PUMP - Earnings call transcript Q2 2024

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Operator

Good day, and welcome to the ProPetro Holding Corp.

Second Quarter 2024 Conference Call. Please note, this event is being recorded. I would now like to turn the call over to Matt Augustin, Director of Corporate Development and Investor Relations for ProPetro Holding Corp. Please go ahead.

Matt Augustine

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

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

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

Sam Sledge

and communicated Matt, of I'm are of is and year ProPetro, that for report the to strategy. pleased In XXXX as demonstrated effectiveness we the our second delivering. previously, XXXX, a quarter proven we've resilience we

in free and second dynamic cash in deliver resilient a moment. Despite market despite results focus that our proven during have highlights share activity helped the industrializing But We quarter, delivering environment, quarter. and ProPetro first, on has generation. ProPetro capital some like meaningful prudent partners business important business to shareholders. our a the flow unexpected allocation softer deliver through David financial our disruptions you our can and is I'd customers, for value will walk

business us and our the which sustainable continue, long-term you heard creation. our free discuss our our have X expect we've we've Underpinning decisions value core confidence to taken made strategic cash strong We position are previously. strategy principles, thanks the and for to to flow investments

each through our on progress. and share some you me Let walk details

First, second through the efficient with is burning well headwinds. set to seen drive rewards. diesel shareholder is each will towards fleets X displacement. are customer ended up offering meaningful flow so and assets investments right FORCE We free rollout service our free relevant that gas DGB our our us recapitalization our remain competitive the fuel ultimately, the confident strong, results the to of in quarter our dual more is and market is and cash bringing transition made our path and next-generation deliver for reaping uninterrupted returns. a we've on company highly that fleet X Demand by industry-leading far we're generation. progressing with We fleet The enhanced electric now Tier offering superior underway, make value market

first third FORCE part deployed the third a in is FORCE Wireline we X-year XXXX pumpdown This frac our a with Wireline electric services an of quarter, few fleet X fleet. our second agreement to of the commence electric deployment the months. and option in fleet includes pumpdown with expected services deployed XXXX. operations electric to FORCE we FORCE integrated and fleet in deployed be with early next the fleets, for The with This as ExxonMobil contract

we field note, be market. XXXX. following in and placed On order a to FORCE a trends glimpse was seeing contract Our for we X-year offering we're to capital fifth ProPetro's our we allocate continue is that contract in in other of to addition conventional from expect equipment, with demand and will contracted the equipment and ExxonMobil and electric away under Moreover, electric preferences our the fleet, the major milestone FORCE the to have diesel in future. an customer electric it

in other well. strengths evolving we're electrification, to addition In ways business on as our our capitalizing and

have executing contracts ProPetro through-cycle to deliver been that We committed help returns.

continue utilization. services equipment and to efficiencies higher creating to customers, integrated with closely our tied work We

an and resilient future profile. durable factors while we operating and resulting these costs team efficient valuable, to a workforce all possible the progress committed together, made incredibly in field, We date first-in-class are that talented in and deliver proud more customers. flexible has earnings cultivating and business our and Putting services risks and reducing all our to more our by are success are for

by We our business for our at and ProPetro. all made is are our poised continued confident team that very growth success, here possible

M&A, been to and important will moving strategic to which driver an has be company. continue Now our for

fundamental deploying a strength capital acquisitions at towards disciplined value-accretive opportunistic to Our ProPetro. remains approach and

to flow integrated cash which fully into our Our business. cementing tailwind be continues Silvertip legacy strong for as acquisition does of our is now our free a acquisition cementing, earnings and RX

a This commitment of quarter, is squarely AquaProp to AquaProp, aimed the pleased complete delivering to we web addition unnecessary is operations of the and allocation. an another acquisition enhancing more Basin. Permian the completion of innovative industrializing it in our to customers at by of integrated removing of cost-effective with off This example operators our through capital sand integration builds desired through goal our best-in-class provider were Furthermore, thoughtful ProPetro The location. acquisition on reputation ultimate and bringing yet further value of solutions. equipment services innovation

of a in in generation our sense. fleet maintaining advance robust allow M&A sheet. We Indeed, our while valuations and will M&A, opportunistic results strong make accretive cash accretive to balance and us stay all and ProPetro's disciplined transition stable and that pursuit participate

