Earnings call transcript Q4 2022

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Operator

Good day, and welcome to the ProPetro Holding Corp Fourth Quarter 2022 Conference Call. Please note, this event is being recorded.

I would now like to turn the call over to Matt Augustine, Director of Corporate Development and Investor Relations for ProPetro Holding Corp. Please go ahead.

Matt Augustine

Thank you, and good morning. in participation your appreciate today's call. We today Financial Officer, me Officer, Munoz. is and Chief Chief Sledge; Adam Sam Officer, David Operating Executive Chief With Schorlemer; President and

quarter our any covered that we by forward-looking Litigation expectations make regarding Securities for Yesterday for Please call comments earnings Reform today's the or we of XXXX. Private released the afternoon, Act. statements fourth projections and on future full-year note are results our events

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

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

January are materially available months Of as are XX, during reported will March results. hereof. These differ change note, today's subject information the for results upon our XXXX ended XXXX. based results to results discuss and these to the and date may we call from of Additionally, three management preliminary

prepared remarks, hold Lastly, after session. will our question-and-answer a we

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

Sam Sledge

team and like achievements some full-year key of in take start of Thanks, and stronger we in year quarter everyone. a our for XXXX. are to Matt, and back but milestones will that, fourth financial in acknowledge to XXXX and results even good from David XXXX. and to transformational the moment, before for a step pleased XXXX off ProPetro morning, was a an to I'd the our be speak

transaction. now into growth Services, pursue this expand that and a and company expanded portfolio that Silvertip us closed on since we to leading in strategic further positions oilfield our but Silvertip of increase closing, company. best-in-class capitalize ProPetro just and the leading to With services ProPetro completions-focused company, begun pressure to a know, cash accretive successful, Silvertip, has November not our include of opportunities, acquisition you vision a margins as drove free Integration us flow As as generation. step have pumping wireline enables our to positioned a we've we Completion that been

Gas announced fleets, previously our master shortly under of first announce in Silvertip, we Tier were meet hydraulic one IV for coming lease Dynamic closing DGB additional services, online for fleet, with December, sixth increasing in order to next electric our fifth As used e-fleets Blending our demand our weeks. the after two and the for our first fracturing two orders, electric agreement come to of or deploy pleased the contract fleet the generation to

actions are execute by approximately expect recent advanced gas four beyond. fleets These and XXXX in fleets making at industrialize Tier the we thirds strategy We our on least DGB electric IV to business, many end opportunities significantly and well-positioned to confident ahead capable. value-enhancing that are our will we of XXXX, and frac our two of that seven ProPetro have the offering natural

was transition significant The fourth quarter for also ProPetro. a period

accretive opportunities call, repositioning and during repositioning prior terms, to for portfolio early fleets January. excited effort our very pursue relationships that ground renew work in a our we're other This others. we portion with enabled quarter customers of prepared and some we has noted As expand and third repricing to us and laid occurred significant the of under

has business the development part along team Our a enabled approach strategy operating a be with intentional team's by excellence at to of our our wellsite this success. very

in from with the in in us of our of January. the the to to the pricing decided to that health with our position overall capture capitalize customers winter order seasonality were our amount fleets the uplift the focused in holiday Ahead and fleets affecting ultimately our temporarily occurred we prioritize in active fleet also Permian storm an on fourth of to of here impact, one repricing the of we second-half impacts able January, the curtail storm to of quarter along to fourth leading In the holidays, up several quarter experienced throughout increased we the U.S. Basin. best

end, At leaders including building were and of recently ProPetro, focus and to to welcome corporate Mary pleased To commitment we look Ricciardello governance, bench employees to her expertise. our to director Board's benefiting Board from pride at ourselves best-in-class forward outstanding Directors strong refreshment on our a the ProPetro. on that of and we

the the Secretary. Corporate member Jody industry ProPetro's new integral quickly veteran, an of become our appointment year General Additionally, team. of leadership also has Jody is an and as core Mitchell new saw Counsel and

