PUMP - Earnings call transcript Q4 2020

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Operator

Good day, and welcome to the ProPetro Holding Corp. Fourth Quarter 2020 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Sam Sledge, Chief Strategy and Administrative Officer. Please go ahead.

Sam Sledge

morning, good and you, everyone. Thank Holding Welcome XXXX and year quarter conference to call. ProPetro earnings full fourth [Operator a Instructions] recorded. being As reminder, the is conference Thank you morning. and good your appreciate participation today’s We in call. Financial Chief Adam Officer, Phillip With Chief Munoz. Executive today Schorlemer; and is Gobe; me Chief Officer, David Operating Officer, year we full our quarter released afternoon, announcement for Yesterday fourth the earnings and XXXX. Please projections statements for Act. expectations are forward-looking or covered Litigation any the future we Securities on make comments that our note today’s regarding Private by call events Reform

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

Finally, to prepared like call With the session. to turn hold that, over will after a remarks, I’d our Phillip. question-and-answer we

Phillip Gobe

All recovery, onset the hopeful a in right. Well, oil morning, good and the XXXX collapse lot XXXX economic of starting price in to signs pandemic brighter. navigating successfully of Thanks seeing and after Sam the everyone. look

Basin. the had last the operations, rollouts year freeze had well for. particularly we country, As It it deep vaccine people’s Permian as and to could picked started, impacting had health approaching hoped put And conduct severely the a of week the the up, exactly spell, began, and year what as then start activity not go was pre-pandemic the the large oil prices swath the to levels safety, were in ability across a possibly cold wrong.

needs never community. all were I to to to not change, of here out answering safe thank themselves, the things continued the for responders chain and Basin their for in respond that with following but ready promote Permian environment, our workers like for stakeholders. of to customers employees responders thankful work ensure selfless our they sacrifices wellbeing. our day to supply stand for and medical efforts partners day energy health need guidelines the again, would the only a our customers, help We also We our to larger in for continued the partners our other like of to employees and and first appreciate our once to resiliency and and our also However, community work call their some for first to dedication. make supply in

operating quarter. levels activity the continued Turning day records new hours our also during steady per We’ve pleased to efficiency were to attention increase from set the pumping fourth for a downtime. and in We period. benefited customer

continue Our And further XXXX. financial a enhancement levels made we activity significant ability to difference expect quarter. to fourth we as sequential redeploy high-performing quickly our for efficiency the crews results to through combined move in increase with

our assets of deployment, oil to ensure This not critical reactivate will flow pricing, and efficiency profitable industry. continue we that cash the adequate excess continues margins. Additionally, service work operating the to targets have is deployment is for success the We’ll discipline equipment availability only focus to to team equipment field we discipline without on pursue expected positive. of

most focus on utilizing reliable their crews the Operational on the services fourth wellhead. with the and in remain again I efficiency performance is most available yet field quality operational important the team the customers members in equipment on all and industry. quarter. differentiator at in oil highest focused was for to display relentless thank safety full it executing of our And Our want best-in-class the

of needs record to customers marketplace. track proven continues the our responding to differentiate and Our of in quickly the ProPetro effectively

customer to at while share we into consistent culture throughout levels also maintain XXXX, XXXX, has expect which market to positive. continue Our focused remaining us allowed cash flow

As year, committed fully the creating improving through and value. margins remainder macro remained shareholder the to of improves this environment

pleased fourth quarter. the free generate flow a grow which at million quarter, almost position again, to end During to we cash of the year increase were XX% cash up the once end, than more $XX our third from

costs through a extremely Looking customers closer back work them. for in operate at from financial level new interest share and service with the their pulling energy in well came together our of the we team through the continue to customers difficult how ensure that by lowering history supply our as of times together most environment business. chain. even quickly to downturns in investments that adapted past managed a proud to that year, E&P customers benefit appropriate a as the making one at for as I’m efficient of sustainable more and to our the was our partners We

a the quality equipment generation, to mutually further losers of cycle the relationships. now recovery, a result focus able industry downturn invest highest to and U.S. their only the more will with providers beneficial lower the customer as reinvestment winners of pumping With transitioning emission pressure and service separate in impending next in

oil to during Additionally, remain allowed balance our XXXX. debt-free crisis of the and sheet price strong company the COVID-XX

this David? to that, positioned served and Propetro over has conservative – sheet succeed continue performance the call industry performance. financial capital turn energy well David I’ll balance in to discuss company to discipline the our landscape. in ever-changing Our XXXX to and With