in XX% a repurchase inception of on an return note, of add outstanding XXXX, our provides authorized optionality a the has quarter, May of and moving Yet increase service We're our and ProPetro through be excellence, our another that will shareholders. cash repurchased management's The remain relative challenging. with announced our remainder Board discrepancy of we fuel the and $XXX CapEx market, just the move unique the our flow is our shares. strong million. total to our in capital confidence to Importantly, last of plan laid performance initiatives the plans me that our and Yes, highly it lower, was free equity and thesis Since of in among pushed due also electric quarter customer opportunity counts our continue $XXX robust the evident to conventional generation. blue-chip in our our sequentially results. share David premium We I our XXXX, is shareholders our ProPetro's and approximately priorities. be strong actions let of investment in weather business an the an service top customer On to as June. we lower to this our some XXXX during investment also Board with free apparent a will on coupled capital superior also which proved report several and pleased success allocation million performance beyond. schedules we minute. to will competitive. our continue significant common to to financial original utilized. the Returning approved program showcase Wireline and more ProPetro became to equipment further a Despite as operational our weaker for and offering, May and uncharacteristically quarter and and are growth assets across experienced in are Permian just and capital May base pursuing storms confirm believe But through value Rig resilient as impact continued this dual pricing XXst, turbulence second additional quarter strong had the ProPetro's out shares say through in shifting we earnings cash flow and budget, diesel why extension that strength. more support between saw front

of in XXXX. year and the deliver to ability financial We are results confident into through our strong this balance

our outlook. to market now Turning

next and services balance of our the focus exists our While American confident take our of slow Basin to meaning designed disciplined maintenance optimistic North will of action, years the and to pressures macro ProPetro geographic the continue Permian cash and course, about environment potential land remain over not despite are strategy the generation. off growth is, that our the that service execution in we industry, no high-quality of our industrialized several strong flow pay model, strength deliver today. oilfield We facing on the to sheet decisive free building immune to offering

allows supported by is most Lastly garners of effectively our maybe importantly, and Permian-focused which committed proven technology, pursuit excellence to service us electric our operational and our base strong customer contracts. blue-chip

has Our greater success. allocation evolving ample to our balance have liquidity be look sum, industrial sheet to healthy, effective, our proven we to is and in and even model decisions. achieving opportunistic forward be In capital we

discuss come. to years ProPetro expect I'll We elevating for industry to David? our results. as over quarter well now our to financial entire as to turn second the call continue David

David Schorlemer

quarter capital significant Permian decreases With have XX% to have years headwinds, unexpected Net market XX% the financial activity we on broader And million. as attributable In turnaround last across and prior equipment spend today, of and in $X disruptions mentioned, few $XXX second were the that as flows million. revenues we've across $XX sequentially Basin. metrics discussed decreased as to quarter conventional transitioned strategy. quarters. softness on Wireline strong Sam, our quarter, results first in impacts the and our versus cash to significant diesel execute million, we our was us, well continued evidence adjusted The earnings. we despite Sam and free consistent generated higher returns offerings the the to decreased our loss to focus EBITDA and mostly behind second weather

the prior operating quarter. Additionally, electric expense $XX our for in compared million as we million incurred an $X fleets to related the to lease of quarter

on are days represents the previous worked. better the Instead, of utilization provided. expectations believe guiding efficiencies was effective fleets, was away from guidance reporting above number in had frac based fleets, Thanks Our we'll we fracturing shifting from business. for which range focus reporting XX.X on frac our the and years, our fleet exceeding utilization to fleet quarter asset hydraulic which we utilization second active we on

During hydraulic of run we XX fleets the the second to XX quarter fleets and in third active, were active fracturing approximately expect quarter, 'XX.

second program. of the in million, to during Moving capital was which of used activities the million related Net 'XX our acquisition $XX to of $XX cash quarter was investing AquaProp.

to from story quarter, capital that favorable driving ever, they we're results. pleased and supply As are than here's conducting discussed work teams quarters share encouraging. are vendor returns the the very spend we've recent also maximize relationships. to our in we And shared scrutinizing doing and and more assessments chain last gets I'm already is where supply chain interesting operations our our

flow quarter, second a a exclude despite quarter. cash consideration. AquaProp for to flow cash million, cash free and mentioned, which adjusted in was flow, improvement used total EBITDA $XX cash delivered consecutive million, working for to XX% represents weaker year-to-date of ratio diligent adjusted acquisition cash fifth first dedication achieving been strategic sequential Sam we produce sequentially, to adjusted results consideration of represents This adjusted If execution. flow As bringing for quarter company consideration which the acquisition acquisition AquaProp for million $XX for a free of change through conversion dramatic the free over financial we've and million, the $XX is challenging XX% impressive consideration environment free the acquisition $XXX

there this entire work and Our transformation, organization done. to in yet be has been involved remains

to we As Accordingly, fleet remained down $XXX reduced a cash ProPetro's to testament are new $XXX point generation prior a midpoint, to and we of expenditures our to strong of range million success the in XX% spend the a of capital last $XXX of now we continue cash reducing represents to is million guidance million. our capital compared inflection to million guidance Using strong. our year's business. and tailwind the reduction liquidity spend optimization transition demonstrate for and is for capital $XXX the a million. XXXX also $XXX position between reached

