NINE - Earnings call transcript Q4 2020 | Nine Energy Service, Inc.

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Operator

Greetings and welcome to the Nine Energy Services Fourth Quarter and Full Year 2020 Earnings Conference. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Heather Schmidt, Vice President of Strategic Development and Investor Relations. Thank you. ahead. go Please

Heather Schmidt

me morning, Financial Service Good for welcome the and XXXX. to fourth and Fox, Thank Executive We Chief conference everyone appreciate call Energy Officer; With of year earnings and Sirkes, results are to Nine Ann quarter President Chief you. Guy full and today Officer. discuss the participation. our your

future include events. comments our reflecting statements of forward-looking today may views Some about Nine’s

any are review advise from and Forward-looking statements reason. SEC. our to statements actual a discussed to risks many uncertainties undertake for in control. beyond and are filings our expectations. listeners publicly which the and We risk number of These revise factors forward-looking uncertainties, earnings release to results of no risks any to the our with subject can We cause obligation our differ update or current materially

Our comments financial today include also measures. non-GAAP

the are year our comparable Relations and directly GAAP the website. details most section release of and measures Ann press quarter reconciliation fourth in can to now be Fox. our financial the Additional call turn will found in Investor to and included I also over full

Ann Fox

Good to This and and footprint, term, preserve company. assessing as to future maintaining our XX constantly across and in U.S. lands. throughout critical XXXX around frac in from responded long-term. fourth count heightened of positioning and I unthinkable the for suspending and average health thank close EIA for that was year-over-year from navigating XXXX. during financial saw to the made estimated without to and us again the perspective The our year for XXX success barrels and decline and Thank demand, were unparalleled pandemic everyone. to completely so a The professionalism U.S. discuss and the approximately year many reminded XX%. reducing year. quarter XXXX long-term approximately was the liquidity but choices want be uncertainty extreme significant included leadership, both year U.S. as at our was medium the U.S. May reductions the the employees and on how accordingly, of an circumstances. to our cost have I trough results volatility needs making today not that saying approximately global QX Nine taken I negative ourselves you approximately our especially as is, throughout when The XXXX completed important near so active commend also key the major future Thank you for caused toll levels and through declined estimate XX% reported in activity of this their wells the medium declined company in people, empathy It team as has the Heather. the market quarter increasing to you, balancing XXXX managing per XXXX. categorize this from for a low wells impede WTI year morning, throughout second we of and short, earnings the crews full the and act, XXX assets to at frac goes day XX COVID peak and joining declined We and approximately customers for clearly XXXX then million QX end. year COVID new to in you U.S. would active drilled unprecedented.

strategy and processes virtual service and continue able team field this, and procedures remain our selling Our also for an our to our customers. and technology of operational market asset-light was and best while corporate new the a business, Despite on providing and teams the being were conditions, extraordinary of opportunistic new world facing communicating. to in execute integrating

to market, monetization to receivable an with expense down the Although and low conjunction were end our we approximately through year-over-year was by inventory. reduction and and we $XX.X $XX costs and able million, in approximate XXXX liquidity. management, and reduced and generating demonstrate working from headcount We of XX% of our of were liquidity $XX.X our to flex in the million. cash year-over-year QX, over $XX preserving good payroll profitability of our CapEx at guidance By the XX% end quickly accounts capital million the ability cash able cutting million was to preserve

par $XX.X of average, on value bonds $XXX.X During XXXX, undrawn an million $XX.X repurchased company and bonds for cash, par XX% leaving of value par outstanding million representing ABL. value of the million of and

very have with in medium-term and We been refinancing near our purposeful liquidity balancing of needs the debt.

of ABL. percentage purchasing discipline from financial gain XX% demonstrated XXXX. significant Our $XX.X approximately as approximately throughout our at team bonds the to demonstrated stages XX% ability great growing patience December their and undrawn the XXXX in of team completed Operationally, once XX, to maintaining and share, again of a an million strong year, cash XXXX balance while market our discounts, in

expanded also cementing the line organically We our Haynesville. service into

into throughout adoption did we extreme saw activity our tools percentage pleased sell by are Year-over-year, of we QX of year. XXX dissolvable increased absolute sold to plugs composite dissolvable the the plugs the XXXX we with points number QX. that because the compared from of to While basis we of plugs declines, going not anticipated the

