	$	0.7	$	23.9
Depreciation and amortization	$	—	$	3.3	$	0.3	$	3.6
Impairment of goodwill	$	—	$	—	$	—	$	—
Operating income (loss)	$	—	$	(5.9)	$	0.2	$	(5.7)
Interest expense, net	$	—	$	(0.5)	$	—	$	(0.5)
Net income (loss)	$	—	$	(6.4)	$	0.2	$	(6.2)
Capital expenditures	$	—	$	11.7	$	0.1	$	11.8
			As of December 31, 2017
Property, plant and equipment	$	6.4	$	157.4	$	25.4	$	189.2
Total assets	$	6.4	$	225.1	$	28.2	$	259.7

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the historical financial statements and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q (“Quarterly Report”). This discussion contains “forward‑looking statements” reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward‑looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, market prices for oil and natural gas, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this report. Please read Cautionary Note Regarding Forward‑Looking Statements. Also, please read the risk factors and other cautionary statements described under Part II, Item 1A.-“Risk Factors” included elsewhere in this Quarterly Report and in our Annual Report. We assume no obligation to update any of these forward‑looking statements.

Overview

We are one of the largest providers of high‑spec well service rigs and associated services in the United States, with a focus on technically demanding unconventional horizontal well completion and production operations. We believe that our fleet of 135 well service rigs is among the newest and most advanced in the industry and, based on our historical rig utilization and feedback from our customers, we believe that we are an operator of choice for U.S. onshore E&P companies that require completion and production services at increasing lateral lengths. Our high‑spec well service rigs facilitate operations throughout the lifecycle of a well, including (i) well completion support, such as milling out composite plugs used during hydraulic fracturing; (ii) workover, including retrieval and replacement of existing production tubing; (iii) well maintenance, including replacement of downhole artificial lift components; and (iv) decommissioning, such as plugging and abandonment operations. In addition to our core well service rig operations, we offer a suite of complementary services, including wireline, snubbing, well testing, fluid management and well service-related equipment rentals. We also provide rental equipment, including well control packages, hydraulic catwalks and other equipment that are often deployed with our well service rigs. In addition, we own and operate a fleet of proprietary, modular natural gas processing equipment that processes rich natural gas streams at the wellhead or central gathering points. We have operations in most of the active oil and natural gas basins in the United States, including the Permian Basin, the Denver‑Julesburg Basin, the Bakken Shale, the Eagle Ford Shale, the Haynesville Shale, the Gulf Coast and the SCOOP and STACK plays.

Our Predecessor and Ranger Energy Services, Inc.

The Company was formed on February 17, 2017, and did not conduct any material business operations prior to the transactions described under “Initial Public Offering” other than certain activities related to the Offering. Our Predecessor consists of Ranger Services and Torrent Services on a combined consolidated basis. In connection with the transactions described in Note 1 – Organization and Business Operations – Reorganization, the Existing Owners contributed the equity interests in the Predecessor Companies to us in exchange for shares of our Class A Common Stock, Ranger Units and shares of our Class B Common Stock.

Ranger Inc. was, through Ranger Holdings, formed by CSL in June 2014 as a provider of high‑spec well service rigs and associated services. Torrent Services was, through Torrent Holdings, acquired by CSL in September 2014 as a provider of proprietary, modular equipment for the processing of natural gas. In June 2016, CSL indirectly acquired substantially all of the assets of Magna, a provider of well services and wireline services, which it contributed to Ranger Services in September 2016. In October 2016, Ranger Services acquired substantially all of the assets of Bayou, an owner and operator of high‑spec well service rigs. The historical condensed consolidated financial information included in this report presents (i) prior to August 16, 2017, the historical financial information of the Predecessor Companies, including, as applicable, the results of operations of Magna and Bayou for periods subsequent to their respective acquisitions and (ii) subsequent to August 16, 2017, the historical financial information of the Company. The historical condensed consolidated financial information of our Predecessor is not indicative of the results that may be expected in any future periods. For more information, please see the historical condensed consolidated related notes thereto included elsewhere in this quarterly report.

On August 16, 2017, we acquired 49 high-spec well service rigs, certain ancillary equipment, and certain of its liabilities. ESCO is included in our consolidated financial results from the date of acquisition onward.

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We conduct our operations through two segments: Well Services and Processing Solutions. Our Well Services segment has historically consisted of the results of operations of Ranger Services and, as applicable, Magna, Bayou and the ESCO Acquisition assets from their respective acquisition dates, while our Processing Solutions segment has historically consisted of the results of operations of Torrent Services. Our Well Services segment provides high‑spec well service rigs and complementary equipment and services in the United States, with a focus on technically demanding unconventional horizontal well completion, workover and maintenance operations. These services are fundamental to establishing and maintaining the flow of oil and natural gas throughout the productive life of a well. Our Processing Solutions segment engages in the rental, installation, commissioning, start‑up, operation and maintenance of mechanical refrigeration units (“MRUs”), natural gas liquids (“NGL”) stabilizer units, NGL storage units and related equipment. We operate in most of the active oil and natural gas basins in the United States, including the Permian Basin, the Denver‑Julesburg Basin, the Bakken Shale, the Eagle Ford Shale, the Haynesville Shale, the Gulf Coast and the SCOOP and STACK plays. For additional information about our assets and operations, please see Note 17 - Segment Reporting to the unaudited interim condensed consolidated financial statements.

Initial Public Offering

On August 16, 2017, we completed the Offering of 5,862,069 shares of its Class A Common Stock. The gross proceeds of the Offering, based on a public offering price of $14.50 per share, was $85.0 million, which resulted in net proceeds to us of $77.0 million, after deducting $4.2 million of underwriting discounts and commissions and $3.9 million of costs related to the Offering. These net proceeds were used to pay off the remainder of our long term debt of $10.4 million, fund $45.2 million for the cash portion of the ESCO Acquisition, and $0.7 million for cash bonuses to certain employees. The remaining $20.7 million of net proceeds were used to fund capital expenditures and general business expenses.

How We Generate Revenues

We currently generate revenues through the provision of a variety of oilfield services. These services are performed under a variety of contract structures, including a long term take‑or‑pay contract and various master service agreements, as supplemented by statements of work, pricing agreements and specific quotes. A portion of our master services agreements include provisions that establish pricing arrangements for a period of up to one year in length. However, the majority of those agreements provide for pricing adjustments based on market conditions. The majority of our services are priced based on prevailing market conditions and changing input costs at the time the services are provided, giving consideration to the specific requirements of the customer. Please see Note 3 – Revenue from contracts with customers to the unaudited interim condensed consolidated financial statements.

Costs of Conducting Our Business

The principal expenses involved in conducting our business are personnel, repairs and maintenance costs, general and administrative, depreciation and amortization and interest expense. We manage the level of our expenses, except depreciation and amortization and interest expense, based on several factors, including industry conditions and expected demand for our services. In addition, a significant portion of the costs we incur in our business is variable based on the quantities of specific services provided and the requirements of such services.

Direct cost of services and general and administrative expenses include the following major cost categories: personnel costs and equipment costs (including repair and maintenance).

Personnel costs associated with our operational employees represent a significant cost of our business. A substantial portion of our labor costs is attributable to our crews and is partly variable based on the requirements of specific customers and operations. A key component of personnel costs relates to the ongoing training of our employees, which improves safety rates and reduces attrition. We also incur costs to employ personnel to support our services and perform maintenance on our assets. Costs for these employees are not directly tied to our level of business activity.

We incur significant equipment costs in connection with the operation of our business, including repair and maintenance costs.

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How We Evaluate Our Operations

Our management intends to use a variety of metrics to analyze our operating results and profitability. These metrics include, among others, the following:

Revenues;

Operating Income (Loss); and

Adjusted EBITDA.

In addition, within our Well Services segment, our management intends to use additional metrics to analyze our activity levels and profitability. These metrics include, among others, the following:

Rig Hours; and

Rig Utilization.

Revenues

We analyze our revenues by comparing actual revenues to our internal projections for a given period and to prior periods to assess our performance. We believe that revenues are a meaningful indicator of the demand and pricing for our services.

Operating Income (Loss)

We analyze our operating income (loss), which we define as revenues less cost of services, general and administrative expenses, depreciation and amortization, impairment and other operating expenses, to measure our financial performance. We believe operating income (loss) is a meaningful metric because it provides insight on profitability and true operating performance based on the historical cost basis of our assets. We also compare operating income (loss) to our internal projections for a given period and to prior periods.

Adjusted EBITDA

We view Adjusted EBITDA, which is a non‑GAAP financial measure, as an important indicator of performance. We define Adjusted EBITDA as net income (loss) before interest expense, net, income tax provision (benefit), depreciation and amortization, equity‑based compensation, acquisition‑related and severance costs, impairment of goodwill, gain or loss on sale of assets and certain other items that we do not view as indicative of our ongoing performance. See “Results of Operations—Note Regarding Non‑GAAP Financial Measure” for more information and reconciliations of net income (loss) to Adjusted EBITDA, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Rig Hours

Within our Well Services segment, we analyze rig hours as an important indicator of our activity levels and profitability. Rig hours represent the aggregate number of hours that our well service rigs actively worked during the periods presented. We typically bill customers for our well services on an hourly basis during the period that a well service rig is actively working, making rig hours a useful metric for evaluating our profitability.

Rig Utilization

Within our Well Services segment, we analyze rig utilization as a further important indicator of our activity levels and profitability. We measure rig utilization by reference to average monthly hours per rig, which is calculated by dividing (a) the approximate, aggregate operating well service rig hours for the periods presented by (b) the aggregate number of well service rigs in our fleet during such period, as aggregated on a monthly basis utilizing a mid-month convention whereby a well service rig added to our fleet during a month, meaning that we have taken delivery of such well service rig, and it is ready for service and is then assumed to be in our fleet for one half of such month. We believe that rig utilization as measured by average monthly hours per well service rig is a meaningful indicator of the operational

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efficiency of our core revenue-producing assets, market demand for our well services and our ability to profitably capitalize on such demand. Our evaluation of our rig utilization as measured by average monthly hours per rig may not be comparable to that of our competitors. For example, our competitors’ well service rig fleets are typically comprised primarily of older, lower-spec well service rigs that are not as well suited to servicing modern horizontal well designs as are high-spec well service rigs, which may result in lower average rig hours per rig for our competitors’ fleets as compared to our fleet.

The primary factors that have historically impacted, and will likely continue to impact, our actual aggregate well service rig hours for any specified period are (i) customer demand, which is influenced by factors such as commodity prices, the complexity of well completion operations and technological advances in our industry, and (ii) our ability to meet such demand, which is influenced by changes in our fleet size and resulting rig availability, as well as weather, employee availability and related factors. The primary factors that have historically impacted, and will likely continue to impact, the aggregate number of well service rigs in our fleet during any specified period are the extent and timing of changes in the size of our well service rig fleet to meet short-term and expected long-term demand, and our ability to successfully maintain a fleet capable of ensuring sufficient, but not excess, rig availability to meet such demand.

For the three months ended March 31, 2018 and 2017, our rig utilization as measured by average monthly hours per rig was approximately 184 and 194, respectively. Actual aggregate operating well service rig hours increased from approximately 39,100 in the three months ended March 31, 2017 to approximately 73,600 in the three months ended March 31, 2018. The increase in rig hours resulted from an increase in the average number of well service rigs in our active fleet from 67 during the three months ended March 31, 2017 to 134 during the three months ended March 31, 2018, and a corresponding increase in our potential aggregate well service rig hours. For the three months ended March 31, 2018 and 2017, our average revenue per rig hour was approximately $487 and $457, respectively.

Factors Impacting the Comparability of Results of Operations

ESCO Acquisition

Our Predecessor’s historical condensed consolidated financial statements for the three months ended March 31, 2017 do not include the results of operations for the assets we acquired in the ESCO Acquisition. As a result, our Predecessor’s historical financial data do not give you an accurate indication of what our actual results would have been if the ESCO Acquisition had been completed at the beginning of the periods presented or of what our future results of operations are likely to be. Please see Note 4 – Acquisitions to see the supplemental pro forma financial disclosures for the three months ended March 31, 2017.

Reorganization

On August 10, 2017, we entered into the Master Reorganization Agreement with, among others, Ranger LLC and the Existing Owners.

(i) Ranger Holdings II and Torrent Holdings II contributed certain of the equity interests in Ranger Services, and Torrent Services, respectively, to the Company in exchange for an aggregate of 1,638,386 shares of Class A Common Stock and an aggregate of $3.0 million to be paid to CSL Energy Holdings I, LLC, a Delaware limited liability company, and CSL Energy Holdings II, LLC, a Delaware limited liability company, on or prior to the 18-month anniversary of the consummation of the Offering in, at the Company’s option, cash, shares of Class A Common Stock (with such shares to be valued based on the greater of the initial public offering price of the Class A Common Stock in the Offering and a 30-day volume-weighted average price) or a combination thereof, and the Company contributed such equity interests to Ranger LLC in exchange for 1,638,386 Ranger Units;

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(iii) the Company contributed all of the net proceeds received by it in the Offering to Ranger LLC in exchange for 5,862,069 Ranger Units;

(iv) Ranger LLC distributed to each of Ranger Holdings and Torrent Holdings one share of Class B Common Stock received pursuant to (ii) above for each Ranger Unit such Existing Owner holds; and

(v) as consideration for the termination of certain loan agreements, the Company will issue 567,895 shares of Class A Common Stock (in connection with which Ranger LLC issued 567,895 Ranger Units to the Company) and Ranger LLC issued an aggregate of 1,244,663 Ranger Units (and distribute a corresponding number of shares of Class B Common Stock) to the lenders thereof.

The foregoing transactions were be undertaken in reliance on an exemption from the registration requirements of the Securities Act of 1933, pursuant to Section 4(a)(2) thereof. As a result of these transactions, Ranger LLC became a subsidiary of the Company and the Predecessor Companies became wholly owned subsidiaries of Ranger LLC.

In connection with the Offering, we entered into a Tax Receivable Agreement (the "Tax Receivable Agreement") with certain of the Ranger Unit Holders and their permitted transferees (each such person, a "TRA Holder" and, together, the "TRA Holders"). The Tax Receivable Agreement generally provides for the payment by us to each TRA Holder of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that we actually realize (computed using the estimated impact of state and local taxes) or are deemed to realize in certain circumstances in periods following the Offering as a result of (i) certain increases in tax basis that occur as a result of our acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder's Ranger Units in connection with this offering or pursuant to the exercise of the Redemption Right or the Call Right (each as defined in the Amended and Restated Limited Liability Company Agreement of Ranger LLC) and (ii) imputed interest deemed to be paid by us as a result of, and additional tax basis arising from, any payments we make under the Tax Receivable Agreement. We will retain the benefit of the remaining 15% of these cash savings.

Income Taxes

Ranger Inc. is a Subchapter C corporation under the Internal Revenue Code of 1986, as amended (the “Code”), and, as a result, will be subject to U.S. federal, state and local income taxes. Although the Predecessor Companies are subject to franchise tax in the State of Texas (at less than 1% of modified pre‑tax earnings), they have historically passed through their taxable income to their owners for U.S. federal and other state and local income tax purposes and thus were not subject to U.S. federal income taxes or other state or local income taxes. Accordingly, the financial data attributable to our Predecessor contains no provision for U.S. federal income taxes or income taxes in any state or locality other than franchise tax in the State of Texas. We account for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled pursuant to the provisions of ASC 740, Income Taxes. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized.

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Results of Operations

Three Months Ended March 31, 2018 compared to Three Months Ended March 31, 2017

The following table sets forth our Predecessor’s selected operating data for the three months ended March 31, 2018 as compared to the three months ended March 31, 2017.



