LBRT - Earnings call transcript Q4 2018

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Operator

Good morning, and welcome to the Liberty Oilfield Services Fourth Quarter and Full Year 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 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. 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

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

Chris Wright

morning Good you us. joining for and everyone, thank

you Liberty, revolution. forward of efficiency win discuss people a bringing XXXX customers, on with the goal to together, day. welcome us full partnership culture for and XXXX to pleased investors and The Liberty shale year people are to best was which Liberty’s our and to was the quarter built created fourth new we great company, have and technology and year and our this support Liberty In we idea family. today a our unique customers, innovations innovations high at that continues public the on technology first frac our drive to singular on company results. driving the every in the team with for bring focus building Liberty focus Liberty a operations, a our customers. We’re win with as

$X.XX XX% $XXX billion, report to and growth metrics up taxes revenue net significant to XX% to EBITDA in financial income results. $XXX are including to We of of million. strong key all XX% before pleased XXXX million We had adjusted

enabled growth of invest of outstanding shareholders in strong generation of distributions return shares. repurchase post the our in XXXX million in Our IPO cash cash total $XX us to and the X% form quarterly of to dividends, and

price the budget due XX% part All reducing quarter in of this was XXXX, return defer decisions pre-tax $X our Liberty net X.X% form and execute quarterly returns year-end. in on investing to and management on The post net future. us in of XX and capital, million in achieved cash to free on IPO success, best reducing the at utilization million. relentless quarter from was made debt Strong while the our our a will for for growth demonstrated year of to focus a we partnerships this $X balance returning and generating was strong service million to on into XXXX, culture future, customers, total technology fourth maintaining to generation continue on of and returning and of completions to commodity capital perspective. to enabled fourth long a repurchasing minute strong returns superior our environment of the last in in debt combination the fleet of built superior suppliers, while while our outstanding with and and the only and to delivering Liberty rapid the our challenging significant decisions focus close with to the cash XXXX this a drop shares, employed a term shareholders. flow in of capital November December. shareholders our cash number invested cash cash employees, customers to a for shareholders. by flow A a quarter In in dividend sheet of by fourth brought provide

work the to believe lead the fourth sustainable that we a move environment was disruptive even less services our this ultimately and to quarter factor commodity focus industry calendar, towards activity by price. on While as positive a for we levels perhaps operators could a production steadier capital is ultimately volatile discipline

average these was strong With unfolds and or start fleet of project coupled fully the active customer a income capital and revenue regardless XXXX. service an returns $XX annualized basis. on provided quarter utilization million the the our with $XX Premium deferrals challenges, million for of basin quality XXXX. million share. fourth was fourth provides employed, or million diversity EBITDA quarter generating the was diluted per net Adjusted for $XX $XXX The $X.XX per customer Liberty market solid to in how on at continue opportunity backdrop the company quarter frac

sand in of volume pumped In fact, January, the highest we in monthly the history. company’s

customers. of a not percentage We to clear completions end in expected EBITDA to due range the and timing end XXXX decline we our of strong, to frac Due we is have first our increased in for of adjusted the clearer XXXX, price our by year of digit partnerships the have by our price are as point. revenue of flat, quarter. with expect approximately to potential improvement the much currently offset XXXX But are picture remain and pricing quarter fleets decreases. forged sequential budgets at the projecting at this finalizing be demand to full single the the customers utilization commodity the growth rapid first Utilization is is still

in and free our technology advantage. returns strong in competitive focused growing on XXXX are and We on flow capital cash investing while generating

drive we We components articulating focus required, quite at fire quick line the a fleets frac hydraulic is safe quick, key continue reduced. a for our suppression to efficiency. a simplified and for out deploying to Through engineering treating system be we with every and between those with wellhead. one with with Liberty in recently on zipper new eliminates transitions, flow feature, frac exposure on and to the the a of technology this expect finished system front, [Indiscernible] replacing potential into The pad. improve multi-well an traditional reduces connect frac innovative new safety pumps partnership integrated of wellheads significantly for we XXXX. amount manifold single the Liberty a our be the our need flow rolled iron fire all suppression pumps to safety allows onboard opportunities personnel will and XXXX, is equipped that When the of On suppliers, pump. line and enhance end by new,

a includes million XX million to from the XXXX. of facilities. budget in expenditures fleets capital XXX capital, decrease completion improvements expect fleet The XX% We XX, XXXX be of technology, the efficiency and and deferred XX for for and million of maintenance about XX million, approximately XX

shareholders rates long of results, favorable to a of While early ‘XX customer appropriate. Liberty taking long of of stockholders. XXXX, XXXX the support without final reinvesting to cash for at We returning fleets we Liberty’s term are high demand will or and market strategic delivery both end in to strong strategy not deployed be correct outlook, flow committed by and is our awaiting strong stockholder as in deployment. return ‘XX and and growth value the cash term compounding with equipment one they balance balance and capital fleets returning combination financial sheet balanced may dynamics.