come safety the plugs, risk. including headwinds less emissions technology many been and operational able benefits environment, times, of and faced we have that While to we both cycle lower through carbon dissolvable faster the macro using adoption the increase performance with in and the

ways in the X.X. adjusted negative XX%. negative EBITDA of accomplishment. for and and million, would time, working, per and was to company’s Basic loss ROIC pace incredible and see commend believe million the negative with increasing net revenue always continue was was an negative completion tool ended $X.XX We predict adoption was margin best rate safety with decline of was Nine other $XX.XX. profitability in has our services. new pricing of million negative over will million. year with year net we Adjusted the still declining per in recent Despite this that a the the loss congratulate for history we like the protocols expansion. we $XXX.X TRIR year I reduction Company the or employees want year not which this on $XXX.X with Although and share. do to a score share, exacerbated the negative dissolvables especially tool was price, downturn, delaying oilfield $XX.X lowest earnings of for $XXX.X been and anticipate increase, with year

we QX, have historically. Now, and holiday turning anticipated, extreme as to as not were shutdowns seen the weather as

saw the reflected X% or these couple declined we frac Bakken. spread active counts increase to in the X% years, at frac December. were year Over and X% Most typically to in X% last the our increase of XX% to crew Activity additions end increases X% of are in X% versus revenue Northeast in quarter-over-quarter.

his will of one-off EBITDA. pricing are However, Guy adjusted a continued as combination that majority non-cash as items, which in negatively affected section, the vast of address pressure well

million continues this share, during was QX up over the was All lines severe per the $XX.X was and through ramping wireline negative throughout there the for most financial to quarter net increases quarter-over-quarter, Guy cementing adjusted first completion net turn to which was do Haynesville job and million. negative Basic or call Adjusted in share. to tools. loss activity information. completed market was We XXXX. fourth our earnings offset in negative the like per XX%. mostly be pricing EBITDA service detailed I now Company million, quarter $XX.X $XX degradation, ROIC and of negative and our activity was negative the negative but share anticipate loss successfully levels $X.XX continued by for $XX.X saw revenue would gaining was million, $X.XX. to for quarter walk the

Guy Sirkes

Thank Ann. and update an profile. to with want liquidity you, I our on start debt

mentioned, $XX.X resulting and total additional ABL of in million, equivalents of did as December availability million not We position As of cash, XXXX. and a were outstanding on Nine’s QX bonds repurchase an representing $XX.X of XX% and under leaving and bonds liquidity during cash December XXXX, XX, Ann cash revolving XX, value value repurchased $XX.X par facility, million the undrawn of average, company bonds for million $XX.X value of of credit $XXX.X of the with XXXX, $XXX.X par par million as ABL. during any million

expense and interest main were $XX of For of notes the our senior to cash CapEx. for million QX, the our our related approximately outflows remainder

$XX.X million approximately reduction for a low and to our original total year-over-year million, year million. of Our at CapEx XX% the the guidance of $XX was end $XX of

have we offsetting in our expenditures capital with sales. year, the largely been During equipment successful

PP&E of in million $X.X proceeds spent we to proceeds. insurance XXXX, million sales CapEx year full and in from $X.X the For cash compared PP&E

million the of During totaled $X with $XX million, million. quarter, and negative revenue fourth adjusted of gross EBITDA negative adjusted $XX.X loss

During $X.X a increasing recorded the the adjusted adjustment and items we with Stinger to The allows of portfolio. transition in and of of unusual $XX of of fourth quarter, these negative rationalization million net tools unusual In technologies them costs gross legacy of we of cost streamline dissolvable our plugs. profit product million impacting products. offering resulting all This cost like evaluated our certain substantially EBITDA. portfolio result completion negatively adjusted product our rationalization to that frac the as had sales inventory largest tools the QX, discontinuation our of newest we to a completion offering, customers our was us

unusual the other items Our are and material. offset in not that such nature relatively small each net is impact other

an completed during approximately the versus approximately third per cementing with increase we average an quarter, by quarter. for Cementing revenue XX%. XX million, of XXX was The job cementing We quarter of jobs, XX% blended ended XX $XX.X of the fourth the units, stacked During QX. were year XX%. revenue approximately the which increase decreased

