LBRT - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Liberty Oilfield Services Third Quarter 2018 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 today's 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. uncertainties to These based statements and risks other subject earnings on beliefs detailed and certain the current public the reflect conditions that release the company's that are company's in filings. are

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

Chris Wright

outstanding that of paramount. relationships total the dynamic market shareholders third the a quarter our in, enabled everyone, to efficiency win morning a Strong we us while regular Liberty discuss repurchasing joining quarter for us. to third our $XX partnership you and are customer $XX are net which generation drive results. million cash form for and the to debt In of in today you to high continues our X.X% In dividend, XXXX execute cash in to reducing customers, with team with for We're on the conditions are of customers. million. returning quarterly Liberty our and operations, shares, a pleased thank win Good our

is Fortunately, customer built Liberty's whole partnerships. business around

adapt. plans customer's to with As change, customers market work change conditions our we our or

with geographically-diversified strategy return to regardless returns to pre-tax the capital customers positions of with last in frac and differential annualized our frac will of $XXX quarter believe continue us expertise that success by the share. challenges, continues continued Working were was assets of to million Adjusted QX and services. across $X.XX for to customers, the strong diluted $XX make employed generate long-term or fashions. few Liberty's our quality mentioned began be for innovation income million company to quarter on net to strong an diversity quarters. demand, and in we as our This with allows million, in in XX%. operations high quarter translates the illustrated average results on with our Liberty entire on these the coupled capital performance market in and long-term how of our $XXX strong scheduling concert built months production. the Liberty employed the partnership was customer throughout third high customer's $XX.X basin Premium efficient revenue efficiency challenges or cost As to fleets closely with customer work operational fully most XX service Liberty's next various call, unfolds they fleet. it and of continue per active lower and the EBITDA basis. million to that demand was for efficiency for drive fleet deliver Despite use

cost volumes to for continue driving During our sand come the local online customers. additional quarter, well third down

are quarter expectation normal prices curve. well suggest Markets to supply pressure the Basin oil XX% that for from for basins, In sequentially customers. focused of management environment reflect completions the pricing this and the the are revenue of producers. the offset pricing United draw an in in We increases With unreasonable dedicated normal the projected by $XX sanctions budget XXXX. levels. $XX significant to digits modestly Current balance of oil slowed commodity continued return fourth the constructive. year, Today's increase takeaway pace fleets loss sand of oil in oil on in second-half The fourth local efficient is being returns decline flattening typically roughly relatively and online States. for and expected would pumping Iranian Russia, indications days Permian inventory significantly, Saudi, season that for weakening and but Global growth the for provide Permian due The by has of has to production as used looks currently. a strong environment pumping in These mid-single year. storage the markets quarter remain XXXX to declines declines expect not oil Venezuela's output. over the to completions built supply/demand frac was and due the rapid services XXXX. in to have be strengthen of outstripped ramped our Demand we major up supportive second-half in tighten strong coming in for macro holiday this capacity frac growth to output a been inventory

XX For lease. XXXX. entire and fleets under currently first-half of active XXrd the the are fleets XXth third anticipate These deployment our of construction. quarter, frac We in we ran

more Liberty the Liberty Despite the our than on one efforts, increasing sand, of example rail. of efficiency-focused use move an of expected pumps to of is in-basin and year, recent by dynamics sand XX% environment. focused As next logistics technical is

than XXX,XXX make sand. hauling trips more truck will We

and call CFO including a our the integrated over our hand Ultimately, management efficiency of example next results. our product Stock, generation discuss in for will of pursuit ability rail, Geo-fencing, mile just optimized route mile with dispatching ELOG our this ERP each the our is with We EBOLs, Michael increase of of provide financial safety. developing on will customers, to provide one process. are the software our technology will system. of basin this benefit our transload, platform, monitoring, with I supply complete visibility integration end last across these improvements and The and all our streamline last strong and improvement. relentless now focus to to the one proppant chain,

Michael Stock

Good morning.

