ProPetro Holding (PUMP) 12 May 182018 Q1 Earnings call transcript

Company Profile

Participants

Sam Sledge	Director, IR
Dale Redman	CEO
Jeff Smith	CFO
James Adkins	Raymond James
Thomas Moll	Stephens
James Wicklund	Crédit Suisse
George O'Leary	TPH & Co
Sean Meakim	JP Morgan
John Daniel	Simmons & Company
Daniel Burke	Johnson Rice
Will Thompson	Barclays
Ken Sill	SunTrust
Vebs Vaishnav	Cowen

Call transcript

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Operator

Good morning, and welcome to the ProPetro First Quarter 2018 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Sam Sledge, Director of Investor Relations. Please go ahead.

Sam Sledge

Thanks, and good morning, everyone. in participation your appreciate today's call. We

the the Officer, Dale in Yesterday is we announcement available past, XXXX, website March Officer, with Executive Chief afternoon, for earnings our www.propetroservices.com. are on today released quarter Redman; which Smith. ended XX, me Jeff As first at and our Financial Chief

expectations we that results. Please our note In addition, posted future also projections our we for today's a presentation regarding any forward-looking summarizes by comments make are this morning, on on call our Litigation statements website Private the events that Reform or covered Act. Securities

non-GAAP statements differ beyond of risks in earnings our materially filings expectations. We Reconciliations we reference from Forward-looking release to listeners can release. certain and our are risks a non-GAAP These today's in directly our results are with which earnings uncertainties included the our review these to factors and the current measures. of subject call, risk Also, during are comparable GAAP the will measures and our control. cause advise financial to to uncertainties, measures to the -- number most discussed actual many SEC. material of

we any will prepared you may questions have. our after Finally, remarks, answer

I'll the that, over to Dale. with So turn call

Dale Redman

chip our frac record blue with the everyone. results our fully for appreciate to posted previous us first collaborative demand Permian for customer fleet that Sam, pleased and Thanks, exceeded good and efforts Basin, morning, with call. financial driving today's in the expectations, we We performance strength quarter, I'm you utilized activity our joining growing report during our base. continued that in

first quarter revenue few highlights, XXXX; through wanted net quarter million; EBITDA from margin the go I a represents first that $XXX.X fourth the the $XX.X XX% which of recorded income of I the While was including: $XX.X XX%. million, few adjusted million fourth to than minutes, higher key Jeff XX% in EBITDA increase of adjusted just provide the shy an in would for and details a financial almost of of quarter. note will a

last on our discussed XXXX we on As footing. we call, strong entered

quarter, winter we We due avoided were the able pride issues including in continue avoid quarter. supply the of Through Northern faced, having harsh with disruptions our to downtime supply close widely U.S. very a during the in to During or flexible sector. be partners, mitigated wellsite with we weather was chain and our chain, and ourselves operations supply chain proved collaboration reported to the first advantageous many it industry that a

the Permian. operating opening first One factors contributing our mines of important to efficiency in sand the multiple the the quarter in of was

avoiding regional Although is already are closer still we are disruptions areas. in products of was by access play situations. customers unforeseen cold operating and operations we to added sand the supply And most the our would or but extreme encounter closely able and to of possible. to with rail to, our which our resume for optimal weather quickly working West truly chain thank we early circumstances. as when our levels I their difficult advance The I operations its efficiencies adequately these to as differentiate service the signs customers were subject that our cooperation by Permian during having early beginning of prepare quality we and in by to also seeing ability were Texas chain affected in like in stages, team, proud flexibility and supply continued of partners am at types quarter,

quality bottlenecks, within sector. the mitigate important and to As risk themes differentiating our customers' our manufacturing the avoid to trend and most be of approach, more continue service will toward the ability through

our benefited a the fourth legacy from line number to days period. two top for substantial compared in the fleets results of as our of full frac quarter. efficiencies increase quarter fleet, driving frac new including of and build per for first deployment fleet, worked stages improvement including fleet operating Also the Our performance our significant utilization the continued during and was

collective During XX.X of the and at horsepower. and discuss the Basin mix new Both period our our agreements. Jeff? fleets now first a job in I than turn This with our were more over quarter. financial our results first Delaware drive deployed as across was averaged more are feet long-term deployed in fleet. an improvement of capacity higher helped This dedicated deployed quarter, to XX% the XX the operating fleets during enhanced top combined detail. beginning line will horsepower we XXX,XXX it ended the fleets, capacity with as XXX,XXX the under build quarter than to well of Jeff