	March 31,				Change
	2018		2017		$		%
Revenues:
Well Services	$	59.7	$	27.3	$	32.4	119	%
Processing Solutions		2.9		1.8		1.1	61	%
Total revenues		62.6		29.1		33.5	115	%
Operating expenses:
Cost of services (exclusive of depreciation and amortization shown separately):
Well Services		49.9		23.2		26.7	115	%
Processing Solutions		1.4		0.7		0.7	100	%
Total cost of services		51.3		23.9		27.4	115	%
General and administrative		7.0		7.3		(0.3)	(4)	%
Depreciation and amortization		6.1		3.6		2.5	69	%
Impairment of goodwill		9.0		—		9.0	—	%
Total operating expenses		73.4		34.8		38.6	111	%
Operating loss		(10.8)		(5.7)		(5.1)	89	%
Other expenses
Interest expense, net		(0.4)		(0.5)		0.1	(20)	%
Total other expenses		(0.4)		(0.5)		0.1	(20)	%
Loss before income tax expense		(11.2)		(6.2)		(5.0)	81	%
Tax benefit		0.9		—		0.9	—	%
Net loss	$	(10.3)	$	(6.2)	$	(4.1)	66	%

Revenues. Revenues for the three months ended March 31, 2018 increased $33.5 million, or 115%, to $62.6 million from $29.1 million for the three months ended March 31, 2017. The increase in revenues by segment was as follows:

Well Services. Well Services revenues for the three months ended March 31, 2018 increased $32.4 million, or 119%, to $59.7 million from $27.3 million for the three months ended March 31, 2017. The increase was primarily due to an increased number of rigs, to an average of 134 rigs from an average of 67 rigs, providing workover rig services, which accounted for $18.9 million, or 58% of the segment increase. Approximately $7.5 million of the increase in workover rig services was due to the ESCO Acquisition. The increase in workover rig services included a 88% increase in total rig hours to 73,600 from 39,100 for the three months ended March 31, 2018 compared to the three months ended March 31, 2017.

Processing Solutions. Processing Solutions revenues for the three months ended March 31, 2018 increased $1.1 million, or 61%, to $2.9 million from $1.8 million for the three months ended March 31, 2017. The increase was primarily attributable to the additional compressors, tanks, and generators we have rented to customers as well as additional mobilization revenue due to additional equipment going to customers.

Cost of services (excluding depreciation and amortization shown separately). Cost of services for the three months ended March 31, 2018 increased $27.4 million, or 115%, to $51.3 million from $23.9 million for the three months ended March 31, 2017. As a percentage of revenue, cost of services was 82% for the three months ended March 31, 2018 and 2017. The increase in cost of services by segment was as follows:

Well Services. Well Services cost of services for the three months ended March 31, 2018 increased $26.7 million, or 115%, to $49.9 million from $23.2 million for the three months ended March 31, 2017. The increase

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was primarily attributable to an increase in expenses due to the expansion of the Company’s activities; notably employee costs, and repair and maintenance costs.

Processing Solutions. Processing Solutions cost of services for the three months ended March 31, 2018 increased $0.7 million, or 100%, to $1.4 million from $0.7 million for the three months ended March 31, 2017. The increase was primarily attributable to increases in new equipment and the mobilization costs incurred which corresponds with additional revenues.

General & Administrative. General and administrative expenses for the three months ended March 31, 2018 decreased $0.3 million, or 4%, to $7.0 million from $7.3 million for the three months ended March 31, 2017. The decrease in general and administrative expenses by segment was as follows:

Well Services and other. Well Services general and administrative expenses for the three months ended March 31, 2018 decreased $0.3 million, or 5%, to $6.3 million from $6.6 million for the three months ended March 31, 2017. The decrease was primarily attributable to a decrease in expenses due to the expenses for professional costs and other costs associated with the Offering in 2017.

Processing Solutions. Processing Solutions general and administrative expenses for the three months ended March 31, 2018 and 2017 is $0.7 million.

Depreciation and Amortization. Depreciation and amortization for the three months ended March 31, 2018 increased $2.5 million, or 69%, to $6.1 million from $3.6 million for the three months ended March 31, 2017. The increase in depreciation and amortization expense by segment was as follows:

Well Services and other. Well Services depreciation and amortization expense for the three months ended March 31, 2018 increased $2.4 million, or 72%, to $5.8 million from $3.3 million for the three months ended March 31, 2017. The increase was primarily attributable to fixed assets that were put in place during 2017 and the three months ended March 31, 2018, due to the acquisition of ESCO as well as additional fixed asset purchases.

Processing Solutions. Processing Solutions depreciation and amortization expense was $0.3 million for the three months ended March 31, 2018 compared to $0.3 million for the three months ended March 31, 2017.

Impairment of goodwill. Impairment of goodwill for the three months ended March 31, 2018 was $9.0 million compared to no impairment for the three months ended March 31, 2017. During the three months ended March 31, 2018 we identified that there was a sustained decrease in the Company’s stock price, which we identified as a triggering event that precipitated the need to perform a goodwill impairment test. The results of the quantitative impairment test yielded a fair value of the Well Services reporting unit that was below the carrying value of the Well Services reporting unit as of March 31, 2018 by an amount in excess of the carrying value of goodwill. Therefore we recorded an impairment charge based on the excess of our carrying amount over the fair value, please see Note 7 – Goodwill and Intangible Assets to the unaudited interim condensed consolidated financial statements.

Interest Expense, net. Interest expense, net for the three months ended March 31, 2018 decreased $0.1 million, or 20%, to $0.4 million from $0.5 million for the three months ended March 31, 2017. The decrease to interest expense, net was attributable to the changes in the average borrowings as well as the interest rates of the various debt instruments during the three months ended March 31, 2018 compared to the three months ended March 31, 2017.

Note Regarding Non‑GAAP Financial Measure

Adjusted EBITDA is not a financial measure determined in accordance with GAAP. We define Adjusted EBITDA as net income (loss) before interest expense, net, income tax provision (benefit), depreciation and amortization, equity‑based compensation, acquisition‑related and severance costs, impairment of goodwill, gain or loss on sale of assets and certain other items that we do not view as indicative of our ongoing performance.

We believe Adjusted EBITDA is a useful performance measure because it allows for an effective evaluation of our operating performance when compared to our peers, without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially within our industry depending upon accounting methods and book values of assets, capital structures and

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the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net loss determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an indication that our results will be unaffected by the items excluded from Adjusted EBITDA. Our computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies. The following table presents reconciliations of net income (loss) to Adjusted EBITDA, our most directly comparable financial measure calculated and presented in accordance with GAAP.


	Three Months Ended
	March 31, 2018
			Well		Processing
	Other		Services		Solutions		Total
	(in millions)
Net income (loss)	$	(7.1)	$	(3.7)	$	0.5	$	(10.3)
Interest expense, net		0.4		—		—		0.4
Tax benefit		—		(0.9)		—		(0.9)
Depreciation and amortization		0.2		5.6		0.3		6.1
Equity based compensation		—		0.2		—		0.2
Acquisition related and severance costs		—		—		—		—
Impairment of goodwill		—		9.0		—		9.0
Loss on sale of property, plant and equipment		—		0.7		—		0.7
Adjusted EBITDA	$	(6.5)	$	10.9	$	0.8	$	5.2


	Three Months Ended
	March 31, 2017
			Well		Processing
	Other		Services		Solutions		Total
	(in millions)
Net income (loss)	$	—	$	(6.3)	$	0.1	$	(6.2)
Interest expense, net		—		0.5		—		0.5
Tax benefit		—		—		—		—
Depreciation and amortization		—		3.3		0.3		3.6
Equity based compensation		—		0.3		0.1		0.4
Acquisition related and severance costs		—		1.1		—		1.1
Impairment of goodwill		—		—		—		—
Loss on sale of property, plant and equipment		—		—		—		—
Adjusted EBITDA	$	—	$	(1.1)	$	0.5	$	(0.6)


	Change $
			Well		Processing
	Other		Services		Solutions		Total
	(in millions)
Net income (loss)	$	(7.1)	$	2.6	$	0.4	$	(4.1)
Interest expense, net		0.4		(0.5)		—		(0.1)
Tax benefit		—		(0.9)		—		(0.9)
Depreciation and amortization		0.2		2.3		—		2.5
Equity based compensation		—		(0.1)		(0.1)		(0.2)
Acquisition related and severance costs		—		(1.1)		—		(1.1)
Impairment of goodwill		—		9.0		—		9.0
Loss on sale of property, plant and equipment		—		0.7		—		0.7
Adjusted EBITDA	$	(6.5)	$	12.0	$	0.3	$	5.8

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Adjusted EBITDA for the three months ended March 31, 2018 increased $5.8 million to $5.2 million from a loss of $0.6 million for the three months ended March 31, 2017. The increase by segment was as follows:

Well Services. Well Services Adjusted EBITDA increased $12.0 million to $10.9 million from a loss of $1.1 million due mainly to significant increased revenues of $32.4 million offset by a corresponding increase in cost of services of $26.7 million, as well as a decrease in acquisition related and severance costs of $1.1 million.

Processing Solutions. Processing Solutions Adjusted EBITDA increased $0.3 million to $0.8 million from $0.5 million due primarily to an increase in net income of $0.3 million.

Other. Other Adjusted EBITDA is a loss of $6.5 million due primarily to general and administrative expense of $5.7 million related to compensation and benefits, professional fees, and other general expenses. The balances included in Other reflect the reorganization and other general and administrative costs not directly attributable to Well Services or Processing Solutions. Prior to the Offering and subsequent reorganization the Well Services and Processing Solutions were run as separate companies and therefore there was no other for the three months ended March 31, 2017.

Liquidity and Capital Resources

Overview

We require capital to fund ongoing operations, including maintenance expenditures on our existing fleet and equipment, organic growth initiatives, investments and acquisitions. Our primary sources of liquidity have been capital contributions from our owners and commercial borrowings and proceeds from the Offering. We expect our primary sources of liquidity will be cash generated from operations and borrowings under our Credit Facility. We strive to maintain financial flexibility and proactively monitor potential capital sources to meet our investment and target liquidity requirements and to permit us to manage the cyclicality associated with our business.

As of March 31, 2018, we had cash on hand of approximately $1.1 million. Our cash on hand, expected cash flow from operations and availability under our Revolving Credit Facility (currently $16.1 million available) are expected to be sufficient to meet the Company’s liquidity requirements for the next 12 months.

Cash Flows

The following table sets forth our cash flows for the periods indicated:


	Three Months Ended
	March 31,				Change
	2018		2017		$		%
	(in millions)
Cash flows provided by (used in) operating activities	$	(1.1)	$	(6.8)	$	(5.7)	83.8	%
Cash flows used in investing activities		(11.0)		(7.3)		3.7	50.7
Cash flows provided by financing activities		7.9		14.5		(6.6)	45.5
Net change in cash	$	(4.2)	$	0.4	$	(4.6)	1,150.0	%

Operating Activities

Net cash used in operating activities decreased $5.7 million to $1.1 million for the three months ended March 31, 2018 compared to $6.8 million for the three months ended March 31, 2017. The change in cash flows used in operating activities is attributable to a higher net loss for the Company reduced by an increase in depreciation and amortization of $2.5 million, loss on sale of assets of $0.7 million, and the impairment to goodwill of $9.0 million. The use of working capital cash for the three months ended March 31, 2018 increased to $6.9 million as compared to the $4.7 million during the three months ended March 31, 2017.

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Investing Activities

Net cash used in investing activities increased $3.7 million to $11.0 million for the three months ended March 31, 2018 compared to $7.3 million for the three months ended March 31, 2017. The change in cash flows used in investing activities is attributable to an increase in payments for purchases of property, plant and equipment and $4.0 million for an acquisition.

Financing Activities

Net cash provided by financing activities decreased $6.6 million to $7.9 million for the three months ended March 31, 2018 compared to $14.5 million for the three months ended March 31, 2017. The change in cash flows provided by financing activities is mostly attributable to the principal payments of $7.7 million made on the Company’s capital leases and $15.6 million of borrowings under the Company’s line of credit.

Supplemental Disclosures

We added assets worth $5.0 million that are non-cash additions in the current period. In addition we also purchased $1.3 million in assets via capital lease financing.

Working Capital

Our working capital, which we define as total current assets less total current liabilities, totaled ($4.7 million) and ($3.2 million) as of March 31, 2018 and December 31 2017, respectively.

Our Debt Agreements

In connection with the Offering and the ESCO Acquisition we issued $7.0 million of seller’s notes as partial consideration for the ESCO Acquisition. These notes include a note for $1.2 million due on August 16, 2018 and a note for $5.8 million due on February 16, 2019. Both of these notes bear interest at 5.0% payable quarterly until their respective maturity dates.

In connection with the Offering, we entered into a new credit agreement providing for a $50.0 million Credit Facility. The Credit Facility is subject to a borrowing base that is calculated by us based upon a percentage of the value of our eligible accounts receivable less certain reserves. The borrowing base is calculated on a monthly basis pursuant to a borrowing base certificate delivered by us to the Administrative Agent. The Credit Facility is used for capital expenditures and permitted acquisitions, to provide for working capital requirements and for other general corporate purposes. The Credit Facility is secured by certain of our assets and contains various affirmative and negative covenants and restrictive provisions. We had approximately $31.7 million of borrowing capacity with $16.1 million readily available under the Credit Facility as of March 31, 2018.

Borrowings under the Credit Facility bear interest, at our election, at either the (a) one-, two-, three- or six-month LIBOR or (b) the greatest of (i) the federal funds rate plus ½%, (ii) the one-month LIBOR plus 1% and (iii) the Base Rate, in each case plus an applicable margin, and interest shall be payable monthly in arrears. The applicable margin for LIBOR loans ranges from 1.50% to 2.00% and the applicable margin for Base Rate loans ranges from 0.50% to 1.00%, in each case, depending on our average excess availability under the Credit Facility. The applicable margin for LIBOR loans is 1.50% and the applicable margin for Base Rate loans is 0.50% until August 31, 2018. During the continuance of a bankruptcy event of default, automatically and during the continuance of any other default, upon the Administrative Agent’s or the required lenders’ election, all outstanding amounts under the Credit Facility bears interest at 2.00% plus the otherwise applicable interest rate. The Credit Facility is scheduled to mature on the fifth anniversary of the consummation of the Offering (August 16, 2022).

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In addition, the Credit Facility restricts our ability to make distributions on, or redeem or repurchase, our equity interests, except for certain distributions, including distributions of cash so long as, both at the time of the distribution and after giving effect to the distribution, no default exists under the Credit Facility and either (a) excess availability at all times during the preceding 90 consecutive days, on a pro forma basis and after giving effect to such distribution, is not less than the greater of (1) 22.5% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (2) $10.0 million or (b) if our fixed charge coverage ratio is at least 1.0x on a pro forma basis, excess availability at all times during the preceding 90 consecutive days, on a pro forma basis and after giving effect to such distribution, is not less than the greater of (1) 17.5% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (2) $7.0 million. If the foregoing threshold under clause (b) is met, we may not make such distributions (but may make certain other distributions, including under clause (a) above) prior to the earlier of the date that is (a) 12 months from closing or (b) the date that our fixed charge coverage ratio is at least 1.0x for two consecutive quarters. Our Credit Facility generally permits us to make distributions required under the Tax Receivable Agreement, but a ‘‘Change of Control’’ under the Tax Receivable Agreement constitutes an event of default under our Credit Facility, and our Credit Facility does not permit us to make payments under the Tax Receivable Agreement upon acceleration of our obligations thereunder unless no event of default exists or would result therefrom and we have been in compliance with the fixed charge coverage ratio for the most recent 12-month period on a pro forma basis. Our Credit Facility also requires us to maintain a fixed charge coverage ratio of at least 1.0x if our liquidity is less than $10.0 million until our liquidity is at least $10.0 million for 30 consecutive days. We are not subject to a fixed charge coverage ratio if we have no drawings under the Credit Facility and have at least $20.0 million of qualified cash.

The Credit Facility contains events of default customary for facilities of this nature, including, but not limited, to:

events of default resulting from our failure or the failure of any guarantors to comply with covenants and financial ratios;

the occurrence of a change of control;

the institution of insolvency or similar proceedings against us or any guarantor; and

the occurrence of a default under any other material indebtedness we or any guarantor may have.

Upon the occurrence and during the continuation of an event of default, subject to the terms and conditions of the Credit Facility, the lenders are able to declare any outstanding principal of our Credit Facility debt, together with accrued and unpaid interest, to be immediately due and payable and exercise other remedies.

