LBRT - Earnings call transcript Q4 2017

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Operator

Good morning and welcome to the Liberty Oilfield Services 2017 Fourth Quarter and Full Year Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

Some of our comments today may include forward-looking statements reflecting the company’s view about future prospects, revenues, expenses or profits. and from could our risks to actual involve materially differ forward-looking matters uncertainties cause that results These statements. that certain These based statements other and public to release on beliefs in uncertainties risks current conditions filings. company’s reflect that are and the earnings are detailed company’s the subject

comparable and now calculation measures. are employed presented may EBITDA substitute and EBITDA to over conference similar Our capital return like net to comments its operational employed which today CEO, not for return call including as company’s companies. the measures are on on earnings release of non-GAAP turn include Wright. the adjusted capital non-GAAP ahead also a GAAP and on and Liberty Please measures the go in EBITDA, be and not other reconciliation is of financial These to this would discussed Chris adjusted measures I on EBITDA A available of website. to income

Chris Wright

welcome morning, call as family us earnings I first Good everyone. for our public on our want company. thank new you and a the joining Liberty to investors to

We our are and quarter year results. proud fourth XXXX full of

industry-leading fleet Over and over members Permian, we XXXX, course doubled expanded returns fleet. Liberty family. and nearly the the this to the presence generating our earnings X,XXX all in entered our while Ford of Eagle team the count, added new did We per

our average $XXX EBITDA million million net fleet. of million of fleet frac EBITDA Adjusted $XX.X with totaled Our fourth average an or adjusted frac annualized billion $XXX of generating on $XX million. million year or the full million per adjusted In basis. was income year totaled revenue per $XX was million. quarter, $XX.X active income Full net EBITDA $XXX $X.X revenue active

rates organic growth compounding return. flow reinvesting by cash returns-driven shareholder at We on focused value of company high a are

technology vision had Liberty’s XX%. suppliers. our For and on return partnerships to a type of capital the committed of in we’ve we XXXX, year different inception, employed build company. with with a to full From a rooted long-term One generated pre-tax customers foundation

We results. idea embedded that together achieve the you has that efficiency, and they enabled have the people to provide the built X innovation of results. with Technology been Liberty. key partnerships fosters DNA bring culture outstanding a company driver will and day this long-term innovation differential overriding and in and our are from if in customer generating Technology a us build has financial right

to problems. minimizing and believers impact. best are design frac that optimization operational are From solves We the maximizing maintenance ideas throughput, specific firm ones cost, the that environmental reducing

We are our oil. a cost driven of customer’s to barrel produce to reduce

significant and resources develop engineering our of unconventional have to We database wells. extensive focused geologic

this in in database analysis Permian have we Simply our as design want point, to as we for done starting in-depth Basin the recommend completion utilizing our are proprietary point their returns. We improvements partners in maximize to for years the Rockies. help the

demand improved for upward increased We We into will this market are modest pricing providing The continues drilling supply. industry positive prices outstrip through are XXXX, a frac activity commodity XXXX supporting believe frac as move the remains strong, potential. very and backdrop. persist we services to excited trend

in members iron, execution be quality will what to we attract on new people of we a than retained workforce More for which the best. focus year so that others. team expansion industry the regulate the XXXX does believe believe our that workforce expect than and industry of Liberty downturn, the constraints easily through ability having to the will we to uniquely We pace more is experienced human continue have last

the are as operate who people assets Liberty the to joined outlived longely family them. are fleets Our

demand Given customer and relationships, experience excess continues Liberty significant for excellent the performance to of record positive market our backdrop, our services.

