PUMP - Earnings call transcript Q1 2022

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Operator

Good morning and welcome to the ProPetro Holding First Quarter 2022 Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After the presentation, there will be opportunity to ask questions. Please note that this event is being recorded. the to turn to like conference Mr. over I'd for Corporation. Jones, Director Holdings Finance of Josh ProPetro ahead. go Please

Josh Jones

Thank you, Executive morning. and Yesterday With Sledge, and afternoon, good Financial President me today's participation Chief Officer, today call. and in we Chief is Adam David released Chief Officer, Officer, Operating expectations D. We Samuel are today's Schorlemer, appreciate Munoz. XXXX. any comments that statements earnings for call projections the Litigation our regarding note Private announcement events the Reform Please first for or by covered Act. our make forward-looking quarter on future of Securities we your

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

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

Samuel D. Sledge

morning, Josh, Thanks, good everyone. and

that the endured as the around desire challenging of to find issues fleets. to into members multiple to all and customers, not of proof XXXX. generating a adjusted additional in quarter in execute operational areas the team results also across go first approach daily the were revenues Our our volatility our have first war willingness of the EBITDA. our obstacles we to the the results These Momentum of financial like certainly a ' Ukraine. in both suggest is margin but Moreover, off, the These increase turning us capital-disciplined would around ProPetro XX% they extra strategy it's and asset ProPetro marketed pursuit they our share experienced very its shareholders. focusing in location first quarter only strong to mile no that returns one also risks we an achieved basis, to months efforts issues provide negatively results our the returns team thank also while of March, of in experienced reduced customers differed. our limited capital and results assume returns. market fleets team February results vital in is remind in on in paying of If that bear increase and target for operating suggest. quarter, remind our heartbreaking a quarter the geopolitical by That led impacted logistical way quarter our that our team's our shareholder improved sand-related and culmination base. for to in I Execution Though over our risk of efficiency said, and than us strategic the our for that daily for in first such team the for with strategy realm, may more the Weather economic preparation and was the ProPetro. reflect difficult on financial our the operations and in maximize in leading behalf completed downtime was risks downtime account in that would that XX% quarter on the not focused

a production affected oil the landscape geopolitical energy how growing short-cycle call becoming markets market first As tight in has we louder. at global see we the in quarter, look crude a tighter on

XXXX fleet high-energy America, may adds North prove to earlier from this America be estimates XX in count prices, rig drilling suggests industry-wide year conservative. into of initial rising continued to coupled XX We with in too our North

the effective chain outpace into supply supply demand issues, While it's will next possible well attrition in also that continued considering rates horsepower and pumping, year. pressure equipment

in steadfast efficiencies pressure-pumping the While stages focusing expansion, proper sold our remain in providing while the in that environment we belief the is expect American effectively the customers capture our failing of backdrop to the continue macro level market, the service return on to early for highest simultaneously a approach and margin tailwind favorable be of a is. North to optimal out cycle. positive We an

significant successfully have re-priced of Over recent the most a portfolio. our amount and quarters, we re-positioned

profitability. operations, a we a in As dedicated with more result, our and reliable resulting high-graded offering more efficient service

now the to in IV to a converted quarter. equipment. operating to Tier transition two IV lower In program Tier fleet. expected burning part taking Dual-Fuel and Dual-Fuel of units We fleets, our of accordingly second in-service as transitioned delivery by Tier IV one operating gas emissions began Dual-Fuel end natural third Tier of today with field We our to addition, fleet the the to have in fleet our the fleet be of

conversions add existing those and do effective reminder, a performance to our David. over turn horsepower support discuss financial that, first-quarter our to in not With fleet. our resources. David As to it capacity I'll capital

David S. Schorlemer

everyone. Thanks, morning, and Sam, good

was Sam operations adding scaled we during prior fleets. We increased X.X% our in made force effectively fleets quarter. from additional as business the XX.X without quarter this the During in the quarter $XXX fleets, million space way. March. increase overhead was fleets, in a deploying million investments price pumping the levels, including XX fourth the to the due and record of improved our last activity which This And for white team higher we at guidance revenue, was from profitability. and requires of to prior generated achieved without noted, XX.X hours continue during year-to-date improve fleet big and quarter, a XX $XXX fleet delivered month increase projects repositioning of compress and of revenue first deck ranking to in and simul-frac the largely a company our year. fleet generated utilization in the XX% pricing fourth coming and our Effective in fleet of discipline XXX a The above

no Our XXX guidance fleet our fourth additional services, is of second Cost operating average a for fleet and and related a versus which currently of fleets. for accounts excluding first XX.X the the quarter was fleets, deployments amortization million utilization repositioning a quarter the of to depreciation assumes to range continued effective million quarter. for impacts XX.X in XXX

including increase levels the driven With costs. by higher and impacts, inflationary activity and sand logistics