to the long and now Stock, the brings outlook our shale our the Michael by us, the excited are opportunities and in over front benefits of positive term to for the whole. and call industry, our country as financial hand will that to We discuss a revolution, this results. CFO the I

Michael Stock

Good morning.

performance in financial publicly first proud traded We’re our as a Liberty’s exceptionally company. of year

For XXXX to share. per $XXX increased XXXX. full across fully XX% $XXX Full after million from per full $X.XX in billion Annualized $XX.X increase XXXX. average $XXX revenue was frac XX% adjusted in fleets, fleets. in year to or compared an in Net to active totaled million of increased the by income This million diluted million $XX.X an the EBITDA the year driven $X.XX full the EBITDA XX% increased adjusted $X.XX in fleet efficiency from year billion million year increase XXXX. to in earnings

market a that fleet We are team our both increases, a for win achieved return on growth. pre-tax year-over-year lower with of costs, [Indiscernible] Liberty. The pleased the completion can efficiency is during period capital XXXX speed with were is achieve which distinct And capacity their allocating and increase [Indiscernible] year to XX%. and high product We capital throughput The we customers operations efficiency full significant difficulty] advantage. competitive [Technical

a people bind sheet. strong marrying and technology so together focus. that culture singular the them this by If We and choose balance and a achieve with operational a unique excellence best you did

with partnership barrel day, that plan. a customers. are them cost to efficiency on results the underline completions surface. is to improve effectiveness financial deliver focused the work We and our for We this in of The what of oil XXXX to believe our every important to

XXXX in shares outstanding invest generation cash company. our in public first to cash of of strong of enabled dividends, $XX the X% return in our distributions as quarterly form to total the Our and of year shareholders million a in us repurchase growth,

net profitable this of reducing million our on All growth. while at was drawing achieved, debt and significant delivering year-end [ph] $X

schedule have the challenging we announce mentioned, cash quarter minute from visibility balancing, increase due able changes, far therefore companies caused on better to a into scheduling to flow project Chris whitespace perspective. significant deferrals, and these fourth was these to a and the As more gaps. customer Typically, budgets Last managing would in be fill calendar.

full to level gain completion top through to earnings as into through more we the a season plans. customers clarity year and lot our are customer get We asset line flowed budgets plans expect completion

Fourth Interest to million quarter. our Liberty $XX quarter. $XX the the quarter, adjusted worked with income to the We of provide $XX unusual choppiness, the in third and pleased the $XXX based quarter credit availability $X $X.X are expense million XXXX decreased quarter. EBITDA the year million. facility revenue for X% $XX under compared scheduling quarter million tirelessly and in our fourth quarter million totaled million compared in quarter the million. $XX from and no the in borrowings the challenging ended roughly to customer Net the net total $XXX of totaled a under quarter equal very ABL drawn in had exceptional clients. At of during XX% cash debt fourth The million of third team credit fourth we balance including $XXX quarter. million. per face execution team of fourth facility year liquidity in fourth third million We end, tax quarter with EBITDA of to expense quarter $XXX from General quarter. performance a million a the $XXX and million total our amount totaled compared of the expenses in million fees administrative the $XXX to million was and income to operations stock million third the and $XX for $XX third totaled decreased to fleet Annualized million revenues associated in for expense adjusted income X.X included decreased compensation of or

paid fourth total X.X%. for to seek returns IPO we a will we quarterly count in shares, we strong As capital best discussed quarter, maintaining our our previously, million and share, outstanding sheet, order strategy shareholders term reducing and compelling per of repurchased by shareholders, the of opportunities a the we dividend have growth balance also investing long $X.XX to when prudent appropriate. returning in X.XX In post share follow a

all repurchase total XX, authorization original availability repurchase share which million December was January of remaining of used of in XXXX million, XXXX. As under the was to $XX our shares $XXX

January of not approved amount an to directors XXnd, repurchase additional to Class exceed of XXXX. XXXX an on through common XX, A authorization $XXX January board Liberty's our million stock, Additionally, shares

X, has of of paid also share $X.XX of directors dividend March distribution be as on declared March XXXX quarterly and record to board Our to of XX, a cash per holders XXXX.

rate, to In into look drive general rate highly and geographically returns to tax Chris, EPS year half XX% second run Liberty to well produce XXXX, positioned are positive we dilutive continue we estimated as back in diverse open for customer challenging how and operations expect similar the call a solid for fully XXXX, Q&A. its a about XXXX, I very efficient turn returns. to be effect. expense As best-in-class rates we to footprint, will the mission are forward term the tax even administrative market. to and to XX% for and position XX% A partnerships, we has before the [Indiscernible] for maintain calculation cash up tax book to the of gap long