David Schorlemer

Thanks, everyone. Phillip and morning, good

Now We revenue expecting versus XX%, in which million total first January seen was our to flow extreme generate our XX results. specifically, fourth in XXXX X.X an history. quarter, the the revenue now X.X down to of are financial attributable quarter increase year. event pleased levels. Effective of primarily X.X increased for this guidance quarter More winter of company’s quarter. fleets. QX between than the more compared the sequentially weather caused third to was to to fleets and recently, for utilization million cash $XXX XX.X in related to were EBITDA $XXX weather post utilization quarter the fourth to was for region XX.X our activity higher of moving we’ve effective This and single free fleets from third we downtime Due in fleets fleets unprecedented adjusted

reduce excluding supply XX morning, customers for was to chain innovation in and are our levels quarter. our continue storms. and fourth and concert and our in versus team, supply fourth And the costs Cost levels pre-storm technology, the higher prior with are fleets Our hard of snow third million chain activity working driven million our We’ve our the in this at with by amortization through quarter cadence working with the able to partners have as $XXX reestablished to increase of working. $XXX the quarter services, depreciation partners. work been we

us real-time data acquisition partners innovative invest we benefit. global expertise and critical example, analytics a This help expertise real-time in ours to our have global resources solutions of manufacturer. utilize are failures. for chain data engine mission the beyond these with our leverages For of analytics well initiatives cloud-based their to utilizing supply Many advanced with condition that and latest reduce our monitoring deep and most

general and and results $XX third Fourth the our benefit focus. Our quarter. team from details million to sweats quarter compared $XX administrative for million the expense was this

in $XX and in million XX% the to non-recurring in both million quarter. stock-based the Excluding periods $XX third fourth compensation non-cash G&A from quarter decreased

January, quarter $X.XX $X.XX million was per for the of net or In $XX hydraulic to of retirement the of horsepower $XX QX, Our loss million conventional $XX of quarter XXXX. or II third diluted diluted approximately we XXX,XXX equipment per announced related versus incurred in net an the fourth share. impairment loss loss diesel pumping share million expense we of Tier loss that

the XXX fleets and a adjusted to increase almost improvements quarter. from margins leverage XX% sequential our time EBITDA for Adjusted million by $XX quarter, supply improvements reductions efficiencies. with EBITDA onsite, fourth Finally, and for million chain maintenance times XX%, third quarter And pumping at adjusted coming logistical these resulted and per EBITDA continuous our basis day off non-productive points. margins was incremental in practices, high third compared the highlighting of operating the $XX improved

deployment assets G&A our and also to and cash discipline profile flow. in our Additionally, improved earnings of the lean contributed

deploy This our us remain of competitive during environment. returns. chosen returns, to our the Phillip Other we highly without noted a cannot companies oil field generating path remains As deploying without earlier, positive what team adequate is enables adequate what assets in flow have cash unsustainable discipline that assets is view. understands service which

for While durable more industry, willing our revenues dramatically top profitability. as as line sacrifice may not to short-term we the increase are

our in to completions that for efficiencies customers operations, which returns reinvest top emissions order we also deliver delivers be us equipment for tier shareholders yields lower performance, industry-leading completion solutions. that and understand deliver must to their able in to Our