Contractual and Commercial Commitments

The following table summarizes our contractual obligations and commercial commitments as of March 31, 2018:


			Less than						More than
	Total		1 year		1 - 3 years		3 - 5 years		5 years
	(in millions)
Long-term debt obligations	$	21.9	$	7.0	$	14.9	$	—	$	—
Capital lease obligations		3.2		1.3		1.9		—		—
Operating lease obligations		13.7		3.2		5.3		1.6		3.6
Purchase obligations for rigs		31.3		31.3		—		—		—
Total	$	70.1	$	42.8	$	22.1	$	1.6	$	3.6

Tax Receivable Agreement

With respect to obligations we expect to incur under our Tax Receivable Agreement (except in cases where we elect to terminate the Tax Receivable Agreement early, the Tax Receivable Agreement is terminated early due to certain mergers, asset sales, other forms of business combination or other changes of control or we have available cash but fail to make payments when due), generally we may elect to defer payments due under the Tax Receivable Agreement if we do not have available cash to satisfy our payment obligations under the Tax Receivable Agreement or if our contractual obligations limit our ability to make these payments. Any such deferred payments under the Tax Receivable Agreement generally will accrue interest. In certain cases, payments under the Tax Receivable Agreement may be accelerated and/or

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significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the Tax Receivable Agreement. We intend to account for any amounts payable under the Tax Receivable Agreement in accordance with ASC 450, Contingencies. Further, we intend to account for the effect of increases in tax basis and payments for such increases under the Tax Receivable Agreement arising from future redemptions as follows:

when future sales or redemptions occur, we will record a deferred tax liability for the gross amount of the income tax effect along with an offset of 85% of this liability as payable under the Tax Receivable Agreement; the remaining difference between the deferred tax liability and tax receivable agreement liability will be recorded as additional paid‑in capital; and

to the extent we have recorded a deferred tax asset for an increase in tax basis to which a benefit is no longer expected to be realized due to lower future taxable income, we will reduce the deferred tax asset with a valuation allowance.

Critical Accounting Policies and Estimates

Our significant accounting policies are discussed in our Annual Report filed on March 13, 2018. Except as set forth below, our critical accounting estimates and policies have not materially changed since December 31, 2017. Effective January 1, 2018, the Company adopted ASC 606 – Revenue from Contracts with Customers, using the modified retrospective method. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaborative arrangements and financial instruments. Under ASC 606, an entity recognizes revenue when it transfers control of the promised goods or services to its customer, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. If control transfers to the customer over time, an entity selects a method to measure progress that is consistent with the objective of depicting its performance. See Note 2 – Summary of Significant Accounting Policies and Note 3 – Revenue from Contracts with Customers for more information.

The Company performs its annual goodwill impairment test at the beginning of the 4 th quarter of each fiscal year. The Company’s goodwill at the time of the annual impairment test of approximately $9.0 million was all attributable to the Company’s Well Services segment and the majority of such goodwill (approximately $7.4 million) was generated in connection with the ESCO Acquisition, which closed in connection with the Offering on August 16, 2017, which was within 45 days of the annual impairment test date. The Company evaluated the relevant events and circumstances at that point in time and concluded that it was not more likely than not that the fair value of the Well Services reporting unit was less than its carrying amount.

Midway through the fourth quarter of 2017, the Company’s stock price started to decrease and remained that way through December 31, 2017. The Company evaluated whether a triggering event had occurred as of December 31, 2017; however, macroeconomic conditions had improved, the oil and gas industry and related market conditions had improved (steady increase in oil pricing through December 31, 2017 and into the first quarter of 2018) and the Company’s overall financial and operating performance had improved as there was increased revenue, profitability, utilization and rates per hour in the fourth quarter. As a result, the Company concluded that there was no triggering event at December 31, 2017.

During the first quarter of 2018 the Company identified that there was a sustained decrease in the Company’s stock price through March 31, 2018, which the Company identified as a triggering event that precipitated the need to perform a goodwill impairment test. The Company elected to bypass the qualitative assessment and performed step 1 of the annual goodwill impairment test at March 31, 2018. The results of the quantitative impairment test yielded a fair value of the Well Services reporting unit that was below the carrying value of the Well Services reporting unit as of March 31, 2018 by an amount in excess of the carrying value of goodwill. Accordingly, all of the Company’s historical goodwill was impaired at March 31, 2018.

Due to the triggering event and goodwill impairment charged at March 31, 2018, the Company assessed whether the long-lived assets, which consist of property, plant and equipment and intangible assets, were impaired by comparing the carrying value of its long-lived assets to the estimating future undiscounted cash flows of their reporting units and concluded they were not impaired.

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Recent Accounting Pronouncements

For information regarding new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements, please refer to Note 2- Summary of Significant Accounting Policies in Part I, Item 1 of this Quarterly Report, which is incorporated herein by reference.

Off‑Balance Sheet Arrangements

We currently have no material off‑balance sheet arrangements.

Jumpstart Our Business Act of 2012

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). We will remain an emerging growth company until the earlier of (1) the last day of our fiscal year (a) following the fifth anniversary of the completion of the Offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. We have irrevocably opted out of the extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The information in this Quarterly Report includes “forward‑looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Exchange Act of 1934, as amended. All statements, other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward‑looking statements. When used in this Quarterly Report, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward‑looking statements, although not all forward‑looking statements contain such identifying words. These forward‑looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. When considering forward‑looking statements, you should keep in mind the risk factors and other cautionary statements included in the Annual Report. These forward‑looking statements are based on management’s current belief, based on currently available information, as to the outcome and timing of future events.

Forward‑looking statements may include statements about:

our business strategy;

our operating cash flows, the availability of capital and our liquidity;

our future revenue, income and operating performance;

our ability to sustain and improve our utilization, revenues and margins;

our ability to maintain acceptable pricing for our services;

our future capital expenditures;

our ability to finance equipment, working capital and capital expenditures;

competition and government regulations;

our ability to obtain permits and governmental approvals;

pending legal or environmental matters;

marketing of oil and natural gas;

business or asset acquisitions, including the ESCO Acquisition;

general economic conditions;

credit markets;

our ability to successfully develop our research and technology capabilities and implement technological developments and enhancements;

uncertainty regarding our future operating results; and

plans, objectives, expectations and intentions contained in this report that are not historical.

We caution you that these forward‑looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, the risks described under “Risk Factors” in the Annual Report previously filed. Should one or more of the risks or uncertainties described occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward‑looking statements.

All forward‑looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward‑looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward‑looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.

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Item 3. Quantitative and Qualitative Disclosure about Market Risks

The demand, pricing and terms for oil and natural gas services provided by us are largely dependent upon the level of activity for the U.S. oil and natural gas industry. Industry conditions are influenced by numerous factors over which we have no control, including, but not limited to: the supply of and demand for oil and natural gas; the level of prices, and expectations about future prices of oil and natural gas; the cost of exploring for, developing, producing and delivering oil and natural gas; the expected rates of declining current production; the discovery rates of new oil and natural gas reserves; available pipeline and other transportation capacity; weather conditions; domestic and worldwide economic conditions; political instability in oil‑producing countries; environmental regulations; technical advances affecting energy consumption; the price and availability of alternative fuels; the ability of oil and natural gas producers to raise equity capital and debt financing; and merger and divestiture activity among oil and natural gas producers.

Interest Rate Risk

We had an aggregate of $7.0 million outstanding under notes payable from the ESCO Acquisition at March 31, 2018, with a weighted average interest rate of 5.0% and $14.9 million outstanding on our Credit Facility with a weighted average interest rate of 5.0%. A 1.0% increase or decrease in the weighted average interest rate would increase or decrease interest expense by approximately $0.2 million per year. We do not currently hedge our interest rate exposure.

Credit Risk

The majority of our trade receivables have payment terms of 30 days or less. As of March 31, 2018, the top three trade receivable balances represented approximately 18%, 7% and 7%, respectively, of total accounts receivable. Within our Well Services segment, the top three trade receivable balances represented approximately 19%, 7% and 7%, respectively, of total Well Services accounts receivable. Within our Processing Solutions segment, the top three trade receivable balances represented approximately 35%, 27% and 26%, respectively, of total Processing Solutions accounts receivable. We mitigate the associated credit risk by performing credit evaluations and monitoring the payment patterns of our customers.

Commodity Price Risk

The market for our services is indirectly exposed to fluctuations in the prices of oil and natural gas to the extent such fluctuations impact the activity levels of our E&P customers. Any prolonged substantial reduction in oil and natural gas prices would likely affect oil and natural gas production levels and therefore affect demand for our services. We do not currently intend to hedge our indirect exposure to commodity price risk.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 13a‑15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d‑15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. As of March 31, 2018 disclosure controls and procedures were not effective as a result of the material weakness identified during the year ended December 31, 2017. The material weakness related to the lack of sufficient qualified accounting personnel, which led to the incorrect application of generally accepted accounting principles, ineffective controls over accounting for non-routine and/or complex transactions, and ineffective controls over the financial statement close and reporting processes.

To address this material weakness, we, along with the oversight of our audit committee, are evaluating our controls over accounting for non-routine and/or complex transactions in an effort to identify additional controls to timely

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identify misstatements and strengthen our overall control environment as well as continuing to assess our qualified accounting personnel staffing requirements.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2018 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. Legal Proceedings

Our operations are subject to a variety of risks and disputes normally incident to our business. As a result, we may, at any given time, be a defendant in various legal proceedings and litigation arising in the ordinary course of business. However, we are not currently subject to any material litigation and in the opinion of management, the outcome of any existing matters will not have a material adverse effect on the Company’s consolidated financial position or consolidated results of operations. We maintain insurance policies with insurers in amounts and with coverage and deductibles that we, with the advice of our insurance advisers and brokers, believe are reasonable and prudent. We cannot, however, assure you that this insurance will be adequate to protect us from all material expenses related to potential future claims for personal injury and property damage or that these levels of insurance will be available in the future at economical prices.

Item 1A. Risk Factors.

Factors that could materially adversely affect our business, financial condition, operating results or liquidity and the trading price of our Class A Common Stock are described under “Risk Factors”, included in our Annual Report. This information should be considered carefully, together with other information in this Quarterly Report and other reports and materials we file with the SEC.

Item 6. Exhibits

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INDEX TO EXHIBITS


Exhibit Number		Description
2.1 ††		Master Reorganization Agreement, dated as of August 10, 2017, by and among Ranger Energy Services, Inc., RNGR Energy Services, LLC, Ranger Energy Holdings, LLC, Ranger Energy Holdings II, LLC, Torrent Energy Holdings, LLC, Torrent Energy Holdings II, LLC and the other parties named therein (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K (File No. 001-38183) filed with the Commission on August 16, 2017.
2.2 ††		Asset Purchase Agreement dated as of May 30, 2017, by and among ESCO Leasing, LLC, Ranger Energy Services, LLC and Tim Hall (incorporated by reference to Exhibit 2.2 to the Registrant’s Form S-1 (File No. 333-218139) filed with the Commission on August 1, 2017).
2.3 ††		Amended and Restated Asset Purchase Agreement dated as of July 31, 2017, by and among ESCO Leasing, LLC, Ranger Energy Services, LLC and Tim Hall (incorporated by reference to Exhibit 2.3 to the Registrant’s Form S-1 (File No. 333-218139) filed with the Commission on August 1, 2017).
3.1		Amended and Restated Certificate of Incorporation of Ranger Energy Services, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8‑K (File No. 001‑38183) filed with the Commission on August 22, 2017)
3.2		Amended and Restated Bylaws of Ranger Energy Services, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8‑K (File No. 001‑38183) filed with the Commission on August 22, 2017)
4.1		Registration Rights Agreement (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8‑K (File No. 001‑38183) filed with the Commission on August 22, 2017)
4.2		Stockholders’ Agreement (incorporated by reference to Exhibit 4.2 to the Registrant’s Form 8‑K (File No. 001‑38183) filed with the Commission on August 22, 2017)
*10.1	†	Executive Agreement between Ranger Energy Services, LLC and Darron Anderson, effective March 6, 2017.
*10.2	†	Employment Agreement between Ranger Energy Services, LLC and J. Matthew Hooker, effective July 1, 2017.
*10.3	†	Employment Agreement between Ranger Energy Services, LLC and Robert Shaw, effective July 1, 2017.
*31.1		Certification of Chief Executive Officer Pursuant to Rule 13a‑14(a)/15d‑14(a) of the Securities Exchange Act of 1934
*31.2		Certification of Chief Financial Officer Pursuant to Rule 13a‑14(a)/15d‑14(a) of the Securities Exchange Act of 1934
**32.1		Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**32.2		Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*101.CAL		XBRL Calculation Linkbase Document
*101.DEF		XBRL Definition Linkbase Document
*101.INS		XBRL Instance Document
*101.LAB		XBRL Labels Linkbase Document
*101.PRE		XBRL Presentation Linkbase Document
*101.SCH		XBRL Schema Document

* Filed as an exhibit to this Quarterly Report on Form 10-Q

** Furnished as an exhibit to this Quarterly Report on Form 10-Q

† Compensatory plan or arrangement

†† Schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant will furnish a supplemental copy of any omitted schedule or similar attachment to the SEC upon request.

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SIGNATURE S

Pursuant to the requirements the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Ranger Energy Services, Inc.


May 10, 2018	By:	/s/ Darron M. Anderson
	NAME:	Darron M. Anderson
	Title:	President, Chief Executive Officer and Director
		(Principal Executive Officer)


May 10, 2018	By:	/s/ Robert S. Shaw Jr.
	NAME:	Robert S. Shaw Jr.
	Title:	Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

EXHIBIT 10.1

EXECUTIVE AGREEMENT

This EXECUTIVE AGREEMENT (this “ Agreement ”), entered into as of March 6, 2017, is made by and between Ranger Energy Services, LLC, a Delaware limited liability company (the “ Company ”), and Darron Anderson (“ Executive ”). The Company and Executive are sometimes hereafter referred to individually as a “ Party ,” or collectively as the “ Parties .”

WHEREAS, the Company and Executive desire to enter into this Agreement in order to set forth the terms of Executive’s employment with the Company during the period beginning on the date hereof and ending as provided herein; and

NOW THEREFORE, in consideration of the premises and mutual covenants set forth herein, and other consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive, intending to be legally bound, do hereby agree as follows:

1. Employment . The Company agrees to employ Executive, and Executive hereby accepts employment with the Company, to serve as its President and Chief Executive Officer, upon the terms set forth in this Agreement for the period beginning on the date hereof and ending on the date three (3) years after the date hereof (the “ Initial Employment Period ”); provided that, upon the expiration of the Initial Employment Period, this Agreement shall automatically be renewed on the same terms and conditions set forth herein for additional consecutive one‑year periods beginning on the third anniversary of the date hereof, unless the Company or Executive gives the other Party written notice of its or his election not to renew at least sixty (60) days prior to the end of the Initial Employment Period or any additional one-year period (the “ Extended Employment Period ”) (the Initial Employment Period and any Extended Employment Period shall be referred to collectively herein as the “ Employment Period ”). Notwithstanding the foregoing, the Company and Executive understand and agree that the Employment Period is subject to early termination as provided in Section 4 hereof. A notice of non-renewal provided by the Company pursuant to this Section 1 shall not constitute a termination without Cause under Section 4(a)(iv) . The date on which the Employment Period expires or, if the Employment Period is terminated for any reason, the effective date of such termination, is referred to herein as the “ Termination Date .”

2. Position and Duties .

(a) During the Employment Period, Executive shall serve initially as the President and Chief Executive Officer of the Company and shall have the duties, responsibilities and authority customary for such a position in an organization of the size and nature of the Company. Executive shall initially report directly to the board of managers or managing member of the Company (the “ Board ”) and shall devote his commercially reasonable best efforts and full business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity) to the business and affairs of the Company and its affiliates. Executive shall obtain the prior written approval from the Board before joining or participating in any other business opportunities or activity, whether as an investor (other than reasonable personal investments), board member, partner, or in any other capacity.

(b) Executive acknowledges and agrees that, at all times during the employment relationship, Executive owes fiduciary duties to the Company and its affiliates, including, but not limited to, fiduciary duties of the highest loyalty, fidelity and allegiance, to act at all times in the best interests of the Company and its affiliates, to make full disclosure to the Company of all information that pertains to the Company’s or its affiliates’ business and interests, to do no act which would injure the Company’s or its affiliates’ business, interests, or reputation, and to refrain from using for Executive’s own benefit or for the benefit of others any information or opportunities pertaining to the Company’s or its affiliates’ business or interests that are entrusted to Executive or that he learned while employed by the Company. Executive

acknowledges and agrees that, upon termination of the employment relationship, Executive shall continue to refrain from using for his own benefit or the benefit of others, or from disclosing to others, any information or opportunities pertaining to the Company’s or its affiliates’ business or interests that were entrusted to Executive during the employment relationship or that he learned while employed by the Company, and that are not otherwise known to the public. In addition, Executive, at all times during the Employment Period, shall strictly adhere to and obey all of the Company’s written rules, policies and procedures, which will be available for viewing and are now in effect, or as are subsequently adopted or modified by the Company, which govern the operation of the Company’s business and the conduct of Executives of the Company.