Depreciation $XX refund diluted compared or and income items, of $X company million G&A of namely $XX $XX first $XX a million of offset general compensation. net the tax from $XX cents fourth-quarter administrative within $XX in $X.XX state million compensation expense million Adjusted in stock-based the per million quarter. per in and posted non-recurring million. of million relating at quarter. million of $XX stock compared a loss excludes share. was fourth net First-quarter million cent non-cash to $XX prior was our non-recurring those figures net guidance Included The loss non-cash a to to and of of diluted by expense and million income a is million was benefit share $X a approximately $XX one-time $XX

being additional first That late achieved recovery quarter. which cost for last in We primarily offset increased $XX get ahead and The cycle activity, and sequentially margins margins plan The of our on these significantly pricing, careful with also to more easier million prior sequential through point Finally, EBITDA by from with said, the year as strategic was investments team and our into would Adjusted XXX our to like normalized accomplishments sand-related expanded to operating fleet a margins. our attributable and increase partially cash-on-cash move we pursuit experienced while improved basis sequential strategy. due jobs, company XX% improved margins almost disciplined strengthening points weather issues. with and the the by its call, incremental $XX full XX% quarter, EBITDA ProPetro at million well EBITDA it increased will compared revenues the margins not expanding this team across for deployment as sequentially in we improvements any coming or adjusted described the adjusted of congratulate forward. fourth provide to of planning momentum returns I XX% we footprint. up-cycle. in for

will and to our other provide to ahead our risks that further margins be customers. expand stay continue Our pose to ability and constraints, issues challenge our inflation, chain of supply premium to to service

business of volatile continuing effects remain to lagging given the war pandemic, extremely We China. our from areas and Ukraine expect the particularly COVID-XX in impacts of these the on the

additional particularly at we any will We this for these strain we believe returns cycle. that risks, point can business on horsepower marketing in our further the unless put compensate by not achieve

related X with to was dual capital $XX the expenditures. Of the that balance being routine remaining we predominantly to incurred During CapEx. amount, related maintenance of conversions, fuel Tier quarter, other $XX million million

further market due the to million, plan and We cash lower receipts range, full-year the in the of for negative cash bias capital in our flow end the toward statement support from flows our the ESG improvement spending compression timing of figure and gas quarter $XX alternatives expenditures profitability. whitespace for to CapEx the to with not of goals investing current improved generate differs million. transitioning our our differences fleet emissions the first cash natural on unchanged, of incurred and projected but and remains levels, continue as our of pace from Based This also only activities Actual of goals our the CapEx used burning of and disbursements. shown customers, with $XX redirect given on to outlook current activity of calendar. our that was capital in upper

IV market supply-chain of full-year the remain of on to pricing our or if factors changes ultimately the and However, from next-generation demand number to manner been inflation investing conditions Notably, customers. aware, worsening conversions as spending our opportunities new projected that strong meets equipment dynamic, invest we our in from higher levels, depend objectives. relative activity our we you a will in are Dual-Fuel or financial a including Tier in have impacts, and identify capital support

the and debt-free. XXXX, XXXX $XXX million available end was cash XXst of under $XX company capacity $XX As liquidity a was quarter the credit and the million total of cash company's Total March including the at of facility. remain million revolving of first

our AR of increase quarter, in our into in facility prior release, extended guidance, capital by through this term normalize While million recent as improved $XX our our networking consistent balances. accounts and which networking the quarters. with And certain We the balance is in and an increase was availability. we noted pricing during in and XXXX our decrease press believe enhances cash million will $XX receivables the a coming our ABL which decreased offset position capital terms

April XXth, our of million. a $XXX XXXX, As liquidity was

a and maintain opening provides solid financial forward, in our to we're fleet is the comments, in Pricing alluded will marketplace. flexibility. also the back committed to his top-tier ensuring Sam. to And commitment capital-discipline power pressure turn going to earnings deliver operating success. in to Sam call I'll as we deployment we services that With discipline the that, firmly to financial position As critical maximum to be enhancing critical our pumping continue