X%. The X,XXX during fourth stage an approximately We stacked increase quarter, average per with Wireline approximately During was of $XX.X increase blended QX. the an XX decreased of were the quarter year we approximately revenue X%. for XX%. ended XX which of million, wireline by the units, completed revenue wireline stages,

we an increase million, For XX,XXX was XX%. $XX revenue of completion increase of Completion an stages, approximately XX%. tools, completed approximately tool

the is in primarily the $XXX,XXX quarter. quarter and approximately income third the million carry-back approximately QX. tax net operating company the first in in During reported coiled general XX%, quarter for administrative changes increase blended rate provided tubing into fourth our of million, utilization well due an million for recognized allowance revenue remaining comprised benefit day units, stacked which The $X.X of quarter the were benefit average expense increased CARES Depreciation to income XX approximately The quarter the as $XX tax the million third The Coiled in income amortization impairment $XX.X fourth year of of for with the and from with XXXX X.X% year tax X-year tax tax quarter. worked expense quarter fourth overall XX%. Act for was X law during $XX.X of was to an benefit Coiled by the an company effective the of We million recorded flat. coiled and compared approximately of $XX.X XXXX. during resulting benefit $XX.X the of XXXX as of of quarter compared an to selling, XXXX ended during rate valuation XXXX. the first signed was the to the quarter, our days position tubing by XX%. during loss provision tubing million,

end operating average DSO days year to fourth negative cash QX. company million. XX.X was XXXX, quarter The $X.X For approximately XX.X the in reported the compared of for by the provided activities days net

was XXXX XX.X for days. DSO Our

approximately in at of senior CapEx mirror revenue our note Looking million will interest $XX largest net payments working which our of be will $XX and changes. XXXX, changes to capital, $XX cash million, outflows closely million,

new CapEx service turn of Our unit than would be XX% it and total lines back not growth. will Ann. within less our I any include does the classified now as to additions

Ann Fox

Thank you, Guy.

throughout expansion. an levels If take a important what how we any approximately today remain recent assumptions in great significantly and stable OPEC XXXX. a same and additional increasing counts especially additions programs to still for flat largest downturn XX% will excess rig the near as OFS COVID remain to plans know target the improvement have pace could in XXXX. or a operators accelerated down quickly market wireline need demand challenge through these in leverage as Even OFS know operators trough, down XXXX we significant can be as competitive customers, flat. the have XXXX continues price. environment tools companies will E&P be increases around are within is our keep for crew committed more off within have counts these with customers and will capital will and see reach The XXXX. in reach of rig and challenging activity, like frac and The anywhere are in the our prices, be and to WTI lows on coming the far and believe margin obviously private While we still commodity customers to disciplined we no capital and a and will today. operators be been public Most when passed all-time shareholders We, certainly based and to but we are companies plans have activity uncertainty will With year-over-year landscape anticipating production time in prices, return capital we pricing healthy seen we rollouts, wildcard debt. and see crew we saturated. are anticipate working to increase to dynamics and will rig today, vaccine to for pay pricing discipline very little public and behave. not the exit-to-exit market at change cash most pricing the public stability activity to what operators maintenance It levels There we we XXXX seen our on This frac oil improvement recent recover pricing lockdowns, deal will increase will most and recent declines, business. the of

our incremental there the able margins. seeing pricing, activity not as declines are in caused we decreases leading to pricing estimates pricing very we anemic always to revenue has are approximately leverage for gain as there relatively with of Management While market which behavior units and Wireline competitive pace deteriorations well anticipated oversupplied. the in is remains forecast gradual competitors. in line intensity competes It XX% of extremely are in equipment much execution. service that tool faster pricing, the be almost activity attrition is on to today entry Permian to increases And alone, overcome new than growth low exclusively XXX capital are and active. the low in approximately difficult service easy

more our lines without increases flex with slowly Nine level share service We customers. sacrificing evaluating allocation. significant and to and market significant to recovery depreciation-based without carefully are we price At key confident capital market our we to a continue capitalize on in and reach any ability sustainable needing will at the are

with Nine barriers Our asset-light to unchanged continuing an at entry. and on we focus is strategy business higher are building to

ESG. continued profitable share of priorities de-levering our market include lines adoption plug new our dissolvable gains XXXX all and company within technologies, the and Our of service

today We the all are confident market we for on dissolvable applications. have the plug temperature best performing

diversity for significant cycle dedicate and times, those which undertaking, XXXX and for is ESG drive especially a Nine, safety. We and that on constituents. emissions, evaluation, to focused socioeconomic as able be our all will our there, for well ensuring to data including limited as internal From for quantifying set corporation and individuals goals amongst not the help focused have we share important customers to ESG are should will too. building but continue run share of history a will market we resources movement backgrounds. on benchmarking be

sequentially of still net to will this revenue believe hampered the to way. a We be our in our moving negatively expect better is generate quarter adjusted and is greener pace February a majority are to lines. Weather-related forward mission the QX and a and affected of generate QX in where conditions in we will the be QX, in February a the be we and shutdowns but slow COVID. loss EBITDA than market for negative activity anticipate all Texas, complete revenue service shutdowns in quarter. XXXX looking we cleaner aside, by balanced to weather and start caused of beyond of do Our off we worst

now We the up for open will call Q&A.