Jeff Smith

and Dale, everyone. Thanks, good morning,

million quarter, results first and quarter million Looking fourth increase in quarter. the to for XX% fourth to services. revenue the pressure larger prior size of down leading as approximately at as fleet company's our than was compared fewer to improved other sequential XXX.X profitability days as to XXX.X for the the a quarter Contributing the well pumping grew from XXXX, seasonal the

the for During due first the was quarter Cost of primarily XXX.X in headcount. was the million depreciation increase XXX activity services, fourth excluding The and quarter higher was preceding pumping revenue fleet to the to increase quarter. quarter with was for which as XXXX, with consistent along size, first of associated associated an total levels services, of million, compared of and XX.X% pressure amortization, with XXXX.

XX.X XX.X in first fourth increased without was XX% million approximately as a G&A expense operating As XX.X corresponding significant General of decreased EBITDA or per pumping segment was for XX.X leverage share or diluted the administrative Net preceding EBITDA stock-based for for a fourth of quarter the compensation, quarter exclusive a XXXX million the million as was the XXXX. cost $XX.X Adjusted XX%, X.X% pressure for margin for increase totaled quarter revenues, represented million diluted of quarter versus pricing million pressure first adjusted per revenue $X.XX first the income from XX.X to for for to XX.X%. XXXX. was compared $X.XX million, which activity and costs. percentage fourth of million XXXX. XX% the of and pumping to than improved quarter the of due or quarter, XX.X higher quarter services of quarter share and of expense, of first

with Turning and to and quarter debt million the capital ended first $XX.X balance on of We hand spending. $XXX.X sheet of million. total the cash

on the CapEx. expenditures, which million growth initiatives capital primarily reflected capital incurred During maintenance we $XX -- period, spending our and of reflected

$XXX.X in recently million Dale of that, million liquidity capacity and it cash closing Finally, to comments. $XX.X back total our million, XXst under as of $XXX his ABL. was With expanded including turn for March I'll

Dale Redman

Thanks, Jeff.

the Permian we strong start ideally for growing for remained first we further quarter, and we our of positioned need As operating believe and strong, services. continued differentiation in fundamentals are The evidenced by see XXXX. the success during efficient in a

for offerings Our discussions provide. with customers clearly remains tells the us market unique that we undersupplied the

earlier fleets. this are and other of we targeted year, build we addition responding includes two expansion further through services. new our of the As announced This frac fleet

work where two term, are we pressure customers for second this significant last most year's The commenced in will basis for long fleet with seeing in our demand pumping quarter. on a these deployed be fleets the to Similar more recently fourth services. month, a Delaware first deployed Basin, efficient dedicated fleets, operations to fleet the

to deployed serve fleets addition, improve of plan needs XX size In we to X inventory and approximately average better horsepower fleet. to fleets additional announced use previously into was the remaining our successfully legacy engines our that end per by efficiencies, customers' This legacy of increase quarter. in internal horsepower the the first the we Tier our to XX,XXX

our also services, this tubing are X new more unit units unit. new build in by X needs, plan We of X to cementing and deployment build cementing seeing growth later Driven customer year. including deploy other we recent coiled

on As opportunities for appropriate, growth to offerings. forward capitalizing service our other we look additional

the and continued services to continue solid, operating we'll demand Given our partnering to our methodical profitability we and embrace by dynamic tactical collaborating environment, and with increasing to remain approach our customers. expected anticipate for

we enhanced for last call, customer wellsite our be and on will partnerships chain performance discussed key. we supply through execution XXXX, As and believe

the to to mode. pumpers transition things these will recovery in the as expect of manufacturing We begin a Permian more differentiate pressure