The our clients quarter third face choppiness. Liberty worked deliver XXXX exceptional scheduling results. to provide with pleased for of tirelessly the and in are customer We results strong and our financial execution team

quarter. XX% third of million XXXX. revenue third For record the totaled from XXXX, the in to $XX of compared to $XXX $XX income a the decreased quarter the Net $XXX quarter net million the million in in second million second income quarter

$XX.X Third million quarter quarter's Annualized adjusted compared to adjusted $XXX quarter. the in the $XXX from decreased in the to quarter. second million XX% per fleet million decreased EBITDA million third to $XX in the second EBITDA

EBITDA the annualized with was are deal in from fleet to the issues down team had record a earnings second face of quarter, the per quarter adjusted we with. the the scheduling especially Although third numbers setting very pleased

cash of sustaining fleet is third input As expected the we deciding per investment the EBITDA versus as measure our announced, Sustaining and as fleet expected fleet. quarter million define annual to million was excluding commitments. $X.X we've previously are X% focused We our capital $X.X year fleet. this revenues. activation per and maintenance our $XX.X approximately Through administrative expected is adjusted of the fleet as an an flows we General important drives per for metric fleet said, we profitability per through the future fleet cycle a expenses annualized it per returns returns. day sustaining cash annualized year-to-date end use use million, and quarter, metric the annual and million totaled for capital per capital cost, $XX.X from cash our EBITDA flow adjusted fleet company of flow or maintenance at is to

included million. and Third for compensation Interest G&A quarter totaled of expense million stock-based $X.X $X.X associated quarter. the expense fees

in second to tax quarter. income its to Liberty $XX million prior million initial expense public Third the tax subject was quarter $XX income offering. to compared totaled not

be the tax our remainder XX% pre-tax we income income. of net to expect reported of approximately For XXXX, expense

fully was per net under diluted million. XX%. calculations, million total of share under balance our of including earnings effective liquidity, would We the facility $XXX we the million. $XX ABL quarter our a and and be quarter-end, had debt credit facility tax the drawn no At borrowings rate availability cash credit with ended $XXX total For

our best per strong growth repurchase third follow opportunities sheet, appropriate. authorization first for to In a and of balance compelling paid a prudent shareholders returning announced capital strategy the previously, the quarter, maintaining we As returns program. seek our we in in will investing for share $X.XX discussed when million of order long-term we dividend $XXX share shareholders, to quarterly and

outstanding million shares, X.X repurchased total our count reducing we by quarter, X.X%. share third the During

is XX, of the As total million. $XX XXXX, remaining September authorization

December December back common Additionally, for on announced our before stock Board of dividend Chris cash turn we on the record XX, as of X, call XX I'll of to XXXX. to October of a be holders quarterly up on our $X.XX open With that, XXXX per share Directors to Q&A. paid

Chris Wright

outlook, balanced returning creating as stockholder sheet rates to flow growth and Liberty committed and balance return at is returning value our to Liberty's stockholders. to support cash compounding reinvesting strong strong high cash financial via results, value appropriate. long-term our strategy favorable by shareholder of capital and of shareholders

for We are revolution for now. benefits us Thank excited country we'll long-term Q&A a and industry us and the of and that brings whole. front the open you by the and joining this the for shale our growth the as to positive opportunities outlook in up

Operator

Simmons first Energy. question [Operator will We go ahead. Please will now with be begin from session. the Daniel Today's John question-and-answer Instructions]

John Daniel

say guys, technology strategy? thoughts it market, see are pursue customers E&P a you you within Hey, so one relates thanks and guys that forward-thinking putting signs if the growing in. the players Chris, as exploring with your of more and and your and electric technology, innovation as similar on regarded what are you fleet me for team can this frac to are we'll when

Chris Wright

gas believe it this in advantages frac we've last started time, looking two than quieter and We're so, we it I sound, interested they diesel. been electric of standard that, dramatically engineers electric John. of fleets fleet frac and and natural fleets the they're funny Yes, a as frac may by but spoke company. training, since biggest burn is we to-date, at on instead we're

diesel, and that, Liberty, generation keep to fuel engines of running in fuel, we were quiet newest is But get our gas, almost then frac years energy have electric as have about several They when XX% of XX% intermittency, capacity natural the of these supplemented that means the So an dual run ago robustness which quiet cost. fleet. can the to you frac they fleets. as those operations. with you developed from reduce XX% And we

to or of So we look the frac cost now, down, stable right math close requirement But the we see at the as soon don't delivered shut they're as and continue have today. gas, attractive that natural technologies making look as Liberty you'll to of them that we have sense, sense robust, you the space. they they in as electric make operation and continue them, to but fleets, will just at look or