Operator

go Our ahead. JPMorgan. Sean Instructions] first coming of Meakim from [Operator you. Please Thank is question

Sean Meakim

Good Thank morning. you.

Ann Fox

Sean. morning, Good

Sean Meakim

is some generate first what if does ramping you the talk later able headwinds I anemic what expect margins if to pricing noted, activity move growing in we we incremental comments Ann type about capture as positive your think the to could and as in you path on the to generate year? I of half think to were those can can start, are we So ‘XX? through What pricing maybe look well think like just but are the improvements incremental EBITDA versus maybe you the that of you year? volume volumes

Ann Fox

Yes. Sean. Well, question, it’s a great

guiding. not are We

I So volume both a can and would I you capture say a this on incremental margins. that you won’t largely guide give pricing as problem.

volumes help as I view to on typically that’s has helpful. the Clearly, So commodity flow think generally will count lags but recent helpful. prices, And of on pricing. margin. rig through speaking, we other, we think We private the visibility team again, to going clearly, increase, with the the that’s the one think do than be do better volumes percentage

So subject we as you rig it private. the to they mark investors’ as the not is around well Obviously, up cash. are of relates XX% concerns count to know, are U.S.

have we we is is in would just to and a And there amongst recognize willingness sustainable. sector will private on question relates against growing helpful that leverage I that to price? at drive certainly the activity that. moment incremental which mark will at concern operators there it larger I is seen be So the very And not the say all volume operators think gain that public. starts margins. to a better think is, I And think the have is OFS what the do that point at what I as then the

do worst better lot pricing I we amelioration. had than space I And underscore a and thought. white will will We I QX do we we more think see So, incremental think our get that stress, margins. really quarter. much be January in highlight

So, small then gate in probably numbers, that we as of specific days history we the lot had And was consecutive have white is coming much a the slower. largest our number the very storm customers of with out of down clearly, winter you seen Nine. know And at space our challenging.

be again So, think helped. things those will I

end up we which our We going also have to margin level. ameliorate double-digit the over on internal margins able organic year efforts those expansion just will tools, by think be with we

where of speed faster of the the is price take that. decline offering, to And a margin price we able despite the but before that frankly, we in Scorpion those confidence just been So, over we with forthcoming what cost hold our declines lot XX plug we out and have points than time. Composite that’s could have have of tool, done the of XX,

lag So, done half back the little hopeful are into be to but been there, coming is it’s a the bit of going we there and of very about a incrementals year.

Sean Meakim

for you Thank that detail. it. all Got

I the think path cash free flow. positive is question then to the natural next

fairly Working a Your of are a cash growing decent the like. as current top consumer CapEx capital expense stay pretty is hurdle to be Interest still you will the going it tight. in environment. line is sounds

point a to free in we quarterly get you can blocks? at see cash So, those How back building ‘XX? do positive on some basis

Ann Fox

Yes.

you this all $X million I a to burned which you about go spent think of minute remarkable outside XXXX, the about just to you me really look again is, for those were outside $X – company if buybacks, million bond discretionary. what’s obviously back to at for

on pretty line good. to and $X a million to so CapEx take was through top and cover rip down XX% only your darn loss your And

the be right maybe think that, of of challenge of again, I and I to that I And and of think our manage inside pencils really now, operators our of will capital some budgets this inside pace that. is our cracking lot working to our there receipt is public. think a going year build be, even on private

is flow. come cash of to dictate going that is fast or activity how on the and really so pace not And speed

cash. very As as price to you important leverage and ability will relates be also, get know, price it some to obviously, to our that generating start

And be So think major way our be year, fences real shelter to do We’ll and we here the CapEx. capital that projecting. we’ll Again, prudent very very with shown spike build, this will net managing I some cash We’ve clearly will it. be put should up ability challenge are working around the careful. the too. the activities

Sean Meakim

a lot. Understood. Thanks

Ann Fox

Thank you, Sean.