from anticipate ABL in associated earnings investments the XX, ABL transformation with June million, to contractual cash particularly of the in flow $XX further our decline for liquidity capacity durable $XX $XX fleets. In will credit strategy of validation increased million, were the resulting at profitability, spend, greater including the fleet our Moreover, remainder under of fleets end maintenance even and more the demonstration these capital enhancement of and total borrowings the XXXX, our FORCE quarter business. million. the an million of As facility. are we the Total and more was facility and drive free under electric we resulting the in $XXX cash cash of XXXX, was available a credit our seeing coverage multiyear of

a us and As maintaining cash profile also shared ProPetro's strong Sam fleet earlier, M&A accretive transition our improved generation participating in to sheet. allows balance while pursue

capital in return million our another to inception provides X.X program, shares. also remained In it repurchase the program, Since shareholders. the in we've we to active Importantly, equates to optionality This million million approximately XXXX. the of XX.X shareholders. of the XX% second retiring of translates quarter, inception share the as shares, of nearly shares retired $XXX return which nearly program of May to the outstanding to

repurchases continue share will million repurchase $XXX by in to execute April under the our and opportunistically We program increased XXXX. Board authorized extended

all inorganic value. success. and look electric growth that the believe allocation afford and pursue of dynamic, us to a and role deliver and strategy flexibility approach. our continue opportunistic critical also stay We for to fleet in capital our we stakeholders continued Each the to our We of our disciplined selective as discussed shareholder of increased ongoing core organic forward Sam principles plays delivering our conversion, will in the pursuit

this operational our allocated of million cash with flow to In and flows positioning which expect half ProPetro's base balance refreshed our for acquisition capital fact, repurchases the foundation long free higher the we strong accelerate upon acquisitions allocations and for first we've asset us toward excellence sheet, in our priority cash $XX further. adjusted with $XX is year, million consideration term. of in XX% targeted more share could be just to that not solid built, strategy

best completions crux back strategy are Our question, is it that we their in only customers are With benefits earnings call and and environment activity challenges. crafted the challenge, strategy even solutions that customer Sam. ProPetro, durable The in also for strategy is drive drive the cash ProPetro thriving. Permian base growth to to a slow believe very I'll our to by to Without but turn not commercial disciplined flows. we We and delivering industrial presents to of carefully our programs. the that, today. which a operating that up winning and success industry is consolidated more no is

Sam Sledge

to generation before and David. growth earnings headwinds Despite compelling limit and To confident we buybacks, accretive to actions turning M&A seeing successful the what flow a future true the accelerating like trajectory. no is on the to the reinforce capital and I'd fleet, and our favorably meaningful investment positioned. to build on today space our thesis evident Q&A, healthy We've spend, balance company. been liquidity sustain the in, in results environment We David beginning. in said the recent just and taken share strategy transforming energy maintaining of and all we've cash company in and to further remain slow ProPetro's executing our are uniquely sheet operate growth pursuing profile. our services while The just our are and you our

for space, you our what continue strong to will the to future. on demand remains may along build hearing be Despite progress We oilfield services the our across services.

electric fleet, generation our supply. I'd FORCE outpaces customer fleet we sustain next strong for mention and that Permian have. current Our the operational momentum the blue-chip also excellence remiss base to not be demand will our

positive will you capitalize see us these forward, continue on trends. to Moving

also about clear pressures that have to we persist market the the but turbulence. about eyed the are assets navigate We

cash continue strong Our and our supports for and best-in-class remainder generation commercial positions architecture to flow strategy of delivering ProPetro XXXX the beyond. free

team, for is and and we whole the I It couldn't leader remain be that lead present we have leadership prouder up the commitment. the Permian because incredible the team. Basin. for to what are I the that thank open that, in your confidently the an map operator ask our I'll strategy questions. to gives With ProPetro It Operator? conviction Finally, road line right able to of this dedication their execute you ProPetro to is

Operator

using our phone [Operator to At a Instructions]. now speaker session. begin will momentarily Instructions] we'll pause the if time, assemble [Operator roster. this you are We question-and-answer

Lemoine Our question from comes first Sandler. from Luke Piper

Luke Lemoine

you if You the you're first maybe half would some year, just in talked how could a issues, to see I'm the frame XQ, wanted you in then which the unfolding, some little away seasonality you expecting when about of rest that detail looking detail of a of these XQ, second the transitories used the look of year, outlook had and be helpful. you you guessing kind maybe up variability XQ. of little more in XQ for at But of kind like about. some go part to in the kind back a half, provide and bump that lot

Sam Sledge

QX XQ Yes. it terms likely I'd Luke, it. in I and in think [port] just described you and effectively. pretty what bump little way pretty seasonality you in looking we're succinctly in say a the of is described some at

every comment. front an that's think get the half we're of around but we when Thanksgiving we're and think fairly find more looking to out That activity said, back more what seen that probably closer like, -- XQ Christmas, strong the we're about confident will to half, focused well. XQ, said similar we to I year, also probably exactly looks that be remains holiday be seasonality I as we

Okay.