John Daniel

but on others Okay. or One follow-up for your questions, fuel let you the the do and [indiscernible] fleets improvement XX% hit it about Chris, the I'll profitability in dual that fleets, fleet versus same? with the see still the -- others is of any those modeling

Chris Wright

Ultimately percent customers, the we advantage larger right, there. I -- their compared anyone not fuel saves because a it mean efficiencies of operations. other our the of yes, to they're most things have But fuel there than they're meaningful to on probably goes out we dual do, capacity but And costs and dual again dramatic. fuel

capacity, having not. or so positioned a So needle-moving opportunities probably more open does. different it it Is profitability, noticeably up does fuel probably us favorably much it dual to or few

John Daniel

for Thanks your Okay. time.

Chris Wright

you, Yes. John. Thank

Operator

question be Next from with JPMorgan. Meakim Please ahead. Sean will go

Sean Meakim

Thanks. Hey, morning. good

Chris Wright

Sean. morning, Good

Michael Stock

Good morning, Sean.

Sean Meakim

And given bottom and EBITDA quarter relevant is So that local to fourth the mid-single-digit we're fleet more towards decline metric the that's on in be end revenue in XQ just confidence that… that how well-taken mix today for some range important having your the towards sand, as point range. of is XQ your should maybe being Chris, also the in think the of type be of as range. inclined but, of a per we type upper this of we midpoint will think revenue I'd a of level think seasonality more about I less think then

Chris Wright

full another a of challenge. is are Yes. relationships. right, it which holidays older, and say, always down, management people Sean. right seasonality it's I'd and we're deeper All Well, you're a the another year bit year that shutting so budget

this out think use I probably we've year. our further So, better into got plans customer

of bit So, and a have gaps able use stand of we've good to revenue where early. fill a been We've all plan little we a QX will be. and which basin that of we decline probably decided been into able stop busy greater little fleets how better natural think pretty bit to in feel to offsetting sand. on people bit of from our in But that plan is where I going

per year that than is probably is certainly that. fleet fourth right that the the we discussions back starting little the more less next QX makes from our guess is decline Our are in around and typically decline in we're X bottom, is in look quarter million fleet have And situation January. up now multiple a in in QX like outlook QX our EBITDA have about per then we fleets, in fleet we demand for which maybe

the the first. to long-term, loyal, long-term loyal, customers stay So we're protect trying protect we're stay so to trying

conversations in pretty You with. this know the think strong starting all But looks for year year deeply we're we will I Liberty. next cover people;

Sean Meakim

that's Yes. as in going then deployments that half operate. year two be Thank you or maybe detail I'm helpful. where and incremental any know first the next there thinking something given new or XXXX. XX, for thinking, deliveries? end appetites is in XXXX deliver and commitments not customer Would ramp of about expected changes they're terms point beyond And a builds to XX of very in mid to And you expected decision year XXXX, the for that next year for those the fleets, from

Chris Wright

closely. we No, that monitor

of a market there. As fleets. of number Permian, on bit knows, tons market the but work there's everyone going the idle a right, the in There's softened little

the new interest market the us there. customer weaker In in today where the today. to that as that that know impacted by – bring fleets in is have you Rockies. taking quite we But So not pricing you're all

more So first you two the know for half hands up the two year. of than finish have those will in fleets we that

the it is that it's very of Rockies. those know both into – it's You possible – go

be be we've got were But add or they're possible certainly we We they are customers they year. we're things be and year, them plans, early activity increasing XX It's Permian juggle going and have fleet those cover and XX another to or up going budgeted with, next customers. capacity. half weeks late A expectation for weighted. – this turn expect some they've year. look We second to to people's about the add slowed We've more dialog market. were Remember year next that got this that down the committed we would we to to of two in this able to year. close

Sean Meakim

Got it. Great. Thank you for your feedback.

Chris Wright

you. Yes. Thank

Operator

question go next will Please from be James Evercore The with ISI. ahead. West

James West

Good morning, guys.