Another of good enhanced governance important element practices. sustainability is

while of transition pleased at in-depth with sustainability will leading our efforts to at to are emissions announce in across XXXX, which ever promote provide issuing safer fleet cleaner an look and We Basin be ProPetro. our work first to operations community our also efficient for the in teammates will that more reduced we Permian report, a environment underway to support on and our commitment deliver in the the

current end, to Being and the over a a to turn take Midland-based services gas Permian like before and are I'd a market leading few and To to seeing. oil broader company David, vantage upstream I oil market it what us gas oilfield into unique discuss we that the and and Basin operators trends. moments serves that focused gives point

foreseeable so and of believe oil natural for structural may Despite natural on in the price and both recent that especially gas remain the gas, pressure remain future. we undersupply, globally,

As being peers us with that programs natural calendars full that have Permian it and XXX% gas customers in from does basins recent large the may to prices, the of gas-focused insulate in drilling working risk decline in face. located some the pertains our

as other subscale bifurcation without quality equipment especially considering to competitors is the temporarily demand if fleets offerings, gas-focused privates have subsequently compiled. demand declines and absorb enough not Permian, services the a do and competitor large fleets the Furthermore, move ProPetro that basins, capabilities in the next believe few frac for when generation disruption, and the new to small in service we gap has

Notably, the prices will Diesel valuable future. programs gas continued transition displacement foreseeable to our completions and bolsters spread for in diesel the strategy. become fleet more and continue our more natural customers' between

forward, As focused remain we the our returns. strategic we on goals meaningful drive taking executing move our acutely and on business level to to next

will industrialized to flow free achieve a To our this, generation additional we approach cash optimizing into unlock through the we first, business, operations are actively our expect which more future.

from third, our to we are all continuing generation high our next our and competitiveness strategic pursue while acquisitions costs are customers. transition are our in that overall of of to services we our opportunistic a And the capital best continuing interests that are delivering in minimizes stakeholders. demand way Second, fleet in increase that

of this to are we the ultimate portion is realize done a generating will already of our are tremendous this being goal value strong and of we value that beginning All confident returns with and shareholders, the for deliver. strategy

all is have that and just turn been have Without over, I'd would it to we been I year team them, for I a if did I'll remiss beyond. come that before importantly, in not take outstanding moment this did to do, not we XXXX be thank work XXXX. not but the now incredible groundwork able ProPetro for their in would we able as the achieve during and lay to to all

I'll turn discuss fourth that, the David financial performance. and quarter our full-year to to With over David? call

David Schorlemer

and good Sam, morning, everyone. Thanks,

for dive dedication I I ProPetro. Before members thanks continued to like hard also echo and to and in, would Sam's our their team work

on move results. our financial to let's Now,

full-year was commitment XXXX and our over to improvement continued showed a year-over-year our which $XXX pricing, excellent XXXX responsive was to Adjusted management. XXXX generating increased by XX% strategy pricing in year-over-year. improved for performance the discipline disciplined Revenue increase million, with EBITDA Our billion, and driven repositioning, cost $X.X financial XXX% results.

this We net loss is Equally impressive net basis chain, to million adjusted a pricing posted pressures, our of company in income million environment. points a able inflationary which supply XX%. turnaround $XX in significant of to to increased a $X a for XXXX. significant that the compared The constrained EBITDA midst a XXXX, XXX and dynamic also were was achieve margins

During generated activity inclusion of Silvertip. attributable of December million acquisition The of the is a the the to third of increase quarter. $XXX fourth November and revenue, and from quarter, we increase X% largely

