ProPetro Holding (PUMP) 1 Apr 202019 Q4 Earnings call transcript

Company Profile

Participants

Sam Sledge	Chief Strategy and Administrative Officer
Phillip Gobe	Chief Executive Officer and Chairman of the Board of Directors
Adam Muñoz	Senior Vice President of Operations
Praveen Narra	Raymond James
Sean Meakim	JPMorgan
Tommy Moll	Stephens
Scott Gruber	Citi
George O'Leary	TPH & Company
Chris Voie	Wells Fargo
Chase Mulvehill	Bank of America Securities
Stephen Gengaro	Stifel
Kurt Hallead	RBC
Waqar Syed	AltaCorp Capital
Blake Gendron	Wolfe Research

Call transcript

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Operator

Good day and welcome to the ProPetro Holding Corp. fourth quarter and full year 2019 earnings release conference call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. Instructions]. [Operator event this being is note, recorded. Please

now Sam Sledge, would ahead. like Officer. to to, over conference the Chief go turn Please I Strategy Administrative and

Sam Sledge

and Vice Phillip Gobe, participation Chief Financial appreciate me Thanks Holderness is Operations, Interim everyone. and Adam Darin call. Senior today Officer, today's of With your Executive Chief Officer, morning good President in We Muñoz.

December we the fourth year ended for our quarter announcement XX, earnings released Yesterday afternoon, XXXX. and

our of Additionally, press to cost last our align we actions week, lower releases These www.propetroservices.com. on structure number reflect levels. strategic expected a available current website better at to announced activity are

Reform that note forward-looking any projections regarding make for are our expectations Litigation future Please statements the on Act. today's call by events comments we covered or Securities Private

subject expectations. uncertainties, are and to are advise statements filings actual many risks uncertainties with risks current several the our SEC. review beyond earnings factors to and can to our We our which results from and the in cause These risk control. release discussed listeners our materially of differ Forward-looking

measures. today's financial reference our GAAP are release. in call, will these the of directly certain we measures included measures non-GAAP comparable earnings during most non-GAAP Also, to Reconciliations

quarterly independent and reviews continues the firm well as sufficiency it registered Additionally statements to of remediation proposed granted and become when The accounting and complete to by financial Management as ended preparation findings, the for the practicable review associated December scope accounting the work information is annual it currently prior the to company XXXX. audit Securities order management company's the diligently of to audit period and plan. current continues of to be allow firm XX, in provide and public July the company its completed. expiration allow evaluate additional to financial in committee's as internal its to an obligations the will cannot to process quarterly to registered its of filing working the to reasonably XX, on currently perform to Commission public independent as so XXXX. soon statements and this expects The trading Exchange and also with year of as do NYSE predict its

we our after questions and any remarks, prepared our will related answer Finally, operations. to results

will the with any we investigation However, not questions to respect internal answer outstanding our the litigation. review, or SEC

like to to would I Phil. the that, over With call turn

Phillip Gobe

call. Okay. and Thanks morning Sam joining everyone. appreciate today's us We good you for

the the environment, well and recent the to plan timing COVID-XX focus call as we the with Given of majority developments operational commodity depressed today's as of commentary our price pandemic update. the around and market

finish to year But I another closeout team in on strong solid yet would first XXXX. like to ProPetro the congratulate a

strong that differentiated a Our our offering. operation to and team proved service employee-led throughout continue truly foster base customer blue-chip XXXX

balance these to leverage will We our protect compete in differentiating and today's market. sheet rapidly changing factors

With that, quick for Sam back I would like a to financial to turn it overview.

Sam Sledge

possible. their to would Philip. I we to none do daily our thank for like Without field. customers, of Thanks is employees' our team our efforts continued customers in and service our the what also

about like with developments. would time to we spend mentioned, much possible today speaking Philip more As you as as recent

So, and I quarter-over-quarter commentary. full for year to refer published we our yesterday would press release like that to financial you

a XX.X utilization efficiencies highlight That start what we in fleets and also effective had I have strong XXXX favorable would with first to with mix. the job said, like a solid of to quarter

activity financial our consensus no declining in March, expectations. to quarter longer performance to due meet Although current expect we first

to take reiterate to a balance and structure. moment like would ProPetro's capital strong sheet I also

$XXX million, of As an million which million credit cash balance under XXXX. including liquidity and outstanding facility we we announced had total as million $XXX yesterday, $XX.X XX, revolving the of XX, had XXXX, capacity of $XXX.X available March company's at of March of

impacted adversely also decline our activity, be the company will with us structure. in allow discipline our externally, will capital projects commitment to base by borrowing moving internally both and for our that health positive protect our to financial to With returns of our customer's the executing look we continuously ways, protect and expected Although said, forward.

it Philip. turn now will back I to

Phillip Gobe

Sam, to and give brief Okay. take to project. on you a like chance thanks. a I would update DuraStim our turn

fleets As pad its successfully supporting fleet on that we on with operation. fleet the from electrically have began stages some powered X. pad previously limited announced, DuraStim one multiple The our first completed first assistance January conventional were

process, this DuraStim the system. acclimation saw from our developments During promising team

along February the of the our decided back to witnessed gas it of modifications facility close delivery the Through remove DuraStim pump AFGlobal the parts manufacturer, location performance the be would our like distribution fleet system. best we calibration system. electric so pumps the improvements with our Upstream and the certain the from the customer's to made the to motors, equipment, from In turbine and the outstanding team collaboration with to and software themselves, made things cylinders. powering be manufacturing we have some fleet to fleet the could return electric

was opportunity adjustments time, the equipment in to operations. we make allow effective our controlled a to to interruption our customer's believe did this way so risk manufacturing the the to At not environment most the partners we the

our provide to going efficient to believe vital customers modifications an We also these service to allow to us be forward.