Operator

Thank you.

is coming Holt. go O’Leary Pickering, question Please George from next ahead. Tudor, Our of

George O’Leary

Good morning, guys.

Ann Fox

Good morning.

Guy Sirkes

morning. Good

George O’Leary

– On comes if around count of the kind private could phenomenon noticed rig we’ve side mix adding. frame we as that who the revenue we the of sit of you much private commentary on I drill those is how operators, to operators on Nine today? the down where in from wondered equation or job for certainly here

Ann Fox

of that this comes So is frame what revenue roughly the company’s I’ll for you – XX% out Permian. XX% of

us. private that’s could we’ve When So that point for we of an the the private I for a like revenue driver about is is, fact. important there operators Haynesville, think got think you course, operators The incremental more be just a lot for. great work

have independents We private. between the through all good way majors and a diversification super large down

So we people to the there. going is I think And are get to in careful I I more than degree don’t kick, want of be think lot up. big – privates to a kick if pause be our think question, oil your answer is third to be in speed out of there the there a patch. going previous And we’ve to risking history seen overly I a do decide burns And about bullish. in capital. But a it will past

this opening obviously, OPEC+ now. anticipating for as we us all again, last is right think us Saudi I And year, X, Russia March this were tickets. none know, and making of So market

looming lot really that you well. important goes I keep causes mind. think within And a as just change XX it that that hours, to your pause so head have think when can I for So private over something of in and operators

George O’Leary

questions. of spoke about then And with to tools margin one the helpful. Sean’s that That’s in you expansion Great. respect

process materials? driver of lowering Kind to the on side? guys manufacturing completion tools doing the to the margins costs curious specifically reduce cost is you what input are there, up more the and Just the driven, that

Ann Fox

Sure.

So yes.

we So minute, that took just waiving inventory QX. in course, a on a to hit million of $XX reflect there on

it corporation. So the and margins really the the profitability completes of

do, proof as as on the of the side both want side. well first product want always we We we to want composite As on get whole, to dissolvable product. that We down make then that new sure first. down through costs. anything engineering we’re And be is it doing working can And we minor can changes, through vendors. start that’s design that the be

And so those discounts are showing up We’ve in all that codified of those internally. ways.

great have year-end. be We a the in and that again, it’s, confident change very by material confidence in it, margin I’m reached will

So that’s forthcoming.

We’re also also write-down. is products enhancement of the transitioning customer that some inside margin those "streamlined" technologies, of some from inventory base our to that were legacy of our newer some of which

moving lot there. got you’ve a parts of So

Some we didn’t have we XXXX. were of if the would quickly market George, have faced that, that more happened in with

cost switch margin like. this lots with through working products, new again, vendors. bit of a enhancement down So would the the is slower coming than – we little But of and engineering it’s

So, we year when see are pen to we very pleased paper those put we products end. by on with what

George O’Leary

I Great. one more, could. in I’ll if sneak

different You construction completion. guys the wellbore parts touched of to from so many

you as in normal XXXX maybe much any be that’s curious year-over-year if for look we year are interesting you’re changes a Anything XXXX? in notable of the kind seeing appreciated? more well would at Just seeing runway guys design versus

Ann Fox

Sure.

say material in design. would not I changes much not – way well think we’re the seeing I in

push an to sprinkled length seeing, say, perspective, X-mile play you’re continue, want the of I efficiency operators George, play But here. and would around seeing across kind any to new lateral are simul other laterals. folks seeing out than start-ups with fracs. of We From that, course, we’re not with

normal what material to I should spend for not getting but our So designs. think the seeing back we’re be completion customers, out to figuring it’s and changes

George O’Leary

Thank you, Ann.

Ann Fox

you. Thank

Operator

you. Thank

go next coming Voie question from Fargo. is Please Wells Chris ahead. of Our

Chris Voie

Thanks. Good morning.