through we in positioned uniquely are provide environment. differentiated Given to cycles, our this execution believe multiple we will success

the we we remain chain and such, As the right at solve attract needs will a of ensuring With value support beyond. manufacturing complex mind, our in bottlenecks of to and continuing we partnerships vendors workforce. to have focused opportunities with believe with best-in-class great equipment retain for the coupled the there be personnel supply for position in strictly in right are places that visibility customers, customers; technical long-term in and avoiding In our our long-term strategic working services; and ProPetro. and on: XXXX the across succeed to we approach we closely addressing the short, help enjoyed significant chain premium top-quality focus inefficiencies by and believe issues; time right

questions. -- we up it for So Operator? with that, open will up open

Operator

comes go ahead. And of Please question Instructions] first [Operator James. our Adkins Marshall from Raymond

Marshall Adkins

in what doing, those the logic mentioned And point And in of X Tier in you ordered Tier of last go are engines? other fill Walk going all, X think gaps that you the first activations a And engines, you X your time I The what bringing on that transition time if secondly, year. do require -- engines fleets. in all I you've that existing the pricing to correct? start through rest just assume the point me is increase? been Tier At to does you are them of will. legacy at that in the

Dale Redman

all Marshall, and of there we fleet, first no expand into you're are that more. correct those of the all, engines Yes. did

guidance if to given the but we $XX we on should, fleet So increase, per we $XX that fleet. of million we've capacity, $XX will fleets and anticipate the million add per not from roughly that cost million added between do

guidance payback the will payback on, have we metrics given to metrics pricing. we've targeted, our type expand those obviously, that in So that

Marshall Adkins

XX to presume plus transition X. Is think that at you, a of -- ballpark about industry, to XX% the Tier of pricing rest way good kind it? XX% flow-through So that roughly the implies to as and I a

Dale Redman

think your math's true. I I Well, to but pretty being mine, close would assume better than that's

Marshall Adkins

you, Okay. that the these you not having some lot industry you competitors, horsepower you attrition is to address adds Is additional your the on fleets? there, horsepower existing existing guys to adding much fleets issue that capacity driving more but et a lot E&P the the of out and And what run numerous are the peers, could a feel that more And downtime operators from seeing seeing industry, just as more they're cetera, so I've harder, location. the you're heard follow-up we bring seeing? the what's to then are fleets.

Dale Redman

number as time And horsepower we us speak the say short great see operating don't is for public our through all we location areas currently I in horsepower can clear puts really company not pretty position, And is to any the been XX,XXX on situation. a basically in a need our that equal. of we've Marshall, think, I and added the in. that -- are only to

that's that So probably I would all say question. to I think

Jeff Smith

to just that. Marshall, add to

did on IPO horsepower XXX,XXX you at when If we and had time, of back in our go March XX was fleets. that the allocated to amongst ground that XXXX, we

time, for So fleets. per horsepower at point we legacy in only those XX,XXX that had fleet

talking number the use pumps bring horsepower those legacy up fleets that that those add XX we've fleets, of the engines all that actually does XX to is been to XX,XXX So XX about. of to

Operator

next question of Tommy Our Stephens. from comes Moll

Tommy Moll

up On per your hovering in my level around fleet math, $XX So at step range. a here took EBITDA you're big year profitability million the QX.

that much of where QX $XX were north far us is range driven? So you than there at that in to versus price that's improvement million saw how might you here sustainable of a you did hit year. QX guys last help number, efficiency QX? give terms be exit higher can even what you going and How that the But forward X? And any of in in was

Jeff Smith

of that QX. stages actually I that stages primarily quarter, you the or we increase it put stages upon in than from was increase and combination pumped increase you the increased XX% the because in of the by from When the of in also revenue per zipper an efficiency. efficiency increase the analyze you quarter But the pricing And say QX, more the by quarter-over-quarter, from revenue incremental XX% in And had will a between percentage was was pumped QX XX% based XX% ground. fleet on revenue to fleets I can look QX about at two tell XX.X% fourth increase remaining that in that driven Yes. our we in the and to frac by X.X%.