was proceeds for from during Capital growth primarily guidance $XX in $X CapEx timing cash paid CapEx Cash million maintenance $XX our due expenditures, cash our activities that million XXXX. $XXX capital from million. million, $XX XXXX differs activities in previously to incurred totaled quarter, capital incurred including $XX used full the were spending of was million. in net used the in XXXX, and related during projects investing Actual equipment. was the investing assets the sale we $XX for expenditures below of incurred to on capital of of spent mostly year in year the achieved CapEx differences million stated Regarding some incur year, and half we during first fourth of XXXX expenditures in million

be million Our levels. toward to heavily the expected for related of and to approximately equipment. $XXX to subject largely and conversion CapEx, Total equipment our with between DGB to remainder XXXX will $XX maintenance capital dual-fuel fleet weighted for fleet to plan million million IV $XXX and CapEx allocated investment utilization emissions Tier be XXXX is lower

to to IV million the As of new II IV we for pumping have billed add to half million, which for Tier during purchased our Tier have and XX dual-fuel our press enhance existing allocated Tier offerings approximately January and we units additional fleet to conversions XXXX customers. in receive pumping release, DGB equipment lower expect an $XX These units. emissions DGB stated of investments will our $XX first we units

of debt-free million, liquidity strength the fourth our of million a to available plus balance end total end, of At remained including the capacity Moving cash quarter. the end $XXX At credit of to hand on $XX had of sheet. of prior $XX on the revolving million we year we compared had and cash facility. million quarter, $XX at the as

and note available end. our strong as of facility. I total cash in to of of and year increased capital comprising $XX that XX January on credit million capacity $XX liquidity would the revolving remains from million approximately $XXX Working $XX million, slightly at Finally, million million $XX

provides firmly are opening in the we his position maintain discipline to is We cash generating strength leveraging committed for financial ProPetro to our ensuring capital the Being this especially of debt and mentioned we and key to look differentiator marketplace. solid in scale and success. a further maximum our Phillip forward our that sheet concentration As comments, operating flexibility. free a free flow balance environment. is critical And in

our the service unsurpassed to in customers onshore oil quality producing prolific As provide continue and region Permian most the we production. Basin, in U.S.

we is and As opportunities our actions are efficiencies focused performance their continuing on of Phillip. With coming for other the backyard. and that, about customers to the Basin transactions the ProPetra’s of turn are back mindful recent that be evaluate wellhead. and in are could XXXX, we most The strategic we essentially it $XX market us billion operators, excited those at the the Permian totaling in to over since leader investments present and our leading completions in I’ll E&P way,

Phillip Gobe

David. thanks, right, All

activity, move of a disruptions further demand external in a to half a consensus been forward will look We’re We XXXX more continued number This support our last Supporting through normal price the due development and XXXX. E&Ps crude view vaccinated return and throughout improved and backdrop saw much and crude visibility of the activity work Americans activities. price crude environment week increase like commute we which to significantly, work, in see began recovery or to their oilfield improvement oil, should of increasing other steady to a barring the pleased weather travel we is will more issues. second of have to that to as for increase provide once an the entertainment.

what our on As time, control. will until can we course we focused navigate that remain we

ourselves to only to continue ensure Over Faced have thrive not running we the positioned we efforts also years, taken do will pandemic improved lean of in to onset pride we in first levels survived, but a the the the that half with overtime. that. exactly of as that escalated organization the our year, activity

competitors logistics uniquely in outperform multi-operating continues spread recovery is and the As XXXX, models country. to across needs complex with ProPetro positioned

they year during periods XXXX. maintain works our customers plan their business into to for model communication technical needs balance their later us side. increasing expect helps development advance, at Consistent the the in anticipate we especially offerings activity will levels, which for Our problems remain past, well better with and of this programs. we as well This and improve allows minimize the our close of potential which with

course, Of improve customer’s will both continue leading we increased driving efficiencies execution, industry once bottom provide unsurpassed lines. to that our ours onsite, and including

to continue and industry discussed efficiencies. As closely and further cost-effective services in solutions past, for to demand continue services the have increased in And we globally long-term Because our to develop with expect those our evolve, the want pumping remain to success. customers competitive. we we mutual execute will recent used of prices, crude support the must pressure equipment work in improvements the to we uptick process of if