3. Base Salary, Bonus and Benefits .

(a) Base Salary . Executive’s initial base salary shall be Three Hundred Fifty Thousand Dollars ($350,000.00) per year, less any and all lawful deductions and withholdings (the “ Base Salary ”), which Base Salary shall be payable in regular installments in accordance with the Company’s general payroll practices. Executive’s Base Salary shall increase to Four Hundred Twenty-Five Thousand ($425,000.00) per year upon the closing of an initial public offering by the Company’s affiliated entity Ranger Energy Services, Inc. (“ Ranger Inc .”) a Delaware corporation (the “ Qualifying Transaction ”), which increase will be effective not later than thirty (30) days following the closing of such transaction. During the Employment Period, Executive’s Base Salary may not be decreased, except that the Company may unilaterally reduce Executive’s base salary or wages by up to ten percent (10%) if the same or greater percentage reduction applies to all similarly situated employees of the Company.

(b) Annual Bonus . In addition to Base Salary, Executive shall be eligible to earn and receive an annual discretionary bonus (the “ Annual Bonus ”) based upon Executive’s attainment of target objectives as determined by the Board in its sole discretion (the “ Target Objectives ”). Executive shall be eligible for an Annual Bonus calculated at seventy-five percent (75%) of his Base Salary for achievement of the Target Objectives, and up to a maximum of one hundred fifty percent (150%) of his Base Salary for overachievement of the Target Objectives. Executive’s achievement and or overachievement of the Target Objectives, and any portion of the Annual Bonus awarded for overachievement of the Target Objectives, shall be determined by the Board in its sole discretion. Any Annual Bonus in respect of 2017 shall be pro-rated based upon the number of days of Executive is employed by the Company in 2017. Except as otherwise expressly provided in Section 5 of this Agreement, in order to be eligible to receive payment of any Annual Bonus, Executive must be employed by the Company on the date such bonus is scheduled to be paid.

(c) Transaction Bonus . Executive shall be eligible to earn and receive a transaction bonus of Three Hundred Fifty Thousand Dollars ($350,000.00), less any and all lawful deductions and withholdings, upon the closing of Qualifying Transaction (the “ Transaction Bonus ”). Executive shall receive payment of the Transaction Bonus as follows: (i) 50% of the Transaction Bonus within thirty (30) days following the closing of the Qualifying Transaction; and (ii) 50% of the Transaction Bonus on the later of (A) December 31 of the year in which the closing of the Qualifying Transaction occurs, and (B) one hundred twenty (120) days following the closing of the Qualifying Transaction. In order to be eligible to receive payment of the Transaction Bonus, or either installment thereof, Executive must be employed by the Company on the date such bonus is scheduled to be paid.

(d) Restricted Stock Units . Executive shall be granted 100,000 (1.5%) Class C Units and 200,000 (1.0%) Class D Units (collectively, the “ RSUs ”) in the Company, provided that Executive executes the Ranger Energy Holdings, LLC Restricted Unit Award Agreement corresponding to each such grant (the “ RUA Agreements ”). Any RSUs issued to Executive shall be governed by the applicable RSU Agreements

and the Second Amended and Restated Limited Liability Company Agreement of the Company, dated as of October 3, 2016, as the same may be amended or restated from time to time (the “ LLC Agreement ”).

(e) Benefits . During the Employment Period, Executive and his dependents shall be entitled to participate in the Company’s standard employee benefit plans and programs for which employees of the Company are generally eligible (collectively, the “ Benefits ”). Executive recognizes that the Benefits shall be governed by the terms and conditions of the applicable benefit plans and programs. The Company shall not, however, by reason of this Section 3(c) be obligated to institute, maintain or refrain from changing, amending or discontinuing any such benefit plan or program, so long as such changes are similarly applicable to other employees of the Company generally.

(f) Vacation . During the Employment Period, Executive shall be entitled to five (5) weeks of paid vacation during each calendar year (prorated for any partial year), which shall accrue in accordance with the Company’s vacation policies as in effect from time to time. The Company will not pay Executive for any accrued, unused vacation upon the termination of Executive’s employment with the Company for any reason

(g) Expenses . The Company shall reimburse Executive for all reasonable expenses incurred by Executive in the course of performing his duties under this Agreement that are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of such expenses.

(h) Withholding; Deductions . The Company may deduct and withhold from any amounts payable under this Agreement (including, without limitation, any amount paid pursuant to Section 5 ) such federal, state, local, non-U.S. or other taxes as are required or permitted to be withheld pursuant to any applicable law or regulation.

4. Early Termination of the Employment Period .

(a) Termination of Employment by the Company Prior to Expiration of Employment Period. Notwithstanding the provisions of Section 1 hereof, the Company shall have the right to terminate Executive’s employment under this Agreement at any time in accordance with the following provisions:

(i) upon Executive’s death;

(ii) upon Executive’s becoming incapacitated or disabled by accident, sickness or other circumstance which creates an impairment (despite reasonable accommodation) that renders him mentally or physically incapable of performing the duties and services required of him hereunder for a period of at least ninety (90) consecutive days or for ninety (90) non-consecutive business days during any 12-month period;

(iii) for “ Cause ,” upon a determination by the Board, in its sole discretion, that Cause exists according to the following guidelines (but, for purposes of clauses (a), (b) and (d) below, only after the Company has provided Executive written notice of same and Executive has failed to cure same within five (5) business days of such notice):

a breach by Executive of any material provision of this Agreement (other than Sections 6, 7, 8 or 9 of this Agreement, for which there is no cure period);

continued failure by Executive to perform his duties to the reasonable satisfaction of the Board;

any act or acts of fraud, dishonesty or disloyalty by Executive with respect to any aspect of the Company’s business, operations or customers, including, but not limited to, falsification of records of the Company or misappropriation of funds of the Company;

Executive’s insubordination, neglect or failure to follow the lawful instructions of the Chief Executive Officer;

any willful or reckless misconduct or gross negligence by Executive in the performance of his duties under this Agreement;

Executive’s breach of fiduciary duty or duty of loyalty to the Company or its affiliates;

acceptance by Executive of employment or work with another employer or business other than the Company or its affiliates or the performance of work or services for any such other employer or business;

any act by Executive attempting to secure or securing any personal profit or benefit not fully disclosed to and approved by the Board in connection with any transaction entered into on behalf of the Company or its affiliates;

Executive’s breach of Sections 6, 7, 8 or 9 of this Agreement;

Executive’s conviction (by plea of nolo contendere, guilty or otherwise) of any (1) felony, (2) of a crime of theft, fraud, or dishonesty, or (3) crime involving moral turpitude;

Executive’s violation of federal or state securities laws or other laws applicable to the business of the Company or its affiliates; or

conduct on the part of Executive, even if not in connection with the performance of his duties contemplated under this Agreement, that could result in serious prejudice to the interests of the Company or its affiliates, as determined by the Company in its sole discretion, and Executive fails to cease such conduct within twenty-four (24) hours upon written receipt of notice to cease such conduct.

(iv) In the sole discretion of the Board without Cause; provided, however , that in the case of termination without Cause, the Company shall provide Executive with thirty (30) days prior written notice of such termination.

(b) Termination of Employment by Executive Prior to Expiration of Employment Period. Notwithstanding the provisions of Section 1 hereof, Executive shall have the right to terminate his employment under this Agreement at any time for any reason or for no reason; provided, that in the event of a termination under this Section 4(b) Executive must provide the Company with sixty (60) days prior written notice of such termination.

(i) In the event of any termination under this Section 4 , or by reason of a notice of non-renewal delivered in accordance with Section 1 hereof, the provisions of Sections 6 through 27 hereof shall continue to apply in accordance with their terms regardless of the reason for termination.

(ii) Any question as to whether and when there has been a termination of Executive’s employment, and the reason for such termination, shall be determined conclusively by the Board in its sole discretion.

5. Effect of Termination on Compensation .

(a) Termination Upon Death of Executive . In the event of Executive’s death during the Employment Period, all of Executive’s rights and benefits provided for in this Agreement will terminate on the date of death; provided, however , that (i) Executive’s estate will be paid Executive’s pro rata Base Salary as earned through the Termination Date, (ii) Executive’s estate shall be eligible to receive any unpaid and earned Annual Bonus for any full calendar year of the Company that ended prior to the Termination Date (in the amount theretofore awarded by the Board) on the date that such Annual Bonus would have otherwise been payable, and (iii) any extended health benefits, if any, in respect of Executive’s spouse and dependents shall continue at their expense as provided by state or federal law.

(b) Termination by the Company Upon Disability of Executive . If Executive’s employment hereunder is terminated by the Company pursuant to Section 4(a)(ii) of this Agreement, all of Executive’s rights and benefits provided for in this Agreement will terminate as of such date; provided, however , that (i) Executive will be paid Executive’s pro rata Base Salary as earned through the Termination Date, (ii) extended health benefits shall continue at Executive’s expense as provided by state or federal law, and (iii) Executive shall be eligible to receive any unpaid and earned Annual Bonus for any full calendar year of the Company that ended prior to the Termination Date (in the amount theretofore awarded by the Board) on the date that such Annual Bonus would have otherwise been payable.

(c) Termination by the Company for Cause . If Executive’s employment hereunder is terminated by the Company for Cause pursuant to Section 4(a)(iii) of this Agreement, all of Executive’s rights and benefits provided for in this Agreement will terminate as of such date; provided, however , that (i) Executive will be paid Executive’s pro rata Base Salary as earned through the Termination Date, and (ii) extended health benefits shall continue at Executive’s expense as provided by state or federal law.

(d) Termination by the Company Without Cause. If Executive’s employment hereunder is terminated by the Company without Cause pursuant to the provisions set forth in Section 4(a)(iv) , all of Executive’s rights and benefits provided for in this Agreement will terminate as of such date; provided, however , that (i) Executive will be paid Executive’s pro rata Base Salary as earned through the Termination Date, (ii) extended health benefits shall continue at Executive’s expense as provided by state or federal law, (iii) Executive shall be eligible to receive any unpaid and earned Annual Bonus for any full calendar year of the Company that ended prior to the Termination Date (in the amount theretofore awarded by the Board) on the date that such Annual Bonus would have otherwise been payable, and (iv) Executive shall be eligible to receive severance pay equal to the Base Salary (as determined on the Termination Date) through (i) the

first to occur of the expiration of the Employment Period or twelve (12) months from the Termination Date for any such termination prior to a Change of Control (as defined in the RUA Agreements) and (ii) the first to occur of the expiration of the Employment Period or twenty-four (24) months from the Termination Date for any such termination on or after the date of a Change of Control. The severance pay provided for in this Section 5(d) will be paid in installments in accordance with the Company’s normal payroll practices.

(e) Termination of Employment by Executive. If Executive terminates his employment with the Company pursuant to Section 4(b) of this Agreement, all of Executive’s rights and benefits provided for in this Agreement will terminate as of such date; provided, however , that Executive shall receive those amounts described in Section 5(d)(i) and (ii) , and should Executive terminate his employment with the Company for Good Reason, he shall also be eligible receive those amounts described in Sections 5(d)(iii) and 5(d)(iv) . “Good Reason” shall mean (i) a material breach by the Company of any of its material obligations under this Agreement, (ii) a material diminution of Executive’s job duties or responsibilities with respect to the Company, or (iii) the Company’s permanent reassignment of Executive’s principal office location to a location more than fifty (50) miles from Executive’s then principal office location. Notwithstanding the above, the occurrence of any of the events described in clauses (i) through (iii) above will not constitute Good Reason unless (A) Executive gives the Company written notice within sixty (60) days after the initial occurrence of any such event that Executive believes constitutes Good Reason and describing the details of such event, (B) the Company thereafter fails to cure any such event within thirty (30) days after receipt of such notice, and (C) Executive’s Termination Date as a result of such event occurs within 120 days after the initial occurrence of such event.

(f) Expiration of Employment Period . If either the Company or Executive provides the notice of non-renewal of the Agreement and thus elects to allow an Employment Period to expire under its own terms under Section 1 hereof, all of Executive’s rights, compensation and benefits provided for in this Agreement will terminate as of the date of the expiration of the Employment Period; provided however , that Executive shall be eligible to receive those amounts described in Section 5(d)(i) through (iii) .

(g) Waiver and Release of Claims . Except for (i) the continuation of health benefits under state or federal law at Executive’s (or his spouse and dependent’s) expense (for which statutory and eligibility requirements must be met) and (ii) the payment of Base Salary through the Termination Date, Executive shall not be entitled to receive any payments, benefits or other compensation under this Section 5 (including but not limited to any Annual Bonus or severance pay) unless and until Executive (or his estate, as applicable) has executed and delivered to the Company a non-revocable waiver and release, in form and substance acceptable to the Company in its sole discretion, of all claims he has, or may have, known or unknown, against the Company, its subsidiaries and affiliates and their respective predecessors and successors, and any of the current or former directors, managers, officers, employees, owners, investors, shareholders, partners, members, representatives, or agents of any of the foregoing, which arise out of or relate to his employment, separation therefrom, any agreement between the Parties, or any other matter or facts or events occurring through the date of Executive’s execution (or, if applicable that of an authorized representative of his estate) of such waiver and release.

6. Confidential Information . The Company agrees and Executive acknowledges that prior to and during the Employment Period he shall be provided confidential and proprietary information concerning the business or affairs of the Company and its affiliates (collectively, “ Confidential Information ”) that is the property of the Company and its affiliates including, without limitation, information and knowledge pertaining to products, services, inventions, discoveries, improvements, innovations, designs, ideas, trade secrets, manufacturing, advertising, marketing, distribution and sales methods and forecasts, operating procedures, financial statements and other financial information, supplier, vendor, customer and client lists and relationships between the Company and its affiliates and customers, clients, vendors, suppliers, lessors and others who have business dealings with them, and the substance of

any agreements with such persons and parties. Therefore, Executive agrees that he shall not at any time during or after the Employment Period, directly or indirectly, regardless of when he obtained such Confidential Information, disclose, directly or indirectly, to any person or entity or use for his own purposes or the benefit of any third party, including any subsequent employer, any Confidential Information without the prior written consent of the Company. Executive shall deliver to the Company at the Termination Date, or immediately at any other time the Board may request, all property, memoranda, notes, plans, records, reports, electronic mail, computer files, printouts, software and other documents and data (and copies thereof, regardless of the media on which such are contained) constituting or relating to the Confidential Information, Work Product (as defined below), property or the business of the Company or its affiliates which he may then possess or have under his control. All Confidential Information and documents relating to the Company and its affiliates as described above shall be the exclusive property of the Company, and Executive shall use his commercially reasonable best efforts to prevent any publication or disclosure thereof.

7. Inventions and Patents . Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) that (i) relate to the Company’s or its affiliates’ actual or anticipated business that are conceived, developed or made by Executive while employed by the Company or any of its affiliates, (ii) result from any work performed by Executive for the Company or its affiliates, or (iii) are otherwise developed by Executive during Executive’s working time for the Company or its affiliates (collectively “ Work Product ”) belong to the Company or such affiliate (as the case may be). Any copyrightable work falling within the definition of Work Product shall be deemed a “work made for hire” as such term is defined in 17 U.S.C. Section 101, and ownership of all right, title and interest therein shall vest in the Company or its affiliates. To the extent that any Work Product is not deemed to be a “work made for hire” under applicable law or all right, title and interest in and to such Work Product has not automatically vested in the Company or its affiliates, Executive hereby irrevocably assigns, transfers and conveys, to the full extent permitted by applicable law, all right, title and interest in and to the Work Product on a worldwide basis to the Company or its affiliates (as the case may be), without further consideration. Executive will promptly disclose such Work Product to the Company and perform all actions requested by the Company (whether during or after employment) to establish and confirm such ownership (including, without limitation, assignments, consents, powers of attorney and other instruments).