Our Effective fleets fourth the our which with line for to was in Frac was fleets. prior XX.X Utilization guidance quarter, XX Fleet of XX

quarter XX.X XX.X the is fleets. to first guidance for Our

strategic Cost lines. million $XXX supply of cost the excluding additional depreciation services, purchases, in chain the fourth our all the increase versus for with of amortization, $XXX and and across the service inflation quarter acquisition, Silvertip million quarter driven by third was

income million Adjusted non-cash to excludes $XX third administrative and general $XX items. $X was in compared cents the posted Company quarter in per Fourth The relating quarter. or expense G&A or $XX of million of million million and $X.XX million quarter. compared non-recurring the share, prior quarter. fourth Income was the net $XX Depreciation diluted share million $XX diluted cents $XX in and Net $X.XX to to million was per

the mentioned, fourth a one for transitional quarter was Sam ProPetro. As

a posted our at fleet. while recapitalization performance undergoing back significant full-year, Looking the we of strong

the Revenues start active came non-recurring general the fleets and $X the so operating strong year, Due and our for million. Moving impacts other at January to encouraged despite results of $XXX of was in for repositioning weather we our XXXX, XXXX, with to and cost million some exclusive quarter stock-based like we approximately share million some businesses month. and to costs of the majority by to are to incurred performance experiencing off during administrative of of undertook the in financial the repricing million, selected we're $XX XX and a far. items we $X great that services of of we'd compensation month only fourth and efforts preliminary extraordinarily

good can a month. now we fleet year our fulsome was note, see Doing expecting forward. last we're going calendar XX had February, it active math, and XXth back reactivated the of that late on our a a fleets committed is in contribution you more Of

total posted to which history. million monthly I'd Silvertip $XX is also January, like out revenue the highest that its of point in for

business We the already is contribution are making. about excited this

robust performance services XXXX. that proceed of baseline discussed, progress the January in into expect As build was and believe we balance we as XXXX. have a to as expect into will for we our that demand we we strong momentum Therefore, our upon remain

and constraints million, guidance, of below to our to our approximately guidance high the results, of full-year Turning included chain of above XXXX end CapEx $XX slightly XXXX prior of components. slightly incurred back was million $XXX major items of supply was our of prior which CapEx our strategic purchases $XXX ahead midpoint million, inventory certain and is critical or the cash get

cash capital CapEx profile program, $XXX optimization ongoing XXXX reinvestment and million our of coupled As benefits with strategy more $XXX the light we first-half in ending pursue to year. from large with to the realize of our our we the develop of the the benefits and of between realize asset and be majority anticipate a cycle, the million the our spending

company's meaningful XXXX, CapEx million of program XX, Facility total in at million. capacity facility. of Credit $XX in available $XXX capital under investment December including the of the borrowings quarter fourth of ABL and of working cash cash some our million and free our Total was We As $XX million the under with near-term. was and flow end were positive XXXX liquidity cash $XX the ABL XXXX front-loaded anticipate credit second-half a the

continue margins and XXXX basis reiterate, our equipment, XX% growth our Silvertip allocation to for enhanced free recapitalized we a in accomplished we over to a over in framework. are accelerate was EBITDA pricing cash our points, year which excited XXXX these a transitioning year was earnings, with accretive XXXX. This capital the completed while disciplined plan adjusted transaction transitional and fueling investment fleet while XXX was executing To flow gas-burning natural maintaining strategic protecting by to and and in by our opportunities all liquidity. significant

Sam. that, back with I'll turn And to over it

Sam Sledge

David. you, Thank

today As the are are and since ahead am onset proud we where have I effect COVID. XXXX a done we to take stock to of look of and where work going, we of the we transformation significant

our our recently equipment the asset maintenance highest and efficiency steps logistical and obstacles few CapEx We've portfolio and challenges our taken continued efficient significant maintenance rotation base. while of across shop to over on for positioning less compete significant and with met reducing our long-run. at therefore the assets Company increasing the more level while have we are have at and have last the in in our capital ensuring head We years,

unique competitive generation the gas-burning natural two capabilities, fleets fleet in us of offering into confident than to future earlier, opportunities our I we one and next to we thirds this the on advantage, will strategic of have stronger Now, as multi-year execute mentioned youngest and is ever are our and country. our transitioned XXXX, By in up-cycle. and sustained a electric the growth ability end of

disciplined we position us industry to may same leading capital to and services have are a M&A to allow the debt volatility prepared headwinds opportunities will advance our At a broader sheet, strategically Moreover, we deployment, approach balance intentional which company. arise. nearly time, macroeconomic a with and or pursue completions-focused as that for any free