DuraStim first have by mentioned we our remain far what thus with system I seen earlier, customer, encouraged field. the in along from we As the

efficient life already process early proving parts expendable operation. technology, Although lead seen believe we in eventually the will we cost-effective of we that a still of this are prolonged signs early of certain have more and to

evaluate We more and wellsite. have it with also we and to experience data as operating at improve gather operation more the its and the system continue

to action are after redeployed excited recently the the fleet in the see back recent as first improvements most We wellsite. to

our continues industry navigate on December current of willingness uncertainty. at have as expire we has through XXXX. options evaluation market duration DuraStim we new times have the of and disclosed, these As fleets to additional AFGlobal These indicated fleets. the previously options different we XX, the options a extend and

Just that environmentally more with done equipment ProPetro will purpose-fit of have friendly, equipment exploring is cost-effective. to internally today remain our and in efficient to be vital competitive. the DuraStim, and evaluate for safer, will own continue its job are that as innovative The arena more to quest offering by we wells tools

Sam the As and decline earlier, prices. a sharp start COVID-XX we did drop see pandemic with mentioned of very year in to strong after beginning the crude the activity in the March to off onset

It dynamics developed, activity affect operating events our their rapidly completions As with became would that evident sales team would look began how very plans. both long and decline. of and these these of to near understand each closely to our customers soon term

past our Over been has the activity few weeks, outlook very fluid.

sales our have, As and we That to are of team in contact our the best have our experiencing as remain negative impact severe always to active services activity said, economics close customers on viable. substantially. for and deteriorated remains customers' we position our pricing our projects with

ProPetro its through work step of cost the financial return. positive With these well controlling internally backdrop does having position important as the as challenges, to produce a it from away very not preserve to be that strong for will discipline

as certain negotiating last as rightsizing lower already late announced such well internalizing that implemented workforce, expenditures, cost services previously items measures as we capital were our pricing reducing have week, on outsourced. expendable multiple we As

further to the streamlining will continue We us cost additional structure. assist evaluate in measures to

virus produced and to COVID-XX From a very an that and challenges of processes the pandemic to business ensure employees, our of the at safety across To strategies new various our to protecting our be the community, undoubtedly unique will forward. adapting we has moving employee and we set the we the mitigating aimed challenges monitoring customers of and spread our have employees businesses are and health standpoint, implemented and globe.

basin. partnerships times. share help in with because is us our customers discipline immensely and market of And focus vital our customer finally, we a These blue-chip navigate the base on financial uncertainty, important challenging will Permian

up with that, questions. open Sarah? I to would And it like for

Operator

Instructions]. [Operator

first question comes ahead. Praveen Our go Please Narra with Raymond James. from

Praveen Narra

that a today situation can little you on any maybe color today? Hi. have activity if sight give working you, any more guys. but guess give everything to us Good of of it's I line it Obviously, what maybe crews you so okay holding the a give Or can are you is morning had question, just on I or you color a number bit Hope and color can fluid to? otherwise. us? not

Sam Sledge

effective It's on sometimes it last Yes. XX you and right. average. but of of the are Praveen, a to goes quarter couple fleets, a XX step an a utilization fleets, situation this XX we basis from single we that tell the fluid first down. it from enter are under standpoint, daily fleets throughout and times said, around can do it's a did looks I I first trend multiple changing the just change exactly there. like March taking that's We and we from it with Like tends significant March very a basis quarter day. Sam. think lower is a Obviously, right a exiting saw on you, kind the daily into weeks within on almost, monthly sorry,

Praveen Narra

then guys your to are like steep you talk as are asking guess flow requests? pretty I what the And from customers are about as or helpful. That's maybe seeing what that threshold for can you keep fleet And fleet necessary working? you a per your EBITDA competitors on cash seeing seems pricing

Sam Sledge

are now past. have extreme right that see visibility of to are the what I in and quickly because through as this many in changing the how team things competitive much much remain our really Yes. can environment reevaluating base, and how we the customer of this hard quickly in whatever downturn being knowing goal of we go not can as gone general mean environment. right. able keeping cash to are We our to going is our customers some more do There moving are just haven't members and most positive it's forward cash measures standpoint to can not keep might from a you, remain to we to pricing to on across our longevity very that But activity we as we be plans. positive, willing their to tell is

Praveen Narra

Okay. Thank guys. you much very

Operator

question with Meakim next from JPMorgan. Sean Our go ahead. Please comes

Sean Meakim

Thank you. Good morning.