Chris Wright

poor with I’d close the to industries community’s some like returns years. understand and We relatively concerns gas investment with on capital on the the recent shale thoughts oil revolution. in

understand here. think, to I got helpful it’s how we

gas Like to ago. transformed upending the pervasive. critical revolution, one natural than only gas one far the the the than oil been process largest more that ago and disruption. for oil only from U.S. XX losers. yielding production and has leads switching a is Any Shale. significantly the The decade of also the world dot years was gas gas the a reached most com exporters. of the important U.S. more losers it and a have the first and gas dot than altering in world’s phase occurred shale of production one shale than there exploration boom, decade change markets, of more in This this where industry has largest was industries oil and growth in Shale focus Barnett to primary in fast, successful winners ago, importers of tests exiting little the was shale largest the of world’s less markets. world on We this optimism then, and Since doubled, world’s significant large, Shale of natural is believe winners. com the mass,

has of impressive. innovation However, the been pace

to this While shale across of returns investment as with questions. period, stage early increasing move have value some and phase the listening today. the we it their expect in the chain dot.com see for for during Thanks operator to turn been companies I’ll disciplined capital shareholders revolution. of out discipline the back we

Operator

session. first question Evercore The West [Operator of Please come question-and-answer now ahead. Instructions] will go begin James the will from We ISI.

James West

good guys. Hey, morning

Chris Wright

morning, James. Good

James West

Chris, I shale revolution perspective here. appreciate the your on

for been the run think a because shale been the the returns for and you you’re on focus. disciplined of specifically I an and -- industry industry you’re right for [Indiscernible] dot.com I guys right, pretty you and out oil hope guys, bad returns on it’s as not revolution phase in pointed But atrocious the you capital have overall, here.

ask wanted with here terms mind pocket of question and to going through to I air the pumping pricing unfold So of pressure unclear, returns my this is top so gone okay, we’ve on ultimately It’s how the is business. year what right now. are in the comment you how if so seeing seeing in behavior guys disciplined, on kind on I and everybody assets, says, are your don’t but of perhaps but competitors? what you You know else certainly could of you’re you marketplace an

Chris Wright

Yes, say we’ll We we what’s today. And of back, peak summer What last very hear -- sense December. sweep probably stuff few the look, level sort customers. are fleets hear activity in fracking XX, last stuff is was, from frac of that of of XX, were some broad peak probably a do last fracking they fracking not high were saw and from you XX% Overnight, it But are in around our the going I’m in them summer XX of James. that but in bars. the going the to on. a [ph] give

keep a the really And failing that people that’s egregious and immediately want new off pretty They pushed shrunk going. if work, laid that’s you they or now it the in the guys park, fleet And the to strikes just of They lay the off, marketplace. pricing few parked. decline. equipment fleet supply before or out So work. have equipment. as It a doesn’t are you’ve those getting takes gets to try significant get find so a and

think the seeing supply out marketplace. a I fair of So we’re come amount of

so last market’s and either available to you probably for for many know demand supply really And above frac fracs, going available is There better, few have frac I demand get actually supply. the six I in a to rational. for an have that But looking reactions the the see our of them, months, lot we’ll in the There been suspect to reduction of mostly many is increase or you fleets soft. continue months and what’s is work. less a a So less in next market a decrease today. the on think been competitors more

James West

Right.

mind I on be may this for a if industry. lot pressure I possible is comment we mixing you consolidated be to you return is the consolidate, it me overall a see in I perhaps new assets the on market. And pumping then, profile have a don’t And that to you in M&A and seems could fleet the but And, mean, have that’s get public not yourself outcome great. companies maybe you to up? consolidation for want in industry. your know another topic some top with other assets, consolidation you maybe need unique of of including or guys the know but Okay what interested

Chris Wright

And you’re players into the predictions today’s maybe But future. the are going least bigger delivered think to a of the course, in ones hard I of about struggle some efficient see especially bit, environment.

consolidation. So some rumors chatter. certainly might see and of We plenty see we might -- there’s

there’s think and of there would last the of players improve consolidation that happens. the of or at little and dialogue probably was end bit frac a a that chance going I one reasonable the certainly Yes, a market on. that lot year two that’s by

James West

it. right. you. Appreciate Okay. All Great, guys. Thank

Chris Wright

Thanks, James.

Operator

of will JPMorgan. question Sean next ahead. The Please go from come Meakim

Sean Meakim

morning. Thank you. Good

Chris Wright

Good morning, Sean.