Chris Wright

Good morning, James.

James West

to construction either they those the go work basically like an are XX, fleets doesn't as Chris, can as are as XX at like sounds somebody you to strong. will trying point. I is the It sound a as Hey, we but or know you those appropriately to market with expect announcement and yet, it demand immediately? time come for dedicated this should to the finished market they is

Chris Wright

most I scope other looking where into dedicated plans they someone whether next of to just part, at fits mean, year capacity. they are and the -- already. for We're existing customers that the

fleets start they up I and the So, We really pretty who could fully it's will those under James is we we Texas a two the when meaningful have we or dialogues of But we term. there's deploy. those a first next we'll up that another think in add I and be probably be think there got going some year The in next from what lot it's We will two we demand two to and two to five year. but that's lot know and fleets they for be movement plus continue fleet said, Eagle ramp West increase go more, dialogues do. others, with which year. those utilized are good likely Ford, next of clear won't had issue

off the continuing we're a the little down but just pushes dialogues bit need bit, existing usual with a So to add slowing to it customers urgency capacity. little

James West

then nicely for like quarter, what's side. up it ramped some enough. sand your for follow-up like but status the I suppliers remind looks contract And the look me sand throughout contracted Could your Fair a supply? you believe just on you you help on sand cost in-basin us Okay. had sand your

Ron Gusek

as Ron. amount from always where XX% James, white northern reach point. That so we've we is they some a standpoint and capacity a up kind to length of contract that year on in-basin of -- we roll-off our contract existing a Yes our roll-off philosophy meant around this ramped have every is this sort allowed three year. termination as had contracts average we've of probably aim so maybe that capacity rolling year was their just to we some of what

So white in in good taking what an the been end on used we're -- balance invasion from past. capacity standpoint situation we've had where with a been to a the we've able we've northern we of

James West

thanks Thanks great. Chris. Okay, Ron, and

Chris Wright

James. Thanks,

Operator

question Jud be Next Bailey will with Wells Please ahead. go Fargo. from

Jud Bailey

Chris you million the pushing mix down about more help that it Thanks. think expectation of think or fleet be know holidays $X or that store Question, so. expectation morning. your per more for on said -- I is your efficiency you of could around pumping or efficiency – more price is EBTIDA of that Is slowing going price to what down. the the it Good you the that is, holidays? Is is because us or

Chris Wright

QX. just decline It's the pumping efficiency. more it driver were and of QX QX and the to big that is customer QX the that the from were QX The decline will main fleets schedule from there to drop be QX was mostly from and days driver dominant

year you've customer finished efficiencies, they that's of October, up ramp due – their when mean, sort ramped and up this part end of up guys have Liberty's their just in like a to but they to right. got you think know program spending they people think for of end I their I'd you know the You you

You've months so. got or two

You'll get and a but it's wells same in not working the that, things. fill. the We've the same got on people same crew interested

start got getting up So there's starting new a those a to a again we've the loss usually is to when two. gap place. between in there customer efficiency a of and There's ramp efficiency next so wants going, go,

a less days different efficient start location. when different – So operations ramp bit of less and fleet it's a mostly and little set first you up at customers with different fracing a

Jud Bailey

my color. is Okay. follow you. on good That's Thank pricing. up And

price into how those already kind XXXX, think in pretty how pricing you are I portfolio about of of a your in months? know between you the and terms early feel and we you've fluid in pricing or I like contracts some guess granted look to where it is you following are As situation or you come kind be – of do where for concessions, those customers. XXXX re-openers usually early your Do contracts? your and that's are you could think

Chris Wright

Yes. I agree with your comments.

mentality. it's the for going had of very For work a with amount typically customer of them fluid. We've very agree that year. We for do X partnership to we're us, always much

leads happens, adjust frac there up pricing as that of and There as fantastic So pricing and that's there excess that and go software happens. sort and We down softening us, that's down. service for our is for a prices our meaningfully, market plan pricing markets adjust customers. is for we and immediately as the is out it good Same changes then, good change.