Samuel D. Sledge

David. you, Thank

a David mentioned, of moving As forward. today and strategy business our returns and capital-discipline are focus on pillars

we our that high-intensity work. Our return understand through-cycle quarter a team And this pumping and are endeavor will we as what of working spent cycle of this variables to down-cycle result support significant in profitability, given manufacturing in our now in the properly. which strong during operate. business believe time in environment our future the cycles pressure validates We and a the creation measuring

we the of evolving of through needs changes could configurations. and pandemic on simply coming the fleet location, noted wide of fleet determine form creating suggested profiles look we how equipment per the no range was capabilities to out our a that customers This important being rapid profitable in if at the were One our of of both longer were team EBITDA cycle. change by most

other services result, to evaluated fleets the we in only such have of our site own replacement not to their assets required services, frac replacement operations. for accounted also focusing those frac here with our down, those and that of of in It's on units our well allow not customer's own the cost simply fleets. create. asset-heavy that be begin all to as maintain to cost a We their the a the As business reasonable ancillary pump level EBITDA services The assets return’s efficiencies and subsidize working but cementing, cost support high is rationale need respective profiles. to

for equipment this full our Historically, rather decisions considered have redeploy equipment. equipment. to marginal investment We cost been also cold and typically on based replacement to that stacked the than activate of reactivate the

does equipment and required us the this requires returns three-cycle level determine that last cycles not always We realities on in rates began the for of and focus new to accounting attrition sharpened volatility business. impacts our address the come forever Additionally, our to operate to energy and go. profitability

and early at move our with result accept into customers certain has. So returns-focused as to factors opportunities we already had this the forward we've combine those as times days approach strategy, in that of will missed it

work as the right the on when profiles tested we more saw equipment only expected results our we first quarter threshold deploy metal, particularly see our not passing on that our resolve Although rapidly, meet return are in do the has strengthened the we path. peers

Josh Jones

to a transformation that but and our improve. is of higher become to of A has supportive that base path that more margins, continue not ultimately capital asset has driven seemingly one runway only efficient,

that yet companies again sustainable particularly my like like produce risks company's our returns, at pumping given in only and to the satisfied best-in-class operational with Operator? While E&P sold-out customers. effectively required With the our measures pandemic is inefficiencies We believe thank the for our prior teammates profitability and customers quarter for against oilfield working to for are ProPetro excited our now be particularly another all lows. that reducing road up-time We'd for but those itself safety levels. team I'd to in pressure performance. not the ProPetro up We we not increasing and performance, acceptable, markets bar are applaud it's will levels, rate but set it current mind, change cycles open once with question-and-answers. about ahead, our not financial fantastic comparative to that of of services or for

Operator

now comes go begin Instructions] Thank Please you. First from [Operator ahead, We'll the session. Stifel. question-and-answer question Gengaro Stephen sir. of

Stephen Gengaro

everybody. good morning, Thanks, for things me. and Two

If I'll pricing you with don't mind, a maybe perspective. start from

stands on pricing for you first that quarters? the to and about sense leading-edge in quarter. where relative us impact should a of positive the over fleet Could of talked in next couple impact the You about how the we prices think give your profitability

Samuel D. Sledge

Yeah, where Stephen, in want how us I continue to now, our shot take priced. about David a right to you think that's as this range why I'll talk might and is fleet Sam. it's a morning. Good analyzing that. at well. It's and hear chime is

a So I do and think qualify on profitability number pricing we as we of edge fleets would a that have leading standpoint. from the

fleets are. our of number maybe a are lagging have We what goals that current

bottom we've effort months. and through is been are leading with doing this pricing, objective our near-term, to So the things the that number of more or a of and pricing better here over our repositioning, into of portfolio, to We'll cost our be whether bring internally. edge it'd just fleet. or up end get controls And these take is to through-cycle closer last continued more the --

David S. Schorlemer

is this Stephen, -- think I David. Yeah,

Just to comments. Sam's add to

can at look looking are we we efficiency, impact customer when think I pricing, also which at that.