8. Non-Solicitation; Non-Competition .

mechanical refrigeration units, natural gas liquids stabilizer units, natural gas liquids storage tanks, and glycol dehydration units for natural gas liquids recovery and storage, emission reduction for flare gas, hydrocarbon dew point control, and fuel gas conditioning, and (b) renting equipment and provisions of services for well-site electricity generation (the “ Business ”) or interfere with, disrupt or attempt to disrupt the relationship, contractual or otherwise, between the Company or any of its affiliates and any vendor, supplier, customer or client of the Company or any of its affiliates or in any way encourage them to terminate or otherwise alter their relationship with the Company or any affiliate. Executive further agrees that during the Employment Period and for a period of twenty-four (24) months thereafter, he shall not, directly or indirectly, provide any products or services related to the Business to the Company’s or its affiliates’ customers and clients, or prospective customers and clients with whom Executive had direct or indirect contact or about whom Executive received proprietary, confidential or otherwise non-public information, nor utilize the contacts, goodwill and rapport he established with any customers and clients to take away or divert business or income away from the Company or its affiliates to other persons or entities, in each event within the Territory. For purposes of this Section 8 , “customers and clients” shall mean and include those customers, clients and prospective customers and clients who contacted or were contacted by the Company or its affiliates to do business with the Company or its affiliates.

(b) Executive further agrees that in consideration for the Company’s promise to provide him Confidential Information and trade secrets of the Company and its affiliates, in addition to other consideration provided herein, he will not, during the Employment Period and for a period of twenty-four (24) months thereafter, directly or indirectly recruit, solicit, hire or retain (as an independent contractor, Executive or otherwise) or attempt to recruit, solicit, hire or retain any employee, independent contractor, or former employee or independent contractor of the Company or its affiliates, or encourage any employee or independent contractor of the Company or its affiliates to leave the employ or engagement of the Company or its affiliates, as the case may be.

(c) In addition, except for services and duties performed pursuant to this Agreement by Executive for or on behalf of the Company and its affiliates during the Employment Period, Executive agrees that, during the Employment Period and for twenty-four (24) months thereafter, Executive will not for any reason whatsoever, directly or indirectly, for himself or on behalf of or in conjunction with any other person, company, partnership, corporation, business or other entity of whatever nature, engage in, make loans to, own, operate, manage, control, become financially interested in or otherwise have any connection with, whether as an officer, director, manager, employee, independent contractor, advisor, sales representative, consultant, shareholder, owner, partner, member or in any other capacity, the Business within the Territory and anywhere outside of the Territory where the Company or its affiliates have made sales or significant sales efforts with respect to their goods or services relating to the Business during the Employment Period; provided , however, that the passive ownership by Executive of less than one percent (1%) of any class of equity securities of any corporation, if such equity securities are listed on a national securities exchange or are quoted on NASDAQ, will not be deemed to be a breach of this Section 8 .

(d) If, at the time of enforcement of this Section 8 , a court or other tribunal shall hold that the duration, geography or scope restrictions stated herein are unreasonable under circumstances then existing, the Parties agree that the maximum duration, geography or scope reasonable under such circumstances shall be substituted for the stated duration, geography or scope and that the court or other tribunal shall reform the restrictions contained herein to cover the maximum duration, geography and scope permitted by law.

(e) If Executive breaches any provision of this Section 8 , Executive agrees and acknowledges that the time periods set forth herein shall be extended by the time period of such breach.

9. Non-disparagement . Executive shall not, either during the Employment Period and after the termination thereof, whether in writing or orally, malign, denigrate, impugn, attack or disparage the Company, its affiliates or their respective predecessors and successors, or any of the current or former directors, managers, officers, employees, owners, investors, shareholders, partners, members, representatives, or agents of any of the foregoing, with respect to any of their respective past or present activities, products or services, or otherwise publish (whether in writing or orally) statements that tend to portray any of the aforementioned parties in an unfavorable light or take any unethical or deceitful action that would materially interfere with any existing or potential business relationship or contractual arrangement of the Company that is detrimental to the best interests of the Company or any other person in which the Company has an equity interest.

11. Accounting . If Executive breaches any of the covenants contained in Section 6 , 7 , 8 or 9 of this Agreement, the Company will have the right and remedy to require Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by Executive as the result of such breach. This right and remedy will be in addition to, and not in lieu of, any other rights and remedies available to the Company under any other agreement between the Company and its affiliates, on the one hand, and Executive, on the other hand, at law or in equity.

12. Business Opportunities . Executive agrees, while he is employed by the Company, to offer or otherwise make known or available to it, as directed by the Board and without additional specific compensation or consideration therefor, any business prospects, contracts or other business opportunities that Executive may discover, find, develop or otherwise have available to Executive in the areas of focus of the Business as described in Section 8 and logical business outgrowths arising from such areas, and further agrees that any such prospects, contacts or other business opportunities shall be the property of the Company.

13. Notices . For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by any means which provides a receipt upon delivery and addressed as follows:

If to the Company to:

Ranger Energy Services, LLC

800 Gessner

Suite 1000

Houston, TX 77024

Attention: Chairman

If to Executive to:

Darron Anderson

704 Little John Lane

Houston, TX 77024__

or to such other address as either Party may furnish to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt.

14. Governing Law; EXCLUSIVE VENUE . This Agreement shall be governed by and interpreted under the INTERNAL laws of the state of DELAWARE without regard to conflicts of law. In the event of a dispute involving this Agreement, the parties irrevocably agree that exclusive venue for such dispute shall lie in any court of competent jurisdiction in Harris County, Texas, and the parties waive any claim that such forum is inappropriate or inconvenient.

15. Complete Agreement . This Agreement, the RUA Agreements and LLC Agreement embody the complete agreement and understanding between the Parties and supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way.

16. Successor and Assigns . This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company and their respective successors, heirs and permitted assigns. This Agreement is personal to Executive and shall not be assignable by Executive, except for the assignment by will or the laws of descent and distribution of any accrued pecuniary interest of Executive, and any assignment in violation of this Agreement shall be void. Upon written notice to Employee, this Agreement may be assigned by the Company to Ranger Inc. in connection with a Qualifying Transaction.

17. Noncontravention; Prior Agreements and Information . Executive represents, warrants and covenants that as of the date hereof: (i) Executive has the full right, authority and capacity to enter into this Agreement and perform Executive’s obligations hereunder, (ii) Executive is not bound by any agreement that conflicts with or prevents or restricts the full performance of Executive’s duties and obligations to the Company hereunder during or after the Employment Period, and (iii) the execution and delivery of this Agreement shall not result in any breach or violation of, or a default under, any existing obligation, commitment or agreement to which Executive is subject. Executive represents and warrants that his service as an Executive of the Company and his performance of his duties hereunder will not and do not violate any prior agreement Executive made with any previous employer or company with whom he did business. Executive further agrees that he has not previously, and will not in the future, disclose to the Company any confidential and proprietary information or trade secrets belonging to any previous employer, and acknowledges that the Company has instructed him not to disclose to it any confidential and proprietary information or trade secrets belonging to any previous employer. Executive agrees acknowledges that he will not enter into any agreement, whether written or oral, conflicting with the provisions of this Agreement.

18. Amendment . Except as otherwise expressly provided herein, this Agreement may be amended at any time only by written agreement between the Company (with the written approval of the Board) and Executive, and any provision hereof may be waived only in writing by the Party who is so waiving (which waiver, if being made by the Company, shall require written approval of the Board).

19. Counterparts; Facsimile Signature . This Agreement may be executed in one or more counterparts, all of which together shall constitute but one agreement. Any Party may execute and deliver this Agreement by facsimile signature or by electronic portable document format (.pdf) and the other Party will be entitled to rely upon such facsimile or electronic portable document format (.pdf) signature as conclusive evidence that this Agreement has been duly executed by such Party.

20. No Waiver . No failure or delay on the part of the Company or Executive in enforcing or exercising any right or remedy hereunder shall operate as a waiver thereof. It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by that same party.

21. Representations and Warranties; Advice of Counsel . Prior to execution of this Agreement, Executive was advised by the Company of Executive’s right to seek independent advice from an attorney of Executive’s own selection regarding this Agreement and Executive acknowledges that he has had sufficient opportunity to do so. Executive acknowledges that Executive has entered into this Agreement knowingly and voluntarily and with full knowledge and understanding of the provisions of this Agreement after being given the opportunity to consult with counsel. Executive further represents that in entering into this Agreement, Executive is not relying on any statements or representations made by any of the Company, its affiliates or any of their respective directors, managers, officers, employees, owners, investors, shareholders, partners, members, representatives, or agents that are not expressly set forth herein, and that Executive is relying only upon Executive’s own judgment and any advice provided by Executive’s attorney.

22. Cooperation . Executive agrees that, upon reasonable notice and without the necessity of the Company obtaining a subpoena or court order, Executive shall provide reasonable cooperation in connection with any suit, action or proceeding (or any appeal from any suit, action or proceeding), and any investigation and/or defense of any claims asserted against the Company, its affiliates or their respective predecessors and successors, or any of the current or former directors, managers, officers, employees, owners, investors, shareholders, partners, members, representatives, or agents of any of the foregoing, which relates to events occurring during Executive’s employment or relationship with the Company or its affiliates as to which Executive may have relevant information (including, but not limited, to furnishing relevant information and materials to the Company or its designee and/or providing truthful testimony at depositions and at trial), provided that with respect to such cooperation occurring following termination of employment, the Company shall reimburse Executive for expenses reasonably incurred in connection therewith, and further provided that any such cooperation occurring after the termination of Executive’s employment shall be scheduled to the extent reasonably practicable so as not to unreasonably interfere with Executive’s business or personal affairs.

23. Immunity and Government Agencies . Notwithstanding anything in this Agreement to the contrary, Executive may, without advance notice to the Company prior to any such disclosure (i) disclose Confidential Information or other information in confidence to a federal, State, or local government official, including the Securities and Exchange Commission, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law; (ii) disclose Confidential Information or other information in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (iii) disclose Confidential Information or other information to Executive’s attorney and use Confidential Information in a court proceeding or Executive brings against the Company, provided that Executive files any document containing Confidential Information under seal and do not otherwise disclose Confidential Information, except pursuant to court order. Without prior written authorization of the Company’s General Counsel or Board, Executive shall not disclose to any third party (including any government agency or any attorney Executive may retain) any communications that are covered by the Company’s attorney-client privilege.

24. No Construction Against Drafter . No provision of this Agreement or any related document will be construed against or interpreted to the disadvantage of any Party hereto by any court or other governmental or judicial authority by reason of such Party having or being deemed to have structured or drafted such provision.

25. Affiliate . As used in this Agreement, “affiliate” shall mean any person or entity which directly or indirectly through one or more intermediaries owns or controls, is owned or controlled by, or is under common ownership or control with, the Company.

26. Severability . If any provision or clause of this Agreement, or portion thereof, shall be held by any court or other tribunal of competent jurisdiction to be illegal, invalid or unenforceable in such jurisdiction, the remainder of such provision shall not be thereby affected and shall be given full effect, without regard to the invalid portion. It is the intention of the Parties that, if any court or other tribunal construes any provision or clause of this Agreement, or any portion thereof, to be illegal, void or unenforceable because of the duration of such provision or the area matter covered thereby, such court or other tribunal shall reduce the duration, area or matter of such provision, and, in its reduced form, such provision shall then be enforceable and shall be enforced.

27. Section 409A .

(a) It is intended that any amounts payable under this Agreement shall be exempt from and avoid the imputation of any tax, penalty or interest under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) to the fullest extent permissible under applicable law; provided that if any such amount is or becomes subject to the requirements of Section 409A, it is intended that those amounts shall comply with such requirements. This Agreement shall be construed and interpreted consistent with that intent. In furtherance of that intent, if payment or provision of any amount or benefit hereunder that is subject to Section 409A at the time specified herein would subject such amount or benefit to any additional tax under Section 409A, the payment or provision of such amount or benefit shall be postponed to the earliest commencement date on which the payment or provision of such amount or benefit could be made without incurring such additional tax. In no event, however, shall the Company be liable for any tax, interest or penalty imposed on Executive under Section 409A or any damages for failing to comply with Section 409A.

(b) If Executive is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the Separation Date, Executive shall not be entitled to any payment or benefit pursuant to this Agreement that constitutes nonqualified deferred compensation for purposes of Section 409A and that is payable upon a separation from service (within the meaning of Section 409A) until the earlier of (A) the date which is six (6) months after his separation from service for any reason other than death, or (B) the date of Executive’s death; provided that this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A. Any amounts otherwise payable to Executive upon or in the six (6) month period following Executive’s separation from service that are not so paid by reason of this Section 27 shall be paid (without interest) as soon as practicable (and in any event within thirty (30) days) after the date that is six (6) months after Executive’s separation from service (provided that in the event of Executive’s death after such separation from service but prior to payment, then such payment shall be made as soon as practicable, and in all events within thirty (30) days, after the date of Executive’s death).

(c) Any reimbursement payment or in-kind benefit due to Executive pursuant to Agreement, to the extent that such reimbursements or in-kind benefits are taxable to him, shall be paid on or before the last day of Executive’s taxable year following the taxable year in which the related expense was incurred. Executive agrees to provide prompt notice to the Company of any such expenses (and any other documentation that the Company may reasonably require to substantiate such expenses) in order to facilitate the Company’s timely reimbursement of the same. Reimbursements and in-kind benefits pursuant to the Agreement are not subject to liquidation or exchange for another benefit and the amount of such benefits that Executive receives in one taxable year shall not affect the amount of such reimbursements or benefits that Executive receives in any other taxable year.

(d) For purposes of Section 409A, Executive’s right to receive any installment payments hereunder shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., payment shall be made within thirty (30) days following the date of termination), the actual date of payment within the specified period shall be within the sole discretion of the Company.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.

Ranger Energy Services, LLC, a Delaware limited liability company

By: __ /s/ Charles Leykum _____________

Name:

Title:

__/s/ Darron Anderson_________________________

Darron Anderson

EXHIBIT 10.2

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “ Agreemen t ”), entered into as of July 1, 2017, is made by and between Ranger Energy Services, LLC, a Delaware limited liability company (the “ Company ”), and J. Matthew Hooker (“ Executive ”). The Company and Executive are sometimes hereafter referred to individually as a “ Party ,” or collectively as the “ Parties .”

1. Employment . The Company agrees to employ Executive, and Executive hereby accepts employment with the Company, to serve as its Chief Operating Officer, upon the terms set forth in this Agreement for the period beginning on the date hereof and ending on the date three (3) years after the date hereof (the “ Initial Employment Period ”); provided that, upon the expiration of the Initial Employment Period, this Agreement shall automatically be extended on the same terms and conditions set forth herein for additional consecutive one‑year periods beginning on the second anniversary of the date hereof, unless the Company or Executive gives the other Party written notice of its or his election not to extend at least sixty (60) days prior to the end of the Initial Employment Period or any additional one-year period (the “ Extended Employment Period ”) (the Initial Employment Period and any Extended Employment Period shall be referred to collectively herein as the “ Employment Period ”). Notwithstanding the foregoing, the Company and Executive understand and agree that the Employment Period is subject to early termination as provided in Section 4 hereof. A notice of non-extension provided by the Company pursuant to this Section 1 shall not constitute a termination without Cause under Section 4(a)(iv) . The date on which the Employment Period expires or, if the Executive’s employment is terminated for any reason, the effective date of such termination, is referred to herein as the “ Termination Date .”

2. Position and Duties .

(a) During the Employment Period, Executive shall serve as the Chief Operating Officer of the Company, and each of its operating subsidiaries, whether in existence now, or to be formed or acquired during the term hereof, and shall have the duties, responsibilities and authority customary for such a position in an organization of the size and nature of the Company. Executive shall report directly to the Chief Executive Officer of the Company and/or to the board of managers (the “ Board ”) of Ranger Energy Holdings, LLC, a Delaware limited liability company and the sole member of the Company (“ Holdings ”), and shall devote his commercially reasonable best efforts and business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity) to the business and affairs of the Company and its affiliates. To the extent that a conflict arises between directions given to Executive from the CEO and from the Board, Executive shall follow the direction provided by the Board. Executive shall obtain the prior written approval from the Board before joining or participating in any other business opportunities, whether or not for compensation, and whether as an investor, board member, partner, or in any other capacity.

the Company’s or its affiliates’ business and interests, to do no act which would injure the Company’s or its affiliates’ business, interests, or reputation, and to refrain from using for Executive’s own benefit or for the benefit of others any information or opportunities pertaining to the Company’s or its affiliates’ business or interests that are entrusted to Executive or that he learned while employed by the Company. Executive acknowledges and agrees that, upon termination of the employment relationship, Executive shall continue to refrain from using for his own benefit or the benefit of others, or from disclosing to others, any information or opportunities pertaining to the Company’s or its affiliates’ business or interests that were entrusted to Executive during the employment relationship or that he learned while employed by the Company. In addition, Executive, at all times during the Employment Period, shall adhere to and obey all of the Company’s written rules, policies and procedures, which will be available for viewing and are now in effect, or as are subsequently adopted or modified by the Company, which govern the operation of the Company’s business and the conduct of employees of the Company.