is grow business in the is expected the production consolidated the energy for we ProPetro space. a see improvement valuation we are and be long-run next to production and for near-term, to several decades. are to we While continue major that to not optimistic our meaningfully space the now recognize Accordingly, contributor the built the will that across will for world begin OFS E&P's

the for move giving management executing strategy. our ProPetro our thank once their for with tremendous forward the want I performance and to team to confidence again teammates

track build am continue proud accomplished. and that performance so I on We of to of our we and record all safety have strong

the to customers. and for keep continue Let's up deliver work great our

we'd a right Lastly, take of energy was about to raised Midland, system. and the moment in honored side of a the here like ProPetro Texas, we to such of energy here capital I be are part American how critical at talk born world. the this to

as Even the the fully value to our oilfield brings to leader, operator it and our decades has services and country globe. taken third-generation area appreciate oil this industry and gas and to me a

environments, usually Basin without Permian which works includes The community, harsh hard, complaint. ProPetro, in

that as history have consumed enough. and families, item to schools an be homes, energy. possession and find teams our XX do. year or sit our communities, impact a appreciated isn't One investing be hard-pressed directly our commodity in and locally the clean, of which Permian oil our plus a our experiences fuels fossil foundation in Our us perspective in of in Today, dependable safe, we we any hospitals. exports from not gas we have power in ourselves product. our helped These abroad. or growing Life can company the world here our our far-reaching production clean businesses, In that to reliable tied gain of all affordable, made leading would find and and on

educate how to the As our grow continues overall of the others the the America, the the it because understand innovation; externally, industry. help thanks and to in our advocate global and to of track energy chain, Basin cornerstone our around indispensable. encourage security community the industry to and should oil sector It's and the they feel have Permian possible be value respect our be happens Fossil States to that in our and, of small, for and republic us history our world. work we We greatest proud, just in advancement gas life industry's emboldened our the are produces join a makes United health of gas production long and continue vital been record of others contributions and and the what to oil will that promotion in in we the to economic for world. crucial the everyday of internally our of to fuels would like humanity for and big

that, like I'd for questions. open With the to up line Operator?

Operator

you. Thank

will will from question-and-answer Podhaizer the Instructions] now Barclays. Please be go And begin session. the question first from ahead. Derek We [Operator

Derek Podhaizer

guys. morning, good Hey,

Sam Sledge

morning. Good

David Schorlemer

Derek. Morning,

Derek Podhaizer

the to the fleets a how basins. activity. industry facing released unknown their seen many biggest E&Ps the could gas So, today be announce reduce from is few We've plans

undersupply your your this Permian? basins fleets expand XX oil specifically view mean, you undersupplied. what's number, XX undersupply being I the do the on of described the on oil One of could peers So, basins, to to market? indicators fleet have the you calculate What fracked for you're number color agree? look at Permian-specific a Do be Just more do helpful. would about? argument that thinking under undersupply you you this

Sam Sledge

questions, Derek. now right prices. great happening natural very And Sure. with gas with topical obviously It's what's

product in more we As That that Basin. do of the undersupply talk so do things believe which definitely we heard peers at about. market, world us into this still Permian is lot there's the in like that our you've said, think of and some that, helps is earlier here ripples of undersupplied subsector frac relatively a stated today, produce. one our here than Overall, the in the just generally, that that with believe, to today. play, transition market we much right has And here -- equipment we

That's have and DGB, why the today, equipment. the to like equipment gas-burning i.e., important it's right for things DG, vitally tools job of electric

make number, of are is that not types into to activity that have seen necessarily weakness the on transition offering really nor the still to I'm offering, very highly. comment heavily demand. the the have in undersupplied that why remains right structurally we Given demanding at our that any we system think but in That's our endorse not the number, I in tools we that fleet seen And a think those XX equipment, own XX systematically Permian. for to customers do most going highest