year, example, operations Simul-Frac this have are which with been For for we operational different success. running our very pleased two customers,

showed next other of completion resource valuable we price our the And well lower our considerations. our reduced a to bring intend market. for are to the work expect impact last customers generation environmental cost. to their through this with greenhouse Regardless year additionally, minimization to we showing customers further operations and technology emissions As year, we’re again side and of of the environment, customers

and have DuraStim dual fleet burning sources. effort we fuel investment to employ us in a electric commitment, significant aiding equipment technology our an of gas cleaner burning in evidence As made

in in During quarter alongside deployment a develop technology blue-chip of currently field base market about full interested test and with to the the remains the January, targeting the coming and would are prospects larger in partner, our that AFGlobal, fourth and XXXX. be I be with electric And DuraStim customers’ extremely we excited the continued in plan we the DuraStim. offering DuraStim a note our to to and fleet months.

additional for I’d to levels the been will also it for industry single is questions. believe cash consolidation assets well reputation positive to ProPetro, of turn E&P at and most about Permian-centric discipline clear important earnings The discipline that have providing and operational a at strategy our the deploying pricing healthy free return flow We very disciplined site. be our support positive the execution With net participants. combination pricing a of given for focus that, for for like unsurpassed needed over operator

Operator

question We will now go from Please with begin the question-and-answer session. [Operator Instructions] Scott ahead. The comes first Citigroup. Gruber

Scott Gruber

good Yes, morning.

half? it could you the And you of thoughts back prices the so recovery go the of are and hear up second given quarter you where second early to But storm to, early guys cadence the on glad kind around just stand, unfortunate your had thoughts the crude experience and in on last running. where fleet week, count where then here thoughts go of in could

Sam Sledge

planning is of consistently the bit quite outlook last with to terribly working our at end I And that given There’s of in allow forward portfolio close few this participate advance. this can’t customer Scott, the the is been year, than a in over maybe a it we’ve different relationships Sam. last beginning lot years. planning. there was that of Yes. that our year, say us of

That we’re higher last a where persists go time does storm hesitant activity business today. for that we’re we think are David any commodity and say changed effects backdrop significant hoping this group. our we have gave XX significantly being crude there customer said, the to down decision-making working more. unless But first the chance I of But that account here. The through today has beyond week. backdrop into takes marginally activity from that improved our right. and process trickles other we think for And guidance mentioned, are parts amongst it You’re fleets we can’t we yet of our Like the quarter has the that on industry. adds still some

Scott Gruber

XQ, Got revenue guidance about fleet a but the just EBITDA think we little the generation think on about your in storm revenues of incorporates you. color to in And per maybe fleet how bit then how the line should with also we on associated both extra the how the XQ? EBITDA EBITDA per costs about incremental, going then the and the with and to storm, here in increments weigh do generation think they’re impact, or revenue fleet

David Schorlemer

is David. this Scott,

going actually dropping I think by be out are in not period month plan, with absorbed that definitely January, a February while of activity, exceeding from by is we came off revenue day. costs some positive year pretty impacted for end to some our that

in definitely that’s that So that I think us something March. impact will February,

that same of could unabsorbed of types are lost pick days that backup weather the a February have going in period certainly, we work, but to we’re see events hopeful don’t to potentially of some We’re that and going some have costs.

partners We’re chain can. the something definitely, that vendors that supply impact But we quarter. and best to working with could mitigate as

Scott Gruber

expands us just per point XQ? too or compresses potentially early at in it to tell fleet Is EBITDA this

David Schorlemer

I think go quickly, we pretty got we’ve month got it’s customers working get ground tell make things week. last chains a to little when to a definitely because up early happen full work but and given together and can some supply to

Scott Gruber

constraints been the one one, about And storm. chain supply we’ve hearing some last even then just before

in pervasive there some supply Just some they, chain type color on too? are sand be great availability how color issues of severe would and others and how

Adam Munoz

this Scott, Yes. is Adam.