3. Base Salary, Bonus and Benefits .

(a) Base Salary . During the Employment Period, Executive’s base salary shall initially be Two Hundred Fifty Thousand Dollars ($250,000) per year (the “ Base Salary ”), less any and all lawful deductions and withholdings, which Base Salary shall be payable in regular installments in accordance with the Company’s general payroll practices. Upon the successful consummation of an initial public offering of the equity securities of the Company or its successor (a “ Public Offering ”), the Company may assign this Agreement to any such successor and shall cooperate in good faith with Executive to adjust the Base Salary to reflect Executive’s responsibilities following the consummation of the Public Offering. During the Employment Period, Executive’s Base Salary, Annual Bonus and other forms of compensation may be increased by the Board at any time in its sole discretion; provided that the Base Salary, Annual Bonus and other forms of compensation may not be decreased below the foregoing amount provided, however, that the Company may unilaterally reduce Executive’s base salary or wages by up to ten percent (10%) if (A) the same percentage reduction applies to all similarly situated employees of the Company, and (B) the Board determines that such reduction is necessary to allow the Company to avoid violating one or more financial covenants contained in its loan agreements or similar financing arrangements, as may be amended from time to time.

(b) Annual Bonus . In addition to Base Salary, Executive shall be eligible to receive a discretionary annual bonus for 2017 of up to fifty percent (50%) of his earned Base Salary in 2017, and a discretionary annual bonus of up to fifty percent (50%) of his Base Salary (the “ Annual Bonus ”) for subsequent years of the Employment Period, the amount of which shall be determined and paid based on annual Company and individual (i.e., Executive-specific) milestones as determined by the Board that must be met in order for Executive to be eligible to receive the bonus to be agreed upon by the Parties no later than February 28 of each year.

(c) Benefits . During the Employment Period, Executive and his dependents shall be entitled to participate in the Company’s standard employee benefit plans and programs, including sick leave, for which employees of the Company are generally eligible (collectively, the “ Benefits ”). Executive recognizes that the Benefits shall be governed by the terms and conditions of the applicable benefit plans and programs. The Company shall not, however, by reason of this Section 3(c) be obligated to institute, maintain or refrain from changing, amending or discontinuing any such benefit plan or program, so long as such changes are similarly applicable to other employees of the Company generally.

(d) Restricted Equity . Executive shall receive 25,000 Class C Units and 25,000 Class D Units of Holdings (the “ Equity Award ”), pursuant to the terms of Restricted Unit Award Agreements that will be entered into by and between Holdings and Executive (the “ Restricted Unit Award Agreements ”). If there are any conflicts between the applicable Restricted Unit Award Agreement and this Employment

Agreement with respect to the Equity Award, such Restricted Unit Award Agreement shall control.

(e) Vacation . During the Employment Period, Executive shall be entitled to four (4) weeks of paid vacation during each calendar year (prorated for any partial year), which shall accrue in accordance with the Company’s vacation policies as in effect from time to time. The Company will not pay Executive for any accrued, unused vacation upon the termination of Executive’s employment with the Company for any reason.

(f) Expenses . The Company shall reimburse Executive for all reasonable expenses incurred by Executive in the course of performing his duties under this Agreement that are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of such expenses.

(g) Withholding; Deductions . The Company may deduct and withhold from any amounts payable under this Agreement (including, without limitation, any amount paid pursuant to Section 5 ) such federal, state, local, non-U.S. or other taxes as are required or permitted to be withheld pursuant to any applicable law or regulation.

(h) Indemnity . The Company hereby agrees to indemnify Executive to the fullest extent permitted by applicable law, the Company’s certificate of formation, the Company’s limited liability company agreement or by statute, which is in effect as of the date of hire and remains in effect indefinitely after termination. In the event of any change after the date of this Agreement in any applicable law, statute or rule that expands the right of a Delaware limited liability company to indemnify a manager, officer, employee, controlling person, agent or fiduciary, it is the intent of the parties hereto that Executive shall enjoy by this Agreement the greater benefits afforded by such change. The Company shall indemnify and hold harmless Executive, to the fullest extent permitted by law if Executive was or is or becomes a party to or witness or other participant in or is threatened to be made a party to or witness or other participant in, any threatened, pending or completed action, suit, proceeding, or alternative dispute resolution mechanism, or in hearing, inquiry or investigation that Executive in good faith reasonably believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other against any and all expenses (including attorneys’ fees and all other costs, expenses and obligations incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in any such actions, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation), judgments, fines, penalties and amounts paid in settlement. The Company shall advance all expenses incurred by Executive in connection with such indemnification, such expenses to be paid by the Company to Executive as soon as practicable but in no event later than twenty-five (25) days after written demand by the Executive to the Company.

4. Early Termination of the Employment Period .

(i) upon Executive’s death;

duties and services required of him hereunder for a period of at least one hundred twenty (120) consecutive days, or for one hundred twenty (120) non-consecutive business days during any 12-month period;

(iii) for “ Cause ,” upon a determination by the Board, in its good faith discretion (but, for purposes of clauses (a) and (b), only after the Company has provided Executive written notice of the facts and circumstances and after Executive has had an opportunity to be heard and Executive has failed to cure same within five (5) business days of such notice if cure is reasonably possible) that Executive has engaged in:

Executive’s material breach of his obligations under (1) this Agreement, including, without limitation, Sections 6 , 7 , 8 or 9 of this Agreement, (2) the Restricted Unit Award Agreements or (3) the Second Amended and Restated Liability Company Agreement of Holdings, as may be amended or amended and restated from time to time in accordance with the provisions thereof (the “ LLC Agreement ”), in each case after written notice and opportunity to cure as set forth above;

continued failure by Executive to perform the duties and services required of Executive pursuant to this Agreement, after written notice and opportunity to cure as set forth above;

an act or acts of fraud, dishonesty or disloyalty with respect to the Company’s business, operations or customers, including, but not limited to, falsification of records of the Company or misappropriation of funds of the Company;

insubordination or failure to follow the lawful instructions of the Board;

any willful or reckless misconduct or gross negligence by Executive in the performance of his duties under this Agreement;

any breach of fiduciary duty or duty of loyalty to the Company or its affiliates;

acceptance of employment or work with another employer or business other than the Company or its affiliates or the performance of work or services for any such other employer or business;

any act attempting to secure or securing any personal profit or benefit not fully disclosed to and approved by the Board in connection with any transaction entered into on behalf of the Company or its affiliates;

habitual drug or alcohol abuse;

a conviction (by plea of nolo contendere, guilty or otherwise) of any (1) felony, (2) of a crime of theft, fraud, or dishonesty, or (3) crime involving moral turpitude; or

a conviction for a violation of federal or state securities laws or other laws applicable to the business of the Company or its affiliates; or

(iv) In the sole discretion of the Board without Cause; provided, however , that in the case of termination without Cause, the Company must provide Executive with thirty (30) days prior written notice of such termination.

(b) Termination of Employment by Executive Prior to Expiration of Employment Period. Notwithstanding the provisions of Section 1 hereof, Executive shall have the right to terminate his employment under this Agreement at any time for any reason or for no reason; provided, that in the event of a termination under this Section 4(b) Executive must provide the Company with thirty (30) days prior written notice of such termination.

(c) Notice of Termination. If the Company desires to terminate Executive’s employment hereunder as provided in Section 4(a) hereof or Executive desires to terminate Executive’s employment hereunder as provided in Section 4(b) hereof, Executive shall do so by giving written notice to the Board and the Company shall do so by giving written notice to Executive that it or he has elected to terminate Executive’s employment hereunder and stating the effective date and reason, if any (including the applicable section of this Agreement), for such termination. In the event of such termination, the provisions of Sections 6 through 8 hereof shall continue to apply in accordance with their terms regardless of the reason for termination. Any question as to whether and when there has been a termination of Executive’s employment, and the cause of such termination, shall be determined conclusively by the Board in its sole discretion.

5. Effect of Termination on Compensation.

(a) Termination Upon Death of Executive . In the event of Executive’s death during the Employment Period, all of Executive’s rights and benefits provided for in this Agreement will terminate on the date of death; provided, however , that (i) Executive’s estate will be paid Executive’s pro rata Base Salary as earned through the Termination Date, (ii) Executive shall be entitled to any unpaid and earned Annual Bonus for any calendar year of the Company that ended prior to the Termination Date (in the amount theretofore awarded by the Board) on the date that such Annual Bonus would otherwise have been payable, and (iii) any extended health benefits provided by the Company in respect of Executive’s spouse and dependents shall continue as provided by state or federal law, and the Company shall provide a stipend to Executive’s spouse and/or dependents in the amount of the continuation coverage (or COBRA) premiums.

(b) Termination by the Company Upon Disability of Executive . If Executive’s employment hereunder is terminated by the Company pursuant to Section 4(a)(ii) of this Agreement, all of Executive’s rights and benefits provided for in this Agreement will terminate as of such date; provided, however , that (i) Executive will be paid Executive’s pro rata Base Salary as earned through the Termination Date, (ii) Executive shall be entitled to receive any unpaid and earned Annual Bonus for any calendar year of the Company that ended prior to the Termination Date (in the amount theretofore awarded by the Board) on the date that such Annual Bonus would otherwise have been payable, and (iii) extended health benefits shall continue as provided by state or federal law, and the Company shall provide a stipend to Executive or his spouse and dependents in the amount of the continuation coverage (or COBRA) premiums.

(c) Termination by the Company for Cause . If Executive’s employment hereunder is terminated by the Company for Cause pursuant to Section 4(a)(iii) of this Agreement, all of Executive’s rights and benefits provided for in this Agreement will terminate as of such date; provided, however , that (i) Executive will be paid Executive’s pro rata Wages as earned through the Termination Date, and (ii) extended health benefits shall continue at Executive’s expense as provided by state or federal law.

(d) Termination by the Company Without Cause. If Executive’s employment hereunder is terminated by the Company without Cause pursuant to the provisions set forth in Section 4(a)(iv) , all of Executive’s rights and benefits provided for in this Agreement will terminate as of such date; provided, however , that (i) Executive will be paid Executive’s pro rata Wages as earned through the Termination Date, (ii) Executive shall be entitled to any unpaid and earned Annual Bonus for any calendar year of the Company that ended prior to the Termination Date (in the amount theretofore awarded by the Board) on the date that such Annual Bonus would otherwise have been payable, (iii) extended health benefits shall continue at Executive’s expense as provided by state or federal law and (iv) the Company shall pay Executive severance equal to eighteen (18) months of the Base Salary, or the Base Salary that would have been paid through the end of the then current Employment Period, whichever is greater (as determined on the Termination Date). The severance pay provided for in this Section 5(d) will be paid in installments in accordance with the Company’s normal payroll practices.

(e) Termination of Employment by Executive. If Executive terminates his employment with the Company pursuant to Section 4(b) of this Agreement, all of Executive’s rights and benefits provided for in this Agreement will terminate as of such date; provided, however , that Executive shall receive those amounts described in Section 5(d)(i)-(iii) , and should Executive terminate his employment with the Company for Good Reason, he shall also receive those amounts described in Sections 5(d)(iv) , except the severance Wages will be paid for eighteen (18) months. “Good Reason” shall mean (i) a breach by the Company of any of its material obligations under this Agreement, (ii) a material diminution of Executive’s job duties or responsibilities with respect to the Company, including a change in reporting such that Executive no longer reports to the Chief Executive Officer, (iii) diminution of total compensation, or (iv) the Company’s permanent reassignment of Executive’s principal office location to a location more than fifty (50) miles from Executive’s then principal office location, but only after Executive has notified Company of same in writing and Company has not remedied same within thirty (30) days of such notice.

(f) Expiration of Employment Period . If either the Company or Executive provides the notice of intent not to extend the Agreement and thus elects to allow an Employment Period to expire under its own terms under Section 1 hereof, all of Executive’s rights, compensation and benefits provided for in this Agreement will terminate as of the date of the expiration of the Employment Period.

(g) Waiver and Release of Claims . Except for (i) the continuation of health benefits under state or federal law at Executive’s (or his spouse and dependent’s) expense (for which statutory and eligibility requirements must be met) and (ii) the payment of Wages through the Termination Date, Executive shall not be entitled to receive any payments, benefits or other compensation under this Section 5 (including but not limited to any Annual Bonus or severance pay) unless and until Executive has executed and delivered to the Company a non-revocable waiver and release, in form and substance acceptable to the Company in its sole discretion, of all claims he has, or may have, known or unknown, against the Company, its subsidiaries and affiliates and their respective predecessors and successors, and any of the current or former directors, managers, officers, employees, owners, investors, shareholders, partners, members, representatives, or agents of any of the foregoing, which arise out of or relate to his employment, separation therefrom, any agreement between the Parties, the LLC Agreement, the Restricted Unit Award Agreements or any other matter or facts or events occurring through the date of Executive’s signature on such waiver and release.

(h) Impact of Termination of Employment on Equity Award. The Parties acknowledge and agree that all provisions affecting the Equity Award as a result of any termination of Executive’s employment shall be as set forth in the Restricted Unit Award Agreements and the LLC Agreement.

6. Confidential Information . The Company agrees and Executive acknowledges that prior to and during the Employment Period he shall be provided trade secrets, confidential and proprietary information intended to be kept in confidence concerning the Business of the Company and its affiliates (collectively, “ Confidential Information ”) that is the property of the Company and its affiliates, the use and knowledge of which gives the Company a competitive advantage, including, without limitation, information and knowledge pertaining to products, services, inventions, discoveries, improvements, innovations, designs, ideas, trade secrets, manufacturing, advertising, marketing, distribution and sales methods and forecasts, operating procedures, financial statements and other financial information, supplier, vendor, customer and client lists and relationships between the Company and its affiliates and customers, clients, vendors, suppliers, lessors and others who have business dealings with them, and the substance of any agreements with such persons and parties. Therefore, Executive agrees that he shall not at any time during or after the Employment Period, directly or indirectly, regardless of when he obtained such Confidential Information, disclose, directly or indirectly, to any person or entity or use for his own purposes or the benefit of any third party, including any subsequent employer, any Confidential Information without the prior written consent of the Company. Confidential Information does not include information which (i) is in the public domain or is generally known or available, or hereafter becomes part of the public domain or is generally known or available through no violation of this Agreement; (ii) is lawfully acquired by the Executive from any third party not bound, to the actual knowledge of the Executive, by an obligation of confidence to the Company; or (iii) is required, pursuant to judicial action or governmental regulations or other requirements, to be disclosed by the Executive, provided that the Executive has notified the Company as such request for disclosure and cooperates with the Company in the event the Company elects to contest and avoid such disclosure. Executive shall deliver to the Company at the Termination Date, or immediately at any other time the Board may request, all property, memoranda, notes, plans, records, reports, electronic mail, computer files, printouts, software and other documents and data (and copies thereof, regardless of the media on which such are contained) constituting or relating to the Confidential Information, Work Product (as defined below), property or the business of the Company or its affiliates which he may then possess or have under his control. All Confidential Information and documents relating to the Company as described above shall be the exclusive property of the Company, and Executive shall use his commercially reasonable best efforts to prevent any publication or disclosure thereof.

7. Inventions and Patents . Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) that relate to the Company’s or its affiliates’ actual or anticipated business that are conceived, developed or made by Executive while employed by the Company or any of its affiliates (“ Work Product ”) belong to the Company or such affiliate (as the case may be). Any copyrightable work falling within the definition of Work Product shall be deemed a “work made for hire” as such term is defined in 17 U.S.C. Section 101, and ownership of all right, title and interest therein shall vest in the Company or its affiliates. To the extent that any Work Product is not deemed to be a “work made for hire” under applicable law or all right, title and interest in and to such Work Product has not automatically vested in the Company or its affiliates, Executive hereby irrevocably assigns, transfers and conveys, to the full extent permitted by applicable law, all right, title and interest in and to the Work Product on a worldwide basis to the Company or such affiliate (as the case may be), without further consideration. Executive will promptly disclose such Work Product to the Company and perform all actions requested by the Company (whether during or after employment) to establish and confirm such ownership (including, without limitation, assignments, consents, powers of attorney and other instruments).