Sean Meakim

your in into maybe more the of a little we just could drivers XQ So bit dive guide.

please? say what help do your much you experiencing? order in Just you pieces volumes, for leading the between today like guidance budgets think set? efficiencies, average edge can us, thinking pricing those as about get fleet your Just month-over-month where for unpack think thinking How this first is whereas, fleet your pricing as you you would is efficiency quarter different versus for

Chris Wright

Sean. bet, You

very We QX in a such you Since [ph] of that was more activity are on than late the in for our a in know market that an about a our is maybe compression we to pricing. in last something, Half variable is on know Think work, with last pricing erosion are that significant to it’s a for whether from prices. decreasing But margin. summer strong centers that and coming market pushes saw then to pressure that said, division trying share QX us, plus and X% these [Indiscernible] of fall call. customers. of the they I talked pushed we more of XX%. example as That’s So get plus unit for got out pricing don’t declined on prices. commodity have you

those makes had Liberty. if was that, you’ve for always schedule normal heard short quarter allow of changes some to before, somewhere activity say the didn’t us So happen there’s schedule But for else We redeploy a or notice the market can that’s advance. as very know we And fourth that all course tougher. in there. we but the efficiently They us -- business demand level, fourth that it. They’re hurts. That time, that with What usually fleets know move quarter in we redeploy fleets change. this these behavior industry. changes excess

QX. as as we fracking we to fleets that continue in that see. out I’m talking have all That say good reason I’d we we’ve today, believe can, continue. our Now as far today. fleet, QX can XX got goes as will on In every will to But you

of across pretty important leading We’ve customers. close this would market with the or that your all They’re fleets fleet, been our We’ll pretty busy. fleet pricing. feel with But fleets Sean, most guess required. the changing And somewhat good line keep close in market maybe to makes compressed. edge we pricing our sometimes roughly phase communication about in rapid they’re softer. year, I very exiting say very is I utilization apologetic vagaries question. today, dot.com decisions this even for though our think, the is I

the probably happened. customers week, I in have not with pricing we’re back I that’s now when we month. at think about that as them compression disparity fleets pricing I don’t next But bottom, in next is might price would wide suspect But, don’t bring today. a mostly up. see dialogues our we

Sean Meakim

Got very it. Thank helpful. guys. That’s you

just And so a then bit. little on to expand

XXXX pricing to to We’ve levels? into efficiency? this like words, for does XXXX. like a ability if volumes fleet improved and So as Just low per that as you improvement characterize your here had metric? we’ve how And of fleet to talked -- stabilize XXXX was pricing you XXXX what as at are drive in high in EBITDA per XQ What current range able your maybe are XXs. the you in drive roughly improve about you’re does bottom -- EBITDA that downdraft backhalf in that other how look in that previously confident would a we without range

Chris Wright

don’t we the Yes. a From we time Well, pricing. -- again, end you drift got that. pricing. don’t get I of there’s of direction in know the here year suspect know course know probably the we’ve I we I in timing to by or other there probably

and of do fleets what of You’ve keep two There’s is of heard this reflective just that’s is, sort the we we about think that. to happened our things guide One quarter busy. pricing. top this can this schedule,

actually customer getting was they thought, fracked. to up awesome days found the or to on if on from was, work work We’ve it keep day that we’re every they didn’t in customer problem busy. that. these faster, QX, they fleets we’ve throughput just the fleets The thought ahead thing, second faster that too with others work follows many had And an slide insert that customers ways our frac. than way either Our

with these So schedule gaps big that’s our why team we gave before, driver to even they operations heard fracking. a that’s win this still as well-oiled us you’ve days huge But on for hat the say a on a And us tip going for highlights the bit little I’m elaborate with in like that, machine on and are Gusek what’s let win running Ron of of customers field. huge we to a for us throughput our going few the focus and on every increased driving continue is on day efficiency, throughput. increased the a

Ron Gusek

I had to in efficiency sorts our now, there. crews. years thoughts. Yes mean, those there things on continue have just the add we training Sean, We’ve together work and a might just allow obviously with crews guys experience continues improvements just around working to for amongst out of tenure, the few efficiency together that for been and the years things I the

connect to Chris to -- on. the New system technology, that alluded we’re the quick working

the location out So we that spending and have on we’re of with this where opportunity idea improvement. time of tracking for all

We of continue initiatives on us to extra to there work those technology and allow get to more that those and pump. rid that find minutes time

one to to So of the to talked out been fleet. see We frac doing continue problems initiative work we’ve quick that there. improve meaningful connect of say a the what those. I’d about think our we uptime being that that single point love failure on still blenders, but solved all we’ve the inside exist equipment we’ve of opportunity there, is on our

pump with partnerships a to of for a opportunities to we increased pumps of find there. time. do improved of continue get And amount we and customers, course, work do together goal grow of design continue customer and then more lot with and We reduced our and continue work large our efficiency ensuring the on mature, uptime to there as maintenance more

can things Permian, a us twelve more all right for plenty plus fleets many find example been that now. had improvement that than for running there. minutes We’ve together, hundred So of of those XXX pumping looking there. QX, leaves have through we day, still that but fantastic The a still day minutes efficiency room

on of think lots I yes. the side, opportunity efficiency So

Sean Meakim

feedback. guys that you Great. Thank for

Chris Wright

bet bet, Sean. You you

Operator

Bailey will of Wells Fargo. Jud Please next come question from go the And ahead.