same. not got I XX% at we've customer always Customer what with probably fleets is that numbers. the half efficiency of our pricing improved is say that high of at edge got leading We've efficiency. are headline pricing So would our maybe

combination our fleet. a goal, we've our of But of of about ultimate we increase mentioned is fleets to pricing. necessarily to as the per commentary, really profitability regardless factors levels try it's the think So in across when profitability

Stephen Gengaro

that your fleet this do Thank fleet and thinking I to think profile year-end, then about you just to color. great. profile By where about was, think thing year XXX earmarked money wanted stands? that ask how And you're you've you the Okay, you the your do XXX. for -- CapEx have for it's the when second evolves,

David S. Schorlemer

the And being we've look conventional we with be Tier Dual-Fuel remainder the to to arena be to end goal have year. But IV just those IV excess into fleets. to the Dual-Fuel the Dual-Fuel seen, is or least towards seen differentiated push at an II continue say think pricing fleets, continue for the I and pushing see, as of of assets. I'd the by fleets

Stephen Gengaro

gentlemen. color, for Okay. you Great. the Thank

Operator

from go Taylor comes The Tudor, Holt. next and you. Pickering, Thank question ahead. Zurcher, Please

Taylor Zurcher

you said my time, your opportunities. having you horsepower think to team, margin strong really taking QX. additional the bit on is some same at thank testing in question. I it's QX. in market to first and for improvement a the on little pass strategy metal My any in Sam, customer David not one But

demand is shakeout just over incremental in having maybe magnitude I'm quarters Permian, And ahead? in curious the up you we what demand six-month see the on So in Permian horizon? much you're there What's could the how opportunities out time pass see to where of the on?

Samuel D. Sledge

question. great Taylor,

I think Permian sector a the prior fleet like into ProPetro do that you capacity us in and bit in reasons see virtually for maybe give cycles that other And grown it increasing this, out, was Is tested Frac to of metal have bit our kind in cycles, our more probably context prior to demand it's and tested sold comment the resolve. traditionally many or environment. when little a like being that companies capacity easier to that.

the to achieve today, return. a look account right couple having cash-on-cash take to timelines. opportunities at we're we the we're circumstances it exist into those that takes with And one, customers calling right the and through cycle As what what

hat the grade risk already and laser-focus on our in soon, -- think more pricing, are that known as we our going overall incremental probably we're been pushing is and Permian an incrementally we're just we've on we generating our the that a maximizing opportunity Really fleets. high hang of is return profile advantage in returns like been without a our like I and frac feel at the outstrip, right to competitive with continuing we than to that teams coupling it right the people, influential that execution more portfolio -- through assets looking feel exists at demand hasn't supply, operational system just market. as that for here And it confident especially right -- pretty ProPetro today, So our to just really pretty a the that and continue to it anymore if is cat adding customers ours.

David S. Schorlemer

send to a well bad And this crude? may want but us our frac Taylor, over are to look, check, can and the you David the a Adam least But need that like, things of getting what just you market add this tell isn't is from maybe come like, things anything. take we're We'll this. at anecdotes to or blank some

So customer sensitivity in that, I mention it urgency, and Adam just other and but to consistent the terms to that's want hearing some what in of think from of folks may market. continues escalate, we're with

Taylor Zurcher

that. supply final strong then back to two QX. we're all to to call, pointed to of a trying I will closely over really in now. to would just as the obviously with and said, you as and three a customer really opportunities. hear. return, to Thanks having probably just weather our no make Follow-up to winter those in and good requests. then of Understood opportunities at just a said, David it's like And you've yeah, we're watching to have dealt mean, Sam both comment some if in and those margins. and the Yeah. risk of add just Sam on past, on value start chain really last creating say jumped more half a echo some months what as we in for accomplished But far I you going The that. January those put constraints do business what we're In to

a all on yet? supply or So run-rate exiting levels a of there you here the in April saw back you challenges not chain January the I'm having in or that and through quite these back curious, still maybe basis way fight some March are are profitability to we

Josh Jones

we to I some navigated of our about think many internally fair can't well. just how headwinds quality say it's do, It's to through just really being, more of First of what location customers wanted I all, a the about what navigated through This and enough a er well. being our not than team we is customers in I here -- our February. on talk it's say how as that -- our that bit do execute little specifically is as dance.