XXth the to our customers ensure made commitments demand. these our and and of basis we commission fleet for always deployed and outstrip two where we and at first arrangements the when fleet we we dedicated and have long-term cycle, the additional deciding staff long-term to have as to XXnd criteria, plan a under ability supply people demand satisfy pleased want XXst to significantly existing deploy a existing We we new when build dedicated where we to we or end plans take with a decide the previously quality on assets, our for of are the Based add fleet. believe evaluate on weeks cycled to approach in During customers second customers. announced, with we quarter, their We orders new Liberty fleets through potential the a quarter. to and

expect results. fleets financial Stock, We expect discuss our be and to will delivered fleets this Michael CFO in will call fourth exit we service. with quarters our XX in third XXXX. With construction, XXXX the newly now hand of these over to the to committed I

Michael Stock

Good morning.

extremely operations. XXXX grew to forward. are growth XXXX of while course and believe have our We count and maintaining XX We from record support pleased excellent put an the results strong fleet XX place throughput our to in with we our going over platform increasing of a fleets safe operational active

tax does not pro our and federal we subject income a For IPO, were income expense. income will net U.S. the discuss such, level Liberty’s this not call, predecessor basis. companies include EPS on forma and tax our at as income to entity to our Prior net

all The what outstanding, the into the company pro and reflect of Our a of Class B shares tax our share on Liberty’s only have would and diluted expense to additional net impact adjustment income reflects Class common per conversion tax of assuming subsequent stock. income income forma common fully public stock all been have XXXX. been of net are calculation A earnings for we

our active and XXXX, to return adjusted $XXX on and billion two are as fully performance. net Chris EBITDA average $X.X EBITDA $X.XX. evaluate million million. of fleet we previously the diluted For generated and year share income earnings employed of pro capital by totaled Adjusted forma matrix was we described $XXX to our key for Revenue per use

average generated active For return $XXX of revenue fleet employed for we of million. quarter X% per capital XX%. adjusted $XX.X million the million, Revenue to third grew on a $XXX of XXXX, quarter and increase the fourth of EBITDA

For earnings the fourth quarter. impact due to EBITDA diluted $X.XX. $XX quarter, fourth exhausted than net per full quarter, fully their fourth of to and we to generated the some and experienced Adjusted per our million forma $X.XX of to $XX fully compared customers net earnings per EBITDA share year compared fleet pro forma pro million for of and fleet income quarter of million million we diluted per $XX totaled share the holidays third quarter of $XX.X operations expected. or $XX.X active annualized the million earlier third in having budgets In income

disciplined space excluding the make and cycle. quarter totaled the million earnings, While provide believe activation fleet serve $XX.X we spending revenue. activity or the upstream commodity of across quarter fourth for their current administrative greater in to balance to will General cost expense didn’t curtailed X.X% prices existing the

initial our balance In million proceeds with debt. unusual $XXX million $XXX debt first five a to portion and decline We company. in non-cash of had as a debt. of total the of increased compensation public term and with of We costs XXXX, offset being of forma cash completely million a and in We the associated of and quarter experienced January a of we On cash offering public down percent a at ended offering. throughput year million. some of basin portion to higher ABL share-based we revenues completed temporarily some down revenue XX, $XX expect administration cases pay operating extreme and reducing for the across utilized excluding the at shutting general of all G&A expense weather our operations. we XXXX our $XXX that facility the Pro year-end, slightly

our impact quarter us earnings, for our the we expect strong quarter year. may our slightly growth in be our earnings first the will in events frac confidence to these for high single-digit EBITDA expectations of demand revenue full see leads expectations, services quarter while While our and below the fourth first

disciplined to we look to organic continue plan. As we exercise our growth XXXX, will

We five fleets. quad a total refurbished our [ph] fleets and expect XXXX final build in new four of fleets Liberty consisting of to deploy

demand upgrading our to pressure are of five and fleets customer high work for in meet We Ford. the Eagle Permian

increase working throughput. to are constantly We

toe end, ancillary we building all with capacity pump third that are services pumping and three handled including by parties. acidizing services include major services other builds our preps down to perform and services Towards frac prefrac in fleets basins to previously business Liberty

the CapEx a of designed of Our total our we the on with believe with lowest preventive maintenance program, fleets basis. rigorous combined per fleet philosophy ownership expenditures cost we one have maintenance lowest are

is $XX XXXX fleet. for million Our or maintenance budget per CapEx million $X.X

provide million For of which budget approximately services fourth and $XXX is additional million $XX carryover the from XXXX, horsepower previously ancillary quarter discussed. CapEx our includes the

our expect capital We funded from by completely cash to XXXX be operations. flow budget