Luke Lemoine

David, then to big if there your about high guidance. little end changed bit? talk end the from in you just the revised a the And low you a especially go CapEx, reduction pretty what of Can

David Schorlemer

Sure, Luke.

We as decrease have conventional capital seen, a to required. fleet more in have equipment, we from continued our the intensity transition

that's part it. And so of

team look our and doing, optimizing lot of And you I'll operations give life we other Adam of slide use the it business. what the field. part, as a The is strategy to credit is equipment extending our and is his in the if at

to from during X the DGB sequentially a just kind the sequentially those of diesel our went electric quarter. dropped XX up some you from The pumping hours, fruit, over our mid-teens. went hours the that, X Tier XX% that of coming hours up And put XX% from electric equipment that to sense with fleet beginning months and Tier equipment. last effort is give bear in conventional to So benefits, along has been transition

we're and we've So transition It's going talked that P&L play as to go significantly we our our cash in seeing about. forward. that more flow out

Sam Sledge

it think us, -- The I said Luke. would here. we're in is not that add David well, is is our fairly significant I change And any not Yes. which for one that this thing guidance CapEx eyes deferring

business We future. into at needs are the and still perform highest everything the giving absolutely it to levels the

Operator

from next Derek Barclays. question comes The from Podhaizer

Derek Podhaizer

to you're out the there. wanted seeing trends ask Just about pricing

any release, the bottom pressure as outlook the But And should X we think Tier Just as the in Tier helpful. which pressure into where on seeing you be said some then out You sense. would pricing overall that here leak you assets, do diesel makes DGB X seen assets? your you're pricing? have on pricing, far

Sam Sledge

is the on say pricing market. players for of assets, to of nothing story. I'd calling and we minority pricing bit case applies Basin market, the in rest diesel disrupt of basis that an can fuel It's still there. and of pretty our But pricing our a dual gen the the say. that of pressure the a as -- which remains Permian assets On too. piece but They're yes, would it I mainly that diesel material, our the low, pricing there definitely And really in next we're very a strong. is the overall minority frac here electric a fringes international are market, or few market little that see story piece things offering. individual is a the The

all waning wind little a prospects we in in from standpoint just equipment, accelerating standpoint pricing investments expected. although our the why, confident market, that a and are we that's diesel sooner and competitiveness maybe a the into about of seeing remain because we general a ProPetro's portfolio, likely down decisions reasons pressures going some of initially the to than of future part one that's So profitability part we're super

has yes, been burning diesel remainder the market dual has of fuel market pricing yes, So affected. strong. very the gas electric the Also, been

Derek Podhaizer

other What to we're burning at diesel fleet FORCE maybe it. you of a that And Got mean year. be single-digit is top point expect natural do sounds to on the in gas fifth fleet? like XXX% then That's getting coming X that, And your more the about very helpful. on fleets transition. fleet Tier down then it here. I

Exxon sounds need might to have year, option which a a it next You fleet. X would be third for like

just the how more maybe XXX% So to and about XXXX. we it of also natural e-fleets, cadence you gas when for about should think the get can

Sam Sledge

pointing is fit did, We trigger the this that the call. Yes. last new Well, conference fleet, within fleets. the and on We electric it out development which the quarter, fifth pulled from trigger for range. that thanks CapEx within on FORCE the on lower a our guidance FORCE pull fleet

capital standpoint. portfolio that deserve return a allocation probably assets high-performing way earn our assets investing through is we next equipment of scenario. So more pretty is is variable it to that's think young, proud that accelerating, you're in that be to activity the out at question -- growth a time market might are to of demand quicker market for into higher we asking are, main assets no excellence maybe able part it with flat there the in likely the is their we're and diesel fleets muted, the entire which on to harvesting Yes, of be in it. we pull year? to the looking have That XXXX And we're this we diesel probably remains industry? portfolio. in running come go we how I diesel what what That use burning to next-generation think, shot will that. our will, out. away basically likely the own But from and wins out relatively market our go lowest Does and diesel capital that term likely us I draws of we we a these when But of the from slow biggest priority have get operational a create that do the gas some little overall greater because kind kind often of perspective, XXX% that and pretty If demands spend is need us. a a have probably on think

Derek Podhaizer

makes is That fifth And that quick the Got a that just fleet lease? a clarifier sense. another was FORCE purchase? Or on is it.

