| Financial Instruments |
5. Financial instruments The following tables set forth the Company’s financial instruments that are measured at fair value on a recurring basis by level within the fair value hierarchy:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| (in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3(a) |
|
|
Total |
|
As of June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments—designated as cash flow hedging instruments |
|
$ |
— |
|
|
$ |
63 |
|
|
$ |
— |
|
|
$ |
63 |
|
Derivative financial instruments—not designated as hedging instruments |
|
|
— |
|
|
|
445 |
|
|
|
— |
|
|
|
445 |
|
|
|
|
|
|
Total assets |
|
$ |
— |
|
|
$ |
508 |
|
|
$ |
— |
|
|
$ |
508 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments—designated as cash flow hedging instruments |
|
$ |
— |
|
|
$ |
18 |
|
|
$ |
— |
|
|
$ |
18 |
|
Derivative financial instruments—not designated as hedging instruments |
|
|
— |
|
|
|
2,375 |
|
|
|
— |
|
|
|
2,375 |
|
|
|
|
|
|
Total liabilities |
|
$ |
— |
|
|
$ |
2,393 |
|
|
$ |
— |
|
|
$ |
2,393 |
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments—designated as cash flow hedging instruments |
|
$ |
— |
|
|
$ |
1,262 |
|
|
$ |
— |
|
|
$ |
1,262 |
|
Derivative financial instruments—not designated as hedging instruments |
|
|
— |
|
|
|
140 |
|
|
|
— |
|
|
|
140 |
|
|
|
|
|
|
Total assets |
|
$ |
— |
|
|
$ |
1,402 |
|
|
$ |
— |
|
|
$ |
1,402 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments—designated as cash flow hedging instruments |
|
$ |
— |
|
|
$ |
35 |
|
|
$ |
— |
|
|
$ |
35 |
|
Derivative financial instruments—not designated as hedging instruments |
|
|
— |
|
|
|
520 |
|
|
|
— |
|
|
|
520 |
|
|
|
|
|
|
Total liabilities |
|
$ |
— |
|
|
$ |
555 |
|
|
$ |
— |
|
|
$ |
555 |
|
|
|
| (a). |
|
The fair value (Level 3) of the seller’s receivable against Akastor AS on proceeds from the sales or liquidation of Step Oiltools B.V. has been remeasured to zero as of June 30, 2026 and December 31, 2025. | We classify financial instruments in our condensed consolidated balance sheets based on the maturity date of these instruments. As of June 30, 2026 and December 31, 2025, the fair value of our financial instruments are presented in other current receivables and other current liabilities in our condensed consolidated balance sheets. The carrying value of cash and cash equivalents, current receivables, accounts payable and accrued expenses approximates fair value based on the short-term nature of these accounts. Designated hedges The following table presents the fair value of the derivative financial instruments and a maturity analysis of the derivatives’ cash flows. Valuation techniques and inputs for forward contracts are based on the quoted forward exchange rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| (in thousands) |
|
Total |
|
|
6 months and less |
|
|
6-12 Months |
|
|
1-2 years |
|
|
|
|
|
|
As of June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange forward contracts to hedge highly probable forecasted sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional amounts GBP |
|
£ |
891 |
|
|
£ |
891 |
|
|
£ |
— |
|
|
£ |
— |
|
Average forward rate (GBP/NOK) |
|
|
|
|
|
|
13.79 |
|
|
|
— |
|
|
|
— |
|
Foreign exchange forward contracts to hedge highly probable forecasted purchases: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional amounts GBP |