We XX horsepower expect would and of fleets, that, back of fleets With of open dedicated service XXX,XXX attached Chris horsepower with consisting horsepower to XX,XXX to down five approximately for turn the end pump XXXX Q&A. fleets, standard horsepower these line. call I XX,XXX high-pressure X.X million pumping we to XX,XXX supporting before capacity ancillary

Chris Wright

I produce and working a operator. Thank turn world’s is us. defined operational will to the a together Thanks throughput, forward want you, I’ll tirelessly look changing and to strengthening Michael. year shell our thank to advance partnerships that suppliers for barrel revolution of the We and worked to the whole increase oil. XXXX team cost execution. the energy landscape. that who lowering Liberty customers, by We efficiency our to believe be customer to back at it joining the

Operator

Please begin McGinn now go question Instructions] session will of JPMorgan. first comes from the We The Sean ahead. [Operator question-and-answer

Sean McGinn

changes half influence about Bakken fleet hi XXXX? through per just in elaborate here morning. move how how on the the the and across per revenue stake, thinking per variance metrics, that you, just Permian fleet, your versus you increase should forward, good Thank the the as mix as there going and a mix DJ first maybe you Permian bit Chris, stages

Chris Wright

the pounds or that. the Bakken. for reservoirs size paid we Permian, mean, in You bet, are Sean. frac more the sand is stage, is obviously average bigger get of DJ since in I than In a the the it thicker, in

definitely would or about is say still the the other or we other I the I lower is be will profit rearview, profit slightly they but the gross paid in more aligned would say In mirror, equal. a per the on per per gross efficiency get in on EBITDA than fact is basis recent fleet pound basis are Permian fleet Rockies. than it even in throughput Permian reasonably today. because moving ahead basins more of are rearview But they It the average a basins.

Sean McGinn

is mix per efficiency Right it have then the on deteriorating, so expectation even would gross be that impact fleet? profit negative doesn’t your necessarily if a

Chris Wright

Right some offsets now we a We like Permian. throughput the But in see recently pricing the and we meaningful improvements that. Permian. lot what in efficiency just actually seeing are the in

Sean McGinn

it. Got

Okay work how much line are and other maybe of here? the us margin pointing on thank you just supply and out in top guess they thinking And about for potential that. a first little just quarter, chain, give any the maybe maybe can worth detail bottlenecks are you more that margin then lost is drag I just

Chris Wright

I speak handled Yes, industry throughput the how margins it QX to But done, if of the as and and pretty well. has and QX. chain But I impact did less we mentioned Ron your some in in supply really get struggles our that. had and weather proud you about impacts struggles will we it am let the

Ron Gusek

Yes fortunate sand the specifically move around of and there. talk of heard as industry’s the that. railroad to been have a to the the some that you Sean, avoid issues any certainly about We’ve challenges ability result

tertiary chain team also things that primary had keep and side our worked but to partners worked thanks on there. sure able supply only to that to hard we Our make and A in hard were big who make supply opportunities we supply with not running. us the Basin up sure pretty secondary to

have shutdown we yet as very, not issues. to to point a that say result sand So experienced this time very of proud a in

Sean McGinn

quarter to January Maybe of March, the be you dating differently fourth very about but it intra the sense quarter just place the a that thinking number could gross you give well can and maybe helpful. typically of factors you about about as trajectory us driving That’s think there’s helpful? versus and little process your a profit in

Chris Wright

with so January shut are Yes, sand. for impacted in weather, Yes. slower water months, the Sean. extreme down definitely we the better. weather, and problems most some anything, highest right throughput I from was of a which not supply wireline fuel You similar say, just where and bet the would us cold roads couldn’t you January And maybe less or meaningfully us, now. little and by was are handled at move addition extremely March – chemicals quarter, to impacted. February or

Sean McGinn

you it. much. Thank very Got

Operator

comes The Connor Stanley. next from ahead. Morgan go Lynagh Please question of

Connor Lynagh

Yes. Thanks.