is and So March. through customers way. We level a February that EBITDA sustainable That like you're January working differentiated what out for right. together really part could of our Logistics I'd profitability on. QX our very yes, called just and a with It's margin our working and impressive that thought Operations team, in congratulate on could like and be month I to maybe our actually team customers build our a and purpose we the on through that and something call we of said, numbers because that think

zip-code April if going I'd yes, back in if that May, into in it. not So we're say here not exceeding

David S. Schorlemer

bit beginning normalized good as activity We're to supply rest of normalizing activity chain play basis, a impacts gives a color is through we and to the and before impact. quarter over some excluding overall EBITDA this see drop-off XX% going sense of actually month out about year. pace That the and that market performance the hopeful Taylor, you the we of what you was David, little of similar well. just quarter, the the on month just give that recovering. saw weather rest the see of strong a We're during logistics how and at seeing

Taylor Zurcher

the for Thanks Awesome. answers.

David S. Schorlemer

Taylor Thanks,

Operator

Thank you.

question ahead. please go Next will John be Simmons, from Daniel

John Daniel

engine you To place when would would placed assuming morning. Adam, to DGB realistically it continuing haven't guys. Hey, engines times Tier if already Good you order fleet Impressive placed able with next you IV fit deployed? be can the it, when to quarter. have say and you today, extend, lead that you for

Samuel D. Sledge

access ensure been quality and that been timely And help suppliers the that's that working basically ability the competitor's we services and time to supply program John, customers us -- And to this We partners execute last and analysis to you part DGB cost-effectively and and products year. mean, right quantitatively, started because the competing conversion the could chains information we're in competitive manner. right and did with is a right this thorough really our as of a our service ability getting bit appreciate, I supplying of our supply position execute on with ability -- although specific now and to arena. really like to promised we've in been make program. our ability there the our in good supply chain Without conversion our provide continue our quantifying that numbers, partner's customers we've that pleased near of products these challenges, chain quite have are in our and we to right us the and on we've future. some to the ability that of our customers asking here conversions and services

beyond, fleets beyond say, right to like spoke the conversions DGB into to getting not hard that there's Going four if earlier, five times engines. that about of now. say shorter we any Dual-Fuel can't for say things that lead more are We

So lead the chains like companies times because will that greater extending. the of supply become good us do and only have others to access those of competitive advantages

John Daniel

Would asking customers months say four for your ago? frequently you are that it today three or more than

Adam Munoz

No it. doubt about

John Daniel

Okay.

Adam Munoz

XXXX, is to that first XX,XXX We roughly at horsepower additional add us at in I in half to get just Adam. delivered which relative said. Sam is hydraulic horsepower we that to end this higher XXXX. pricing. our XXX,XXX fleet and the working hydraulic already of then on And hit will plan the of John, work field the

to a diesel to of continue priority conversion for yes, burning. that equipment So burning definitely going be gas our to fleet more us

Josh Jones

fleet Dual-Fuel That right conversion, no horsepower. to that Tier to of is what And our addition Dual-Fuel, just net there, Adam talking horsepower all capacity. about IV clarify said he's is

John Daniel

Permian, remarks one crew just mentioned last of the would that higher. rise the in prepared I me, that activity assuming, the The US, that would year, the XX you that think not I'm a frac the be, over to but across course XX for crews enough. Fair view

out. plays that assume Let's

fleet, Tier just to IV bring it's wanted I market? back is, XX that what to don't Dual-Fuel, it you but If it would care reactivate you take to long whether your how

David S. Schorlemer

now. cycle or I get question, that is strategy our a That's know cash-on-cash we what I here. -- to to good I to we're I'm not and that's probably right all if would back know would there a above return, of just call what our our don't answer focus mid-cycle point John. And don't yet. fleets through ready

how from in positioned fleet in that the I basis with leaders have my are from remarks, noted standpoint. a prepared a That we said, I we're that yet some satisfied think do pack not performing we're significantly. profitability

now. priority -- of is that focus something is. continue the time have our a that list little right for to don't bit It's in we down terms it's what a frame you I So analyze.

John Daniel

Okay. Thanks, guys. Fair enough.

David S. Schorlemer

Thanks, John.

Operator

Thank you.

Our will Simmons. go MacPherson next of question be from Ian ahead. Please

Ian MacPherson

Good everyone. morning, Thanks.

Samuel D. Sledge

Morning.