Derek Podhaizer

that. Okay, great. Appreciate

about fleet question, attrition. Second to want talk I

Just X recapitalizing thinking IV guys you have Tier about DGB you the out. coming X fleet, your and

four age update Tier know You replacing helpful wrestle fleets, as how that the in exit fleets much topic reconcile investors coming fleets of that to to number is we to to think fleet your Can you coming how guide because utilization your us are I will the leave big out. a to out, trying the that's are new the equipment market, with in. be bring give and just with, you XX. attrition another full-year get on trying I going going any many these are II just you specific didn't legacy timing, be fleets diesel towards e-fleets these of to guided have an but they as XX

Sam Sledge

again. This Sam question. is great Sure,

enough. bit a not how understands that today, community quite totally in basically have if replacement our case of the what E&P to have last And and will equipment I a the DGB. not hard talked certain we said, community how it sure I and it as at think XX been be about that in is Yet, many working with operating you much is topic shortens conventional of existing look with horsepower. of has out that know attrition assets. prior quarters, That understood we're just life of peers. continue all that the we've is the investment done program, months the this DGB

So, none been net of additive. that has

e-fleets almost but all more be to come well. that for of it'll replacement nuanced, you'll as a on look bit Now, be as

in guided we think our fleets. I XX of materials, some to activity full-year XX to

we Here today. XX are running

we'll to two opportunities that year year, add market we So, can't well. you'll the in third back-half e-fleets in look this be quarter as this of today. and you probably the mostly exactly replacement like for look what of Obviously, tell

We good a prices like. have feeling might under pretty look that commodity certain what

replacement-refurbishment a So, a is we'll But remain is growth really nimble story; this story. transition there. not this fleet

Derek Podhaizer

it I'll Thanks. that, appreciate Great, Sam. back. turn

Operator

Thank question Gengaro you. the Stifel. And Stephen Please next go from is ahead. from

Stephen Gengaro

Good guys. Thanks. morning,

Sam Sledge

Morning.

Stephen Gengaro

four and the quarter in third the two two, e-fleets, clarify, then the other to when? Just

Sam Sledge

at 'XX. of year, beginning the of right Probably the end

Stephen Gengaro

commentary gave in million is what thank a in the The see build market. you. year that you the of connect Okay, this based it $XXX January number about and the which on you pretty and January reasonable EBITDA suggests consensus, is on full-year,

It you that? the Given mentioned cash flow flow your just and Should seems way, starting year. wanted but second-half free to the if the well? a should given full-year that's be free around as reasonable in that CapEx, cash for -- your thoughts get point of you

David Schorlemer

a positive recapitalization from our Yes. believe a will year capitalization that is be free We in XXXX. Yes, was -- to we turnaround last cash Stephen, which certainly year, definitely David. significantly flow of fleet big make this

Stephen Gengaro

the you wanted thing what just give when then with current pricing have an pricing things on to very where stand, customers, think I just us Okay, what check. you just great. how assumed. discussions can the for conversation tight. I is, still the me you're pricing obviously does about the edge leading That's and update seeing final And market recently? in appear But gone and dynamic,

Sam Sledge

work going remarks alluded to pretty that be and be. This us be that for may in Sure, -- we're said, or the again. significant not in helps we January. see But materials really more the realistic opportunities? they quarters has you've our to pricing there hard working Sam opportunities We've on to last there peers pricing really us no. pricing now. in done is at the That the support magnitude that and six our to probably be Sure, question. we're with forward did speed, pleased business. We sustainably five the our And our Likely, are. our march great continue that pricing been forward, team Will over pricing the about seen a year? been I've prepared to trying front uplift what will

I is in But just commodity market. -- we're what prices, is with at that gas seeing the recent happening recent directed made mainly mainly comment what's

for remain It we a cash So, the some spot. think conservative. return the free future healthy the pricing are of the in our that. way That relatively continue today, on meaningful shop execute flow said, we in we is improve in today really can if and in field to fleet and to us I bolster

about with where we We'll can. be I tactical to collaborate perspective. push to a and we from really So, very our continue can feel sit where we to good where pricing customers

and more also uplift better operate intentional of lot we our and assets. about creating our Lastly, what being at efficient we and how money just being numbers, economic and a just to internally, by there's getting we do, a almost spend how lot accretion our more

that there like So, that's last for value having good us outside really outlined as pillar lot to that aid creating of our about optimization first the those here on quarters, few should more efforts. we've some stuff And there's pricing. of look we're in excited got things strategy going the a -- without we've