wondering EBITDA dial should we look $XX Just million or on that little more the a first midyear higher with in reasonable decline front? in moving for where in per get fleet EBITDA so quarter this at to if Is expect your a you’re third if the per we efficiency Permian? year? on we pricing are how what of – fleet. Just you do expectations much could and expectation Can that higher and just doing quarter the back better

Chris Wright

in timeframe numbers exceed to has approved. we expect this but Connor, Pricing year, that impediments. other yes this summer, whatever we certainly have don’t those

were then. and had less In improved we about deliver our and budgets team, holidays just sand different QX efficiency Our mostly struggles talked reasons. since moving location that pipes. similar of and fluids days has things on able for we some have through QX, our exhaustion to

EBTIDA to we in better them and But press the Similar to But release in today is of be revenue operating was growth in QX. looks we backdrop in But I in macro for QX fleets cleaner is versus yes, QX. is the QX. our are per it from It EBITDA. us overlapping reason. both Although a expectation again an say, as for than weather impacted not fleet flat. roughly our frac would said had decline environment

Connor Lynagh

do was due doing or customers to I that’s Permian comment guys are steps think the your that making absolutely. comment made in interested, is to? with it the things you in What attribute Do efficiency. market on Yes particular you you there. up wide that you a

Chris Wright

itself some there is should when But growing struggles obvious basin which Ancillary the have services We thing busy. very and is say, would to going you it’s are specific see there in folds. some a have more fast. Permian you Liberty that more probably months I to a stretched is are know is

on available you stresses down deal partners how XXXX would and customers up see partners different the challenges supply look the the with basins. same to a you different or and logistics and and level. before it catch comes to in XXXX, If right chain and with services system to right But in the the Bakken learning activity infrastructure the and just

Connor Lynagh

can Got here, terms it. to how And you is where opportunity just how in mean US? of more it that I broadly see from efficient is it it just the X%, just bigger market XX% much in Is there. the high-level, be you or set going across

Chris Wright

would is I the the X% expect say, to There you say, are what XX% bounded wide with got would I get probably meaningful. upside may can large get that and that in we we but than it years range. Certainly, a I nicely. done efficiency. mean, us I down initiatives them heard we’ve road back. somewhere several say, wireline more is be are it’s would pump in we all and our stressed fleets that of and we in you’ve not down stages, press release in some between in but our of of get seeing down a know, a operations do of market, you hold know some guns you of the the that fleets, to number gains

that back. don’t we So us we want decided, to hold

preps thing pads. fleets help and other down That Same are things efficiency for we reduce that drive acidizing pump prep across will So of all taking operations and our and toe problems. in-house.

it. So schedule move on they are to

testing job this testing it now an efficient. does year more and We that better system it’s faster pressure automated a are out but pressure rolling

I So there and could on on. is, go

a operations. number We have of

of together done As know, out our more customers with that’s you our how just the day. culture a company to get figure at to

Connor Lynagh

Absolutely. a the lot Thanks for time. taking

Chris Wright

Thanks, Connor.

Operator

question next comes go Syed Waqar Goldman from of ahead. The Please Sachs.

Waqar Syed

Thank you morning. very much. Good

active for fleet the be think QX? fleets do QX average would and Just What some you – then housekeeping. count

Chris Wright

to very XX XX to will go be It be, to quarter the end XX we only in going will but this with quarter quarter. and roughly it’s and the in late fleets we looks

probably next XX little quarter. So over a in

Waqar Syed

in deliveries or fourth the end how you should at expect the for third be sometimes modeling quarter, be then or and quarter quarter, of in the And to those? middle them we

Chris Wright

to say be going could Well at the the up out, hard precision. any right end QX of middle in fleet quarter be up looks the like the be quarter air, at of end. quarter to QX it’s fleet the more it sort Hopefully should the of air. sort to in than quarter and of but far That the with in it’s the enough

Waqar Syed

– your year, little the for for And a you numbers provide you more provided could that CapEx the breakdown.