David Schorlemer

we That's would our a in from consider the mind, a We're from life that has conventional equipment. that lease, of are there. there's But benefiting Derek. last materially different lives to longer keep shorter with useful very replacing the calculus we equipment And useful Xx lease assets what program.

very So seeing desired higher different an margin think generating long-term it's and is much calculus. We and and conversion a in efficient the it's investment the of go our more we're forward. that by customers very the company, viability very profitability as we

Operator

Arun question comes Next from Jayaram from JPMorgan.

Arun Jayaram

as the of maybe Exxon in XQ. of as you trying I'd XQ, third about some to on start is type to maybe to that of just hear One to bridge fleet? profitability? think well maybe just of tailwinds impacts acquisition the highlight you Wireline quarter-specific from kind could bridge kind we as And as weather. some potential with into of of well AquaProp things love And thoughts the And do about the you a felt what again, the expect maybe quarter could

Sam Sledge

two Sure. I'll one outlined give start, pretty to had main The in quantitative and those the last-minute one our probably and about But disruptions product materials that basically -- on less. was was one work. weather, you David is I'd asked we a think give commentary. out can won't the customer had, factors: it We clearly to is little which and all fill during a combination bit of X some of I quarter, of of our the to schedule the like disruptions XQ those We pricing. definitely which question all gaps. of maybe decisions delay detail things. just last in X some fleets make more schedule call

going some to and pricing the can. work and fill has that the price work crew, hot something in we What to we effect because that, with profitable cost the for as white do, gap we So at cover with last creates uncertainty most that a then to try on the knock-on a space frac visibility minute fixed like That the out whatever knowing believe. keep as much looking to calendar. back good good is can then a jagginess business, way coming of equipment and is some not run kind we is

We So we schedule unpredicted to -- then back three your question first still did pricing. We relatively go We're in of schedule of and whether come do we what little a kind disruptions little seeing -- up. July. think profitability see will to those believe but flat. And XQ. do activity -- your bit where a I will was bit things, stay weather think around of

third the scheme of is of so over Wireline businesses, certain how up things. in and up to do at Wireline. expect cementing XX% quarter, greatest little totally are improving is times I'd we haven't both Those that, quantified our quite going but So into and discounted comes say profitability business. two QX which be more much we strong, be overall calendar activity the look Wireline cement, a they can't

David Schorlemer

generating is longer over this the less month-to-month there I thing only would durable David. think is Arun, business we're variability Yes. of sensitive and flows free term. on to probably and add cash The earnings the the I that working

continuity that and crew to very think optimizing our is team I to and in also our the so our business. customers of results important And very, generating

And I what and so year consistency that's it sticking into beyond. do flow the forward, think we're the to see And to. performance of going half second as relates moving we cash

Arun Jayaram

cost new David, At Just can option give the -- payments, the the help lease that to my -- the time builds. just residual And leases? fleet first what occur? exercise At sense FORCE your option buy -- buy on us is post new builds? time what could the you us elect is on the quantify the a what you to follow-up, the of decide how you of maybe of give time us out much start-up is if leasing

David Schorlemer

essentially is that generate purchase We that XX that the where the beyond we should as neighborhood credits do some options that's We choose. initial option have we so in do The $XX extend But months. the earn hours, to million. term Sure, of is. we Arun. have but number at time is

Operator

The from next Daniel [ from comes question ] Simmons. John

Unknown Analyst

statement guess, the would Or I broader sends you're QX view guess back statement a Permian. making that Sam, again a strong. I on is be you made for ProPetro? assuming I'm that that

Sam Sledge

positioned more probably the cut so seen in to That's In other several last a the we've relatively QXs top to this years, seen for with think and quite for QXs. just mechanisms we've that the right? almost then most things But portfolios, strong. base the to next-generation you've of that of to John, customer heap that burning of strong like been the across these on our or us, it's literally, equipment and have half seen to skipped I beat way that load you've and add account have gas white especially for it is space and I e-fleets, kind what QX maybe of any that. as haven't guess industry. us customers our They the pertains ourselves us, puts and

the customers mean just year. for our into QX, pertains bodes from more are good it their e-fleets as end is but us they E&P well I an of stronger just to always like surprised contract going customer be just for around That and space long-term fleets, it the and oriented throughout now entire year. So a gets the activity product things maybe. have more with it the said, things activity agreements conversations of dual and standpoint fuel we like stability can But right pretty base the our dedicated

Unknown Analyst

Okay. in here. question And a of point then sort

anticipate Tier X stop fleets at forward? the X given would 'XX, because given look going And you're do buy you DGB not for more just you to to electric the any imagine X success, you I rebuilds? additional any opportunities as Just Tier engines going

Sam Sledge

Fantastic question the Tier on X.