in that of for profitability. the additional all combination provided So

Tommy Moll

may in lift X? pretty get think here? additional you get hitting efficiency you here cylinders some you as any into QX like levels robust you're And and on do all on feel activity much pretty we Or

Jeff Smith

annualized that I to think an cap going necessarily, a beyond million that per we would EBITDA there's say $XX would per but not fleet, fleet, uptick in say that be we that by efficiencies. primarily on if additional additional is percentage of then work. point work being come XX-hour combination and even driven from will additional Those being wells lower due zipper our some efficiencies higher a of to fracs, an vertical percentage that

Tommy Moll

spot has there of of robust. some follow-up peers, said, the still of just in it then your like That Permian. doesn't in here, as a choppiness demand And in you for trends terms pricing recent basin but some sound for the one been guys, is the

think it mostly And supply you're you from work? out some given well that what it would give fundamentally you Is to a you're publics do the pretty under old these all market? coming issue. fleet any dedicated Can us who equipment of were a trying private noise sense it's operating model? larger in different I to back entrants into there? So the bring more of insulated Is seeing guys feel new

Dale Redman

think There's pretty of a with to I we've game. Tommy, Yes, our this play been ways lot messaging. clear

as And this the a long manufacturing and is position I chip that to drilling this to to the we're, way to these to switches and that realization mode, programs. have the focused dedicated going laser is blue wherewithal coming the haul, the stick Over to really have play everybody be the continuous think again, model. acreage with customers with

that's market. haul, little earlier us market. spot of the long a So we're because given over the the this taken frothiness unbelievable and visibility hit going have we may of of a in lot But confident, forward

Operator

James Wicklund Suisse. Please next ahead. go comes Our from question of Credit

James Wicklund

Tommy my ask I'll question, actually grow but how was it different it a which biggest you here, answered on really from way. margins,

Your is be hit there margin is will XX.X% and any never margins, pricing are there that that essentially done. now right? improvement, saying normalized. Halliburton once there Is never XX%, that we EBITDA believe Investors out be anymore we XX% that expansion, will

Dale Redman

point, to tell on but and things you, last manner over at you're in uplift Well, the the execution, reduce it, customers. James. telegraphed I in in I can a and I I really you thing, mean, it been disrupting your that's the to clear of as X.X think your your trying you're to where your said, way very have focused the without you that's day depends uplift there. accomplish sync But And to done that were, a where collaborating cost and with this, tell years. that's and on that look customers And others and is one be if right if can economics you're are we've same going you well get your get more at going starting if really good you're you're

that from are technological specific So continue to There no, in in the that's we can done. ways middle very we year. right come we're to not advances we're will excited. a of, more a be But lot be that different and of throughout the going standpoint

James Wicklund

ask let Okay, this. me

through raise inning baseball out margins, a we efficiencies, more over wring your are time? You're right, to ability your What of terms In basically in? to player.

Dale Redman

Oh, innings. closer I the don't the setup in in anytime soon. guy think or we're we're early bringing think I the

James Wicklund

Perfect.

with with your define Schlumberger as with my about talking your to and And chain always are partnerships how us any I you a what call, tightly for customers, great broadly stuff. partnerships? partnerships into performance-based a some strategic and granularity customers your strategic-type, understand or partnerships, little give And supply line like with is just how we you Can you about deal. define but we And follow-up, chain? you in especially partnerships working customers think think compensation you've entering supply your we your when Okay. mentioned and

Dale Redman

a affected customers this suppliers, cyclicality the business special really a really to this you to your your the you to good all acted it absolutely performances when your I during Yes, think of we're have trust visibility you these gained by you've well Jim, opens you have type basin, and situation, across of where plan time a in and you feel and business up of And better. of lot we your and it opportunities others neat much if like business a it. enhance allows

years space. exciting I in specific, I can XX-plus of you most tell time it's this but being get So my won't in the

So more to come, Jim.

James Wicklund

you're XX. or only XX thought like I

started have must really early. You

Dale Redman

I did, I did.