You and $XX terms provide upgrades year. of maintenance for further and between new million mentioned $XX from builds then in you million CapEx. breakdown Could last

Chris Wright

let Michael will I speak to that.

Michael Stock

we between ancillary the when with probably Waqar, look Yes, -- is associated on $XX that. and $XX forward to million million service this line about

for or looking $XX really which pump new balance runs We’re really includes high being is our refurb the to final in $XX pressure. CapEx fleet. the at also million upgrades that million equipment builds down about about And and of

Waqar Syed

kind what services returns are ancillary in side? the line So pumping with your the going returns to on they these on be investments, are of

Michael Stock

they It’s on They the combination the to ancillary and need are, the rig have fleet they these they on strong in also right. oil But a accelerating efficient. will returns more Waqar. around have, their double and making have billing own

on expecting are returns great those assets. So we

Chris Wright

a to out a at how simply motivation on efficiency complex. for will reason to good a business them. broader more bigger get day. do them simply figure done we compared small to relatively returns to equipment. it’s that’s doing And hunt Waqar have But the are the The Yes, is why that we

Waqar Syed

expect do just free year? cash generate then last you to question, And one flow this Great.

Chris Wright

Absolutely.

Waqar Syed

And you within you could the that you could know quantify what do range be? think

Chris Wright

that. more plan you of past. seen the we’ve performance above am am I not for in well are But or to I mean, got got to any model have us probably as – than But model our financial the have sure you heard our generate elaborate us CapEx. past the year. flow a I expectations above you cash prudent our from operations from a as Certainly,

We are capital, guys. return and return of on capital

talk year, think us you may sheet year and this balance but capital. So mostly strengthening be hear return building next will of the I about

Waqar Syed

Thank Appreciate much. great. you it. Okay very

Chris Wright

Thanks Waqar.

Operator

of question and Please Company. comes from O'Leary go George The TPH ahead. next

George O'Leary

morning, guys. Good

all given acutely maybe as and how Just their for completions driving are you Texas issues the market, tick pushed on your the areas technology are did in focused improving on what into or then are guys you and focus the customers? those those issues where customers helping your field, efficiencies operations further customer thinking of through the some maybe about you various

Chris Wright

see you for I number in wellheads bet. faster to as in You maintenance flow moving, supply, back water means pad customers operations other Texas. perfect in But and look services significant increase designs. wireline, drilling a of a there. move manifold mean, That ancillary the are ability the of is the frac

what You are edge of pushing often can take. the you

then our and and smoother the increasingly very operators delineating colleague, focus efficient and deal But flow hit savvy. the now wants just got have the don’t to acquisition as able anything and you been points. know focused I more them geologically to well focused So have been us just savvy, back I is Hopefully, on if have they with clean there to operations. if shifting acreage my major the to be not for out customers you are Ron there land or have elaborate their and and to They down outs. screen wellheads. know

Ron Gusek

there, going a this we maybe to role are Permian going We thing think going is in on focused significant the other the play be to I completions transition of highly sand. anticipate that’s regional course only to in forward.

we sure on laser there. that to customers, supply of been have and the in chain partnership so south to have making north the making the so well that’s we access want have and we’ve to that supply distribution wide number can and sand something the sand in appropriate with sure west a to Geographical we highways. hard have on – in regional worked make our of in end, place east focused So with sure been the access we we execute

have sand any to trailer us Of access we course trucking the for out the can know fleet, widest giving you move Propex of with possible course there flatbed us. Golar

to with So deliver we have partner that make as to well. that sure on that been component additional customers hard able working as our we a are

Chris Wright

sheet. of it’s And balance course a always

is barrel and The just our of to But contributors straight find of and large want that customer’s You best is efficiency goal throughput are the thing way. other operations to goal ultimate on efficiency up. throughput of our the cost producing that’s oil. and a lower

our very do of types, on. So do profit sand. XX,XXX over of best now to very rigorous right team is that. figure database to engineering a wells try and rates, sizes, fluid But to analysis on one systems, large design, and the regional now volumes, out has targets mez I us built how could go completion That’s frac

We impact. in offset course the sand parts by different different bullish general on than of middle positive outlook confirm so But that than costs. just are playing just either that’s – now cost impacts and sands past that. last pretty clearly large of will role And in But an productivity the or of have its well to of they’re are We got since significantly pumping modest we not has and been ongoing are the for impacts regional on year an different that analysis that are more in be doing they more a this observable well decrease basin the there. of all we offset the horizons effort.