Phillip Gobe

Good morning.

Sean Meakim

versus put as to And talked to get little we your around trying for of cost we you Just Can some of progresses think more parameters XXXX? through expectations targets? that costs? handle a more fixed if so a go maybe variable how reduction we

Phillip Gobe

think technology I as cut that, CapEx, right CapEx. growth out CapEx maintenance Well, and have reevaluating the obviously look we we now at new

is are As overhead well extremely aware be to there. stripped probably lot low, our you not a so of, money out of

vendors of We certain in working equipment coordination on with services and we got us our got. lowering have prices

work outsourced a we eliminated of We and have lot the in-house. that bringing

are of we again, very this are a pulling number now levers are there And at we right concentrated. So time.

in are of various we are quickly to environment We various we and a levels able react have pull. looks at got can that we activity and the the to plan the levers

Sam Sledge

both Yes. on. Sean, to I that, have is in we think savings And already is of add I variable terms fixed and are that executed seeking will or we it

Just team as scaling our way across down we were experience that XXXX think scaling an helpful and very very like in in up, interesting in XXXX as years effective we well. operating is

that Our rightsizing effective at to is the experiencing. we are team very operating level operation whatever activity

as are we quickly as savings are we can seeking So region. entire and across we the reacting

Sean Meakim

can there contracts? feedback. with three Fair to they as well anything or those Pioneer And were to just on three those enough. around you six could the Are then, that Is as maybe contracts context the fleets? as the else appreciate Okay. reaffirm with you respect firm months I DuraStim elaborate ago? as

Sam Sledge

to will of we I heart cyclical the Pioneer will and business contract DuraStim our times agreement That looseness structural add about and our Philip contract quickly may as speak and see Pioneer would to to Really point was adjust the to as be been let make hoped fit. options. the of with functioning within Yes. less to for plan activity they a allow and the more little tightness this I both their Pioneer has at it to talk little market. a

have we willing feel to good through collaborative Pioneer there. sides think are as time. we be working relationship So a both this And great got as I possible. think with about We

Phillip Gobe

been As DuraStim, the very our have They and concerns it we needs. great a relates working responsive are with partner to to with AFGlobal.

recall, we first will lighter deployed expected. you was think As than I DuraStim fleet the

the push in periods issue amount the we time told recognized think is wanted be time would is evaluate with cut me that understand we would that it. with to they They a both to pricing you extending again the very works given of that and picture told talked cooperative I get now didn't work our working about the place out for They they now up we And him willing they option pretty us the the growth end out us. it. us to situation right in with both environment to last right oil. are much are they us given And and they week, But macro so we and So the down that of and capital current and options needed. are understand on maintenance. they closely us.

Sean Meakim

Philip. Well, thanks

Just clarify, directed to customers three question committed the my with for was fleets? really the

Phillip Gobe

in Well, running would they are particularly believe that fleets wanted it's the in now, to a they fleet big of ion that deployed what agreed reduction tribute are location. that the the with technology. this, we on say number they running at I net where we and I They us in were that customers, are DuraStim now, environment given at think and the

they lower that's I we efficient, people, bring going are a need let They willing continue. cost to out they it priced going in that less run less to us believe and are more and new world. forward, be think technology to

time. the now for are So second deployed we

point, As enough we the it they if don't see this options I service. know far knowledge. don't And we one will as were commitments. and But goes ever on I other in there. extensions commitments, from firm three have have where got the at

Operator

from go Tommy Stephens. comes ahead. question with next Our Moll Please

Tommy Moll

thanks questions. morning and for Good my taking

Phillip Gobe

morning. Good

Tommy Moll

DuraStim. wanted just follow-up more with I to on one

you options us what on, three there And how for it already you on So is for got paid that referenced delivery that you. got are options you many Any versus be a helpful. few and what have would just detail then paid Thank have you could fleets for? Or you the taken applies of one? give have to have times.

Phillip Gobe

Yes.

has DuraStim three paid. all capital essentially We committed the for. paid for we of Virtually been have fleets that

mentioned is to push the As for those have through earlier, that we far do. out were AFGlobal when as year which options, will can I additional options understanding an units. DuraStim we the due three options out we it this got And as play with those

Tommy Moll

set on exactly I on you Or helpful. That's fleets obviously future? deploying in you that that's in just have the got you other of that the you it. own that say power-gen two power-gen expecting demand what was you And point and side, and would power-gen Got taken the already the are have one TBD Do field. a DuraStim for item the have? based at possession some

Phillip Gobe

a turbine is from it's in paid another still have one remains it or the be another own think on, an still say But pad is to a to would operation whether fleet going And it's I where I question. dialogue it DuraStim we a customer? TBD source specific be item. going the is There available. our that is we power. Is question, the open currently have turbine for where to go is. be turbine seen. your going be to on To that's And is on Is power, there we the power on going that going to who operator? that

Sam Sledge

Yes. to And Tommy, I add that. will just

some innovation seeing on the types. power are many rapid mobile side We of different pretty

creative, the So cost I are fine, us comes our if effective play coming little see here this of that all, that out in a to think are customers are of we letting market bit and more kind to DuraStim, a interested solution over just months.

