Pricing for all our services increased in 2022 due in part to the limited supply of readily available, high-quality drilling and completion equipment.

We have increased our 2022 capital expenditures forecast to approximately $390 million.

On December 30, 2021, we repaid the final $50 million of borrowings under the 2019 Term Loan Agreement ("Term Loan Agreement"), and as a result had no remaining borrowings under the Term Loan Agreement as of December 31, 2021.

For the three months ended June 30, 2022 and March 31, 2022 and six months ended June 30, 2022 and 2021, our operating revenues consisted of the following (dollars in thousands):

The following tables summarize results of operations by business segment for the three months ended June 30, 2022 and March 31, 2022:

Adjusted gross margin is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross margin to adjusted gross margin by segment.

A rig is considered to be operating if it is earning revenue pursuant to a contract on a given day. Average rigs operating is defined as operating days divided by the number of days in the period.

Average adjusted gross margin per operating day is defined as adjusted gross margin divided by operating days.

Adjusted gross margin is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross margin to adjusted gross margin by segment.

Average active spreads is the average number of spreads that were crewed and actively marketed during the period.

Average adjusted gross margin per total job is defined as adjusted gross margin divided by total jobs. Adjusted gross margin as a percentage of revenues is defined as adjusted gross margin divided by revenues.

Adjusted gross margin is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross margin to adjusted gross margin by segment.

Direct operating costs were higher by $8.5 million, or 23%, primarily due to increased job activity and cost inflation.

income into net income (loss) in our condensed consolidated statements of operations upon substantially completing our exit from our Canadian operations.

The $4.0 million change in other income (expense) between the first quarter of 2022 and the second quarter of 2022 was primarily due to foreign currency adjustments related to our Colombian operations.

The following tables summarize results of operations by business segment for the six months ended June 30, 2022, and June 30, 2021:

Average revenue per operating day - U.S. $ 24.56 $ 21.44

Adjusted gross margin is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross margin to adjusted gross margin by segment.

A rig is considered to be operating if it is earning revenue pursuant to a contract on a given day. Average rigs operating is defined as operating days divided by the number of days in the period.

Average adjusted gross margin per operating day is defined as adjusted gross margin divided by operating days.

The increase in capital expenditures was primarily due to higher maintenance capital expenditures and upgrading of certain rig components.

Average direct operating costs per total job $ 588.40 $ 307.27

Adjusted gross margin is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross margin to adjusted gross margin by segment.

Average active spreads is the average number of spreads that were crewed and actively marketed during the period.

Average adjusted gross margin per total job is defined as adjusted gross margin divided by total jobs. Adjusted gross margin as a percentage of revenues is defined as adjusted gross margin divided by revenues.

Adjusted gross margin is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross margin to adjusted gross margin by segment.

Direct operating costs were higher by $43.4 million, or 111%, primarily due to increased job activity and cost inflation.

Capital expenditures increased due to higher levels of activity requiring premium equipment to meet market demands.

The increase in capital expenditures was primarily related to incremental spending in our oilfield rentals and oil and natural gas businesses.

Other operating (income) expenses, net $ (10,458 ) $ (2,569 )

Selling, general and administrative expense increased primarily due to increased personnel costs as a result of higher headcount, wage growth and changes in stock-based compensation.

The $1.7 million change in other income (expense) was primarily due to foreign currency adjustments related to our Colombian operations.

The majority of these expenditures are expected to be used for normal, recurring items necessary to support our business.

During the six months ended June 30, 2022, our sources of cash flow included:

$15.3 million in proceeds from the disposal of property and equipment, and

$25.0 million in net borrowings under our revolving credit facility.

During the six months ended June 30, 2022, we used $17.3 million to pay dividends on our common stock and $194 million:

to acquire and procure equipment to support our contract drilling, pressure pumping, directional drilling, oilfield rentals and manufacturing operations, and

to fund investments in oil and natural gas properties on a non-operating working interest basis.

We paid cash dividends during the six months ended June 30, 2022 as follows:

Treasury stock acquisitions during the six months ended June 30, 2022 were as follows (dollars in thousands):

Acquisitions pursuant to long-term incentive plan (1) 1,372,101 23,237 Other

We define "Adjusted gross margin" as revenues less direct operating costs (excluding depreciation, depletion, amortization and impairment expense). Adjusted gross margin is included as a supplemental disclosure because it is a useful indicator of our operating performance.

See Note 1 of Notes to unaudited condensed consolidated financial statements for a discussion of the impact of recently issued accounting standards.

Volatility of Oil and Natural Gas Prices and its Impact on Operations and Financial Condition

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