George O'Leary

put Basin successful and legacy color early kind notably kind – the same been markets down as days DJ of your the in at vein know just progress relatively that of That’s uber per and you you frac bifurcate guys you point have some have could to in in to Texas standpoint very do and get the then helpful you between the you an market. it’s this Maybe from the most stage continue volumes earlier. many into and you but and realize example you grow numbers bifurcate the big per I I say efficiency how are some that time, and then geology the with about in stage of versus it of sand helpful? over for that you color can But Permian day the stages and to could realize per talked able has would close the Permian there DJ done DJ gap just push to maybe be some closer day

Chris Wright

Yes, in is They number frac there frac will they I pump day not really think done the the sand there they On get of activity volumes? in again volumes, DJ even hours will and get to or done the a – stages Permian will. number. there in DJ in

in DJ difference the on of probably We versus stage a have with F. stage customers XX factor in volumes A sand

look really aren’t mean don’t right you stages unit talking but we stages to have efficiency. can monitor you when we same really – I the at about, the So are

overall I think sizes. whatever the a change for or pump better the we Customers placed or throughput day in day. a day hours DJ pounds or in efficiency a or sand Bakken of stage in metrics in

doubling are we them. Sometimes

Sometimes but impact a don’t we in are All they efficiency them. really and shrinking day. those throughput stages impact

George O'Leary

maybe hours or Texas pumped higher however just could want And in kind markets if one we of you efficiencies think been the expect helpful. that’s in you is about it I legacy I the change rate more versus and maybe say, guys rate to have in historically. guess would more there the active then can Okay be change of you of sneak

Chris Wright

reasonable earlier on. that’s think I Yes, a assumption

revenue efficiency, George. of statement, in rate and improvement steeper yes, So rise our

George O'Leary

the color, All right, much great. Thanks for very guy.

Chris Wright

a one. you, Thank good have

Operator

from question comes Simmons ahead. John The of Daniel Please go Co. next &

John Daniel

me talked Hi now. excess seeing their frac upgrading counts you Thanks putting see prepared about remarks, or your for their demand guys. in. customers fleet in simply they right Chris, frac expanding providers? Do you

Chris Wright

You see both.

rig in is for there fleet Their a have on up. a think their expanding flat coming drilling up. that be a of are customers. intensity count been significant frac while, amount count efficiencies Even I might frac still migrating

general in now. there the is today fleets increase demand an frac basin in for right So across the

again, For sure not the on just certainly that is us point. or other number for is are macro we to But your up. really going betting

to best will find that in benefit most partner it’s partners right efficiency and throughput. the Now the and the

So is capacity needed. work certainly yes, always not because new are going upgrading They operations. to just our are fleets there

John Daniel

competition, such you and I will and you forced your picture lower will folks approach sort lock-in utilization mean, pricing you you on on to big what great assume technology player you’re quality to do that quality to a to just have you your and at try a to should fleets would your top to This take cut job have that – question so Can quality company fleets. how suggest the are service you. and And win lower lower but and yourself pricing. you as successfully day that find done the guys Right out, of market execute doing when will tier and play talked share. seemingly work, may competitors be back forced continue let’s to home from dedicated alluded just to if foundation for build price about the a for having the that their elaborate

Chris Wright

you Yes, bet.

So in happening. that’s markets that’s happening always great today. Even

done paid four players service done get valuable if are the You you day there get for and you in get different then It’s and get seven stages frac they the that. different know done. to same they deliver if a differently qualities more of

services their our thing, on customers, the Your shrink. all they ancillary daily for fees

Because we deliver value. So do premium providers price? of premium get premium paid bit a a little Yes.

we slightly cost may than our though their too. customers quality think win by lower even higher it a I value paid first that lowers stage Ultimately, a get player.