Operator

Our Co. George O'Leary comes question of from next TPH &

George O'Leary

on roll the to you at I should comment those a you XX-hour And wondering, some was going guys. XX they fleets to many appreciate from yet I across work have work shifting might I I upside given XX shifted? I last perspective. done be hadn't have were still forward? your think had point. case? how a to interesting, day spoke there? will per we there the Is you've couple two efficiencies the that And color of that believe Or time the Or the How fleet? thought about from fleets stages was may already switch XX-hour that

Jeff Smith

think that But for us how it's QX. them. more see that also obviously, but progresses make -- efficient more efficient migration more we'll for we're of we to working non-XX-hour Yes. We're to We on actually the the of basis. fleets working the customers exist. had existing That out X constantly that that does fleet through as still try for efficient -- possibility with

George O'Leary

And you in dose QX the work. I framing calendar days QX? a on is then efficiencies calendar guys were quarter-over-quarter. -- on And heavier mix there saw be did your of quarter, how us the fewer the and white horizontal of vertical also there the I between in the update fourth for and would space across work my if there could you second versus wonder some color vertical nonrevenue some then guess, fleet. helpful you in just super many Any question,

Jeff Smith

I days actually that percentage here would a to the the in in the our actually overcame a year probably a you that did, And of our lost results have from But Permian, days like QX beginning of we couple also few QX think to calendar from at some everybody we QX right things did few where zipper went category. that up time, probably fall in I that tell just the... X%. can X% in

Dale Redman

Vertical.

Jeff Smith

Vertical, I'm more XX% sorry, us the the in vertical allowed from and But work. than percentage to zipper overcame increase XX% enhance to that the profitability.

George O'Leary

in come in the and can that targeting such on be are returns itself? improvement or And and in investment construction incremental like things do customers, you makes that. you more seeing two seeing you you very that's business continued of in Great, and guys certainly But cementing bottlenecks is some trying might lot full if aren't add guess, investments. guys frac to by just done decision guys you the helpful. tubing cementing the the always guys are more execute are you sense. well I of actually a economic for driven cementing that basin I to And job? pricing And because your getting helps good units, execute the it coiled understand good that

Dale Redman

Yes.

base. a that cementing managing to continues wait think go to strong. segment. The not which we cementing, when you for that within do folks as lot on to departments to really of the running our get there demand know, is guys and to the up, our really it's say is deal. these on big the count that segment, service are customer these pressure I wait ability going cement rig And having get those drilling we're puts like guys on a And and there and to a not testament

to great build we And out. see a to continue some segment that's [indiscernible]. So

Operator

JPMorgan. Our comes Meakim next of Sean question from

Sean Meakim

a question capital allocation. So just on

lot how I year so? go of you're sorry, timing of weigh we of versus X.X years think And shareholder capital in XXXX. should our the your think or to through you impact to I'm -- 'XX? the cash model flow have growth just on into next capital about we capital decisions curious as a just returns in deployment going or how model,

Dale Redman

Sean. Yes,

position, shareholders in of I and they'd to are the think that's community be we'll on thing the careers, their the parties. desires will And that needs in sector us see where and I what on our the all fun where going we're going. with -- shareholders. really and watch and table business and all of and are that's the needs opportunity in out have, the for to the both our the we sensitive use it's And collaboration of do, have right our the as really of it's like that all we investment cash we'll do that always the be to fronts, talk off. balance discipline of ahead things what sector. to the customers good as be through is the think and of into with to get All enterprises we'll going us throw that And

So to run discussions just real get investors But our I are we'll continue we those having our businesses. year and on we the it's and later we -- into time, discussion in as with our XXXX. think a as customers continue

Sean Meakim

returns Okay, you higher as try Just of the do evolve you that fair metric well as guess, about this Or you that. in go through paybacks? to appreciate enough. static. achieve they I or go hurdles And consider as terms cycle? you just the faster through I if stays would think thinking cycle,

Dale Redman

put over the I they perspective -- And or going X.X think well very -- as benefactor of I the year we'll Yes. our backs business. we a we've our progression Again, not a last ceiling plan we've our going opportunity, on the have margin continue we're we've customers, it could given the that's situation, their think our be a visible margin not from to way to by so been And to lift. a do plus. I this commodity methodical, years margin and we're we customers. think on price received managed And oil