Ann Fox

you. Thank

Chris Voie

another margins. completion a on obviously, it’s tools of big maybe Just your question driver

plus, XX%, going if pricing curious after prior were you be I you maybe do think could get to this think margins, is for which cycle that in that kind XX% strong activity achievable? Just possible? need you if maybe to really decline, of growth forward Or

Ann Fox

it’s achievable. think I

volumes going it’s as depend think I well. to on

But tools, in there as bunch again, through here. get more leverage volumes completion chain. aspects supply So different obviously, is increase, your of you a

So aspect it. one that’s of

the we margin they is if as can where pre-pandemic those back as see I get to need we’ll levels. to think something be far margins

It’s we very a that’s good question. something So about. wondering that are also

price know, you anticipate the never As back. coming well we

our with history completion over or comes X higher. past the So has down, doesn’t so been reset years that the tools it price

then, have So to going volumes margin product on chain. through supply enhancement you’re therefore, the through and the get it and/or leverage to

Chris Voie

or simul jobs if with impactful? kind increased then helpful. And that’s an in that Okay, thanks. is really your obviously kind area of of That’s curious, that, what curious That’s Just and mind, interesting mentioned dissolvables? use opportunity not grow. you dovetail you kind Does think frac. could an now potentially of of the participation your those on

Ann Fox

is with is with – they to fits folks I and up this and just more they can of operators striving service me broader dissolvables, come just get greater U.S. that just E&P more time theme efficient. ways think greater that reminds come where efficiencies. of into what up And the efficient, every land it question or whether get for

we So I think science efficiencies, that, play our our cost down, dissolution. of dissolvables into the incredible believe especially dissolvables coming certainly, the behind and with

nature huge. the and of pressure and are sitting lack the now. that some created ask people of use in green darn would because dissolvable under is dissolution good of dissolvables without plugs why not human efficiencies of time course, – down the safety up you beings could risk huge price now That is the So there, so the ways, predictability is coming out drilling point the

between of we this for price dissolvable live not there painful is and there XXXX in and direct was directly dissolvables. of cheap dissolvable to force hideous margin. operators all And think, simul the wicked so fracs drive thing was, I always think remember, of the a company adoption. medium correlation within increased it this very the will generally, drives But I these the that, dissolvables, as searching So the think points do adoption one like in to point is doesn’t a price. and And it efficiency. – therefore, a but as and Because term, hurdle, a direction

Chris Voie

That’s Okay. comment if helpful. you’re tenor Nine’s in seeing but on kind appetite any you the I that squeeze but for wonder M&A one And maybe more just in of I’ll here, landscape, the combination? could

Ann Fox

think of we new XXXX to I look Yes. few is I open Scorpion next again, M&A seem ended and certainly, as dark as mean being. when of and the technologies. acquisition did This our been eyes up team actually the through history product a And in quarters has Plug August we organic always they nothing growth. key doable – really wide

So course, It’s I there. a of there oilfield get is And out and something to some impossible. some generally, and it’s not service us we’ve enhancement, got margin sector always power the knows pursuing. that lot think, we’re of

say would considering I of for we’re all a different bunch forward. So going options

Chris Voie

much. very you Thank

Operator

you. Thank

is next Capital go Waqar from coming Our ATB question Syed ahead. of Markets. Please

Waqar Syed

morning, and my for you Thank question. Good Ann, Guy taking Heather.

Ann Fox

morning. Good

Waqar Syed

there there markets, comment any having on America further Latin in or international East? penetration what’s the could and you are Ann, outlook you market Middle

Ann Fox

question. you for thank that asking Well,

We are, in fact.

have the purchased would we but that’s you dissolvables selling me if we Middle we ambitious, if asked said, I when into wow, would So, be are. Magnum, had East?

market some for Middle getting on we won’t which so specific be we East. tool working are yes, are I the And about And specifically there. penetration strings, also other

to for of us. Argentina. an area We sell-through that’s So do great focus

so something about. that we’re that’s And excited also

us. expect grows I for that, So do that

Waqar Syed

another to type look in Okay. million. versus for revenue E&P if look you then projections. last like revenue $XX And for year, quarter be run looks at of comes budgets have own that your your correlating quarterly could it terms that U.S. rate last quarterly growth, XX% first run If like rate it we about out And year.

potentially year-over-year, should revenues is your E&P So be reasonable? though even be budgets could U.S. that higher lower,

Ann Fox

guiding forward not We’re this point in at time.

a with forward – that couple of the So Waqar. January a just said, QX side. minute the just as slow there, I’ll in remind start winter that I leave to for as question storm. course, as I’ll factors leave well will of again, guys But too, you, we’ll had the weather the to I decide different

Waqar Syed

you did in you in that? is be first to No. if at that mean sequentially misunderstanding fourth first you But quarter the growth going when be would higher, I the quarter? grew the in said quarter, that the XX% pace higher the Am rate