8. Non-Solicitation; Non-Competition .

(a) Executive acknowledges, and the Company agrees, that in the course of Executive’s employment with the Company, Executive will be provided and become familiar with the Company’s and its affiliates’ trade secrets and Confidential Information. Executive further acknowledges that having access to and knowledge of the Confidential Information of the Company and its affiliates is essential to the performance of his duties with the Company and that such information is an extremely valuable and unique asset of the Company and its affiliates that gives them a competitive advantage over persons or entities that do not possess such information and knowledge. Therefore, Executive agrees that in consideration for the Company’s promise to provide him Confidential Information and trade secrets of the Company and its affiliates, in addition to other consideration provided herein, Executive will not, during the Employment Period and for a period of eighteen (18) months (such period, the “ Restricted Period ”) thereafter, directly or indirectly contact or solicit vendors, suppliers, customers or clients of the Company or its affiliates with whom Executive had direct or indirect contact or about whom Executive received proprietary, confidential or otherwise non-public information for the purpose of providing services relating to well servicing, well workover, fluid management and well completion services and related engineering consulting services for the oil and gas industry and equipment rentals related thereto (the “ Business ”) or interfere with, disrupt or attempt to disrupt the relationship, contractual or otherwise, between the Company or any of its affiliates and any vendor, supplier, customer or client of the Company or any of its affiliates or in any way encourage them to terminate or otherwise alter their relationship with the Company or any affiliate. Executive further agrees that during the Employment Period and the Restricted Period, he shall not, directly or indirectly, provide any products or services related to the Business, to the Company’s or its affiliates’ customers and clients, or prospective customers and clients with whom Executive had direct or indirect contact or about whom Executive received proprietary, confidential or otherwise non-public information, nor utilize the contacts, goodwill and rapport he established with any customers and clients to take away or divert business or income away from the Company or its affiliates to other persons or entities. For purposes of this Section 8 , “customers and clients” shall mean and include those customers, clients and prospective customers and clients who contacted or were contacted by the Company or its affiliates to do business with the Company or such affiliates.

(b) Executive further agrees that in consideration for the Company’s promise to provide him Confidential Information and trade secrets of the Company and its affiliates, in addition to other consideration provided herein, he will not, during the Employment Period or the Restricted Period, directly or indirectly recruit, solicit, hire or retain (as an independent contractor, employee or otherwise) or attempt to recruit, solicit, hire or retain any employee, independent contractor, or former (within the then-preceding eighteen (18) month period) employee or independent contractor of the Company or its affiliates, or encourage any employee or independent contractor of the Company or its affiliates to leave the employ or engagement of the Company or its affiliates, as the case may be.

(c) In addition, except for services and duties performed pursuant to this Agreement by Executive for or on behalf of the Company and its affiliates during the Employment Period, Executive agrees that, during the Employment Period and the Restricted Period, Executive will not for any reason whatsoever, directly or indirectly, for himself or on behalf of or in conjunction with any other person, company, partnership, corporation, business or other entity of whatever nature, engage in, make loans to, own, operate, manage, control, become financially interested in or otherwise have any connection with, whether as an officer, director, manager, employee, independent contractor, advisor, sales representative, consultant, shareholder, owner, partner, member or in any other capacity, the Business within North America (the “ Territory ”) and anywhere outside of the Territory where the Company or its affiliates have made sales or significant sales efforts with respect to their goods or services relating to the Business during the Employment Period or the Restricted Period; provided , however, that the passive ownership by Executive of less than one percent (1%) of any class of equity securities of any corporation, if such equity

securities are listed on a national securities exchange or are quoted on NASDAQ, will not be deemed to be a breach of this Section 8 .

(e) If Executive breaches any provision of Section 8 , Executive agrees to and acknowledges that the time periods set forth herein shall be extended by the time period of such breach.

9. Non-Disparagement . Each Party agrees that it or he shall not, either during the Employment Period and after the termination thereof, whether in writing or orally, malign, denigrate, impugn, attack or disparage the other Party, its or his affiliates or their respective predecessors and successors, or any of the current or former directors, managers, officers, employees, owners, investors, shareholders, partners, members, representatives, or agents of any of the foregoing, with respect to any of their respective past or present activities, products or services, or otherwise publish (whether in writing or orally) statements that tend to portray any of the aforementioned Parties in an unfavorable light or take any unethical or deceitful action that would materially interfere with any existing or potential business relationship or contractual arrangement of such Party that is detrimental to the best interests of such Party. Notwithstanding the above, this provision shall not apply to any testimony given under oath pursuant to any pending or threatened legal proceeding or management-employee discussions, internal feedback, coaching or performance reviews.

10. Remedies . Executive acknowledges that a violation by Executive of any of the covenants contained in Section 6 , 7 , 8 or 9 would cause irreparable damage to the Company in an amount that would be material but not readily ascertainable, and that any remedy at law (including the payment of damages) would be inadequate. Accordingly, Executive agrees that, notwithstanding any provision of this Agreement to the contrary, the Company shall be entitled (without the necessity of showing economic loss or other actual damage) to injunctive relief (including temporary restraining orders, preliminary injunctions and/or permanent injunctions) in any court of competent jurisdiction for any actual or threatened breach of any of the covenants set forth in Section 6 , 7 , 8 or 9 in addition to any other legal or equitable remedies it may have. The preceding sentence shall not be construed as a waiver of the rights that the Company may have for damages under this Agreement or otherwise, and all of the Company’s rights shall be unrestricted. If Executive breaches any of the covenants contained in Section 6 , 7 , 8 , or 9 of this Agreement, the Company will have the right and remedy to require Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits derived or received by Executive as the result of such breach. This right and remedy will be in addition to, and not in lieu of, any other rights and remedies available to the Company under any other agreement between the Company and its affiliates, on the one hand, and Executive, on the other hand, at law or in equity.

11. Business Opportunities Executive agrees, while he is employed by the Company, to offer or otherwise make known or available to it, as directed by the Board and without additional specific compensation or consideration therefor, any business prospects, contracts or other business opportunities that Executive may discover, find, develop or otherwise have available to Executive with respect to the Business, and further agrees that any such prospects, contacts or other business opportunities shall be the property of the Company.

12. Notices . For purposes of this Agreement, notices and all other communications

provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by any means which provides a receipt upon delivery and addressed as follows:

If to the Company to:

Ranger Energy Services, LLC

800 Gessner, Suite 1000

Houston, TX 77024

If to Executive to:

J. Matthew Hooker

56 Sunlit Forest Drive

The Woodlands, Texas 77381

or to such other address as either Party may furnish to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt.

13. Governing Law; EXCLUSIVE VENUE . This Agreement shall be governed by and interpreted under the INTERNAL laws of the state of TEXAS without regard to conflicts of law. In the event of a dispute involving this Agreement OR EXECUTIVE’s EMPLOYMENT WITH THE COMPANY, the parties irrevocably agree that exclusive venue for such dispute shall lie in any court of competent jurisdiction in Harris County, Texas, and the parties waive any claim that such forum is inappropriate or inconvenient.

14. Complete Agreement . This Agreement, together with the Restricted Unit Award Agreements and the LLC Agreement, embodies the complete agreement and understanding between the Parties and supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way. Any equity awarded to Executive in connection with his employment hereunder will be subject to the terms and conditions of the applicable Restricted Unit Award Agreement and the LLC Agreement.

15. Successor and Assigns . This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company and their respective successors, heirs and permitted assigns. This Agreement is personal to Executive and shall not be assignable by Executive, except for the assignment by will or the laws of descent and distribution of any accrued pecuniary interest of Executive, and any assignment in violation of this Agreement shall be void. Except as noted in Section 3(a) hereof with respect to a Public Offering, this Agreement may only be assigned by the Company with Executive’s permission in writing.

16. Noncontravention; Prior Agreements and Information . Executive represents, warrants and covenants that as of the date hereof: (i) Executive has the full right, authority and capacity to enter into this Agreement and perform Executive’s obligations hereunder, (ii) Executive is not bound by any agreement that conflicts with or prevents or restricts the full performance of Executive’s duties and obligations to the Company hereunder during or after the Employment Period, and (iii) the execution and delivery of this Agreement shall not result in any breach or violation of, or a default under, any existing obligation, commitment or agreement to which Executive is subject. Executive represents and warrants that his service as an Executive of the Company and his performance of his duties hereunder will not and do not violate any prior agreement Executive made with any previous employer or company with whom he did business. Executive further agrees that he has not previously, and will not in the future, disclose to the Company any confidential and proprietary information or trade secrets belonging to any previous employer, and acknowledges that the Company has instructed him not to disclose to it any confidential and proprietary

information or trade secrets belonging to any previous employer. Executive agrees acknowledges that he will not enter into any agreement, whether written or oral, conflicting with the provisions of this Agreement.

17. Amendment . Except as otherwise expressly provided herein, this Agreement may be amended only by written agreement between the Company (with the written approval of the Board) and Executive, and any provision hereof may be waived only in writing by the Party who is so waiving (which waiver, if being made by the Company, shall require written approval of the Board).

18. Counterparts; Facsimile Signature . This Agreement may be executed in one or more counterparts, all of which together shall constitute but one agreement. Any Party may execute and deliver this Agreement by facsimile signature or by electronic portable document format (.pdf) and the other Party will be entitled to rely upon such facsimile or electronic portable document format (.pdf) signature as conclusive evidence that this Agreement has been duly executed by such Party.

19. No Waiver . No failure or delay on the part of the Company or Executive in enforcing or exercising any right or remedy hereunder shall operate as a waiver thereof. It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by that same party.

20. Representations and Warranties; Advice of Counsel . Prior to execution of this Agreement, Executive was advised by the Company of Executive’s right to seek independent advice from an attorney of Executive’s own selection regarding this Agreement and Executive acknowledges that he has had sufficient opportunity to do so. Executive acknowledges that Executive has entered into this Agreement knowingly and voluntarily and with full knowledge and understanding of the provisions of this Agreement after being given the opportunity to consult with counsel. Executive further represents that in entering into this Agreement, Executive is not relying on any statements or representations made by any of the Company, its affiliates or any of their respective directors, managers, officers, Executives, owners, investors, shareholders, partners, members, representatives, or agents that are not expressly set forth herein, and that Executive is relying only upon Executive’s own judgment and any advice provided by Executive’s attorney.

21. Cooperation . Executive agrees that, upon reasonable notice and without the necessity of the Company obtaining a subpoena or court order, during the Restricted Period and for one (1) year thereafter Executive shall provide reasonable cooperation in connection with any suit, action or proceeding (or any appeal from any suit, action or proceeding), and any investigation and/or defense of any claims asserted against the Company, its affiliates or their respective predecessors and successors, or any of the current or former directors, managers, officers, employees, owners, investors, shareholders, partners, members, representatives, or agents of any of the foregoing, which relates to events occurring during Executive’s employment or relationship with the Company or its affiliates as to which Executive may have relevant information (including, but not limited, to furnishing relevant information and materials to the Company or its designee and/or providing truthful testimony at depositions and at trial), provided that with respect to such cooperation occurring following termination of employment, the Company shall reimburse Executive for expenses reasonably incurred in connection therewith, and further provided that any such cooperation occurring after the termination of Executive’s employment shall be scheduled to the extent reasonably practicable so as not to unreasonably interfere with Executive’s business or personal affairs.

government official, either directly or indirectly, or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. Executive further understands that he shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, provided such filing is made under seal. Finally, Executive understands that, if he files a lawsuit for retaliation by the Company or its affiliates for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and use the trade secret information in the court proceeding, provided Executive files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

23. No Construction Against Drafter . No provision of this Agreement or any related document will be construed against or interpreted to the disadvantage of any Party hereto by any court or other governmental or judicial authority by reason of such Party having or being deemed to have structured or drafted such provision.

24. Severability . If any provision or clause of this Agreement, or portion thereof, shall be held by any court or other tribunal of competent jurisdiction to be illegal, invalid or unenforceable in such jurisdiction, the remainder of such provision shall not be thereby affected and shall be given full effect, without regard to the invalid portion. It is the intention of the Parties that, if any court or other tribunal construes any provision or clause of this Agreement, or any portion thereof, to be illegal, void or unenforceable because of the duration of such provision or the area matter covered thereby, such court or other tribunal shall reduce the duration, area or matter of such provision, and, in its reduced form, such provision shall then be enforceable and shall be enforced.

25. Section 409A . This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”) to the extent any amount payable hereunder is deferred compensation subject to Code Section 409A, and will be interpreted accordingly. Notwithstanding anything herein to the contrary, (i) if at the time of Executive’s termination of employment with the Company Executive is a “specified Executive” as defined in Section 409A of the Code and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) and such payments shall be paid to Executive in a single lump sum as soon as practicable (and in all events within fifteen (15) days) after the date that is six (6) months following Executive’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code without any accelerated or additional tax) and (ii) if any other payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that is reasonably expected not to cause such an accelerated or additional tax. To the fullest extent permitted under Code Section 409A, each payment made under this Agreement shall be designated as a “separate payment” within the meaning of Section 409A of the Code, and references herein to Executive’s “termination of employment” shall refer to Executive’s separation from service with the Company within the meaning of Section 409A of the Code. To the extent any reimbursements or in-kind benefits due to Executive under this Agreement constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to Executive in a manner consistent with Treas. Reg. Section 1.409A-3(i)(l)(iv). Additionally, to the extent that Executive’s receipt of any in-kind benefits from the Company or its affiliates must be delayed pursuant to this Section 25 due to Executive’s status as a “specified Executive,” Executive may elect to instead purchase and receive such benefits during the period in which the provision of benefits would otherwise be delayed by paying the Company (or its affiliates) for the fair market value of such

benefits (as determined by the Company in good faith) during such period. Any amounts paid by Executive pursuant to the preceding sentence shall be reimbursed to Executive (with interest thereon) as described above on the date that is six (6) months following Executive’ separation from service. To extent any amount payable under this Agreement is deferred compensation subject to Code Section 409A, and the period during which Executive has to execute and or revoke a release prior to payment straddles a calendar year the payment shall not commence or be paid until the second calendar year. The Company shall consult with

Executive in good faith regarding the implementation of the provisions of this Section 25 ; provided that neither the Company nor any of its Executives or representatives shall have any liability to Executive with respect thereto.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.

Ranger Energy Services, LLC, a Delaware limited liability company

By:__ /s/ Darron Anderson ____________________

Name: Darron Anderson

Title: President and Chief Executive Officer

__ /S/ J. Matthew Hooke _____________________

J. Matthew Hooker

EXHIBIT 10.3

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “ Agreemen t ”), entered into as of July 1, 2017, is made by and between Ranger Energy Services, LLC, a Delaware limited liability company (the “ Company ”), and Robert Shaw (“ Executive ”). The Company and Executive are sometimes hereafter referred to individually as a “ Party ,” or collectively as the “ Parties .”

1. Employment . The Company agrees to employ Executive, and Executive hereby accepts employment with the Company, to serve as its Chief Financial Officer, upon the terms set forth in this Agreement for the period beginning on the date hereof and ending on the date two (2) years after the date hereof (the “ Initial Employment Period ”); provided that, upon the expiration of the Initial Employment Period, this Agreement shall automatically be extended on the same terms and conditions set forth herein for additional consecutive one‑year periods beginning on the second anniversary of the date hereof, unless the Company or Executive gives the other Party written notice of its or his election not to extend at least ninety (90) days prior to the end of the Initial Employment Period or any additional one-year period (the “ Extended Employment Period ”) (the Initial Employment Period and any Extended Employment Period shall be referred to collectively herein as the “ Employment Period ”). Notwithstanding the foregoing, the Company and Executive understand and agree that the Employment Period is subject to early termination as provided in Section 4 hereof. A notice of non-extension provided by the Company pursuant to this Section 1 shall not constitute a termination without Cause under Section 4(a)(iv) . The date on which the Employment Period expires or, if the Executive’s employment is terminated for any reason, the effective date of such termination, is referred to herein as the “ Termination Date .”