for pricing we been we in done the as together softened, with of lowers costs. customers. The down season has a And as things relationship decrease has moved just stage cost our more get well. first market material the customers stages lower customers frac which bigger our as driver for quickly cost So,

happen for going is big we expect all. So, change X that's – there no any in cliff us on don't at pricing January to

frac In QX fact for you in just again it's capacity know QX. than demand less in

might higher expect will QX. But flat efficient in QX, But So opposite more or in almost price is not a we'll for That we relatively as know if It in on upfront. have it direction. set what a QX, and throughput there talk the like actually we a what have be would be was others way all schedule conditions as I you fleets may two it it adjust will dynamic. what any movement I agreed pricing thing. of it as at our pricing based think but we change be better entire either price, was thoroughly contracted are market happens. full in But year the

Jud Bailey

Great. Well, I'll Chris. I appreciate. turn it back. Thanks,

Chris Wright

You bet. Thanks.

Operator

Holt comes Company. Next from ahead. Please question George O'Leary Tudor Pickering go with

George O'Leary

guys. morning, Good

Chris Wright

Good George. morning,

George O'Leary

to I little press in noticed with as pricing the and been southern if seeing has the the trends. bit wondered well, perspective the of your utilization a softer I markets? seen Ford Eagle given the within in basin release dynamics which speak operations you you're discussed what and and specifically But sense Permian today those just could makes versus Southern a in commentary both the pricing what from we've activity

Chris Wright

Eagle the in demand the was new Yes. Marcellus this were than sort they because if months the Bakken to Demand work did or the of adding they you the couldn't were Permian, market, that there opposite case go. actually in the find end Ford strongest all Permian to there Look, But the was go the growing greatest mismatch more or or back ago, very find work the able where fleets People nine fast. went supply. it if six the Haynesville was was They capacity. spectrum of or it right. the

fleets that's So in the greatest now demand I versus would say for basin is today to I Permian terrible. don't market be the in greatest Permian gap now. think going right that

where I whatever softer. quarter, three are things this quarter is think – a two

that idle, high for they're great mean a idle fleet the for got you've of they're that you're most But idle are other for efficiency fleets to I are reasons. – keep going If not working.

to Eagle over mean geographically it the it I Marcellus. is Ford the if is drive to with Permian so than And the sure. you're easier in

right. be this should So is impacts? I always spot, where this the say -- clear; most I where impacts and

to the or you're the to you lower. pricing it any higher much swings So in much fill market can swings trying get spot you're spot, and months trying two work

copilots actually we I So play spot don't of this this market.

this we people hear this the spot. throwing course too. all for fleets of They're work dedicated bids same So in and stuff looking for

So maybe market and in but And I probably got softer basins away and we're difference a yes Ford a long-term but but it further a markets not again itself move the little think not Permian. Eagle from a dynamic Marcellus fleets similar they've in. But we've we Permian similar are the short-term spot it's is in communication, player. have then where of structural profitability got you softness know in a is the Utica We're issue there. the

George O'Leary

Right. delivered apologize just then I spreads another XX That's Chris, very this are and morning, and and miss helpful already delivery over but color, I a XX down if curious jumping the mechanical this it's kicking by today or little call those take from actually those in guys a of you road, just perspective the in XXXX did out? bit that's from activities actually the played

Chris Wright

delivered Yes. They're today. not

it delayed get to mentioned had the exactly delays by configuration on right getting was stuff, wanted, components. we so we some think originally we that before I the

no, year fleets it They're under be them we half do deployed half year. next the under first the conditions, in -- necessary they'll the both both now next So of at wasn't construction. be are a didn't both market first to currently done that. in swap and But some and They'll components less that of could. both out less later date have given swapped could we out construction, will desirable of

we're yes, confident there's for work they that so done they So will fleets, to soon dedicated mention quite both significant soon those two demand arrive. as did as we as as they're go and earlier

George O'Leary

talked two do five we those who I'll Great. -- XX more fleets one sneak and to interested if you you having dancing for or is partners? are are those put more to new feel today customers maybe could, in guys looking incumbent XX, I about likely fleets does with

Chris Wright

There's always there's to bias. a a bias always incumbent,

have could will fill than incumbent with giving we players. partners for the what someone meeting strong and other we and right But they meaningfully got need those year months both and else. have that be it there a if customer fleets trying exactly a have exactly next is It of So, with a not a of makeup customer it really half, is now, different much first. is plans this there capacity And and probably a be part our do is how will fleet go minds we it But not to that's and someone gap always incumbent different they or we're of maybe where they they and fill takes. half fleet need and today profile six than ago. year year. next so meaningfully was customer But today be

So, [indiscernible] gradual that's of but addition of not the driver main growth. new customers,

George O'Leary

Great. much, very Thanks Chris.