I think without business there's we clear efficiency leverage of gains very we've increasing been price. operating lot in and this that a think

metric very And to unique position from we're a so exceed perspective margin payback Sean. in expectations, margin a a and

Operator

Our John [Operator from next Company. Simmons question Daniel of Instructions] comes &

John Daniel

Got whether a that Tier nothing X to this want few Do for asked you it's morning, I'll care back Tier the Tier go questions engine? to a your hard. X, X customers were Dale, earlier. or Tier X

Dale Redman

that I no, need issue don't those not they to X kind the not versus X, that and... on focused think than of they but things are to Tier -- Tier say cognizant sensitive They're of this of be in at and they're safety an business efficiency to, and things that's point. not more this

John Daniel

premature X fleets It over Permian Tier us Tier a would customer that premium for get X be price assume to base? that on

Dale Redman

No, I that statement. would be say fair a wouldn't

time. this payback metrics customers our that are willing pricing not with It's not significant And the take to over think on. in structure. their and do tune that are I change dramatically

Jeff Smith

John, our kind at QX I think on a X that fleet. already payback of we're that two-year show numbers Tier

So that's pricing. the kind been already into current of baked

John Daniel

QX, of as would that's fair but assume QX? you Okay, QX fleet versus I'm more work frac efficiency. EBITDA I QX we to expect question Can should assume that you driver do metrics in versus therefore, a on wouldn't say work, zipper -- the in improved frac that they Quick you Jeff, mistaken. care, per alluded mean, enough. I zipper

Jeff Smith

substantially. can a got it's months, number that know monthly QX, look in projection that on percentage. we've to at XX% basis, I for a don't can if around from basis, you a on three you for moves tell you varied Like, the tell I monthly that kind of XX%. zipper I example,

So on I in that month-to-month time. we've projection QX around. at got point it exactly this will for basis, move a a don't know

John Daniel

introduced for it intake that's looked stuff with if fluid ends? seeing are performance at, call just And thus any in versus, what, been technology. the guys anything, one legacy fluid tested me you stainless have Last on far? differences recently And steel you

Dale Redman

some it's We're of how think little early, kind purposes. I bit little I a we're to on any a to guidance early of John, affect by things financial that. answer still it's But doing. to the modeling think going that's give encouraged

Operator

Johnson go question next Daniel of from comes Rice. ahead. Our Burke Please

Daniel Burke

of line zipper quick. strong questioning to month it John's that was you the it seems of with fair around, rate. Staying zipper real pretty a say can Is percentage the recognize exit like guys caution I March? jump XX% but month the had

Dale Redman

No. That's actually January. goes much how kind fluctuate. That show -- can you it of to this

Daniel Burke

Okay, ping-pong interesting to see around then. that

Okay.

one. another see, Let's

Looking to equipment is for at are forward curious specifically just willing fleets? new it needs provide in you easy speculative for terms the slide highlighting of times to build. no visibility Was how customers guys incremental manage deck, the lead with level of you

Dale Redman

mean, guys really made I Yes. our have look it easy.

our Everybody that closely day-to-day and to in this customers fronts, partners. change And hard really team chain and and both our business our tandem. Our is hard and partners, supply team the the to has, of a suppliers a on on are along basis key a is to seamlessness. really the going lot business that. And how customers work that's express it's we with our manufacturing we don't anything see with

Daniel Burke

maybe you plans if last announced Jeff, the you is year was growth remaining then it Dale. have have I you one Okay, just And left this budget for for the guys expansion to have on for available. had what a date? Do CapEx sense the

Jeff Smith

in range for stick our of at Yes. XXX thus CapEx be growth then the should we what year guidance by million. CapEx, I for the million the if revenues. previous and you of XXX the year equipment as far, total maintenance of would that mean, to announced the And X% we've look as far

revenue year. that modeling you in total, in slightly puts number, you're that the whatever which, excess for million for of probably XXX of So X% that,

Daniel Burke

Okay.