|
£ |
245 |
|
|
£ |
245 |
|
|
£ |
— |
|
|
£ |
— |
|
Average forward rate (GBP/NOK) |
|
|
|
|
|
|
13.90 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
As of December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange forward contracts to hedge highly probable forecasted sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional amounts USD |
|
$ |
13,812 |
|
|
$ |
13,812 |
|
|
$ |
— |
|
|
$ |
— |
|
Average forward rate (USD/NOK) |
|
|
|
|
|
|
10.58 |
|
|
|
— |
|
|
|
— |
|
Notional amounts EUR |
|
€ |
490 |
|
|
€ |
490 |
|
|
€ |
— |
|
|
€ |
— |
|
Average forward rate (EUR/NOK) |
|
|
|
|
|
|
12.14 |
|
|
|
— |
|
|
|
— |
|
Notional amounts GBP |
|
£ |
2,076 |
|
|
£ |
1,185 |
|
|
£ |
891 |
|
|
£ |
— |
|
Average forward rate (GBP/NOK) |
|
|
|
|
|
|
13.85 |
|
|
|
13.79 |
|
|
|
— |
|
Foreign exchange forward contracts to hedge highly probable forecasted purchases: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional amounts EUR |
|
€ |
150 |
|
|
€ |
150 |
|
|
€ |
— |
|
|
€ |
— |
|
Average forward rate (EUR/NOK) |
|
|
|
|
|
|
12.03 |
|
|
|
— |
|
|
|
— |
|
Notional amounts GBP |
|
£ |
940 |
|
|
£ |
695 |
|
|
£ |
245 |
|
|
£ |
— |
|
Average forward rate (GBP/NOK) |
|
|
|
|
|
|
13.92 |
|
|
|
13.90 |
|
|
|
— |
|
|
| The table below presents the notional value of the non-designated derivative financial instruments and a maturity analysis of the related derivatives’ cash flows. Valuation techniques and inputs for forward contracts are based on the quoted forward exchange rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
(in thousands) |
|
Total |
|
|
6 months and less |
|
|
Months |
|
|
years |
|
|
|
|
|
|
As of June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange forward contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional amounts NOK |
|
|
NOK 69,800 |
|
|
|
NOK 28,200 |
|
|
|
NOK 41,600 |
|
|
|
NOK — |
|
Average forward rate (NOK/USD) |
|
|
|
|
|
|
0.10 |
|
|
|
0.10 |
|
|
|
— |
|
Notional amounts GBP |
|
£ |
11,200 |
|
|
£ |
6,100 |
|
|
£ |
5,100 |
|
|
£ |
— |
|
Average forward rate (GBP/USD) |
|
|
|
|
|
|
1.35 |
|
|
|
1.35 |
|
|
|
— |
|
Notional amounts EUR |
|
€ |
42,100 |
|
|
€ |
22,800 |
|
|
€ |
19,300 |
|
|
€ |
— |
|
Average forward rate (EUR/USD) |
|
|
|
|
|
|
1.20 |
|
|
|
1.21 |
|
|
|
— |
|
|
|
|
|
|
As of December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange forward contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional amounts NOK |
|
|
NOK 131,200 |
|
|
|
NOK 97,900 |
|
|
|
NOK 16,500 |
|
|
|
NOK 16,800 |
|
Average forward rate (NOK/USD) |
|
|
|
|
|
|
0.10 |
|
|
|
0.10 |
|
|
|
0.10 |
|
Notional amounts GBP |
|
£ |
13,800 |
|
|
£ |
6,000 |
|
|
£ |
5,300 |
|
|
£ |
2,500 |
|
Average forward rate (GBP/USD) |
|
|
|
|
|
|
1.35 |
|
|
|
1.35 |
|
|
|
1.34 |
|
Notional amounts EUR |
|
€ |
49,300 |
|
|
€ |
21,600 |
|
|
€ |
18,900 |
|
|
€ |
8,800 |
|
Average forward rate (EUR/USD) |
|
|
|
|
|
|
1.19 |
|
|
|
1.20 |
|
|
|
1.21 |
|
|
| For the three and six months ended June 30, 2026, we recorded a (gain) loss of nil and $1.5 million, respectively, related to non-designated hedges in other non-operating income (loss), net in our condensed consolidated statements of income. The Company did not have any open non-designated hedges during the three and six months ended June 30, 2025. |
|
| Financial Instruments |
|