There are again. those up But course, supply up did winter we of self-sourcing mean, those to a I in are today, the are earlier products their to the As location. and of as lot and chain abilities call, work of impact mentioned again. impact running customers now, as that and of of running some products we’re right get

going impact any supply from So forward perspective. a we chain don’t see major

Phillip Gobe

mix year, dramatically. a changed sand. question the and quite right be say, seems that asked running last and to up been different. answer that getting would a now, in our you back But we If were where people that lot have bit have and sourcing But of bottleneck the has

Sam Sledge

to I’ll Sam this much sand Scott, the thing, is product. very add that just And time a only my again. And in perspective, from is, is

and that of stock other of to on regionally the or their to the planning important. like parts are With team us that mines chain term, to planning near our job here is job going that think and and with a mines recovered be done and a our the working to disruption allow with hand we’re enough all health ahead produce clean customers our But have to continue other to chemicals working ability think consumables and done the storm. supply From I has supplies to the great products Most us very effects ahead, mine are to So nicely. the today we keeping sourced, I long-term are yet great work. plan a get teams in seen. of back sand

Scott Gruber

Thank color. the Appreciate you. Great.

Operator

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

Sean Meakim

fleet So fleet, your the ability thinking impact see you’re half as mix and volumes that of is we better and may shifting be operating Good morning. of progressions, together, Simul-Frac make assume have DGB putting you the fleet think not through course, can then base parts, elaborate how back leverage was on XXXX, margin flat? your about lot year? on the the fleet DuraStim fleets there’s all on some changing, as through progress per to I mix how you’ll should about underlying you. moving towards lateral there’s your of presumably, revenue a then per we rate Thank on basis a if the EBITDA you the in but year, foot and of pricing

Phillip Gobe

are see even increases. are to that of year think to we the definitely mentioned, I than price end. that conditions at beginning as beginning was see crude Well, And The conducive the on is vaccine materially better environment to global we’ve it markets. we’re impacts

comments itself that, there. and situation rise a sustain at that be do play some to believe we to those opportunities customers had will we’ll in out. willingness And need continues of from that there’s will that even where as pricing counts some point we’ve this fleet So

the to there’s In impact will more the cases, some terms to and for got really of ultimately how our those a terms and We do got we’ve margins. efficiencies in of believe lot in but equipment, mix we’ve opportunities that still validate at delivery forward. those reduce work some to of work do improve well costs confirming going that site, to dates

activity So operating levels, as we to out I from focusing seeing QX fleet right we’re into QX think we and quarter-to-quarter, leverage that playing year as now did on improve, to the the see overall improve. just continuing from out play see a counts the

Sean Meakim

to then you’re in disciplined of just And maybe enough. focusing you be stay work tightening you could for, calorie the how fair on more your market noticed on that a bid to near-term, little Okay, – going higher the noted the type willingness opportunities.

little many way how just the extent us market the ago, maybe we XXXX? versus bidding terms fleets of you of the thinking context relationships, for maybe seeing help some on market? jobs part get what or today first of more to on year the of could So in long-term emphasis the visibility there’s the but tightening So beginning of just in in in about to you’re understand recognizing quarter context tendering are an seeing course, operate, in a what you’re which

Adam Munoz

Adam. Sean, Yes. this is

bidding in far same I had, of question as coming a you on think the we’re the players still the Permian. As bidding lot up seeing that work

is to up we seen numbers range. closer feel we far kind those of think where as some of of be the I have to getting competitive what needs and kind as coming it

prices a I’d conversations to the lot the starting pricing going there closer seen been customers, far couple pricing as their at at future, we’ve is improve in little the your price still the past. the still improvement. they on far as to lower have than a offering bit, But we in question. were having some year seen as pricing. increase have where just as as companies line we’re with bottom improvement I throughout of There been a You levels in move that up if say, think But commodity continue timing least the would But outliers to stabilize, at are we they say past I and our have seen. haven’t

Phillip Gobe

Yes.