XXX You clear, remaining be just of year? for mean, the to million CapEx

Jeff Smith

the year. for total no, No,

Daniel Burke

the year. Total for

I Okay. appreciate clarification. that

Operator

of Will go Thompson Barclays. Please comes next ahead. Our question from

Will Thompson

You comfortably March. in January, per Maybe provided to terms guidance topped understand, late compare EBITDA in February us March of fleet? your help how did

Jeff Smith

first that was, and March. all, our first up time in given actual of guidance we've difference the guidance. between The results was specific of gave we what type It it's the that

can the standpoint. I we're of willing then And knocked I actually is park what out tell side of we secondly, it actually last that the on So an in tell quote. March, week you conservative that can from were you, efficiency to we

at week numbers -- were we earlier in of that XX% numbers If March. you the actually look booking daily higher of revenue last than were portion the March,

certainly, So from guidance end and the of was the of on revenue profitability led then the beat standpoint. from to a quarter profitability. the versus to course, But that, to also trend, the added up beginning

Will Thompson

importance Dale, And Is Permian sand sand. the local delivery trend eliminating there? towards the associated the supply how simply do any pricing you from have contracting any local downtime you see mentioned then, with of sand delays? this Is And ProPetro trend then, and efficiencies the volumes? you benefit chain

Dale Redman

Yes.

have think with agreements good for And into I long-term the agreements. we built as people time we've entered long-term we've dealt there, company. a with the with long some news it's

good intensity great. of and volumes And our it's going like. to coming customers to them here. be mitigate Logistically, the going so really be also costs those some and great several relationships the well to are for into be associated of helping It's sand with it's increased Obviously, the on really play of going fronts. economics

very of So to and online. well XX excited and get mines more mines, those base, I to of to continue other purchases been the by it's came regional expect we're year as pumped come about XX% we embraced -- customer online. that throughout And XX% think, mines currently, our sand our from we

Will Thompson

It And And I -- this seeing with into appears that should pricing. last read spot quick particularly do longer dedicated fleets mean, any move on Delaware? then really seeing, pricing? could the one for just can to into what you talk that pricing converge then, about quarter, me. cost as term, you're is we inflation you that one we're maybe agreement the but implications,

Dale Redman

Yes. Will, just spot we been a have major not not provider.

stay paid got Tier that we to really what Tier do. that standpoint. -- I providers model, glad in want that So pricing that see to These can't and fleet I'm make we location. the speak on dedicated off. we've we customers category affecting us to on X X-type really stuck And we a we're just focus has market. from sure and don't

are your So where question, know a answers from that I but that's micro don't perspective. if we

Jeff Smith

also to was where conversion to I about I would you of that regional the going relatively come down, you stable. I -- is, structure -- the cost would and structure, I that say can obviously, price the add exception our QX, asked Will, and to sand, say in that the cost tell with

Operator

Our Sill from next SunTrust. question of comes Ken

Ken Sill

of questions lot deal have so nitty-gritty great the with been a A I'll of couple ones. asked,

good now customer lead would I what be got for First, a time fleet? relations. you've mean, the adding

you But engines. from you were long how get the one bought to would it start to You take scratch, if delivered?

Dale Redman

the lead-time X think watching as manufacturer. us visibility real X Ken, I long have And The the bottleneck. question? we're we what that answer your you our little probably transmissions, customers. active history if a time that get been tell months not the you're is. manufacturer, that from can't answer and with with you're with guys probably our in this I before as that at the it. that that's with we looking have to items situation really I quicker, engines, you good lead definitely are that Obviously, But know does have time we're in a position with to and

Ken Sill

would be months. shorter I tell. that others to at at And the were the X closer and of would Time assume the end will you scale,

see fleet, Another on question, fleet. there's the the really out. that lot It's a just I basically, my a parts fact don't conversations of units the anyways, replace over multiple perception, times. I you trailer attrition mean, been guess, all of can a about, And go in you life the

or years, one, where point X time we're you the we'll okay, it say, So years, XX you rebuild percentage just where we'll start trailer, okay, say, where a okay, like have XX it not and years guys -- is it's do a say, -- fresh? total you you to this of