lot going obviously those on innovation we very that watching in systems There that to going make better. something is arena only So that is is closely. are a of

Tommy Moll

agreements. sense. makes dedicated another topic to Pivoting That Yes. here,

where how as had for going utilization, relationships in much a fleet all you? have down, are a ahead, the today, still to which of the you the it have for the have but you expect work, or Even we of those with all have the dedicated terms you or type do let's the the even have type visibility visibility work in second under have indicated that and they is dedicated at if said much reduced just, pads, just terms have month have like basis you insight? to and efficient you got close in type just Or is where do quarter can of what laid to that arrangement expect that's a historically have, you say all that one you For be, customers of you earlier, daily you arrangements, And good really got Sam, predict? really evolving really much hard how that? pretty on it

Adam Muñoz

commitment But real this Tommy, fluid and Munoz. still a that us and from sometimes would time time office dedicated have the have It's the long of were periods like that with with is live Adam in of we operation to that are currently said. this day, still we is for assured are fleet day-by-day, say and Philip and the been model. field level deployed, the things I times saying, Sam a like have level. definitely Sam we customers changing multiple relationships

visibility, and right just of are like environment are tough I fans, I our operators really being be this So guess in tough flap it's as operation. can they basically day-by-day theater focused in on the living well the at to now, judge we just that and guess operate

Sam Sledge

filling is that I am of quickly events going up. level seems there so talk their be is are That what be. of is think to that know operators general talk proration, not the moving oil our to I there sure storage consensus. activity

quickly some had world think operator some what level difficult is things forward, going days activity. what's given at two idea have amazing we had be think to of good point on, I But it I this that going the around visibility XX have macro it. has at to say, going last the thought confidence into one activity is We the are So level. the any weeks, to pretty very we so how in on much it's and point, evolving I just changed in anticipate

Tommy Moll

will All right. guys. it you turn back. I Thank

Operator

Our Citi. ahead. next question with Scott comes Please go from Gruber

Scott Gruber

morning. Yes. Good

Sam Sledge

Good morning.

Scott Gruber

defer you to should per parts well. maintenance I I maintenance on with utilization, forward? touch CapEx and should can some think CapEx. going about we there as on lower How deflation wanted some purchases fleet assume be external

Sam Sledge

equipment used that to down. from in XXX%. go that's last Scott, we the We basically when And some we utilization go off great lot fourth a question. us of Yes. year of profitability down We learnings We quarter had saw our a active quarter. come downtime numbers the kind extra of produced that's for it what redeploy fleets. efficiencies up, saw to think the those fourth of

say, our also to, that items going large ends, using fluid fall for the prolong maintenance We that CapEx, our think fleets engines, size equipment equipment active extra into of life is the only power-gens increase that to transmissions. component

to equipment we think a some lot of per fleet with So we will extra the CapEx maintenance manage that spend opportunities down. have

expect crew number. maintenance good we XXXX guidance cut when CapEx. year about most pretty to I We in per take think our that can $X spend recent very are million was we think a in to per active we

It's are there not on supporting because number equipment right, CapEx dollars working through spend, shouldn't still on operation. down. maintenance that that significantly our pretty will activity-based down minimize We cut But an internally equipment activity what comes the that that is totally is spend parked reason spending maintenance is only might be. and we CapEx if still, why in think as essence, number no is come we

Scott Gruber

as in some is fair what's on And well. potential? the some assume inactive would to that you purchases maybe it defer and be parts on able color deflation But some to to any deflation addition cannibalize external

Sam Sledge

Yes.

that this of by fleets, right. life. last are want are, things indirectly active wouldn't to. like we But equipment think the to in If large we maintenance I a then do resort. equipment life had use essence, these unless prolong excess our We we are of components on you kind prolong cannibalization deferring

Scott Gruber

their to circling taking fleets Or required the discretion? that clarify, fleet And to three assuming at at first the Got customers DuraStim it. committed is hits this DuraStim, two on just just milestones, then the are and back point?

Sam Sledge

so and mean don't there right for game just by it's have now, We have I threatened equipment not now, encouraged Are those, might to not it our Yes. any what very I anything, of different know play? and believe searching But just much visibility type of hard is general we the it's And do matters just it fight. commitments more right. so that we Will doubt those right declining in economics, Scott. if now. a matter. for I it. think about market customers you rapidly Activity take going No. type the No economics for the But is we tools? don't to that equipment still we keep still of that right a are DuraStim play

Scott Gruber

just more slip on one sorry for That's fleets? this good. per missed the fleet a If I What's adjustment earlier. XX.X and if can XQ EBITDA reasonable I active

Sam Sledge

we good all because down. now of a point. can is, say right is about can say for March, Really, we we that's all this levels. It data is it And that at QX step-down is seen haven't off

will Okay. I back. it. I it appreciate turn

Operator

next O'Leary Please question George go comes Company. from & TPH ahead. with Our

George O'Leary

morning guys. Good

Sam Sledge

Good morning.