I know, from XX of you in years. to last and that’s for on dynamics getting on last been to quality going XX another am they lower going that for are the fleets the having home, that’s So but customers find say displays going months been

is the backdrop. in always there So that

is – situation declined different where you dynamics. exceeds a get for you there frac frac – demand new demand work to or rolls frac market if capacity is Now on and fleets have current the for a

still You operators. between pricing the a have differential

You still higher-quality on going have now a location today. is preferred but preference see to start pressure to you pricing you know going a player have way other than it the

John Daniel

Final a fair? more In and remarks, for based of of million. just EBITDA talked right. suggest prepared expectation about math my Michael. high again that shy growth you for an QX for $XXX done Okay, EBITDA Is on and housekeeping single-digit one would which your

Michael Stock

how net, John. That’s works, the yes

John Daniel

that not range give is you year? math be including if equity-based for estimate can might us that what and the with sort for but Okay an comp of equity-based for a comp

Michael Stock

probably that take will We offline. could

on We of the model comp working are with moment. equity-based at the the still

John Daniel

Okay, guys. cool. Thanks

Chris Wright

appreciate your John. interest, Thanks

Operator

The from go Please Scott comes next question of Citigroup. ahead. Gruber

Unidentified Analyst

Kaki Is is Has guys, for longer-term changed that Can in plans? entering pictures? previously your all? growth Hi stepping you MidCon discuss You just or at discussed that in this Appalachia. Scott. Barter guys just the still

Chris Wright

No, build out. quickly we we the by or We would want all and like se. again, driven and there base. no that. come there deployment, our per for I on say, will this an we And decision. that’s just to fleet a than love we to But time bit broader them sure to But additional where like opportunity plans. enter focused a a We in to a It that customers will more change customers little bigger with got decide help it’s basins basin. be and scaled two customer want get a

in Bart, through near It’s future. do we not not windshield It’s the right surely now. the right will So that.

a and Permian still basin. Our market share Ford the Eagle Permian small. huge in The is is

Ford. Eagle are entrants We new the in

constantly we it So will I and are focused it’s basin, will the for But day while building and we a when. next we not But request are when basins with in. add the customers next say months. dialoguing XX for be we that the – in can’t the on come. for

Unidentified Analyst

be a And Can Got it you just for customers customers that XQ just in a with for are go fleets you. existing to and like visibility talk come agreement more you there’d discussion have guys the going And bit this work in new for the do or little to is at or on point. please you about handshake think customers? XQ.

Chris Wright

We are in discussions.

are are know fleets we to. are there other where we But people talking think I going. the

will that. So probability last a pretty where of we But have haven’t I say would fleets we formerly those clarified two go. high

both think them to customers. existing likely of will I go

Unidentified Analyst

for me. Thanks. That’s it. Got just

Operator

from of ahead. comes Cowen. Vaishnav question go next The Please Vaibhav

Vaibhav Vaishnav

good capital. Hi you for And return if hoping about color my how believe provide that? can you question. think thanks taking of mentioned some I Chris, morning. around was I you

Chris Wright

Yes.

on the know cash option all done special we we and holders. when You we simply the an dividends companies have per in times, private share generate In there public good we which it’s during up mail past, additional marketplace, dividend it share through a buybacks. have excess is

of is business of all been grow and the special so that’s it’s And may every this the valuation value that motivates deem we prepared have to the when buyback. me I reasonably been create we If If likely ultimately think in to in undervalued, will the stock? of is we we are goal, purpose to a we and What’s is owners to us large of we’re to greatest would stock. of the increase shareholders to valued, the value mean a it share. what that. way help close careers throughout do our it’s our depend stock business, share here do our We through but significantly and value more a of dividends the

Vaibhav Vaishnav

based So your as you at on you internal model it cash sounds comments. see free much or stated than CapEx think free you least like have guys in cash flow more flow, your significant