2. Position and Duties .

(a) During the Employment Period, Executive shall serve as the Chief Financial Officer of the Company, and each of its operating subsidiaries, whether in existence now, or to be formed or acquired during the term hereof, and shall have the duties, responsibilities and authority customary for such a position in an organization of the size and nature of the Company. Executive shall report directly to the Chief Executive Officer of the Company and to the board of managers (the “ Board ”) of Ranger Energy Holdings, LLC, a Delaware limited liability company and the sole member of the Company (“ Holdings ”), and shall devote his commercially reasonable best efforts and business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity) to the business and affairs of the Company and its affiliates. Executive shall obtain the prior written approval from the Board before joining or participating in any other business opportunities, whether or not for compensation, and whether as an investor, board member, partner, or in any other capacity.

the benefit of others any information or opportunities pertaining to the Company’s or its affiliates’ business or interests that are entrusted to Executive or that he learned while employed by the Company. Executive acknowledges and agrees that, upon termination of the employment relationship, Executive shall continue to refrain from using for his own benefit or the benefit of others, or from disclosing to others, any information or opportunities pertaining to the Company’s or its affiliates’ business or interests that were entrusted to Executive during the employment relationship or that he learned while employed by the Company. In addition, Executive, at all times during the Employment Period, shall strictly adhere to and obey all of the Company’s written rules, policies and procedures, which will be available for viewing and are now in effect, or as are subsequently adopted or modified by the Company, which govern the operation of the Company’s business and the conduct of employees of the Company.

3. Base Salary, Bonus and Benefits .

(a) Base Salary . During the Employment Period, Executive’s base salary shall initially be two hundred sixty thousand Dollars ($260,000) per year, less any and all lawful deductions and withholdings (the “ Base Salary ”), which Base Salary shall be payable in regular installments in accordance with the Company’s general payroll practices. Upon the successful consummation of an initial public offering of the equity securities of the Company or its successor (a “ Public Offering ”), the Company may assign this Agreement to any such successor and shall cooperate in good faith with Executive to adjust the Base Salary to reflect Executive’s responsibilities following the consummation of the Public Offering. During the Employment Period, Executive’s Base Salary may be increased by the Board at any time in its sole discretion; provided that the Base Salary may not be decreased below the foregoing amount provided, however, that the Company may unilaterally reduce Executive’s base salary or wages by up to ten percent (10%) if (A) the same percentage reduction applies to all similarly situated employees of the Company, and (B) the Board determines that such reduction is necessary to allow the Company to avoid violating one or more financial covenants contained in its loan agreements or similar financing arrangements, as may be amended from time to time.

(b) Annual Bonus . In addition to Base Salary, Executive shall be eligible to receive a discretionary bonus prorated for 2017, an IPO bonus and a discretionary annual bonus of up to fifty percent (50%) of his Base Salary (the “ Annual Bonus ”) for subsequent years of the Employment Period, the amount of which shall be determined and paid based on annual Company and individual (i.e., Executive-specific) milestones as determined by the Board that must be met in order for Executive to be eligible to receive the bonus to be agreed upon by the Parties no later than February 28 of each year.

(d) Restricted Equity . Executive shall receive 50,000 Class C Units and 50,000 Class D Units of Holdings (the “ Equity Award ”) which represents 1% of the equivalent company value, pursuant to the terms of Restricted Unit Award Agreements that will be entered into by and between Holdings and Executive (the “ Restricted Unit Award Agreements ”). If there are any conflicts between the applicable Restricted Unit Award Agreement and this Employment Agreement with respect to the Equity Award, such Restricted Unit Award Agreement shall control.

(h) Indemnity . The Company hereby agrees to indemnify Executive to the fullest extent permitted by applicable law, the Company’s certificate of formation, the Company’s limited liability company agreement or by statute. In the event of any change after the date of this Agreement in any applicable law, statute or rule that expands the right of a Delaware limited liability company to indemnify a manager, officer, employee, controlling person, agent or fiduciary, it is the intent of the parties hereto that Executive shall enjoy by this Agreement the greater benefits afforded by such change. The Company shall indemnify and hold harmless Executive, to the fullest extent permitted by law if Executive was or is or becomes a party to or witness or other participant in or is threatened to be made a party to or witness or other participant in, any threatened, pending or completed action, suit, proceeding, or alternative dispute resolution mechanism, or in hearing, inquiry or investigation that Executive in good faith reasonably believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other against any and all expenses (including attorneys’ fees and all other costs, expenses and obligations incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in any such actions, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation), judgments, fines, penalties and amounts paid in settlement. The Company shall advance all expenses incurred by Executive in connection with such indemnification, such expenses to be paid by the Company to Executive as soon as practicable but in no event later than twenty-five (25) days after written demand by the Executive to the Company. The Company shall purchase sufficient Directors and Officers liability to protect the Executive. In addition, this clause also covers the Executive for 5 years following the Executives termination.

4. Early Termination of the Employment Period .

(i) upon Executive’s death;

consecutive days or for ninety (90) non-consecutive business days during any 12-month period;

continued failure by Executive to perform the duties and services required of Executive pursuant to this Agreement, after written notice and opportunity to cure as set forth above;

insubordination or failure to follow the lawful instructions of the Board;

any willful or reckless misconduct or gross negligence by Executive in the performance of his duties under this Agreement;

any breach of fiduciary duty or duty of loyalty to the Company or its affiliates;

acceptance of employment or work with another employer or business other than the Company or its affiliates or the performance of work or services for any such other employer or business;

habitual drug or alcohol abuse;

a conviction (by plea of nolo contendere, guilty or otherwise) of any (1) felony, (2) of a crime of theft, fraud, or dishonesty, or (3) crime involving moral turpitude; or

a conviction for a violation of federal or state securities laws or other laws applicable to the business of the Company or its affiliates; or

(iv) In the sole discretion of the Board without Cause; provided, however , that in the case of termination without Cause, the Company must provide Executive with sixty (60) days prior written notice of such termination.

5. Effect of Termination on Compensation.

(a) Termination Upon Death of Executive . In the event of Executive’s death during the Employment Period, all of Executive’s rights and benefits provided for in this Agreement will terminate on the date of death; provided, however , that (i) Executive’s estate will be paid Executive’s pro rata Base Salary as earned through the Termination Date, (ii) Executive shall be entitled to any unpaid and earned Annual Bonus for any calendar year of the Company that ended prior to the Termination Date (in the amount theretofore awarded by the Board) on the date that such Annual Bonus would otherwise have been payable, and (iii) any extended health benefits provided by the Company in respect of Executive’s spouse and dependents shall continue as provided by state or federal law, and the Company shall provide a stipend to Executive’s spouse and/or dependents in the amount of the continuation coverage (or COBRA) premiums.

(b) Termination by the Company Upon Disability of Executive . If Executive’s employment hereunder is terminated by the Company pursuant to Section 4(a)(ii) of this Agreement, all of Executive’s rights and benefits provided for in this Agreement will terminate as of such date; provided, however , that (i) Executive will be paid Executive’s pro rata Base Salary as earned through the Termination Date, (ii) Executive shall be entitled to receive any unpaid and earned Annual Bonus for any calendar year of the Company that ended prior to the Termination Date (in the amount theretofore awarded by the Board) on the date that such Annual Bonus would otherwise have been payable, and (iii) any extended health benefits provided by the Company in respect of Executive’s spouse and dependents shall continue as provided by state or federal law, and the Company shall provide a stipend to Executive’s spouse and/or dependents in the amount of the continuation coverage (or COBRA) premiums.

(d) Termination by the Company Without Cause. If Executive’s employment hereunder is terminated by the Company without Cause pursuant to the provisions set forth in Section 4(a)(iv) , all of Executive’s rights and benefits provided for in this Agreement will terminate as of such date; provided, however , that (i) Executive will be paid Executive’s pro rata Base Salary as earned through the Termination Date, (ii) Executive shall be entitled to any unpaid and earned Annual Bonus for any calendar year of the Company that ended prior to the Termination Date (in the amount theretofore awarded by the Board) on the date that such Annual Bonus would otherwise have been payable, (iii) extended health benefits shall continue for 12 months at the Company’s expense as provided by state or federal law and (iv) the Company shall pay Executive severance equal to twelve (12) months of the Base Salary (as determined on the Termination Date). The severance pay provided for in this Section 5(d) will be paid in installments in accordance with the Company’s normal payroll practices.

(e) Termination of Employment by Executive. If Executive terminates his employment with the Company pursuant to Section 4(b) of this Agreement, all of Executive’s rights and benefits provided for in this Agreement will terminate as of such date; provided, however , that Executive shall receive those amounts described in Section 5(d)(i)-(iii) , and should Executive terminate his employment with the Company for Good Reason, he shall also receive those amounts described in Sections 5(d)(iv) . “Good Reason” shall mean (i) a breach by the Company of any of its material obligations under this Agreement, (ii) a material diminution of Executive’s job duties or responsibilities with respect to the Company, (iii) the Company’s permanent reassignment of Executive’s principal office location to a location more than fifty (50) miles from Executive’s then principal office location, or (iv) the adjustment of the Executives’ salary following the Company’s IPO, but only after Executive has notified Company of same in writing and Company has not remedied same within thirty (30) days of such notice.

(g) Waiver and Release of Claims . Except for (i) the continuation of health benefits under state or federal law at Executive’s (or his spouse and dependent’s) expense (for which statutory and eligibility requirements must be met) and (ii) the payment of Base Salary through the Termination Date, Executive shall not be entitled to receive any payments, benefits or other compensation under this Section 5 (including but not limited to any Annual Bonus or severance pay) unless and until Executive has executed and delivered to the Company a non-revocable waiver and release, in form and substance acceptable to the Company in its sole discretion, of all claims he has, or may have, known or unknown, against the Company, its subsidiaries and affiliates and their respective predecessors and successors, and any of the current or former directors, managers, officers, employees, owners, investors, shareholders, partners, members, representatives, or agents of any of the foregoing, which arise out of or relate to his employment, separation therefrom, any agreement between the Parties, the LLC Agreement, the Restricted Unit Award Agreements or any other matter or facts or events occurring through the date of Executive’s signature on such waiver and release.

7. Inventions and Patents . Executive acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) that relate to the Company’s or its affiliates’ actual or anticipated business that are conceived, developed or made by Executive while employed by the Company or any of its affiliates (“ Work Product ”) belong to the Company or such affiliate (as the case may be). Any copyrightable work falling within the definition of Work Product shall be deemed a “work made for hire” as such term is defined in 17 U.S.C. Section 101, and ownership of all right, title and interest therein shall vest in the Company or its affiliates. To the extent that any Work Product is not deemed to be a “work made for hire” under applicable law or all right, title and interest in and to such Work Product has not automatically vested in the Company or its affiliates, Executive hereby irrevocably assigns, transfers and conveys, to the full extent permitted by applicable law, all right, title and interest in and to the Work Product on a worldwide basis to the Company or such affiliate (as the case may be), without further consideration. Executive will promptly disclose such Work Product to the Company and perform all actions requested by the Company (whether during or after employment) to establish and confirm such ownership (including, without limitation, assignments, consents, powers of attorney and other instruments).

8. Non-Solicitation; Non-Competition .

(a) Executive acknowledges, and the Company agrees, that in the course of Executive’s employment with the Company, Executive will be provided and become familiar with the Company’s and its affiliates’ trade secrets and Confidential Information. Executive further acknowledges that having access to and knowledge of the Confidential Information of the Company and its affiliates is essential to the performance of his duties with the Company and that such information is an extremely valuable and unique asset of the Company and its affiliates that gives them a competitive advantage over persons or entities that do not possess such information and knowledge. Therefore, Executive agrees that in consideration for the Company’s promise to provide him Confidential Information and trade secrets of the Company and its affiliates, in addition to other consideration provided herein, Executive will not, during the Employment Period and for a period of [eighteen (18) months] (such period, the “ Restricted Period ”) thereafter, directly or indirectly contact or solicit vendors, suppliers, customers or clients of the Company or its affiliates with whom Executive had direct or indirect contact or about whom Executive received proprietary, confidential or otherwise non-public information for the purpose of providing services relating to well servicing, well workover, fluid management and well completion services and related engineering consulting services for the oil and gas industry and equipment rentals related thereto (the “ Business ”) or interfere with, disrupt or attempt to disrupt the relationship, contractual or otherwise, between the Company or any of its affiliates and any vendor, supplier, customer or client of the Company or any of its affiliates or in any way encourage them to terminate or otherwise alter their relationship with the Company or any affiliate. Executive further agrees that during the Employment Period and the Restricted Period, he shall not, directly or indirectly, provide any products or services related to the Business to the Company’s or its affiliates’ customers and clients, or prospective customers and clients with whom Executive had direct or indirect contact or about whom Executive received proprietary, confidential or otherwise non-public information, nor utilize the contacts, goodwill and rapport he established with any customers and clients to take away or divert business or income away from the Company or its affiliates to other persons or entities. For purposes of this Section 8 , “customers and clients” shall mean and include those customers, clients and prospective customers and clients who contacted or were contacted by the Company or its affiliates to do business with the Company or such affiliates.

(b) Executive further agrees that in consideration for the Company’s promise to provide him Confidential Information and trade secrets of the Company and its affiliates, in addition to other consideration provided herein, he will not, during the Employment Period or the Restricted Period, directly or indirectly recruit, solicit, hire or retain (as an independent contractor, employee or otherwise) or attempt to recruit, solicit, hire or retain any employee, independent contractor, or former (within the then-preceding eighteen (18) month period) employee or independent contractor of the Company or its affiliates, or encourage any employee or independent contractor of the Company or its affiliates to leave the employ or engagement of the Company or its affiliates, as the case may be.

(c) In addition, except for services and duties performed pursuant to this Agreement by Executive for or on behalf of the Company and its affiliates during the Employment Period, Executive agrees that, during the Employment Period and the Restricted Period, Executive will not for any reason whatsoever, directly or indirectly, for himself or on behalf of or in conjunction with any other person, company, partnership, corporation, business or other entity of whatever nature, engage in, make loans to, own, operate, manage, control, become financially interested in or otherwise have any connection with, whether as an officer, director, manager, employee, independent contractor, advisor, sales representative, consultant, shareholder, owner, partner, member or in any other capacity, the Business within North America (the “ Territory ”) and anywhere outside of the Territory where the Company or its affiliates have made sales or significant sales efforts with respect to their goods or services relating to the Business during the Employment Period or the Restricted Period; provided , however, that the passive ownership by Executive of less than one percent (1%) of any class of equity securities of any corporation, if such equity

securities are listed on a national securities exchange or are quoted on NASDAQ, will not be deemed to be a breach of this Section 8 .

12. Notices . For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by any means which provides a receipt upon delivery and addressed as follows:

If to the Company to:

Ranger Energy Services, LLC

800 Gessner, Suite 1000

Houston, TX 77024

If to Executive to:

Robert Shaw

1319 Glenhilshire Dr.

Houston TX 77055

or to such other address as either Party may furnish to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt.

22. Immunity . Nothing herein will prevent Executive from (i) making a good faith report of possible violations of applicable law to any governmental agency or entity; or (ii) making disclosures that are protected under whistleblower protections of applicable law. Executive understands and agrees that he shall not be held criminally or civilly liable under any federal or state trade secret law or breach this Agreement for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. Executive further understands that he shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made

in a complaint or other document filed in a lawsuit or other proceeding, provided such filing is made under seal. Finally, Executive understands that, if he files a lawsuit for retaliation by the Company or its affiliates for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and use the trade secret information in the court proceeding, provided Executive files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

payable under this Agreement is deferred compensation subject to Code Section 409A, and the period during which Executive has to execute and or revoke a release prior to payment straddles a calendar year the payment shall not commence or be paid until the second calendar year. The Company shall consult with Executive in good faith regarding the implementation of the provisions of this Section 25 ; provided that neither the Company nor any of its Executives or representatives shall have any liability to Executive with respect thereto.

[signature page follows]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.

Ranger Energy Services, LLC, a Delaware limited liability company

By:__ /s/ Darron Anderson ____________________

Name: Darron Anderson

Title: President and Chief Executive Officer

_ /S/ Rob Shaw ________________________

Rob Shaw

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Darron M. Anderson, certify that:

I have reviewed this quarterly report on Form 10-Q of Ranger Energy Services, Inc.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: May 10, 2018

/s/ Darron M. Anderson

Darron M. Anderson

President, Chief Executive Officer and Director

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert S. Shaw, Jr., certify that:

I have reviewed this quarterly report on Form 10-Q of Ranger Energy Services, Inc.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: May 10, 2018

/s/ Robert S. Shaw Jr.

Robert S. Shaw Jr.

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

Exhibit 31.2

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

UNDER SECTION 906 OF THE

SARBANES OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Ranger Energy Services, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Darron M. Anderson, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) of 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 10, 2018

/s/ Darron M. Anderson

Darron M. Anderson

President, Chief Executive Officer and Director

(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

UNDER SECTION 906 OF THE

SARBANES OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Ranger Energy Services, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert S. Shaw Jr., Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) of 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 10, 2018



/s/ Robert S. Shaw Jr.
Robert S. Shaw Jr.
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)