Ian MacPherson

not seeing been we're You've clarifying activity in challenges, woods relief the with pinch fast, to the trying yet purposeful pretty not grow all your you're even all out of operational if not you're points. necessarily total in of

with as ask, more or and like that, fixes your etc. or and So your it churn in help everything? and your to dig could this these? elevate are you consumables influence just sand do you still you on seeing And is customers coming toward the the you that way and prescribed on side to maybe speaking through that things labor sort a wanted improvement the chemicals, I have margin more little you out and bit play regard are power high components on fleets, your

Josh Jones

a today. gas And of challenges. talking basin. Ian team execute operation the said, bit best in the materials, is operational business Labor, hard question little to This and this I'll have tough. is. more Sam, best fuel at in a without the think we That fantastic take I business questions. a shot we question is frontlines This reiterating I again, your holistic of answer about can your don't appropriately manner. how think

appreciation competitively continue So our a it's in and our of an bit exist I ability combination think crosswinds of customers. But team, also because to our still a of the to system. headwinds asset differentiate the excitement our about that base, for

pricing there be are trying future. at At pressures? about to to So going be realistic time, to opportunities be Yes. to relief? That as how Yes. cost continued same said, inflation looking we're are for going we're possible as the the there continue

of balanced time. to have all managed quite the broad-sweeping set and of circumstances it's that be a So

Samuel D. Sledge

end just say that curve We ahead think think to as at how pricing quarters saying you We hard say think we want top not quarter traditionally a also, actually a well. be I perspective, don't the I standpoint. there's two and if could of go of a of can here. scale, trend upside the from business some ahead without the this is we're think from that We're little bit all from realistic about and of to our a competition I we're profitability-per-fleet

Ian MacPherson

little and would QX, bit be Thanks, me then that, seems bounce. helpful. out That's to that it with Okay. following a question, in for not pointedly prior maybe Sam. of And more on it

I get revenue getting over think EBITDA you would in QX transit that towards that in you factors margin QX experienced be agree here to with Would could, I mid-teens the would margin, possible. have not beyond margin that? mid-XXs that EBITDA the you growth and assumed on based QX with again,

David S. Schorlemer

No.

would strategy I I around think are fleet I top-line think that much deployment, improvement. differentiated so what we're expansion call around and that given we looking not our as margin

-- inside you to a think that I of number more biased be mentioned more regarding might bit I what So a top-line.

openers deck fleets and as as run have impacts. increase, of room some as we inflationary far business expansion, can that think re-position our lead where there think see we I I we continue back price we to has some to the margin still price as much have we recapture and go do

to So run that there. got we've I some think room

Ian MacPherson

David. Thanks, great. That's

David S. Schorlemer

Yes.

Operator

you. Thank

Please Syed, question be Next go Capital ahead. ATB from Waqar you Markets. will

Waqar Syed

pumping you’re a QX that? around Could think was Sam, gain than productivity to that you higher going to comment Are lot XX% morning. on to still flatlining 'XX. about XX%, Good up productivity. you. think we there's level? You XX% QX more maybe start is Thank from I

Samuel D. Sledge

don't many times the personally I just versus We higher, our it as this, sounds me soon in we've and I it team any customers Great like question combination approach I again. record how past push our been and can't as yet Waqar, know think. asked wrong with operations in

to So productivity? are increase pumping our Sure. there to opportunities continue

of more end the I our think zip-code in operating it's of along bottom the portfolio.

operating end is of class. I in think top the portfolio our best

higher. wrong a by I will I our I've I because it think think teams continue continued be to at before. But rate. proven it many gains so will a I to be times call Waqar, that will grind hesitate been think plateau slower there

David S. Schorlemer

Yeah David. and is Waqar, this

not about. simul-frac is folks of think have Just as reflective a that's what one earnings hours that XXX And even as hitting release mentioned we've And hours, we to some those the month. of our out talking on improvement March. fact I to highlight in the in our of continued one other earlier, that calls been as of fleets recently something much pumping see and

blood can be squeezed a you when out seen of turn got good seem think I surprising we how continue. improvements and makes month So ourselves that point But to you much significant Sam to as it. that think -- we've each we

Waqar Syed

merit there some heard question. of Sam, that have the but Tier to not kits hear that into upgrade think that? than same to some some emissions another may to there system Have that your Dual-Fuel profile you competitors is better effect? Great. are II anything We Do IV from Tier equipment DGB. you if

Samuel D. Sledge

we've that lot testing of Through Waqar. engine a debatable bit that profile. is better manufacturers and little emissions Tier a what maybe say, done directly that a IV would think I