Phillip Gobe

morning. Good

George O'Leary

understanding I just to on piggy make kind question wanted sure am Scott's the correctly. I back maintenance of question to

of time up any the today And just maybe if with horsepower point horsepower as So the that pads? beef active you idle I pumps, or as in I or also sounds are that going moving then some maybe but in just there average March? run you used backup frame or you wonder Is on parts. all to defer kind to want understand of those more the being lower maintenance. at your rates it size guys of that's to fleets pump equipment rotational fleets, the could of like,

Adam Muñoz

can our this already on at equipment hydraulic closely tear far XX,XXX you we horsepower on the additional the mean maintenance team rest the which if we answer at a location as operations the current more and there, equipment. working I wear yes, with out is are as developing, efficient us probably Currently, fleet fleet operate division per talking to less with horsepower, are George, to your Adam. with call from we this spare like equipment extend it to on here the fleets of question, And I yard. the a of that kind have the se, just per amount Sam a equipment going led are wear and on to the calendar at the piece last you think to reducing pad equipment leapfrog active system but the pad it basis. this on life rotating allows that Yes. question, by job-to-job and and are endures each But of of to

George O'Leary

Okay. you as seems That's backdrop. helpful, to guess it then this, And if positive very kind Adam. want as get cash guys stay you mentioned things bloody macro of in I

wherever So maintenance your above keeping per eyes, do is think lens? EBITDA Or cash annualized does Just that how different you through curious flow about you positive? level settles strategic think fleet out? that in that CapEx about mean, that

Sam Sledge

have think account overhead Yes. well. CapEx We cash maintenance the George, obviously when at I of as outside you fleet fleet hear positive, to the say for EBITDA us level. level minus that's

location gives the make you bit to don't these, I efficient account with have in best But our for EBITDA really as is a of best just doing Yet cost. interest will it opportunity equipment said, the right. therefore a remain cash efficiency think to that on the keep fleet. We are kind to cash moving fluctuates, positive, times that we that that pressure will We to end mean continues much be pumpers to cash more essence, in like activity target. more and to show be the burning best in of work. goal calculation make that because fixed

peer right only are allow at strong to come we not relative So a a pretty basis and advantage are good stay our we pose of but to stay active. a take to that value return to very positive to ourselves going a to proposition level, and to point that from the trying active fleet across customers starting group produce now on the

George O'Leary

All helpful. I in, That's if I more one will could. right. sneak

also differences just customer a of kind private mix between we a are boat in customer customers. at to and guys the point, private all curious good Or any but are blue-chip versus customer as the public public if this behavior your just You point? I have, notable the base was operators in of base? there base

Phillip Gobe

All same going the upstream. on boat,

George O'Leary

that thought was I I ask Thanks think but answer, would I the anyway. Philip.

Phillip Gobe

you. Thank

Operator

question from Voie Chris Wells comes Fargo. ahead. with next go Our Please

Chris Voie

Good morning. Thanks.

Phillip Gobe

Good morning.

Chris Voie

some I that customers' totally just am are come. sure activity follow up your So sure are questions. lack but understand likely announcements visibility, of I aware of conversations. and to you activity on tracking jobs I on incremental to the the are you am of some having

you for, you If do how you drops that add to to the sense be fleet up the XXXX? incremental a only were might visibility can compared that have give of much

Sam Sledge

You visibility are talking drop? about what that else do might have we for

Chris Voie

your Yes. customers announcements of conversations have Based on you their or public had?

Sam Sledge

that. difficult But to too the can right you time. is fairly just at quantifying It's Yes. downside XXXX significant that number. I fluid to quantify tell that now. There a this is

Chris Voie

I guess --

Sam Sledge

come press capital multiple them have releases Several reductions. of with on out

it's idea So fluid you getting it are changing, how daily just right kind of know, give of sentiments it if weekly, you how is now. an and be to not

up, could that change again. very especially fills stories hard get our outlook whole So visibility, as it's to

Chris Voie

itself, price think some obviously to fleet quarter-over-quarter where level? level we edge then you can compared stands you where on give efficiency can of And or But the the per cover the XXXX as the your side, pad spectrum. of the enough. change Fair about it the is cost evolving to so EBITDA high leading at on and is if just pricing efficiency color whether are a and you generally as guys function end well

Sam Sledge

It's a pretty wide ranges.

basis. As you on know, Chris, we an do individual our treat best customer every to

have tell some of a small more steps had had you small down. this of hate you moving a had stick to start group with, within I that Everything and down I So XXXX pricing average steps year QX in from, few of taken in own range and given We here. we pricing we And down. on and QX customer couple we say, just steps definitely profitability to I is mean just in oversimplify can it. and our know would some

have structure customers. to So and daily work possible as fluid as of to a on alter we said much we we continue those as our as a cost our very numbers along situation to that basis pass before, continue it's and

Chris Voie

And a the due be more. impacted it Okay. your adversely us? In extent rates and mentioned you borrowing the can one just were you to maybe to Can give call, quantify impacted? there the Is that you on release expect partly probably receivables. range you

Phillip Gobe

is follow And roughly the X% to will down, basically of that. receivable. borrowing goes activity just base base The tied borrowing receivable, as

Sam Sledge

Chris. going as Yes. our It's of I on best to process. going we are to we mean, be work can lenders direct activity, function with this a

Chris Voie

All you. me. it for right. That's Thank

Operator

question with next of comes Bank Please Chase Mulvehill ahead. Securities. go Our America from

Chase Mulvehill

I kind environment. Hi. of on few morning. follow-up maybe current Good questions had a have about the a guess we

seen of a basically completions some a There some releases for halting from about through month. press the are the have end few E&Ps We year.