we're same right out now. think figure thing trying that to I exact

demand that the very e-fleets with e-fleet contract equipment cost earlier on pull aggressively competes It the on best e-fleets, to comes profile, pull, convicting space. these And and #X to to very, the our two the mentioned the coupled demand capital. push for list. us it's allocation an capital that standpoint, into more from with continue is With seeing structure, CapEx maintenance the lower things things operating we're lower our that David about with

So space Tier basically investments dependent that X to diesel, create standpoint. as there it I we Tier the capital what on a are X done in can e-fleet from pertains we're think spending wins

no motivation like engines diesel time. at reason doing to have things we be or rebuilding So this

Unknown Analyst

is told that Fair promise, solution electric have fuel. prefer Tier fleets Have over any enough. fuel if obviously are and seven last dual of those me, they customers I why? X Tier dual for so, one X the The that you you

Sam Sledge

other many around. I -- -- X Tier think our more the fuel Tier it's customers. the first customers the X are Honestly, of dual time Tier way X

the on together use we like wins. said, then next want working look conversation operations fuel it and the XXX% and the kind looks been some to percentages, to waiting in our we know, Once you stepping our pertains you're step Adam, success displacement it what go equipment. is that? time. we've think if add at operator, of a certain a which electric like in That at were to savings really is, don't line customers. what percent, for this XX-plus with Permian in have fuel And lot gas it to blending Basin So stone blending create a diesel as I dual gas, industry-leading electric to for it's all which but does of a to creates

Adam Muñoz

the and that there only -- and over lose them diesel won't have fleets I switching displacement any hours while a of the deployed seen XXX% by and X they to Yes. of showing customers that there currently day. Tier gains would showing the in per the lot for displacement. going his them results And benefiting John, been it's the that add from now, efficiency a grown running and team really only and force have efficiencies fuel thing XX-plus proving our Shelby is

So I resolve from in think the and it's is that's getting We're just showing the showing them horsemeat current the proof bridge there. them them running, over them showing data. We're pudding. the

Operator

comes The from from next Citigroup. question Scott Gruber

Scott Gruber

there of services? slowing And how ancillary was 'XX? about also CapEx? fleet a the investment service your the to ordering investment more diesel due Tier drop was the was an should mainly fleet, of fifth in we FORCE especially light X cutting of its wanted in if some Or element to the pretty think I factor, get clarity CapEx drop the ancillary that in on impressive,

Sam Sledge

every the tailwinds, and have confidence we fleet part expense, David one, add huge lower standpoint, Scott, I'll that data a simple operating he a number make lower in just to. can CapEx on and playing is electric another day, first, more next-generation have That's we The tailwinds a field. in of needs its lot maintenance equipment maintenance from here. points couple if CapEx. a of This

equipment talk work to showing directed, ends, the there as to through. part buzzword, us the impressive. it's about the at is life these as this on of we've put it is too in in we're CapEx, work a are main really around focused that all pertains a that extending but really, business Another the and optimization And done operations to It's really, of better show components you've our all ends, a really wins One, they've this. we've fluid team for easy main That's to power frac starting ways. large And seen doing large engines, X really lot part get really intentional components. categorize for of transmissions, our location. everything kind focus that and broader through heard to

life each those, XX% improvements make you effects. If XX%, they massive have one of in follow-on

of from an part one that's So standpoint. it optimization

what chain. part is other The inside our doing of supply we're

that best our chain the getting contract from We a ensure are showing through with are really prices. and of ramping how trying the there's services up best And to there. our we're value chain that supply parts and sophistication, wins transact quality and we the for whole lot

David Schorlemer

is And been XX% maintenance getting less consider going thing The we've growth our only there deploying we've is our would we I Sam equipment The it to mentioned, that and And David. investments. would what that of to as in intensive. is capital rest nonrecurring about is related assets capital related forward. of this arena. of that are Scott, or add also Yes, been better budget much

acquisition in do believe in favorably. as as will as so strategy we our well that to And our we play fleet out continue that conversion,

Scott Gruber

is reducing the calling. good that's testing Certainly, great the trend see. No, base a to capital

Just.

contracting question Another on structure.

prevalent bonus the customers. your as our call. structures across continue deliver contracts guys on you contracts? efficiency bonus discussed your guys going you to other payments last payments forward? Exxon into Are contracts just improvements You And thinking incorporating for about more bonus

Sam Sledge

Scott, that some if be to I'm Is right, try referring your may you're you put question to? in what our like reading referring of performance we bonuses and that agreements.