7. Financial instruments The following tables set forth the Company’s financial instruments that are measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
2025 |
|
| |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3(1) |
|
|
Total |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments—designated as cash flow hedging instruments |
|
$ |
— |
|
|
$ |
1,262 |
|
|
$ |
— |
|
|
$ |
1,262 |
|
Derivative financial instruments—not designated as hedging instruments |
|
|
— |
|
|
|
140 |
|
|
|
— |
|
|
|
140 |
|
|
|
|
|
|
Total assets |
|
$ |
— |
|
|
$ |
1,402 |
|
|
$ |
— |
|
|
$ |
1,402 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments—designated as cash flow hedging instruments |
|
$ |
— |
|
|
$ |
35 |
|
|
$ |
— |
|
|
$ |
35 |
|
Derivative financial instruments—not designated as hedging instruments |
|
|
— |
|
|
$ |
520 |
|
|
|
— |
|
|
$ |
520 |
|
|
|
|
|
|
Total liabilities |
|
$ |
— |
|
|
$ |
555 |
|
|
$ |
— |
|
|
$ |
555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
2024 |
|
| |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3(1) |
|
|
Total |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments—designated as cash flow hedging instruments |
|
$ |
— |
|
|
$ |
1,713 |
|
|
$ |
— |
|
|
$ |
1,713 |
|
|
|
|
|
|
Total assets |
|
$ |
— |
|
|
$ |
1,713 |
|
|
$ |
— |
|
|
$ |
1,713 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
$ |
— |
|
|
$ |
4,612 |
|
|
$ |
— |
|
|
$ |
4,612 |
|
|
|
|
|
|
Total liabilities |
|
$ |
— |
|
|
$ |
4,612 |
|
|
$ |
— |
|
|
$ |
4,612 |
|
|
|
| (1) |
|
The fair value (Level 3) of the seller’s receivable against Akastor AS on proceeds from the sales or liquidation of Step Oiltools B.V. (“Step Oiltools”) has been remeasured to zero as of December 31, 2025 and 2024. | The carrying value of cash and cash equivalents, current receivables, accounts payable and accrued expenses approximates fair value based on the short-term nature of these accounts. The following table presents the fair value of the derivative financial instruments and a maturity analysis of the derivatives cash flows as of December 31, 2025 and 2024. Valuation techniques and inputs of forward contracts are based on the quoted forward exchange rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
Total |
|
|
6 months and less |
|
|
6-12 months |
|
|
1-2 years |
|
|
|
|
|
|
As of December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchanges forward contracts to hedge highly probable forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional amounts USD |
|
$ |
13,812 |
|
|
$ |
13,812 |
|
|
$ |
— |
|
|
$ |
— |
|
Average forward rate (USD/NOK) |
|
|
|
|
|
|
10.58 |
|
|
|
— |
|
|
|
— |
|
Notional amounts EUR |
|
€ |
490 |
|
|
€ |
490 |
|
|
€ |
— |
|
|
€ |
— |
|
Average forward rate (EUR/NOK) |
|
|
|
|
|
|
12.14 |
|
|
|
— |
|
|
|
— |
|
Notional amounts GBP |
|
£ |
2,076 |
|
|
£ |
1,185 |
|
|
£ |
891 |
|
|
£ |
— |
|
Average forward rate (GBP/NOK) |
|
|
|
|
|
|
13.85 |
|
|
|
13.79 |
|
|
|
— |
|
Notional amounts EUR |
|
€ |
— |
|
|
€ |
— |
|
|
€ |
— |
|
|
€ |
— |
|
Average forward rate (EUR/USD) |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Foreign exchanges forward contracts to hedge highly probable forecasted purchases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional amounts EUR |
|
€ |
150 |
|
|
€ |
150 |
|
|
€ |
— |
|
|
€ |
— |
|
Average forward rate (EUR/NOK) |
|
|
|
|
|
|
12.03 |
|
|
|
— |
|
|
|
— |
|
Notional amounts GBP |