– pressure how over line. line growth the top if that and much from to down, think you making at pumpers, I the trickling it looked reports, look the as if I’ve of those it bottom all not

So I we’re to we’re get way think point probably the probably we’re up, pricing, trying people is you’ll at. say – going just they’re where saying but pricing hear probably to about the

So they’re the focus I the may on again, to pace wouldn’t tend expect others. us free to revenue same you generation cash hear EBITDA But the the I then that move that at would projecting. margins flow on and

So we’ve it bit. and a little just by lost wasn’t some jobs

there’s if still take work. to they to low, there get it So willing out people need the

activity. chasing not We’re

We’re chasing margin and cash really free flow.

David Schorlemer

at think differential of a work, I is that missing lower the one that competition. And the that’s we positive it are we’re to missing we if things have seen

we’ve finally been and to start that to they’re work. picking And profitable will So beginning hopefully where up walk holding we’ll up levels continue.

Sean Meakim

Yes.

You’ve got great context. really

may So a to the put in but work see fleets more progress still Permian. lot. Thanks made,

Operator

question next with Please The Simmons. Ian from is ahead. go MacPherson

Ian MacPherson

doing morning. no to Good week, hear a okay anyone. fun glad after for last I’m which everyone’s Thanks. was

visibility what been you fleets you and QX last would Do quarter, back up tick like, to you down to inclined So XX probably last not have it have today. from week to flat activity exit to said I’m a your at guidance for sounds as nudge March XX? above guessing you’re if opposed

Sam Sledge

I that say work confirm that answer we Sam. hesitant have have do to me fleet, is visibility But another detailed hesitant to exactly. additional is is that, we to makes the This in visibility do yes, short more yes. the timing to The near-term. on add

Ian MacPherson

Okay.

that So just of EBITDA on Q-on-Q were efficiency if mostly not not of down like and understand revenue gains payments showing fleet, in pricing. slightly it topic your that comps idle per well. sounds we back up QX on that was especially efficiency circling this that I and are And think kind as your entirely the your

there ability mix do top think you a efficiency from basis, in tier So terms my here how on feel to just question this like, you’ve more of Simul-Frac of pumper towards? comparable like operations plateau apart a you’re of room that and at undetermined is sort your is racing do that much to and there terms but you thing, ProPetro? your – optimize that in you are of run a the still an close peak is of Or sort point to

Sam Sledge

is when this asked in I Again, question, Sam. day. Ian, because you that smiled only the I hours XX there’s think

We’re the XXth XXth hour. not get going to and

like enabling those time threshold, prepared David is is a short think example of right. answer the is his of incremental but we therefore mentioned us probably higher, a the there’s can And answer you’re add So longer remarks. do. don’t exactly in every we quarter we metrics to many efficiencies operational margin grind higher, crude an Fourth on per basis, grinding

early But well, will the as participant there of you is our rate slower. if but are is enabler only There the we healthy the be to in be So we profitability what of us days more hopefully more like a of individually. with simul-frac. what for not see now about like efficiency could And then of operationally something so sector to coming there be work the us, for that see that quarters. last couple in to come type next of come, could impact do simul-frac months. the when now yes, another of which think leg of we But prospects change as

David Schorlemer

– to And Ian, Yes. add David. this just is that

have benefits site, We do if greatly of note efficiencies, customers our also the we benefit efficiency. as that not we. all greatly the And through have same job level we customer higher at efficiencies should the

the we’re in to So improve working able is bring on our levels achieved. working one not to their if think to are efficiencies that they’re them with up higher of we speed and be that the things customers

a So And big there’s going with a for that we that that a improve that that think potential to provide think focus go we customers We value we’re to forward. make that’s as work add ProPetro. XXXX. for we

just only of not Sam efficiencies our customers. mentioned, within also simul-frac mix but that So improving

Ian MacPherson

Super. everyone. Thank you,

Operator

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

Chris Voie

morning. Good Thanks.