Also an customers. some displacement these have, we a quite as savings big from Dual-Fuel seeing well the emissions think engines I to have more is diesel. government to this fleet, pushing are customers that and engines Tier been our higher own of we've cost I units mandated. anecdotes Tier DGB were is DGB and Caterpillar we these of rate and it think as we're was part IV again, IV bit of a competitors, And some really displace diesel the with displacement. designed envelope significant our the new purposefully that's improvement which why These and us a hearing with

David S. Schorlemer

neighborhood getting, think XX% XX% II displacement Tier to seeing, XX%, the some the of of on in excess even we're DGB Whereas displacement. upwards kits. We're in XX% in I cases of

Samuel D. Sledge

one also thing, fair add all to think life. effect more note engine asset Adjust of these have an that on or to life it's conversions I

will long fleet? So be you how diesel and last? much modification can have conversion to And detrimental we of component that large or maximize the a our of to how it trade-offs could displace

Waqar Syed

and Good year? any on about maybe what comments the be for last remainder you QX the one point. free inflow, Could And capital question. cash outflow Yeah. just for year? then cash the of then David, could for flow talk the working

David S. Schorlemer

as -- not be to the and the in our bottom think the quickly increased but for related and the capital. in And we second delays capital that of what mind been call during benefit tickets into changes line, market, resolved generally, top quarter, see -- We capital Sure. Working that some flat more going capital on I revenue again, signed. very would working approach rather to don't some networking line, in so there'll to capital-efficient changes we've looking some again, focusing side unwinding on getting dramatic our quarter. And to therefore able working keeping progressed. I fairly we've maintain

will, quarter relates our in year, we we in have guided through it although the free last conversions fleet that the had under-spent as negative that as as we plan and quarter flow, to I moderate think, work first some would, constraints. cash begin cash due flow in the supply the our original chain to in invested near-term, So to we we

that's in so spending of But we that the show quarter, XXXX of we type up, we'll determine need. half be we'll get year. Some second continue what to then hope, the to looking in of to have to the second equipment profile that the we going

on be hard it's it's I dependent negative biased still again, to out. the year. plays think market say, but would or So the be going just neutral even I to for toward And how

Waqar Syed

the Appreciate Thank much. you Great. answers. very

David S. Schorlemer

Sure. Thanks, Waqar.

Operator

you. Thank

Arun excuse Next ahead. Morgan. Jayaram, Please me, from question comes JP Arun -- go

Arun Jayaram

you. bigger Good Yeah. had strategic morning. for question Jayaram Morgan. with Arun I Sam, a JP

of being firm vertical are a And regarding held generally more pressure-pumping primary aware, bit just have company. you're you to As integrated stimulation. your pure a a pursuing guys peers strategy

So mix of I a of benefit more given to maybe market, thoughts that privates integrated a that from cons pros on seeing get some of and to offerings. offering who sense, the we're or how makes wanted the your integrated vertically could much just in customers, if higher integrated more

that wondering was wireline, be of logistics, any plans have I So may do etc. terms if just about you and could may future it that to things sand of talk in a pure you outside some frac, little

Samuel D. Sledge

-- a this offering, ourselves here I the businesses making is. sure It's of question. improve as quite something that to our would a asking is is as well of combination be I Great of a perspective of not offering se that service competitors my say on guess perspective and from bit our product what as from profitability Sure. what that opportunities more business per wellsite pumping, internally more a integrated customers that still our is our we couple analyze ask far of may I -- same core we that a the to us. and or we're focus like are say pressure integrated I may few things And a would as market think into wireline their with our service. core is continuing us spending in

the you that at Can but in on that our continue So add ongoing they to we of core were business? that business? all wellsite, better to think cash-on-cash and same if that capital we way returns yet, just we some looking we're to cycle look analyze we would that. think And have in I don't the as how context the can give completion’s we're targeting opportunities an at they with I through compete say, us terms ancillary our basis. to answers bring services core into integrate for

those core offering, important to to a bar can be service the put to differentiated if that is accretive also being we quality opportunities want line way. a us position added to in in operational not our customers. high a And able those ourselves service That's in things, our we have in our current Permian materialize, We business, may dilutive perspective. we any and to utmost want from an or may be to be not to best that the provide Basin maybe of whatever

look was three wondering Great. guys been between been open that on have but is follow-up, we the our our from I the opportunities model. over about you of keep start might meet we on could our elaborate the my benefits fleets years, And criteria those quarters. outlined. repositioning basis have to an of And So continue and few those think of and over and that our forward heads ongoing if maybe two, you just expectations as and that trying up last all repositioning opportunities eyes couple I some far to Sam, at

and some from many benefits So maybe moves. these give the of margin sense perspective of us a been a how repositioning fleets have from