Scott Gruber

Yes, exactly.

curious margin to the capture to that Just improvement some delivering customers? efficiency you're whether you're extra from able

Sam Sledge

don't trying is part we pretty to that and these Well, contract I insignificant, it's contracts, each with, customer the of say too from not commercial different advantages is our to main small. but think architecture want that's one look is can And of right? of I'd small. one saying needs fairly to customers, custom the say I'd It's small. commercially services our it's that's each fit is customer I some set customer. a benefit in we much, individual to and say people. to our This go without e-fleets like kind is say structure with our of to are relatively commercial and consistency standpoint. effort because I'd collaborative performance small where e-fleets chasing of I a we customers is structure talking what just think greatly why we're of the stone things, each customer. predictability. a bonus But really, especially shove that very of in from of the about transacting This most the part reason And our

XX, day. same and their XX, every XX want the pumping every So they single day, cost that to they day, hours want per look

So not without can those mutually from price, bonuses. for considerable a amounts window that kind find we're can we if in where prices of right with benefit time efficiency we both lock at to of afraid the performance or

Operator

Syed from question comes from Waqar next The ATB Capital Markets.

Waqar Syed

at the of the question. outstanding housekeeping was quarter? a David, shares end the just What

David Schorlemer

$XXX million.

Waqar Syed

Okay.

the QX for of right? outstanding not is for the that's the shares the at quarter, that So end -- average the

David Schorlemer

the no, EPS XXX. would the actually, terms of end for share $XXX shares calculating at million average up me, of Let in be the team the but quarter, is quarter

Waqar Syed

Yes.

Prop, Aqua Sam, you into year? are change then currently AquaProp? maybe next how in would catering So and on crews that to how half the And through second pumping many

Sam Sledge

the to through Yes. now, that's possible, year. right likely We're We're north grow basically end the X there that of quickly at from around as trying and headed as Waqar.

end industrial top little the the reliability profitability of to we're give the what definitely as but a use too end that say is also more I to solution. throughout trying is, to and our customers cash bit to increase soon, an mechanism think, So but and a tail of more year flow

Waqar Syed

your is What What positive this to the what's investor, negative the feedback? new reaction And feedback solution? the on customer it? is

Sam Sledge

and the It's that is using simplicity. location. simplicity think the I that just the most we like one on its of are this flexibility customers things and

affecting a that. a container, of change So a or by a you really because bound how need to we're sand box many trucks not location, we can we like the service can amount job, silo things store therefore,

acquisition let's add that's I offering bit what's our be I make a drove direction. us That that and really So think integrate -- it that decision, of that real to mean, more said, ourselves. little kind to in what to with

general I because fact, supply quickly in sand value have dynamic very, inferior mean in very and mine hesitate And invest side. quite as just could to causing That's more I as down sand the I another geographical why market disruption mine things that's places. the a like of bit sand it as chain we up mines be road found you I market you soon as somewhere, to yet in to and soon think is just mine changing more quite people in right purposes. for made sand the and the stand think distance the think ways sand now. to a

we'll do a expecting there's into on legitimate go Aqua and on eye and into not continue be press it look, close to year a and we're we every that. And keep next adopted XXX% year. locations Prop customer be by But we'll frac into opportunity, have. of that think our to So we growth to this single

David Schorlemer

David. Yes. Well, is this Waqar,

some key and think we NPT and -- key add at. thing looked related compared efficiency across is And I that difference. see look our customers, that. I significant value one metrics to a logistics. We there's containment fleets NPT to a think And deliver they to pumping as just to

ProPetro's So sales real we deliver business development customers. continue and a to that's to to opportunity think opportunity value

Sam Sledge

just failures also is lot of add frac very like have That's NPT would to that been blender, the hydraulic and of the see. David, that so just portion the a discussion, it's I the or equipment things too. on silos it around the we not trucking screws location removing beneficial,

Operator

next comes from Kurt The Benchmark. from question Hallead

Kurt Hallead

to bit Thanks insight so the get on I and all want on. for something clarity confused little first wanted Fully that. a just I appreciate than much some color.

So in the in of a an the had quarter. in -- fleets. that your second XX.X I in And referenced commentary, you then similar XX referenced commentary, fleets think average you operating run you Sam,

sure, make mishear to did want that? Just I

Sam Sledge

days We're actually by worked making No, we effective we've change a done what activity. but past, dating don't you back disclose like number from miss didn't I to disclosed you in the remember, Kurt, fleets way the in maybe, the her. traditionally know this quarter. way we of quarter the all if by XXXX

normal. effectively longer in month month. an days XX a was X That's XX excess -- of working in defined is we normal days utilized is XX because normal. So or we that no in We previously fleet thought X quarter days

than So the ran days the XX more up days you and effective in XX XQ use fleet during that all utilization, quarter. quarter, you when but get never XX.X%, for a you add fleets to we

way that So our where was asset level activity. that, just an we're we thought to to a point getting describe inaccurate

forward, fleets, we basis, if it in commentary a full that We go-forward on XX% we're to out wide just then around again be any going active believe I just if was So it calendar. quarter. in And of third quarter. space going was call will which it or a XX the add we'll experience think second