Just odds curious additional is versus IV in handicap that that? as not I more? there poll chance you to customer CapEx the we of DGB. think How in investing do investment about CapEx committed investments and in guidance incremental Or a the investment Tier drives year? Are later

David Schorlemer

flows, is this make the in capital David. place is Chris, to regarding set This we very team. communicate with is that that sure this theme that We internally important. have cash related and Well, we discipline. that performance metrics a have want CapEx understand to investors we

And today we’re to expectations this stick so investment going sets current as for plan. the it under our to year,

As a conversions? the Potentially, potential terms we and we’re the to increase do careful the And deploy very increase capital. that year disciplined to there very, how of spending on about we’re capital we unfolds, what of could be side. going be to be in going level very

Sam Sledge

And to environmental lower equipment. and avid evolve. Chris, ProPetro that a level maybe I’ll at need that are the equipment need have just We we need efficient cost bit to footprint. We out that this for profile, needs to We sector smaller investment pumping at equipment equipment about believers that a space. add more has zoom onto is pressure Sam. little a talk and a

equipment this our we’re some it’s to find So to so make investments. need just gas make companies if equipment. announced We’ve dual electric We’ve us vital needs the way and for can our investments. DuraStim, we sector and more making as evolve we recently investments so return obviously a via that evolution a to offering to sector of push peers like our made and some a

entire that to those evolution where steps get hopeful a of sector this forward the a happy be can are we group. are as and in on forefront push right can now place we our So taking

our So we can our communities. all better serve and customers

Phillip Gobe

just back pricing If certainly cash would And that. up, flow Yes. capital getting consider discipline. that to are we we margins improve if and see we then improve, see conditions move those

Chris Voie

levels. a do how think Can just second day? least gappiness but fleets in first tight them hadn’t the about maybe record you a fourth excluding And in huge your the in Thanks. XXXX? been tracking increase fourth efficiency you there? February, on then a compared calendar weather quarter characterize, like per seen I some quarter, well if basis think efficiency still Okay. my bit. the day, amount to a can quarter industry calendars for rough a lot in stages are to most the question, the companies, mentioned pretty they in there is did of look the XXXX work calendar the at compare we’ve you Or for of to Was compared and little that

Sam Sledge

work short dense with the deploy mean, and I the to there calorie customers to We is calendar our high equipment yes. only opportunities. crews Yes. answer

have We’re is not really part earn as deploy of when a again said, time and return interested quarters, calendar. keeping that Because we’ve a in full equipment and we gaps. and huge, huge to today prior in time this a we

Chris Voie

Great. Thank you.

Operator

question next The ahead. Please Stifel. is Stephen from go Gengaro with

Stephen Gengaro

a morning, you – as fleet, far times a when Two X.X-ish on things. allocation Good in simul-fracs? what of talk of horsepower? And horsepower think do doing need in the because the you about constitutes you as these understanding Thanks. you’re simul-frac little can about more the how kind One, gentlemen. my side, just

Adam Munoz

is Yes. number. Adam. accurate X.X this an probably times is Stephen, Yes, you’re

simul-frac, to customers a have pad or depending not different equal or approaches all a on the six considered different well it’s whether two-well four are Although, pad.

there horizontal to are rate of down to each type they that rate equipment continue can as accustomed change down same or achieve wants target of as amount well design traditional customer backed that a design. on the want that with whether they the well, rate or each to So zipper the

Stephen Gengaro

assets Okay. versus more far second out assets? equipment seeing those price mission in IV market? benefit assets. are about any the XXXX traditional emission in Are What Or think of you And the sort that as you of is, the move the how as you kind talk the plays a evolves Tier for assets – you the pull kind are only? behind you And do seeing as question dynamic change some lower to as of yet? Thank pricing you then you. seeing low do of and utilization