Stephen Gengaro

is Silvertip, like XX just one that And with thanks. for XX one quarter David, running million Great, the the D&A David. now, first million quick right? is to for

David Schorlemer

for preliminary guidance the -- we at January -- results the at X No, X gave or it's

Sam Sledge

or G&A? D&A

David Schorlemer

D&A? about talking you Are

Stephen Gengaro

Yes.

David Schorlemer

get to me that we'll real it's up back that. yes, let quick. -- on Yes, you But pull

Stephen Gengaro

thanks. Okay,

Operator

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

Waqar Syed

fleet And concerns this is asking question. about movement been earnings earnings thanks was coming volatility in, with there's is and And largely that the the been Sam, I'm shift, in that for and on in some -- not done? investor taking line taking reason expectations. customer some my

so, And as maybe now or is variability that over forward have noise some May? still we we through look

Sam Sledge

has bit Yes, inside -- over fleet the years part, -- a Waqar, our how than to, last say overstated would is and important great a know most excellence different year Yes, feat And of say, XXXX. that story how the a of over. I do year a ProPetro question. basin. little up XX probably it we effort on. probably from very it this I our that much repositioned year, say, one in without be from been is, of losing I this part if early other fleet, in massive has We've would one basically half of the operated can and prior that here customer operational maybe more maybe the for pride that to don't of ourselves there, kind than repositioning leading standpoint, from

places we And and value-additive big rolling with with of some off of of ProPetro. of those blue-chip end that have good to Pioneer. efficiently that are have was off customers that and operating tail pricing A the contract the really fleets very we think part those come contracts in repositioning our really, of

big it much say over the accomplished should be I steady a standpoint it it a year. is how last more can't to this from pertains of saying as that we've year. without what customer So, deal

Waqar Syed

fleet active a us XX January? number? year, fleets be XX of to simul-frac in whether this guided with you XX And to you've changing then give that is less could going the horsepower your in more for mix simul-frac fleet from total doing And as XX or XX, guidance terms to you're Okay. fleet to hydraulic then with now, the XX

Sam Sledge

horsepower we of we same first. one make fleets X.X question full from simul-frac last where what I two today. circumstances, still operating the of we your technically, we're But simul-frac, number are it, take in the on basically is. the to utilization if active don't amount can quote comment a operating under where all what We the is side. total I'll basically our -- know today's on And It's -- materials.

Waqar Syed

Okay, tax rate the taxes that's And comment then would effective year the for what and cash you great. question the be? on

David Schorlemer

is this going have taxes. not to any Yes, We're David. cash

have We operating $XXX of in excess losses net million of remaining.

Waqar Syed

-- great Okay,

David Schorlemer

Just to we're the from Stephen. prior to quarter. XX D&A, the be per question in answer range XX will expecting

Waqar Syed

Hey, the David, at year? shares outstanding end question, the what total other the is one of

David Schorlemer

the XXX was -- quarter million for fully was the fully diluted XXX million.

Waqar Syed

Okay. right, thank you very much. All

Operator

Please Thank is the question from Arun Morgan. next Jayaram you. And ahead. from J.P. go

Arun Jayaram

the working timing the that DGB IV Tier the think could unit? for good field, well if in I you of as give the be Sam, us it's wondering -- of you morning. Xth as Yes, perhaps was to timeline next, what do expect I the e-fleets the

Sam Sledge

come August. DGB X X, Sure. then in in today Xth succession in April-May to timeframe, pretty coming got We're you're putting And that unit the in, e-fleets and July should close July-August they right looking work at for now. and Xth possibly. We've May-June

Arun Jayaram

Okay. X then for And and X?

Sam Sledge

year. year, of End of this beginning next

David Schorlemer

QX. expect would for I activity up those really to Yes, show in

Sam Sledge

Yes, in revenue generating QX.