JudBailey

Thanks. morning Good guys.

Chris Wright

Jud. Good morning

JudBailey

about follow give kind against of what think Sean’s a up in to to a rather of hours relative that how about sense X% cited were for you about your to questioning, sand record. expectation up thinking guidance digits. of of growth that that or pumping the your activity Do wanted us January of be we kind [ph] would being volume revenue a I Just that. you to are think you XX% pump line would that I or kind to you single being number, said how revenue Could think hours revenue get on up about expectations? the mean, you think the pumping up

Michael Stock

Yes.

right about Sean. there, you're think I

a of sort over volume think I revenue overall to that single-digit metrically we're Q you're during XX% Q to growth. talking get probably

JudBailey

Okay. today, on get you my how how for I near-term here do then over I next would rest calendar the you the as both quarter? first that And how and you guess visibility question for is about XXXX -- to feel of characterize your And the visibility sit guess XXXX?

Michael Stock

the this than fleets in spring, collapse shrinkage In right I pretty as collapse in booked customers activity we spite are the the certainly polar I of the out we look actually as in is word. our far good. rapid feel We completely wrong mean, later with and dialogues [ph] running. the we now our larger customers. from interest say would is have the or

not feel well So pretty going we say is XX for fracking going today. to. yes we to? yes There will I to we What that more the the good. utilization So, we of what are demand confident that say to are very in fleets be are are say about fleets than Liberty decisions our would

JudBailey

slip more based one last for that could I comment. that. Thank Okay. Chris, on you

down to fleets got XX could If willing much demand that find work it in the far just at that to you back the the fair think that no it a is year. and Or this half commit XX price road is point? Is discussion? of one it

Chris Wright

but think that. it’s put Oh unlikely And about -- dialogues fleets probably both we no. problem I that are mean, No we do. at all. to we in work I we month. But next could

for right the going is to customer put combination yes, of there out. position? strategic a matter So balance it do it's of we So work it’s What’s and customer? Does partnership. it that? now, to Is right – price long we’re do not term a question it find make to which what means the could a our fleets

both then, pull slow, the year. We but good very more a has had possibility It’s lower have those current Profitability than of likely in one of up on I today. by of Today, on those. current cycle. it mid in bubble. press on to been at back that or at we'll not economics. good had we such that the be of word cautious, that said a don't It be a our will We ago right But them that. think very end real representative deploying customer I know. was hold have is idle the year It's There one don't is we’re a I still was meaningfully we levels is and More no think release. reason we a fleets disciplined, relationships. know

every not So and future. where market. the we customer we anxious the respect go in have we to horsepower they might relationships we’re today’s into deploy But can

So a it’s Again humans and it's We in it. deploy asset year that’s the balance. a fleet. – always XX a a

We’re years going that. to longer than have XX

we're longer well. but of at it, So term as pricing It reflects. reflects course current it looking

Michael Stock

with Little going very be customers, people, be color discipline, looking we’ll we there to look within believe think on capital on judicious that focus and our a that, Jud, flow. I at currently is mean, at aren't budgets, cash on customers very discussions our -- staying when that. strong in I We operators with that customer E&P on

of the their down they QX. you with asset spin be view end sort roll assets. their look another they we is choppy that of year. sort of able to of What get we'll we We to for sure completions their want make a and very cycle we look the year where back want as Otherwise in up very -- could So, when to are the through to how careful of the going end clear -- like?

sort not whether capacity to at we're at the can flex do who looking want of expand And little QX So not with look we or clients judicious other in that look got we've who we're especially that. whether we some and if of some slowdown can very may a being we as or period. at sort clients

sort the got summer. then a sort and use still a bit utilization. So capacity be have QX if flex very little stretch we've it We may of over XX will fleet can the of and solid we only through

year. this very So we're great that looking at in of amount a detail

JudBailey

it turn color appreciate back. Okay. Well the I’ll listen that. I on

Michael Stock

Jud. Thanks,

Operator

The George with will from Company. next Holt come go Pickering Tudor O'Leary Please & ahead. question and