So kind just maybe potential that can halt more having and what are for seeing from the the are be are general you think I about more of because not. your Just Do to your we these E&Ps are going you don't know widespread? you with if It's characterize to base customer one-offs? you thoughts them completions? conversations

Phillip Gobe

more is talking out probably changed release completion about press of holiday activity. seeing a on already above. all are our once. that's Obviously, with We one And customers a the than

it no going One are to go likely rule, map as signals say, stop flow, is will this down. are right activity that is to to that thing point. at a activity go that getting determine maybe everybody's you can general who now. all way going that or oil over the lower to continue pipelines We just least is But Who signal starting is the down. isn't be at it's completion to to would that given now

Chase Mulvehill

Okay. when you Coming to out DuraStim the fleets. the Like All were efficiency? the cost, back guess DuraStim in appreciate the I trying color to emissions fleet I and right. improve? there. or what more XQ took to some related you were one did modifications modifications,

Adam Muñoz

mechanical its to ran minor the location, pump on adjustments. units and to far changes of efficient This was software Chase. maximum big to is as was it There on efficient achieve that how perform caused more some unit on adjustments It The efficiency Adam, pumping location. performance. the equipment primarily mechanisms is the or increasing cylinder as one like and how the so also the helping

Sam Sledge

units one will extremely together, from upstream and AFGlobal they the our pumping working Chase, that, add aside of right. I themselves, to And well ProPetro, are thing customer,

the the If of system make remarks, from equipment, saw pump But to upstream some minor you we There to that to in turbine, itself area electrical performed tweaks motors work way. mentioned the we were electric performance the very in his system. just that the the had trailers back well. these things Philip the electrical that along outstanding distribution

Chase Mulvehill

Great. one And on quick DuraStim. follow-up the Okay.

gas competitors out. your since emissions of greenhouse at about put really that of the have public a from for is that's we with Tier frac out One DGB profile first DGB Tier X looked they that argued paper when X heard and maybe, the guess fleet come kind emissions. talked electric I conference was and versus electric better call this anybody

comments about going electric? go electric? are whether just any know the to you all don't you any you Or if road? DGB X And at have looking Tier DGB I X Tier So down are converting versus

Sam Sledge

we multiple or customer a have going of service at are something there well? the I I the a think Yes. We that you been demand-driven. that is correct. conversation. of to was Yes. factually is DGB the to-date mean, X looking something to need at are day, because and decisions are as And equipment providing paper Tier everything to that our most in we think fairly tools customer-led And end

if we like with, no asked that of doubt work will DGB working something something good that's by relationship be is we X that towards. will have then customers something that So a us a Tier

think was DuraStim customer-driven in way. electric own with itself mainly its very benefits is in has and we move and Our

Phillip Gobe

Yes. think election at I don't power as a source. source I that for would for power point turbine link that just our That was DuraStim. the

a I than Tier power AFGlobal Fuel. profile system the will will have to actually appreciate, As X that equivalent generation emissions a soon Dual or have lower

the to But options that to power. independent I think multiple generating turbine are generate there That's the referring DuraStim paper probably power. So of product. was the

Chase Mulvehill

it. Got

Okay. makes back Thanks it right. will sense. I It turn All over. gentlemen.

Operator

comes with question go from next Stephen Please Gengaro Stifel. ahead. Our

Stephen Gengaro

morning, good gentlemen. and Thanks

Phillip Gobe

Good morning.

Stephen Gengaro

they et about wrongly, you investors think rightly the the relationships just a and I on. things cetera. of have And ProPetro think lot Dale I first, the Two about market, of or think to sort and touch wanted in

manage here, color do point? you gone comfort And us how go this some can how discussions you customer and forward the And relationships? give are at you As that? around

Phillip Gobe

interaction Yes. is, with in effectiveness great then efficiency thing And has of And our say people one employees founded the I can great process, levels the been I Adam some customers about And of great The that. ProPetro that company, all at add. might on and was in will our Dale. Dale getting took multiple day the release and while customers. the the the work the he the take of Dale customer, a location. and contacted have something to now. on-site job right keeping integral customers happens with put about the through We

get You job if it you a can keep and are only performing.

foremost, and They customers to our him. sad So But execution. and no first terms morale, see great I and they on were relationships change of and there the disappointed had think leave. very they attitude see in business focus with Dale