Arun Jayaram

Okay. And going -- a -- sense capital give just you accounted of a know is my you leasing are And CapEx? in Can the sense you I could give follow-up, e-fleets. of of some us how be much to the for of your guys us this

David Schorlemer

Yes, --

Arun Jayaram

ahead. Go

David Schorlemer

that customer-supplied be outfitting will will Yes, equipment. be XX% about there

be CapEx that's doing so, this And part year, our guide we'll of that plan.

Arun Jayaram

would you Okay. finish all capital And lease four, can you give be obligation us around some when ballpark? what the goalposts

David Schorlemer

leases, that. than minimum of But lease minimum or The obligation. the Well, you're once those are are period total active. initiated three-year lease -- $XXX representing close and delivered less to are million materially over that's obligations a once those

that bit gives you So, of hopefully, a guidance. little

Arun Jayaram

understand, is just allocated saying, are you that XX% in there to And on enough. CapEx? top of Fair that's your

David Schorlemer

Fifteen.

Arun Jayaram

Fifteen, Thanks. clarifying. helpful super our Appreciate. to know you That's for didn't feel that right thank for that okay, model. I me.

David Schorlemer

You bet.

Operator

from Stifel. Gengaro question Please is from the Stephen And a go next ahead. follow-up question

Stephen Gengaro

the update Thanks. this. basis Arun where But, stands? of you per just percentage from on that sort a larger of is can quickly most a may fleet do evolve covered and just electric? perspective, maintenance that of on as how And actually CapEx your fleet new us

David Schorlemer

we've $XX guiding is basis. million Sure, million bit This that little Steve. $X a annualized been to David. per fleet up on And on

mentioned years based XX% his Particularly, I hoping that are think over efforts the earlier on old. age our two of fleet our see trend optimization that to is it as we of Sam well that comments than down. less in

weave-in are we begin maintenance that the going type electric fleets, doing to we an not So, that in had expect of be to combustion internal are be you in engine would going -- past. the to the we as we

and So, but between capital only to associated the assets. with in not we XX% also see cost the maintenance improvement those expect XX%

the we'll see So, as fleet begins transition I profile those time. take think to some electric, But, play things over time to out. it's to going more

Sam Sledge

Stephen, is Sam. this Yes,

people going significantly and going well equipment. is Just to pursuing lower. think maintenance, us. longer, that of assets time this David pile a as operate for longer The less significant said is is are I need and just are for are period on zero top to others to e-fleet less them cost of well. type that just very over electric CapEx what maintenance of attention, and story they of This last Lower significantly as to And there. ownership

that. see And equipment. like -- to field equipment more the long-term whole, more how much to we And you words the probably the hear of when will like on Permian those industrialized, ProPetro meaning easily really me I after that's we here kind able operated very the is that in and probably the fleets us takes But, frac will use guess general. business is. that as do that's you electric believe resource. word use note happening lastly, Time differentiated densely like of a be excited about future remain more the get in sector in kind word tell. to for This our two-fold what's And Basin of of

probably taken migrate our bit a tools a of basis. the job day-in and sub-sector for day-out too it's secondly to little But the use a and right note tools we that it's on today. equipments to Unfortunately, the to long

intensity kind our use to job. tools have we outrun the We seen that completion of do

from am in a going that ProPetro. create business, more And really am where starting tools a confident sector are consistent I to value. in help that going young and this as equipment as more and an are leader industrialize So, for are we to I and bring standpoint we value -- about technologies

Stephen Gengaro

gentlemen. you, thank Great,

Operator

from the ahead. you. Derek from is Barclays. Thank a And Please question follow-up Podhaizer next go

Derek Podhaizer

to I industrialization am approach. stick that on going

to cash business? approach are comment, to You Can your unlock about give that examples increased some the you Sam, mentioned looking are flow what cash increased What in about you of type to you of flow. new talking us at generate opening exactly? strategies

Sam Sledge

Sure.