George O'Leary

guys. morning Good

Chris Wright

George. morning, Good

George O'Leary

of percentage a parking what guys Or frame fourth Trying at achieve the in helpful. super angle; average days would light work question that? per to you and pricing if average EBITDA days in be flat keep or utilization decreases? XXXX? pumping the maybe quarter the then, kind utilization to to ball come frac quarter-over-quarter that of different would think from slightly activity And fleet the need I maybe you question of could

Michael Stock

from down standpoint. that over XX% to QX, Yes. Q, George, you XX% if utilization look at we QX Q to a were probably

George O'Leary

of flat? incremental the less keep progression the And is spread that then basis days through EBITDA to or how points for more or per good, many trying you need think you to but January pump quarter? the how many first whole think might to do just

Michael Stock

We’ll high probably up of order single XX maybe digits QX. going to XX% points into

George O'Leary

Is on frac rented to the And fleet? your a whistles nerdy fleet. articulating believe something and efficiency more bolt to interesting. new, great. manifolds had burned super typically zipper then well giving to manifold as focus question to of curiosity But on refer anything side. I'm I to can of a I the else. new on the a bells a or if that is CapEx I you'll helpful. and just product is adding rental replacing kind out it just an than your purchasing That's Zipper arm. be Okay, add from that this -- curious you perspective else

Chris Wright

We'll be purchasing it.

our on to CapEx So it bolted be will fleet.

George O'Leary

Rest questions much. turn it has very of my over. Thanks Okay. answered. back I'll been

Michael Stock

Thanks, George.

Operator

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

Scott Gruber

morning. Good Yes.

Chris Wright

Good morning, Scott.

Scott Gruber

the Does that sounds per there’s been like mentioned to calendar in go to XQ. know it another through a stages and there's of Chris, as full we ask back outlook, one. on rate XQ? sight per XQ wanted front. of I mean XQ questions activity this I to you into several back or mid month XXXX the fleet a getting line to Coming

Chris Wright

XX running pumped fleets we're sand of Absolutely, record amounts mean, I'd and close today to or there we I January. in say it.

going stage far boy, been so smooth, levels very winter but are has and to think have has activity I smooth. winter so disturbances, been has right So, Winter, good. we're winter been throughput now very --

Scott Gruber

then a of me couple it. And numbers. square other help Got just

mid EBITDA X% But it, EBITDA hit the believe. mentioned XXs when I talked roughly utilization. a had pricing you per was a you about guys guide You Previously, had for at, essentially net full running call XQ fleet flat. were

would take at we’re utilization. if X% to at hit net pricing gap a but level that on XXs that assume I in already first of out, EBITDA, apply you’d to So, that the mid there seems XQ be

how calculus? that many -- about just think you So,

Michael Stock

reduction revenues even erosion to We six mid-teens which is pricing of costs a over to to eight activity We in price to going which below largest that you EBITDA price in round the through that QX. net talk year we about to numbers, customers end, going or the without from time margin XX% total in months reduction to last erosion mid are some us. probably down. that's your compression or pricing had I even more to grow had level. start because went Revenues, flat QX larger Again, if got some Yes. but so because erosion that material XXs mid-teens throughput high. would cost price days frac The fleets us get just a a maybe QX have is We But schedules, did incredibly closer that peak think and in a almost to compressed QX, January, but on net from we price QX. every other and is the that I We've I of alignment point better. end say X%. was of your yes, the day an average XX% decline more got per that yes, is we boy, fleet didn't lot. month alignment to a at of to now so is And fracked and running in from had sand pricing is the or schedule now, dreamy for good than couple quite dreamy

Scott Gruber

and strategy. do dot.com we Got you called maybe strategy? to it. do with because phase anything you the out number changing regard a to nothing of last it, have of answer things as guys this But as move And great a one won't one your you think about

Chris Wright

plans What's world way dialogue our our do the marketplace about are think always changes. right or the peak We're views which customers changing -- with strategy. things customers of to which in the or chain, We -- always changes. customers. most customers in -- Look,

We’re always challenging ourselves internally.

Is is that again more as of probably that much absolutely, much changed years from or look, kind behind principles we it. they different? our a us culture have how to change don't in and the talk doors now. So, Liberty different No. of guide technology can five and But yes, about years. of the the a gas in going bit oil XX last Is the like Yes. world all

Michael Stock

I and of one the quadrupled last think right. a the we in two half almost obviously, things, years, Scott have

a So growth sort of phase. in jury that

now period a focusing a efficiency, time focus internally. slow going spend on next amount year lot do with huge is can that as allows are on on to number to focusing We that. the of we better focus growth lot slight are there a us of a we in getting And time things effectiveness, --

Scott Gruber

Great I appreciate you. all the color. Thank

Chris Wright

Scott. Thanks

Operator

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

Connor Lynagh

morning. Good Thanks. Yes.