David Schorlemer

is make Well, two all thing in definitely can you happen it buckets. want it it. And put really. customers demand of I our them The the want, And there. doesn’t

is there their people people emissions burning supply. are but focused focus on there natural are focus their on and also emissions, So gas

mostly emission So it’s a cost issue. issue and

believe currently lightest is it all everybody technology. low I emissions deployed. So the wants

see up see contractual II customers’ get to we that Tier and the to pricing ramp type only any So able just to some IV could they it between support equipment. bring our make now don’t don’t or companies differential but so Tier I there’s market. of unless of because pricing change DGB commitment And of differentiation, right their demands much out that lot a investment kind

Stephen Gengaro

Understand.

on better the Is you’re to that assets, putting to you’re a get So upgrading to when fair? investment return expecting from these perspective. a dollars work price justify

David Schorlemer

we wouldn’t that Well, think same deploy will. I be right willing think opportunity the regime pricing It more, could. is obviously say now and that go I we But pay end that’s in up to would equipment And in our equipment equipment find if to it. I margin convert expectation now. If around we will highest eventually lovely are necessarily with accurate. right and we we’re that and shift the customers we’ll

Stephen Gengaro

Thank great. the you for Okay, color.

Operator

[Operator go next Markets. Capital ATB Waqar Please Instructions] question The Syed with from ahead. is

Waqar Syed

deployed Good how is have do you morning. currently active? question cementing or many first clues My

Sam Sledge

are We currently or they following have rigs. XX are that XX active

Phillip Gobe

it’s around given number rigs little rig today. bit XX of Waqar, chasing. the right we’re Yes, fluid type a the of But we’re a number

were XXXX, – the at think following peak XX activity, peak we we were almost rigs. I

Waqar Syed

is the cementing to revenue a in Permian? rig according in changes quarter tracking the in And the count

David Schorlemer

generally as movement total compared it Permian is. little up say, a we’ve rigs. in the I’d seen to bit And actually share our pick

Waqar Syed

CapEx XXXX? the per Okay, of great. that for maintenance what’s fleet you then And thinking

David Schorlemer

Waqar, this David. is

million past CapEx. converting to closer think equipment fleet We be number amount going have guided good probably that of $X range of to $X we’re a that year. million as this upper that per is maintenance of the We in to end the

on a end. number guidance. higher for end those the we’re But currently of I think that be fleets it in overall that lower where up that the once out being probably ends will plays cycle with toward fleet our

Sam Sledge

of also been might via more as a bit has some have And on little that that, the of you equipment some to get some we we’ll fleet that need via dollars that parked nominal into have an investment. – to intention add reactivations

toward day I impacts the high So also that’s that maintenance that definitely of minimizing as what us end make although minimize much range well. components our have operation. our CapEx very time-driven. we large per comment have we we’re CapEx more and hours these fall to like through more CapEx that the to keep our laser maintenance categories And work of into to would focused more maintenance on our and spend, throughputs and continue are

work per and the hours they work, they day more So to the longer need be more oftenly the the they more, replaced.

a some your in maintenance well. efficiencies CapEx fashion of So as is own form of product

Waqar Syed

Fair enough.

for the what – so embedded And the is in are for and costs fluid number what you that maintenance planning year? CapEx

David Schorlemer

Yes. It’s of about the CapEx. XX% maintenance

Waqar Syed

just then what fourth revenue the the in And contracts idle Okay. from finally was Pioneer quarter?

David Schorlemer

$X.X million the It in was fourth quarter.

Waqar Syed

That’s sir. all you, Thank have. I

Sam Sledge

Waqar. Thanks,

Operator

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

Phillip Gobe

right. Thanks us joining All everybody for today.

leave is the which one. to with a story, very simple you Just want think I ProPetro

for a with reputation on a the the in operations working arguably high the focus world delivery. for United discipline have and basin best safe customer and business, quality very States the best and the We base people capital in

have to and you. on the the forward of next has now needs of great our to in as more speak you earning In customers the year Thank our the sheet story enviable progresses with an no calls. future. with we’ll debt addition, day. balance We respond we liquidity a hope We sharing everyone and look ample and

Operator

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

now disconnect. may You

ProPetro Holding (PUMP) 24 Feb 212020 Q4 Earnings call transcript