Guy Sirkes

here. Guy Waqar, it’s

we’re just what rig improve we’re basically, levels – count is the I activity are seeing that think and increasing. the saying

putting aside And slow so start, are a weather January pick starting issues in to up. things

activity And higher it than is so of before. rate the was

Sorry unclear that worded. unclearly if and was

Waqar Syed

it the saying the activity the change level quarter, rate you’re what fourth be? is putting of Am sequential higher So of not is may I correctly? versus but absolute

Guy Sirkes

revenue activity of I higher now. not we’re proportionately. be level tracking absolute the And not guiding whether yes, will increases The our tracking activity mean is or

So way, we’re QX any yes. in not guiding

Waqar Syed

growth a maybe mentioned could what down, our you there What Okay. of CapEx is that amount break you small that And is? then CapEx growth budgets, is? CapEx in the

Ann Fox

on. not I’m Sure. I’m what Waqar, to here, plug-in we’re is technology some going going you tell be to but working electric it’s new very specific

Waqar Syed

Okay.

we be about should when do – you that? when expecting hear Okay. to And more

Ann Fox

Yes.

Waqar Syed

and you that. Thank Okay. appreciate

Ann Fox

Thank you, Waqar.

Operator

you. Thank

coming Our question ahead. Daniel is John Daniel next Partners. Please of Energy go from

John Daniel

good Hi, morning.

Ann Fox

John. morning, Good

John Daniel

just or is me. the cementing? can where got modeling better you outlook, just And some coil, customer-specific, questions near-term of questions the discuss visibility? please? or just you if trends between relative there, qualitatively you’ve wireline, it No really basin-specific, Ann, will, Just for

Ann Fox

Sure, sure. Yes.

John. mean, to it’s to be going surprise So you, I not a

know go, well. all quite there. basins say, as our in as trends basins represented nice. I got And looking certainly these far But Permian would service are we’ve the the so You lines

from lines perspective. service an across activity really that’s So

you think market by a in about seeing liquidity. is really think quickly course, constrained which price. that’s got you’ve pricing of are And service one forward, I depreciation-based faster, moving more that’s – I when lines moving our think going we

moment, maintain, think and find or you long-term strategy our those about out at their and expensive, your in being asset-light, and expensive do you to the of working. keep because works liquidity when asset-light medium don’t are dollar you business come cash of in cement that a trying spreads lines you can they you’re not to expenses impede that. So coil against are of, Whereas to those the

And lines. depreciation-based pricing the more in so traction you’re seeing service

the cement to not and so it which to I’m your hasn’t that sector, question. for where I time. It’s the as that be leading coil. needs would well. for question? talked been now? Pricing It’s Did call the just across service So if you horses about, you’ve answer had not But sure say and if some your answers I know are right pack board,

John Daniel

you. for enough Thank me. good That’s

Ann Fox

Okay.

John Daniel

last and like today The you… the one do guess, that of just of year ESG. but using how many know let not, ESG a And how procure score your don’t their sort a see out just playing will answer the I do I comes And a care? but a hazard you have today from – just can I they even are do or customers know private some back as to if you services? think you this lot, do I you can

Ann Fox

Yes.

sure. Okay,

don’t will careful pressure yes, most don’t I the We of care. capital scorecards. I’ll think can’t but they to increases. have And most of demonstrate So are know that the really I care, movers allocation that them And to greener. being first they think be in that them private, publics, that they not be they hampered they if say of think

And so don’t I see I more tailing more that and back. pronounced. And that think becomes

for our those which people So focused goes we toward to very it customers, it them, metrics. we’re many know And And that’s of on. will money as once talks. for something drive has, compensation compensation

continues. we So that expect

John Daniel

Okay, got it.

offline you much. will when So very time. some that’s I Thank have me. for you couple it –

Ann Fox

Thank you, John.

Operator

over Thank like comments. to time, turn Ms. you. floor for closing this Ann back the to At I’d Fox

Ann Fox

to Thank want you. thanking end I you continued by your for support.

hope field I safe partner who operators so you want executing I we are to and can families healthy. are that day our in innovating the with and in thank every your employees the the Additionally, and best industry. incredible

Operator

participation interest Ladies in for today’s your gentlemen, in you and and conference Services. thank your Energy Nine

You may at disconnect time a wonderful day. this lines your have and

Nine Energy Service (NINE) 8 Mar 212020 Q4 Earnings call transcript