Michael Stock

morning, Conner. Good

Connor Lynagh

year. investment of a was I capital referring to, budget the portion little are you obviously, wondering significant give on pretty you the more can technology guys this us if color

we're about give capital could of relative some how that I returns -- to you us So about, what, is you the investment? things a on of going of much for already the but alluded think to how sort the talking sense think

Chris Wright

move kits, to new focusing that this items efficiency be we Is we're mean, improvement different [ph] of and -- Hey, time I the the in dividends. I sort of detail. rolling and ERP investment it have upgrades in arm, in doing dry year. suppression blend probably, we the that a out we're systems, think on inside do articulating better. we because new every the on building, of And is five upgrade, fire things to you that is that upgrades sort technology fast we’ve of number we’re how one in pay there this Other guar call day. of things forward, just dry things towards XX% invest want facility discussed going the we of these focus going as get years right. this of doing to one your that's

So, investing efficiency, other of at yes, look return ways. it's sort a of look and the whether investment line, people. improve that of bottom the the investment number we and and And in at reduction a as to every – throughput cost it's straight on improve lot

different at I So look think we all way. those basins that

Connor Lynagh

return the to shifting just the Maybe Yes. of to Got it. more capital side things.

free that? hold think buyback. -- planning the decent you this through cash be $XXX and you they execute do million -- So improve generating how about it year. will walks on just are entire potentially you of you where amount are you things changes think dividend the if Are to flow seems to seasonally a any about policy dollar How planning

Michael Stock

happens take that a that, No. have we is I the in on march of be could advantage see we're sheet because goes. this We'll downturn. like balance available year, But did interesting year. not moment, look to challenging. an we last decisions commodity At just as market these that pricing. we asset seeing to if this we This of sort mean, the we the at dislocation want sure where the make through is the

intend we regular we as announced and said, be policy event. it dividend we Our a to when that for

We changes as we'll share it -- quarter. we of as moment will we sheet. it. in have the at as that the sense at every policy associate far the look no But makes look And price at balance plans the buyback

Connor Lynagh

it. Got for the color. Thanks

Chris Wright

You bet. Thanks Connor.

Operator

question Please next come The Stifel. of Gengaro will go from Stephen ahead.

Stephen Gengaro

gentlemen. morning Good Thanks.

Chris Wright

Stephen Good morning,

Stephen Gengaro

Just things -- I two quickly. on want up to just follow

willing numbers sand potential ballpark current fleet of pricing kind at pricing. being throw to the current Any there? and frac you'd frac per be of current EBITDA out first The pricing sort

Michael Stock

QX and was guidance hope we efficiency increases. is to again given just fleet. And on I a we’ve a any can see market up world. flat that guidance haven't over And future. XX to side we'll the we for the do But supply comes million around we look further Well, EBITDA move in the prices we'll from where would see demand what of together how per obviously, given is fleet think QX the

Stephen Gengaro

be geographically your the quarter. any versus sure? are quick other you. We question, don't then Thank just prior just want shift And to think material assets so. the Okay. where to I

Chris Wright

isn't. There there No, isn’t.

We opportunities in. we're in base and every have

today, sit on got and base and huge our no the they've challenges, assets movement we differences So all of but between not here as end.

Stephen Gengaro

Very good. Thank you.

Chris Wright

Stephen. Thanks,

Operator

next Research. Please Wolfe Gendron ahead. from question go The will of Blake come

Blake Gendron

you're And to Thanks morning. first what it’s steady U.S. going for in that compelling My pretty going -- you a completions about taking Hey, or good state my for get market. XXth off would just to a vision paradigm -- get returns you're certain is land to on question. a the to return take growing after the you step take and guys for a is growth say we're level it what stop and take back table? to deploy the going just cash where spread talked But you answer.

Chris Wright

last like U.S. you a I It say, time market. there make steady. we and becomes that believe it depends don't think do believe on steady should that But And build might an ever gas outlook or for forces I a the industry that the that we are oil driven five a has we’ve last asset than long oil. some more years high over And total well industry, the is price U.S., prices you cash down world not but get production cyclical Obviously curtailed in going to that's if grown spending look because demand continue. times. oil in high flow, more

been years. in meaningfully not breakneck will likely oil last crazy think production the grow the at it's ahead, I years the speed U.S. but five

people the growth – outspend at is revolution. was as and move towards not So start for common shale as the of

in I little of oil bit stead level slower think a year. production not steady bit but growth we'll activity, get a little steady U.S. probably year therefore

think we those that to every to as the dollars. cash return? I back it's to that saying generate our stock. going we Sometimes best be this with what And it's so continue do buying year What's strategy will

And it's it be to throughout is huge all be going those be there's frac Sometimes sometimes going to building opportunities. to can returning more sheet balance because other fleets, shareholders. investment a cash burnishing