|
£ |
940 |
|
|
£ |
695 |
|
|
£ |
245 |
|
|
£ |
— |
|
Average forward rate (GBP/NOK) |
|
|
|
|
|
|
13.92 |
|
|
|
13.90 |
|
|
|
— |
|
Notional amounts EUR |
|
€ |
— |
|
|
€ |
— |
|
|
€ |
— |
|
|
€ |
— |
|
Average forward rate (EUR/USD) |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
Total |
|
|
6 months and less |
|
|
months |
|
|
years |
|
|
|
|
|
|
As of December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchanges forward contracts to hedge highly probable forecasted sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional amounts USD |
|
$ |
97,710 |
|
|
$ |
74,136 |
|
|
$ |
10,817 |
|
|
$ |
12,757 |
|
Average forward rate (USD/NOK) |
|
|
|
|
|
|
10.89 |
|
|
|
10.92 |
|
|
|
10.54 |
|
Notional amounts EUR |
|
€ |
10,109 |
|
|
€ |
5,485 |
|
|
€ |
4,379 |
|
|
€ |
245 |
|
Average forward rate (EUR/NOK) |
|
|
|
|
|
|
11.90 |
|
|
|
11.93 |
|
|
|
12.09 |
|
Notional amounts GBP |
|
£ |
6,027 |
|
|
£ |
3,658 |
|
|
£ |
294 |
|
|
£ |
2,075 |
|
Average forward rate (GBP/NOK) |
|
|
|
|
|
|
13.94 |
|
|
|
13.91 |
|
|
|
13.83 |
|
Notional amounts EUR |
|
€ |
40,449 |
|
|
€ |
28,141 |
|
|
€ |
12,308 |
|
|
€ |
— |
|
Average forward rate (EUR/USD) |
|
|
|
|
|
|
1.08 |
|
|
|
1.08 |
|
|
|
— |
|
Foreign exchanges forward contracts to hedge highly probable forecasted purchases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional amounts EUR |
|
€ |
4,235 |
|
|
€ |
3,185 |
|
|
€ |
1,050 |
|
|
€ |
— |
|
Average forward rate (EUR/USD) |
|
|
|
|
|
|
11.76 |
|
|
|
11.94 |
|
|
|
— |
|
Notional amounts GBP |
|
£ |
2,596 |
|
|
£ |
1,206 |
|
|
£ |
450 |
|
|
£ |
940 |
|
Average forward rate (GBP/NOK) |
|
|
|
|
|
|
13.65 |
|
|
|
13.95 |
|
|
|
13.92 |
|
Notional amounts EUR |
|
€ |
2,246 |
|
|
€ |
2,246 |
|
|
€ |
— |
|
|
€ |
— |
|
Average forward rate (EUR/USD) |
|
|
|
|
|
|
1.11 |
|
|
|
— |
|
|
|
— |
|
|
| The table below presents the notional value of the non-designated derivative financial instruments and a maturity analysis of the related derivatives cash flows as of December 31, 2025 and 2024. Valuation techniques and inputs of forward contracts are based on the quoted forward exchange rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
Total |
|
|
6 months and less |
|
|
months |
|
|
years |
|
|
|
|
|
|
As of December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchanges forward contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional amounts NOK |
|
|
NOK 131,200 |
|
|
|
NOK 97,900 |
|
|
|
NOK 16,500 |
|
|
|
NOK 16,800 |
|
Average forward rate (NOK/USD) |
|
|
|
|
|
|
0.10 |
|
|
|
0.10 |
|
|
|
0.10 |
|
Notional amounts GBP |
|
£ |
13,800 |
|
|
£ |
6,000 |
|
|
£ |
5,300 |
|
|
£ |
2,500 |
|
Average forward rate (GBP/USD) |
|
|
|
|
|
|
1.35 |
|
|
|
1.35 |
|
|
|
1.34 |
|
Notional amounts EUR |
|
€ |
49,300 |
|
|
€ |
21,600 |
|
|
€ |
18,900 |
|
|
€ |
8,800 |
|
Average forward rate (EUR/USD) |
|
|
|
|
|
|
1.19 |
|
|
|
1.20 |
|
|
|
1.21 |
|
|
| The following table presents a reconciliation by risk category of components of equity and analysis of OCI items, net of tax:
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
2025 |
|
|
2024 |
|
Balance as of January 1, |
|
$ |
(2,250 |
) |
|
$ |
1,098 |
|
Change in foreign currency risk |
|
|
3,481 |
|
|
|
(4,314 |
) |
Income tax allocated to cash flow hedges |
|
|
(766 |
) |
|
|
966 |
|
|
|
|
|
|
Balance as of December 31, |
|
$ |
465 |
|
|
$ |
(2,250 |
) |
|
|
|