Adam, know anything I if don't else. have you

Adam Muñoz

tough think higher at that on at every We it the I I head in culture the the definitely would through hit ProPetro and as the and as the mentioned, site second even mean had to great field Philip. at there, Philip But developed survive here a relationships offices are what continues up throughout we have customer levels. these well you times. right I

the to customer keep moving be forward. So those and been have the just that strong operational relations to safety able our and key out efficiencies perform crews there

Stephen Gengaro

remember you you. in I thank are down, activity I how appreciate I the managing color. as and working I a are And to is you guess field? mean, the the Great very process? low. managing crews retention are you high. efficiency is the base. experienced the I very, seem are to that rates does think But your employee if tied correctly, How it like And your personnel coming obviously I structure follow-up, cost of the keep

Sam Sledge

tough, mean we want can the our day, us wellsite we equipment all biggest on We I Yes. right. on of same right. find the the all, Stephen, can assets make the believe people to. that go the we the if daily that But pressure location pumpers, different truly all of are at it a at end our is basis. it's type people,

our who right. changes, intensifies, focus almost activity our as operating those on teams So key players are within

our So is needed company who activity, culture entire best a has if across and the helps offering learn as constant levels. shrink teammates, us the ongoing And iterative aren't protect our our it's are not who our as an those we more it's operation. simple activity that personnel anymore. parks as our that of and There process analysis about more with crew people to

Stephen Gengaro

the Great. appreciate I And I it. for you thank answers.

Operator

question Hallead ahead. with next Kurt Our comes Please go RBC. from

Kurt Hallead

call. my a and everyone. I morning, is Good morning Good here. Philip well for hope to everybody And me welcome the this and questions of couple had voice healthy. morning. just conference hoarse Excuse

that we offset say, XX% activity. at if So a in year-on-year to is happen with difficult there the frac were say, has kind is in that to on of what's the Permian, very it know going declined any context market, decline? of the by But to we exactly play in dynamics the superpowers that pump basis all predict activity let's to

Phillip Gobe

the on location. efficiency outstanding their Just

I most pumpers. goes efficient the think activity for are as down, you looking

still not the and are we We working. cheapest are

and can appreciate fewer what doing. fleets. So people we do fewer are price at that And people the just we not I think look full and value with it stream

advantage I differential we do So think there. a have

Sam Sledge

post as hard-earned. our to people. our can just try is customers. Yes. mentioned and operational environment to our superpowers. is be going to to that add on Kurt, value What superpowers. that, Nobody and in to as And testament And we team to has are operating standpoint efficiency you total hard we we this develop a That leaning great mean, I from a

Kurt Hallead

Okay. Thanks for that.

second in you talked your cheapest the pressure was, The of that and pricing follow-up are obviously you marketplace. not some about the

of that We those letters companies am these varying received asking sent assuming as letters have well. XX% that are had by I discount. E&P aware been around you

So kind of is you guys are pressure facing? of pricing the that magnitude

Sam Sledge

letters I savings their across asks, mean rumors yes. I mean They those are type projects, the are I collective those think. looking for are of those true. and

there to is XX% coming making that a that So were quite even of this, is stretch, right. lot pressure a pumpers say margins into out there

still plan customers to bit moving said of seen go stay we a like disciplined earlier. to where we stay positive of a So it's as remains with How cash low to or kind we we go target. individual will multiple times possible as be will and

Kurt Hallead

companies lean take you forth. guys very and furlough Got executives mentioned so you. seen cuts And know pay But then we on you we so seen a overhead. and have of employees number and are I have on

do of you So kind SG&A? flexibility what on have

Sam Sledge

Yes.

talking all All the And it. above. we of are about of

everything be implementing is term. I We table. in measures, am will the near on sure the But

think be correctly to are foremost, to facing with activity The and need levels respond. first anticipate got we and various ready we size we that have to activity we the and

what attributes. out shut employees of district what unique have one down, the move that's to think what to facilities We down, close to don't figure I to around.

We have quickly. all very got We respond it can here. right

activity everything about table. things see the done continue will you is more probably it. to thoughtful have the how been as have we in evolve. But We And future on

Kurt Hallead

Sam, active year where general can per XX%? think on are mentioned million CapEx? you us I And that about to one great. per CapEx. what to to To are you as you reduce you give have maintenance looking you and more, That's some Is XX%, looking $X that. Can the reduce maintenance just sense magnitude target? it historically crew do

Sam Sledge

goes there will will think think term. to I go would maybe I and near there, point. creative to is XX% I little deeper little more We things good get some a a is think do quoted from point. But a where dig you the it XX% And starting be number from we there. that there have to do think be, can the we starting

Kurt Hallead

adjusted fluid ends EBITDA for that the is CapEx? Or when account you maintenance positive less that CapEx? And then minus is cash, the EBITDA

Sam Sledge

adjusted EBITDA Fluid It the maintenance be CapEx. are minus CapEx. in ends would maintenance

of, you getting would kind to either kind So it's of same be way. the number

Kurt Hallead

you. Got

Okay. Thanks answers. for I that. your appreciate

Sam Sledge

Thanks problem. Kurt. No

Operator

ahead. AltaCorp Our go next Capital. question comes from Waqar Syed with Please

Waqar Syed

fleet the you. were couple ran was that you fleet turbine or Number the it first for LNG? gas? Thank of one, here. using CNG a Or And questions

Adam Muñoz

is This Adam. Yes.

that's out delivered and first flare a customer was to CNG capture location. The there actually DuraStim supplied with by compressed with into have we

Waqar Syed

Okay. Great.

were Secondly, your around say, fleets, let's customers' XXX%, how of of meeting doing them many your needs? XXX% fleet, of active February, pumping

Adam Muñoz

And to Small, sole a provider or small customers. fleets number. it's we a was it Obviously, Pioneer. with are other maybe pretty three two small

Waqar Syed

Okay. And then what was the QX CapEx?