Liberty as will in depends a But stock, climate because like it's the we that I'm and balance there's probably not to But reason circumstances will coming rambling in that we we return -- of towards So, returning Yes. front on in about less to is do today's Unlikely the it's XX five But not that. continue lot much cash the so a fleets capital opportunities particular of no us. nothing there's -- growth. But shareholders not at years? grow all. grow. that We'll will deploy to we to grow likely all. where of

Michael Stock

them. our what frac through digit market in and that customers we Like growth with the fact and our those we have really us poll we obviously deep the service And market with share build customers we relationships of us those with single value the partnership that is customers, and take get. It with XX it's as XX. take as through will

organic an there’s strategy been yes, beginning continue. So growth has and that place in we'll since the

Chris Wright

just year sake. a commercial not business. growth finished seventh for fast. We've very we're our We growth grown in But

set not out So but level out we cash we're great. demand -- and quite by capital, the be not of on bigger. and differential a is generation to provide growth. just and it goal we large relatively was and do rapid us But pace. the things isn’t was we’ll The set to grow differently fast, it for executing at grew funded that We for a and to we differential service makes return polar liberty to better. say, sense is so breakneck on be It's

Blake Gendron

out more I’m relatively encouraging up the in I new of to a sort second of the is going allow design to Plug-and-perf sort of aspect pressure back And and specifically is sense. completion potentially that's adopter could think on of sleeves. up allocation story as to as this there factor design but been story shift question decisions just capital easier. the state a of those visibility single there? makes a in helped throughput specifically, It's to the Bakken better nuanced throughput meaningful sliding a it. any that you opposed side That and or bit completion meet question. steady Got it'll more the My

Chris Wright

No.

among to a them like just obviously because the help it’s fractures costs. like frac we frac used with the modellers frac reservoir When the joke get just throughput. wells the with when sliding all throughput interaction they sliding wells like basins you XX% sleeves sleeves. think as the modellers. offset want completed stress where the fractures didn't get higher easier fracs were fracs this of arrived to Bakken place you're no can the like But also I seeing of faster and you or model And you benefits don't in steer that seen other in zippering and well right lower

you for wells a week a can half reasons with the that, when instead a get and instead faster you of well week, of well was. anymore, single day done of a it One but frac in much

slowed the pushing by going a there single So completion the that you we of well. tide plug-and-perf were against on HBP to wells

You you more and had XX% XX those money more wells. days cost invest you productivity several produce well are or increase But and to you like XX% to and increase plus percent.

doing we in it's two and a and we There's and they sliding be multiple the almost Bakken know guys So think strongly in tradeoffs it probably them sleeves companies on everyone. still things. were has with of partner why that favor the

was each want moving run it get fracs why we getting compelling. ago. was plug-and-perf the the papers to to to run -- or we've returns. sliding stream is individual one is called going go. each see recovery five different this individual rock be the to almost you and in can quite economic limited plumbing dozen always entry after I be mean right of just they're That's diagnostics in years and density stage, get on. so or to And You remaining than frac trying them. we will We're long is published were the and them maximum contact more than seven three greatest And to way sleeves. today the originally Plug-and-perf probably that it better Today and in stage. five proofreading a fractures

Blake Gendron

Thanks. All right. Got it.

Chris Wright

winded for answer. the long Sorry

Operator

question ahead. come Cowen. will Please Marc The go next from of Bianchi

Marc Bianchi

highest on in Hey, sand a monthly January, for the ask wanted quarter. thanks. Most you questions volume little mentioned first the bit been to of more company. answered. was my have just I

January together progression As the of what's expectation from you the quarter? the through quarter, the first of for guidance the remainder put here

Chris Wright

and would We've reason see February I of today our to be a at in the say pace high flattish. believe got and all won't March. no case that running fleets

Marc Bianchi

it. got it, Got

Chris Wright

nice flattish And a QX. change is from

Marc Bianchi

I kind you're of -- guiding that consistent would the first Is the you quarter. Is be the here in that profitability suspect pretty what would exit with Sure. that to rate would imply assumption? fair have

Chris Wright

I think is. it

Marc Bianchi

it Thanks, Chris. back. turn I'll great. Okay

Chris Wright

Appreciate so the question. Marc. Thanks much,

Operator

And Wright turn closing this like concludes conference our answer over question session. and for I to now would to the any back Chris remarks.

Chris Wright

dialogue with the to following interesting in marketplace. time liberty times and the investing for in everyone company, for the your Thanks interest today

Q&A So rest to of look but dialogue Take great a section, longer in the forward the care. year XXXX. we a and

Operator

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

a disconnect your You may now great Have lines. day.

Liberty Energy (LBRT) 6 Feb 192018 Q4 Earnings call transcript