Samuel D. Sledge

of to conducted customers than and do. very we that to pleasure operations our easy on get been just say We revenue have of don't a cycles. that stream it's difficult in about David side that's -- or development, the call on our a is that. can marketing, bit bit quantifying our to in not that for done a qualitatively, execute like expose business ourselves a type talk and bit the prior different Arun, like guys and challenging. on that's really we've to terms information. But get on global Yeah. of differentiated good I how and Adam than crude teams market that myself strategy. And the competitive and And That's index

pricing, our and better opportunities, also teams to to earning putting we ourselves with better and So opportunities customers. through but only better expose have with our not earnings through assets

to done has moving a chase cycle So it together it, I do -- that as it's on, how of worked is forward, option say, enough fleets. less through always say this There's we've an execute we of cannot about repositioning team bit our to continue probably return. quite but to

Arun Jayaram

it. Got you. it, Thank got

Operator

comes with. question from Next Don go Please Chris ahead. Instructions] [Operator

Unidentified Analyst

I future what moving from I know you and perspective ask or versus your the gentlemen. a wanted forward. a towards to are know one couple about pad where industry thoughts wanted you just that's of moving going fleet simul-frac to questions of see the morning, simul-frac. your completion Good

Adam Munoz

makes job. on would, comment just that collectively to a had of what well. would management as for I of is sense pricing of the P I the as mean, and into this as I last E Adam. We correct tough we've well team, year of far think is This a terms that's lot simul-frac. a all coming both long as sides, year experience operation as Yes. the it and as as as

is equipment of logistics, look logistics would make to And the like simply I others. infuse. just to have personnel simul-frac into would is capability the on for those to how more probably as - aligning the there's noted there's far and pressure earlier throw the on But business. just infrastructure focus it sides say and that pumping, just meaningful and that frac that side. cylinders think business Sam all continue than we on what and like we ourselves the be amount this hitting as zipper you definitely both operation simul-frac to tough needs to picture in is the do people the with better that that operational that an I

Samuel D. Sledge

piece be to on going And Don, This they're, add information said, that personal to XXXX we to is be belief don't sector-wide, into think the growth. be more. will belief everybody. for just type same, there That much it's marginal the I that of It's of say, of less. operation my are top going not one very is of just heading not more simul-frac, that,

acreage sizable You position. have to have a very

more infrastructure the ability think some growth to will around. to that water work simul-frac very that move everybody very be but with have good water for We're happy very well, do customers slow. that won't I have in it to and You and the be

Unidentified Analyst

follow-up X they one when that fleets you're reporting? that. Okay. account that normally have for on How or doing the you fleet s Were fleet you or simul-frac you How counted just fleets? And do X do now? do as X.X

Samuel D. Sledge

utilization, one it's working Today, they're a quote still measure. fleet. counted When day we as on

cost quite is say zipper similarly for a So how Midland for like something Basin job. standard measured the financially because for one is on different said, zipper fleet. operation day of That is account day working replacement location the it simul-frac fleet than we equipment one different for simul-frac far working a as

So that that the needed costs different. returns significantly meet is profile and intensive operation to replacement

measure on similar So different that as things the bit like a quoting operation. our when economics of type are quite utilized we fleets we're effectively these for utilization,

Unidentified Analyst

color. Thank I it right. appreciate you. turn back. All the I'll

Operator

I'll our concludes question-and-answer to Please like This Mr. you. over D. go ahead. to session. Samuel back conference closing Thank Sledge for remarks. turn the

Samuel D. Sledge

you, here part we critical joining for great soon globe. an thank quarterly remains to to gas today's our We life on a at We and Have play call. ProPetro you hope oil everyday innovative energy industry And across everyone where you a for in to you. next the proud talk that us us and Thank hope to are call. join day.

Operator

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

You disconnect. now may

ProPetro Holding (PUMP) 4 May 222022 Q1 Earnings call transcript