Sam Sledge

don't that number Waqar, in I on me of later. now. right we follow-up have that front can

number you weeks that for or another have will six in We so.

Waqar Syed

of fleets number enough. what And Fair you last current that is or manned your Okay. had?

Sam Sledge

for How the quoted we in was only was the I ballpark quoting rates many are average, average March of that are that number exit the fleets down right. we? comfortable that XX QX, fleets with just think I

below at already that was the it So end March. of

Waqar Syed

is it But enough. XX number it same? that fleets, Or that? both higher manned the the Is is number utilized fully virtually of than Fair of the is number?

Sam Sledge

We in are real-time. rightsizing

So say. hard to

Waqar Syed

Fair active And many Okay. you today? how cementing enough. units do have

Sam Sledge

in we in I sometime total. XX QX, February around think were

Waqar Syed

unique Or on well? going follow side something rig closely well? the to count units the Okay. Are there cementing cementing as the pretty about is as

Sam Sledge

I rig think the count. that you of Permian parallel that see run will in

Waqar Syed

have. That's all Thanks. I Okay.

Sam Sledge

Waqar. Thanks

Operator

Please ahead. Research. question Gendron next with Blake go from comes Our Wolfe

Blake Gendron

you squeezing I anticipate cash I back in given base? bad wanted circle was It a issues your am potentially year? here, move or in if you any Thanks risk for as this here. do collections expect XXXX source debt customer capital. XXXX. major just wondering of then me working forward and on Hi. And that

Phillip Gobe

our our customer I definitely relatively base, kit. something It say, bad blue-chip in are think level. the the a capital of of move this would our one smartly. working to we we period just as be I with time, down low managing will tools takes that And through debt do

Blake Gendron

Got it.

here, assume this deleveraging, zero flow at cash doesn't the operating to focus So go primary point? if is that we that

Phillip Gobe

borrowing will yes, base. that our mean find I down, and you our maintain debt stay go Deleveraging, will I within think balance

to agreement. our of covenants the going not to, by are try We

So down certain we borrowing cash to the will within pay stay use a level to to debt base.

Blake Gendron

CapEx for And know gross some offline. at are was in a assume would Do Okay. the that taking quarter. this question have you total was gross target point? there I you CapEx XXXX for I first CapEx

Sam Sledge

For total growth?

Blake Gendron

Gross.

Sorry, gross.

Sam Sledge

A of the it. of lot aspect maintenance because variable of it is

that So to be will hard pinpoint.

Blake Gendron

Okay.

my Just to frame --

Sam Sledge

will by and It's the host have hard point. that significantly call, have probably right at might, time we Blake, this we CapEx early better It to Down estimation fast point. now. I gross will can numbers just CapEx is another gross say at we some all mean

Blake Gendron

I you. got

Okay.

some I Just reductions there forward? potentially are of recently, to you moving it with give And us just upswing trying have a to crews. would certain to some I finish to considerations the those the the members back? breakdown you maybe with the ProPetro attract specific moving how crew was you is workforce maintain could Also, how some then best versus workforce of Or Pioneer? together your Are if guys? will Pioneer, to folks are you agreement you mix-and-match given approaching with you crew you workforce working field having pretty keep easier trying had keep some to up, legacy be on with or can? maybe reductions that crews around. most on wondering as configuration your are crew to imagine of mix-and-match of interesting legacy are much your commentary a you respect

Phillip Gobe

the out organization say, say it's whether I best best to a Blake, call, service there Sam customers the just mentioned guys. and fits or that Pioneer keeping ProPetro are the would we of our the I would the mixture legacy no, personnel field, culture, I like that mean both. earlier that's in our that in provides

But for is one could We than of any other. no, the higher great lot one's each you have for that people got say work number there think us. don't I that a

Blake Gendron

Got it. Thanks.

Operator

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

Phillip Gobe

of that up. Okay. with we scale to down. how Many in. the call people with the calling to would like when know these the know But how start company it to Everybody, I scale thanks We with positioned. They differentially began. thought started for They end the very are people.

in quick likely which react, make what's may and a of, are lot to the in areas us evaluation to the to And We for come basin. survive operating back, have will going to different it are not terms do it of working going respond be to that's we got to in while we things be what's have the concentration probably of is we fastest basin. it continue probably and down, the that. going when basin it's active Permian after And most don't

going of to advantage to take are We that. be positioned

forward call. we the to thank So quarter everybody you look and next

Operator

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

You disconnect. may now

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