Going more or more a the going builds function use to forward, going new more be be is is buybacks? of of still best the – it to

Chris Wright

where year expansion it’s It game our of on will flow, establishing new cash free like year this trying years have the distributed, of CapEx circumstances. are no all of in shareholders. may be in builds depends we presence Permian a and mean, majority will be to if change and is going to circumstances business. a bit in flow the free maybe the the cash absolutely There distributed There going a where be we the to to where I our

with the feel again inevitable it It’s and it’s in the will in it’s windshield our always so dialogue they think not now downturn, about come, So do where robustness that’s how we the ongoing cycle, customers, again. for we come our right are granular. but macro we

significantly capital fixed. So for cash us, between never It returning swing shareholders. the will proportion growth and will between those to things be

Vaibhav Vaishnav

That’s you is, helpful. normal EBITDA? operations. weather, more quarter normal we exit third March per Can like rate said think ‘XX If it’s I in back fleet March that million abut March, like sounds think of we that around saw $XX

Chris Wright

do that. to not prefer I

in to right But business not where am well. know Appreciate all we good feel provide to what we our halfway guidance the are hold going more back. will on Of you even But for are March about know that. and going I now you through but I specific looking course We things sentiment. have your is are outlook. that.

Vaibhav Vaishnav

I of not for is pricing sounds that completely XX. least already at at should It sure about fair be level thinking pricing fleets those if Is the two And about the still at I way but fleet is thinking sounds locked am XX, it? or higher. understand. like number like improving. that this

Chris Wright

If the if pricing there yes, more year than change still it’s supply and pricing last going we upwards. saw upwards slow there drift changes a – but not a drift and rapid continue is yes, still is on, demand is strong market slowly to the is

Vaibhav Vaishnav

one the if dollar apologize Did me. builds, horsepower the I per new am last guys two cost? for you And I missed sorry, I this. mentioned like for what’s

Michael Stock

of the at coming the horsepower, with that fleets new horsepower dollar can design said little approximately $XXXX per out Ron, new. about the above probably a always was builds the it a bit – dollar new It’s slightly for moment. talk maybe is to to that

Ron Gusek

lower focused Yes, have of been I we piece said think, on we’ve company purchasing never the a of a cost upfront that’s equipment. that

of case, always we total that’s so particular have ownership, about out. this We in horsepower at been cost next-generation a looking coming are

Quiet it call will Thunder. We

be on of of end will fleet a quiet new generation the with our it pump it. generation a So but next

cycle So that We pumps the transmissions. engines hours in rebuild for the and pretty maintenance the kind aligned pump on with piece XX,XXX really up and thing of was and that significant to wasn’t end power we for or progression seen have got that pushed get and will have point transmission components around next-generation aligned so hours are pump. now of end power us rebuild hours call those that. engine where pump and it like a XX,XXX engine a something XX,XXX-XX,XXX or major to will all the in cycle all pump number This

forward So look these we’re extremely fleets out and that of couple about to perform. to see excited there how they getting next

Chris Wright

metric, money about a last follow-up. added third always expensive. employed. but as on just If thing which obviously That’s that’s on it, only half much return not To with it’s buy make is why capital always I comment. cheap. Ron’s to am it’s to can we for this price, Yes, something One I the going

to rate in So to – accrete growth got we company, of are always looking reinvest how organic you a capital value to return. at an at high

that’s total spent. on investment. every so of again ownership, dollar we And return an at cost how we That’s look total

Vaibhav Vaishnav

very helpful taking questions That’s thanks my and for

Chris Wright

and and interest us so our for everybody. for your Thanks so today thank much. Yes, ending. the questions very QA Liberty And from dialogue. everyone thoughtful joining Great in questions I I is for much believe

We stand are excited about where in XXXX. we

the success Everyone us about to and the have great we we the and you team to are we to about on excited the Liberty future. their operations be forward that proud three proud the very a do have with talking our look customers. of very frankly loves are We what of here day. partnerships in Very again

Operator

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

now may disconnect. You

Liberty Energy (LBRT) 18 Mar 182017 Q4 Earnings call transcript