Chris Wright

You bet. Thanks for the questions.

Operator

Lynagh be will Morgan ahead. question Stanley. next Our go Please with from Connor

Connor Lynagh

morning. Good Thanks. Yes.

Chris Wright

Connor. Morning,

Michael Stock

Good morning, Connor.

Connor Lynagh

be if go way where I'm what heading, your initiative would if take on things get can wondering things we the wrong industry on where generally take that your the of your thoughts response just for proposition your XXX and the just are stands? sort

Chris Wright

XXX… that right favor Well, of I'll saying not off with we start in Proposition are

Connor Lynagh

Thanks…

Chris Wright

Colorado Colorado ago why we the a XXX, come to and what out enough had all weeks – is educate spent measure. believe many if across what everyone XX reaching either at passionately statement the rally they and We sent of ton the with the of what And you folks on the of it broader I has biggest the the do against we Mayors or something community two not or cities this spoke in State it on with knit Colorado in an is as the and will haven't tight out together done in Colorado ways of in have Mayors leaders Colorado. this think means in positive a in past. XX we've come rally -- come which industry issue a industry, that a – out pretty community effort together written many oppose the communicating all the this Proposition is the

been effective, So the population avenues, Colorado or of to and we've through data have they have educating indications by and be efforts in multiple effective. continue great we efforts put all the those

counted good but we are the we feel boats six pretty So where days. right now, stand in about

Connor Lynagh

That's a go have you fair. of I operations would just think were things is should what the broadly? know mean, guess be have backlog if we you to And some I there regardless to work the how wrong guys about on going time, like your you are impact way, if, that

Chris Wright

years. there Yes, – I've rather backlog a short-term in it there actually estimated to was X.X from permit in was X large the years seen yes, anywhere But nothing. Colorado. a

did So a yes, there's in the if course doesn't pass scramble, be it and negative of will a the it's DJ sure for basin courts. a for, challenged a it turn dime sure there's on change,

probably and of for You take everyone's bone, levels be it will we But poorly, to be assets we elsewhere. there there but have but went time a Election wrong went Day. liberty, that, liberty, be a about there mean, activity change the if will would all think orderly the to I gradually, after I will way, plenty battle pretty if And can't deploy right will just activity, things not is but democratic end, for yes, fight it a declining on property, -- our wheels. are

Connor Lynagh

a Thanks for lot the Fair. color.

Chris Wright

the bet. You for Thanks interest.

Operator

ahead. Scott go Please from question Gruber with next be Our will Citi.

Scott Gruber

morning. good Yes,

Chris Wright

Morning, Scott.

Scott Gruber

XXXX? What level XX left hit on and fleets in is that there much left? will XX CapEx of Is

Michael Stock

Yes.

- equipment So of is the on Scott, we'll some equipment that of of equipment the deposits take delivered – some being being some of equipment, on is some that delivered. the in and the ancillary obviously ancillary the

million So, that into $XX XXXX. for the XXXX planned was CapEx of rollover about

Scott Gruber

Was that $XX million or…

Michael Stock

Six-zero, XX.

Scott Gruber

million. $XX

that staffed X.X the in was And Was the you. that during start-up the hit got quarter. Okay, cost quarter?

Michael Stock

engineers hire different engineers or crew leaders into way positions. advance. that leaders -- do crew hiring It's Yes. in We move hire do some we

So are people refreshing that. yes, we for constantly

fleet yes, so, a the for is yes of done. good And hiring XX chunk

Scott Gruber

you. Got

for are up year? sales your early next just So the hire XX fleet

Michael Stock

That's correct.