is growth company First have we thing place that think how you will operated company is I comes find to ProPetro. the more decade, traditionally mind I common very through like an services past say just typically oilfield is for which for think

growth. of a experienced it's cycles, of amount couple last significant the Over

to set on just for additional, that's we've growth, But scale marginal by that doing really I and But, working yet of we And value team. through to grow operate. created Not operating create period So, are think time. the we a adding are equipment significant today. how what to of the means to as we a operate value at create scale.

more components more components, our might and kind intensive procedures around of the intentional dollar business. been operating Those across past. of fragmented spreading and being capital So, operating culture cultures the have kind high operating that about in standard

like it's fluids, say engines, base main guys the like asset modular that our large right, Derek, transmissions, today. know of not I when power, you components So, things components, you

than maintenance on. team and consistent creating That's predictable It's all over and to hard pieces that's that's different why equipment over approach we is in the and and what working time. so past. And hard to are right that make -- describe those on lower practices we around have time. mindset here accrete spend it's a our now. we our line bottom So, to really do can with in it's trying more -- the of me bit easy really where to intentionally things. execute of for sit should That first-in-class say that Look,

Derek Podhaizer

appreciate Got on to shareholder there. returns. I comments touch wanted the it. I

the in significant process fleet. obviously You've made recapitalizing

CapEx your You year-over-year. down coming have

back-half You talked cash for positive about weighted. more generation full-year free the flow

have really leverage don't any You all. at

split free and You free cash a of flow Shareholder are announcing program as peers cash buybacks trends flow between percentage dividend. program.

when program you helpful. get here? on be returns, shareholder Just a a see an wanted thinking to What initiated of more for? Just update this your we may are looking will color on

Sam Sledge

goal competitive at goal. value. that build is of the ProPetro table a distribute can here question. great very topic Yes, That to kind on firm is the to set just And the that

the priority allocated equipment we a it's at for team that how our taken to long-term If us. past do in competitiveness believe and company been that over that And, capital protect you everything. was major for XX look the has to to the story our succeed. right thing situations to have transition we months, over And

with we We through offering things. can help like can Silvertip. things create did so are can lighten can opportunistic that We load playing value leasing we we us and like our we distribute And to look also dividends that buybacks, on tools with we a are that winding where front things story. down can at transition somewhat like if the a e-fleet M&A the that and try two using field program be capital and do

territory. our transition somewhat strategic pivot capital and So, focus to shareholder I equipment would say is towards the from and allocation the that transactions returns away beginning story

Derek Podhaizer

What Or supply see generation have that? Maybe there. in party gets hypothetically be me, peers? solutions in fourth deployment. e-fleets All components get pushed into your would many being a the potentially right. like two you The from Would of out natural that some cause potentials turbine, of from the we to would gas are grid expect heard you the Obviously, lot delayed side? just chain There XXXX. that say e-fleet pushed power third two power coming the of not of is some first one next Then, in ways more the quarter. resets.

just thoughts that side? with if would component e-fleet? it and lighting we it chain you the around out Just right see more slip, Or, be to were the on your would hear up would power like some be go supply solution of those delivery

Sam Sledge

good to one feel value I that. lead items, know Yes, on chain pretty on execute as brief comment. some tight don't remain not I'll more about is make than I power us our tight speculate partners that We there will if Derek. that, so just and sure much today E-fleet help want long this. there's are definitely

Derek Podhaizer

Got it. Fair enough. Thanks.

David Schorlemer

the have to in starting did And power recent for that most our contract add to fleet we that. QX. for we secured electric just announce And

So, we deployment. for our are set first

Derek Podhaizer

That's Great. helpful. Thanks, guys.

Operator

Ladies the closing remarks. concludes gentlemen, this and to conference over back like I question-and-answer session. would our turn for to Sledge any Sam

Sam Sledge

us thanks for and today's thanks, everybody for joining call. Sure,

general. back XXXX We report are going and excited ProPetro us, like in to of we you and to will are the the excited we where prospects here to we about company's and the joining on success. at for really sit, continue to be talk and We again future Thanks come soon.

Operator

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

You disconnect. may now

ProPetro Holding (PUMP) 22 Feb 232022 Q4 Earnings call transcript