Dale Redman

equipment, payback that running obviously, as need question. eloquently But have you that at very to got replacing what comfortable history. we harder in on metrics did lot you we're it a look -- metric the since confident, to I two may we're at guess, we're comfortable, use time know return Yes, large good in it. the rebooting asset. any we're say, life the I business of today, the capital, we of and don't talked And this said, very have to the But would can XXXX, with and metric I we and very we back we that's about years, any that. that components in than that I be life answer as three define

your we margin question, know a from don't standpoint. I that we're comfortable answered normalized but where I are very So

would of rest the that. echo think I industry the

Jeff Smith

Yes.

the you're of When Just that got to been last the we in you haven't has that, yet. XX% actually we of the months. on the face problem that I working that to horsepower the to really today add ground about, tell put had talking have nearly XX% XX horsepower, would you

have this we point faced not of So that in issue at type time.

Ken Sill

fair. That's

probably the answer is, it's to the market situation-specific -- the be think I how going what's looking what like.

Dale Redman

Yes. We agree.

Jeff Smith

agree. We

Ken Sill

Do prices to to sand the could is did sand price back elasticity to Regional customers hot. on mines comes for we're cutting in higher back when see a question. wells on? sand as last lot on the got they going sand going loadings regional that see One We go your coming that amount sand lower put of of think some testing customers you demand prices.

Dale Redman

win. way, take point, drill a we to that we or Either sand great will be case, be With more and wells. more will used the that put savings away

Operator

Vaishnav Our Cowen. next question comes from Vebs of

Vebs Vaishnav

this onetime forward? the is going sustainable So quarter. pretty that from all? does sourcing Was -- that there anything Or solid local profitability obviously, mines Or your at benefit sand margin in a help quarter?

Dale Redman

and at is there -- situation think not here We this was any we're all. sustainable, onetime

see going we've going so market think get point. I what this to forward and to in excited this to why we're been that's

able take to us. So be should that we are before advantage the all of opportunities

Vebs Vaishnav

was coming that be already And XX fleets. should it higher for thinking slightly thinking of should in, in of XQ? new so be it March Is the XQ. better, And under slightly we in -- come sounds fleet profitability like with profitability a fair way

Dale Redman

is as number mean, fleets. I of first that far think all, correct I of the Yes. that, as

that, to believe at to upon the first at level think least be the ramp dependent that no I that enjoyed And continue, that going that to the in regards efficiencies. not have I we into as quarter same reason QX. would end efficiencies said, profitability, it's of completely with at we we think

Vebs Vaishnav

And one last one for me.

You per guys talked it imply And just us How efficiency. think for really high how what about think is you can you it does go? early about of right now? Where fleet? of EBITDA Can efficiency? it help innings

Jeff Smith

I there think still annualized of versus there mean, can room the I the It's not believe horizontal. three capped why we've -- is few kind jobs customers is EBITDA at percentage work I that month fleet of the a more. be of in the And the all because zipper. we we truly percentage of per current on think is those on and with level we're per -- are of And efficiency the per think or we numbers our definitely metrics. stages for Well, scheduling quoted of those site, that that improvement that things. our enhanced all as there It's It's fleet is our work is of quarter. reason work that vertical

Vebs Vaishnav

had it Is operation, about that? $XX there way way goes Is very to there if you to million any million, million? to optimal like a this $XX think bracket like $XX

Dale Redman

We that guidance give at would not with all.

and whatever focus see I -- on think yes, think we'll I in to it -- think that where need give on that. gain, we relay you we could where And results. couldn't guidance we go, we are okay? currently, the how can you'll real I But time,

Operator

would back Mr. for our question-and-answer Redman like any remarks. session. the Dale conference closing concludes I to to over This turn

Dale Redman

Everyone, appreciate we really your time.

And your of a for thank believe day. said Have year all differentiation is the good before, As support. we've we you this really in our space.

Operator

now Thank attending today's conference The for you has presentation. concluded.

disconnect. You may now

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