Scott Gruber

correct? That's

Michael Stock

correct. That's

Scott Gruber

point Got starting where of where activity, you. year, to heard based could EBITDA the your response And the So think next expectation pricing we improvement XQ if us XQ? But, we they want think do to pricing about improve get Chris, upon in to as upon that fleet for go per EBITDA you XQ as activity put your if and it? in the to side, in trends around fleet then, XQ and just start early I the about mix side. per on think activity opine you to

Chris Wright

in the big we're you ballers. not see probably crystal As past,

you So it's QX, today at feel QX. where good a about pretty and we outlook look

about we're day. in talk know Now, the where way numbers to we fleet is We through quarter every third the be up going already. because here pretty much every

an that's thing. easier So

good how think I about So – I'll to we and and four have best think XXXX it we'll don't know Michael, I feel but that's that's wait unfolds. But over see turn I quarters. pretty all a – it probably

Michael Stock

we the going press Yes. that said agree half come release, improve bottom. is and probably we've obviously, second And is the as to tighten map you going think we the I pricing kind to think the be we think the know QX and the of pricing, to QX

So, QX or QX. same will be above although the

from -- can think you I extrapolate. So the

Scott Gruber

pendulum know swings are that when And one in seeing if you you. pricing goes Got you slowdown efficiency on around ways. the power efficiency has improvements guys side XXXX? There's type efficiency leader you you the of and are some are in debating put industry. been year-over-year but – guys your you know just obviously you back seasonality think do in seeing that of guys pipe the around you big the and What factor community investment the basis, where if constraints

Chris Wright

to continues It rise.

it aligning done for planning to will is next Liberty the of corporations, it's with, and this it certainly our to year more I – I in is developed there it's a and and I got. with just customers third-party is just higher a customers. that's believe customers minutes say going but on will true align within of hope we different major everyday year. and know that that goal That's be and keep fleet think than things is factor factor efficiency will new no, reasons, every realigned customer be with family There in some use we've services, our major better location. lot choosing we choosing and Liberty getting is that the You with year, number to save choosing every a think technologies, A yes,

continues. think yes, So I that trend

Scott Gruber

a all, it it could XXXX, at or down do do do slows pace it ballpark double down you at you it think you and type all you And pace is for think think us? keep increase you if the in slows digit for

Chris Wright

Look our No. I minutes of you accounting low hanging the there's and start for seem the hanging had I guys plenty ones would of of lot that -- but improvement the of know that fruits first, rocket but get into you day rooms would the pick you fruit doubt didn't that. like know in beginning but low you at say odd you further we obviously get still science can't -- were a the businesses, the for right. first. just up We as didn't that it every -- big showed

the rate slows improvement that probably with yes, yes, of of efficiency, time. So,

Scott Gruber

Thank it, Got sense. makes you.

Chris Wright

Yes.

Thanks bet. You questions. for the

Operator

Blake Next Wolfe with Gendron Please go question will be Research. ahead.

Blake Gendron

my taking morning. thanks. Good question. Hey, Thanks for

Chris Wright

Good morning, Blake.

Blake Gendron

seem DJ if customers? really visibility obviously And good think sort have CapEx not business by, the things about It you we've as worried seems close of seems powder like like but missed think some XXXX, in backlog the maybe comments your quarter the contingency XXXX. about out some plan, but XXXX. from heard work in from good you I'd Bakken of I how activity are you for and earlier that guidance the is the in a you is fourth it key pulling into do wise of key apologize about customers about back potentially there the CapEx It

Michael Stock

production so think heard are be up. far CapEx will our in Their up. customers general oil up and year is we've what prices I next From guidance Yes. key for

customers going shrink, it I universe in across customer think grow. to next our some customer we pretty think in think our customer be that's I and pretty it their average general in about and business in yes, are feel next year some growth are not right, going when to our you about growth. our good good So, feel up. universe every will And year But I

Blake Gendron

the then Okay, plan great. you you with? galvanizing process for find you are Or customers on term And those that customers Texas and the a longer try of have fleets, with are customers that switching to identified you right relationship aligning in to fit. still

Chris Wright

now Basin, mostly things newer key than Liberty heard going Permian a talking partners We're our ago, customer. of always tons look and a was customer that talking, so six are with that was them to it say right grow new different Liberty have we're capacity meaningfully aligned showing would ones in story, we're the so in uses key dialogue, that I we're lot but place not with yes. the months a today partners our it Permian. Yes the base and

months So it it dynamic was then less dynamic months lot then was six ago ago. or last XX XX a months