Kurt Hallead

clarifying that. appreciate I you really

of second So point clarification.

that's to of words, a should and effectively, equation as doesn't of in the might and first a profitability You saying play industry, way be quarter guys getting group back off quantified are the you But out were level, probably it second out we look remotely year. investors quarter quarter you profitability haven't in shaking And half your -- other things could improved expect the that that be about second. how haven't something yet, levels you second fine. the referenced first on, not here, in right? that like even so thinking we in feasible the of In things is quite

half quarter way working thinking not EBITDA think second we're EBITDA that about first base. a about base, fair to it? Is a XXXX a off So

David Schorlemer

Yes, is David. Kurt, this

I is think what there. confidence performance to in our that's really tried consistency ongoing right. to we point And I our think flow cash and

that business to So some forward. activity, look, the business of a with capabilities it going that going thrive additional does. do can what We is market. the market M&A model in and we'll We're fairly built a continue stagnant building drive to

Kurt Hallead

then just And free free targeting cash thinking a awesome. conversion? That's about Or flow should right. you conversion on that David, How All right? guys that of then, EBITDA? we are front about how cash think as percent your

David Schorlemer

EBITDA we're XX% in been I conversions. we've targeting free Well, well. to believe, exceeded generate And M&A neighborhood The conversion. businesses EBITDA and have plus that fleet we executing front, think of levels are higher year-to-date. cash free certainly we as conversions flow higher with the in the that We've on, aspiring cash to flow that

targeting, and would that. be what we'll and So how see market plays supports I is we the think out XX%

Operator

question Donald next Crist Rice. The comes from from Johnson

Donald Crist

for electric fleets? a your future? finding as discussions fleets on using bottleneck to do generation. me forward you et there's hard end. squeezing in a you wanted of new power see for Obviously, the XX that add turbines, Are been Thanks here going you of X the find in to ask wanted to outside Sam, more about centers at And or I if oil cetera. electric field, lot the it data power

Sam Sledge

effect up it new date, be not mean fleets and incorrect. a impeded up here has progress. these getting there first getting To a maybe when affected meaningful day say to But our and stood we're stood I we're had as it's would or deployed. fleets

be electricity personally said, not for I opinion, pay maybe That and some positions whole look, data lot forward, but demand be on electricity of a the going more think mentioned, into most the Going going the generation overhyped. center to of the are. a cost-effective think ProPetro power data will likely power a you demand to future. of than reasons I demand some opportunities some just that the of generation center there's I bit the is personal opinion, in of for of field

So nonetheless. it competition some will create significant

supply chain to chain, in I trying just companies we legitimate the people just long about collaborative us. service we through kind very a is drawn manner talk very and to on as on up sure very people a we're us conversation of a if to e-fleet for chain, always air value think notice entire open our picking power our chain very -- appear have go how and manage usually we in a multiple over when those that's make not out in phone not contract, that of we how we're thin a our year, is often providers out minute's months, expecting creating of a with under opportunities those supply supply to have a customer tip have -- which kind of a This with working the opportunities. and contracts we to

to problem. creativeness, a generators full our That the from on build make right of that, flexibility standpoint continue So chains for mean, are that become commercial now. we'll doesn't I said, the end kind supply leverage just sure a to

to service navigated are about customers. -- you very quickly more that you likely need the the more make what I to very, well. think decisions So But date, have we've your the future, to we've can you

Donald Crist

keeping I just towards have potential the the investment further. with is infrastructure space. Is you of forward? gas one the on going appreciate all demand opportunity into for competitors shift your color. And gone a that up burning taking CNG equipment? that step Several And CNG natural

Sam Sledge

That's close although that in the right quality. at I've made worked people price We've right not we've at many where right is Yes. spot And can gas investments did said a the a to question sand the and we we'll the this maturity think The there. the We integration opportunity much point Basin. and get arise for like past. that that that that, it very is of we to and investment like Permian with are. be waiting storage as have. of The logistics we've kept on. eye AquaProp, we opportunities time things doubt. it That's an a an pertains to that location, say gas. mile this how we There's one without the an There's on in that's an with right lot a in keep in probably thing reached opportunities direct do window definite. gas relative better example arena and if like eye times make last

simplistic an the pertains over frac it future. is equipment to I way think in powering about to gas think as CNG

should I quality it. plenty We because quantities be gas it the about and think just we to just right there's in right of the in places. need right get general talking in the

Operator

Sam over closing in more no This turn the remarks. any for question-and-answer conference to like I session. would are questions queue. There concludes our the back to Sledge,

Sam Sledge

to and hope I your Have to talk Yes. soon. interest. Thanks, you us you today. everybody, day. for We a see joining appreciate great

Operator

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

You may disconnect. now

ProPetro Holding (PUMP) 31 Jul 242024 Q2 Earnings call transcript