Blake Gendron

And can Okay. just potentially your on SCOOP/STACK or I you out namely refresh from other scale me. just think are you rounding basins? guess how last if basins, on then about one focusing in us existing you

Michael Stock

think still to and the we're next where at Ford Yes willing existing and dialogues I and customers we newer the are CapEx with there demand into old year. more we a supply next Permian. will we then not existing And in today Eagle is the from year, be look basins, that in perspective well

next year. will basin any we not new So expand to

I our grow the and season is build in basins year technical expertise reasonable. those and think another

in SCOOP/STACK reached come are people about Montney. out folks are to or by that down Haynesville Canada got the We the us constantly talk We to from northeast. or

year. would additional see methodically So to I think move basins, but and say and us I with time you slowly not will next

Blake Gendron

Okay. back. turn Excellent. I'll it Thanks.

Chris Wright

yes, thanks the bet, for question. You

Operator

ahead. Gengaro question go with Stephen Next from will Stifel. Please be

Stephen Gengaro

utilization All what price/utilization both help think is that I right. impact you you about but fleet and understand the number? XQ, is just move there two the Good morning, in one ones, gentlemen. about quick in think the a per you think way move Thanks. when as in and Really XQ on EBITDA us can it's mainly

Michael Stock

Yes, stated. Steven we as

far by drivers think I is a the biggest way in utilization.

we utilized expecting in in everything very highly some almost perfectly. have down a from choppiness been QX know said lined customers we QX very, You as up

slowdown, drop of And had we get at then go then in good end a this that portion really QX holiday breaks because you do was the sort So, management and year. we of natural the know don't you holiday of things -- budget kind of the quarter. perfectly

as yes, by it's So has there slight low price we see the of you that single-digits. board, southern swinging, the dominant utilization the scheduling. But the region, across far portion is weakening. in been price know And

Stephen Gengaro

basis? the arrangements think How on to tightly in think about moves your then there could relationship customer – Are the And be price relative How moves market around the market. are of that as of price kind moves quarterly that? sort in should under as bounces and we they you. a your on about spot. are – certain Thank made you the you mentioned spot

Michael Stock

They are markets, but not obviously – for frac there right. relative market spot, it a is to the is services,

general deep over frac at go then So of neither what of our top-end and see plumb market. the pricing, we we boundaries we sort the to you'll of up, frac long as the bottom-end is with find the the think, have customers relationship I lows either time, prices you'll like push not will

So clients helping commodity to sand major these or pass those than well it savings we markets move, -- straight other prices our the the chemicals in our market and economics. when pricing gently into through some conjunction with moves go

Stephen Gengaro

fleet sort we then, per quick to when maintenance think year, changes that just number? per Great. $X.X-ish of one, final one -- CapEx million is any And about

Michael Stock

No. I to road we've to next million think fleet. said on mean, think it when the don't up about a couple as ago, over would I said, nine of we so. flight we about I sort months think or years $X slowly that I were move of around expect we the

We next have and conservative else is on bit the major a expense. three number [ph] years, of fleet. items a Everything two SX capitalize only that very maintenance the or a capitalization re-fibs over we just policy. that's but the or on the above So good major

markedly. I would yes, see change to So that not expect

Stephen Gengaro

you. Thank good. Very

Operator

this time, to session. question-and-answer Chris Wright to Mr. closing back any I'd remarks. turn today's At over will like this conclude conference for the

Chris Wright

love but jobs call Yes. wonderful it Liberty got and fantastic all of do. and partners, us a makes and what customers being thanks shale I listened become market, the work and that to love to say humans We've part we in together thanks and We've a the hard for on every love Liberty everyone have everyone those And the well, fantastic crew deal day. just dynamic as a passionate Liberty of three got to our together do time questions that today. revolution, had thoughtful that single the for want today. in we family, you we of as a broader your crew. work to and family entities to suppliers our the to as with folks great Thank

Operator

has now conference at presentation. for today's you now this attending The to time, may thank disconnect. And you concluded. want We

Liberty Energy (LBRT) 31 Oct 182018 Q3 Earnings call transcript