LBRT - Earnings call transcript Q2 2020

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Operator

Good morning and welcome to the Liberty Oilfield Services Second Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] 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. These matters involve risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. and company's certain on are risks the earnings the are conditions detailed reflect company's to filings. subject and release statements beliefs current based that in These public other uncertainties that

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

Chris Wright

everyone. morning, Good

partners future. team and all of in more know, applied also the the business basin we enable with and our manage businesses a stayed which rate the many the customers charting declining precipitous the foremost, customers. gas challenges, Liberty tenants opportunity. even did businesses we our do the down a the withstand current have our history, a collapse build In core Like customers its players and The ability long-term. is strength chaos, resilience they face Liberty, top-tier value rig the What dialogue the are we guide it? there in of demand First their our an found oil the and our near-term better do pulled to constant in hard built and cycle. has alignment circumstances, with complete completions over meet chain. producers, count, more We to wound in extraordinary And others. across aggressively in that to strategy earn our planning oil leading was and we did current return and how to principles testing the of crash, support with them oil of halt. In many working workforce right highest midst course down even for activity. these were nature, As rational the In with with and It prospects our for current and recent partners. operations. even restarting decisions acted evaluated and to we in to they unparalleled decline worked and to back and was back operations swiftly than cases, to cycle is for cyclical assure pull simply made well, and been safe began activity, an industry immediately decision, an Liberty cycles that with violent

we collaborated As and We chase XXXX. We as with customers grew the share for over customers of around negotiated and partners, our the our activity. second customers and the we and market top their behind And the our year. outlined the stood sake we with not did partners activity to levels our last in activity course business of call, the remain we market. expected disciplined managed entering of half frac our all

optimization Our portfolios. operations of in with team asset advance practices this active to engineering been low customer has utilizing customers, across our quite completion and understanding

stressed, things than July May. still. that in heading a DNA to are are late-May will then. fleets leader basin efforts subject since in This trade-offs our the customer not interest implementation. frac be is June of drawing right document data June. attention. various technologies better deeply activity has Liberty's better frac better next than direction. as and is is to increasing And ESG driven great and the generation slowly Oily Another was rebounding between been enhance but okay. say slowly and bottomed Things was August

to active expect reach We double-digit average frac year. this later fleets

During structure flex end and to from levels implemented protect adjust of activity cost the year demand to we sheet. worked enable tough to us also preserve our with customers. decisively second balance to expectations our measures cash our and We deliver quarter,

quarter, under are million the cash our increase of share which is second representing of of $XX our our availability Liberty at pleased to the an We’ve activity, We notably loss everyone in broader showcase suppliers. facility substantial the a customers equivalents execution $XXX strategy. of reported to Michael end disruptions results $XXX These cash required report quarter EBITDA that and successful oily of our million. The frac million leaving industry $XX including of our second quarter first of from despite million, basins, where results was we industry million Total adjusted most $XXX shortly. end credit full quarter. debt drop million, and the the at in This the of from came end, from the in second exceeds quarter. our at sequential operate. net resulting in $XX position liquidity will our community of us financial cash total and sacrifice a an family have results

frac making feel by and exhibited Liberty evidenced pumped does strong are advantages and have that truly am we of The day centric outstanding resolve with over rate XX and last us per and leave when asset to build time. companies. Liberty, last This completion records XXXX, and this customer XXXX Liberty. In for and their continue crews doing and humbled These demonstrated return We base, This we our we technology return to all this in partnership greater proud on operational destruction partner the pad an I plugin brought their that were to procedures folks with attributes the in partner. believe of steadfast Where team is customers central success. innovative First, dug the proud XX% partnerships, the commercial commitment customers Liberty, to their available approach get rapid to in like performance and efficiency, on customer today? the with are XX% of innovate in we're the of to on every are These way we well downturn We're minutes frac a choice culture trying simply downturn back a of them. proud the same last competitive safe a of enables one. loyal anxious these thing work. crews. of to result engineering the to will be implementation swaps. performance delivered The to accomplishments confident long-term operations, than and safety relationships quarter, and rightfully fleets our furlough of depth metric, to has frac to designs from team COVID our times. our a

same long-term. Not highlighting We of partners it engaged market even supply another companies time, importance at the but is only entered destruction, pace. are the of an bankruptcy top thing the helping the restructuring and frac XX seeing balance, right is the faster having also towards this to for the has the advisors. Two have already move

in several dialogues partners. customer with are new We potential

took adjustments a our We fleets frac of the But cyclic highly with customer forcing levels had the our nature cost down year. quickly painful is cycle staff industry. having match this to dialogues make variable of ever, cost We consistent about this us our have structure to structure. fleets fastest action significant always to the to activity XX later

Michael and which comprehensive will elaborate cut our suspended operating cost our CapEx reductions, dividend also We made plans in half, on.

our balance the Finally, of both of liquidity importance We've weather with always sheet conservatism to at and advantage the downturns. take forefront remains our of approached decisions.

been customers our positioned unrelenting customers to Michael. take today goal or of pursue shareholders. Liberty, uncertainty, advantage positioned creation us face I While to is can To turn profitable long-term the over the assure closer our now leave to our to tough hard I the of markets better of of our that of call and our well we've opportunities. people full work for continue you on value will never focus and

Michael Stock

Good morning.

price last our cease or pandemic the oily the a operate. basins producers in for call, on we to where and oil worldwide earnings basically shale shut oil COVID-XX for fracking production drove American was As discussed resulting effect period decline down we rapid dramatic. and The on demand North

customers Our reflect the results levels our and second over dedicated to year course last the quarter on reductions activity call. the transition of the our outlined earnings align cost cost structure our on with our execution

returns, We And all we are protecting the as profitable the stage demand setting activity. the return focused of for are laser on business.

activity the because declined our disciplined customers For million our the oil million macro-economic quarter, levels revenue volatile fell tier reduce top second to approach the dramatically, exposure, activity basin quarter by XX% XXXX from and reflecting first $XXX the in $XX backdrop. of of

of quarter, quarter. net Fully million of cost were after to share the Severance net to million first second loss $X costs of fully income $X.X diluted declined start-up tax quarter, costs during the the $X.XX $X fleet quarter. compared quarter in income net and quarter. for million related the compared per net were to $XX Our second including the first was laydown the million a share in the sales in $X.XX per in loss diluted

to second from first in loss the million of Second of $XX solid a quarter $XX declined in adjusted the EBITDA the profitability million quarter quarter.

the facilities $X.X available during exclude million quarter receivable XX% we expense quarter, significant first of million in and $X.X about a $X.X due quarters of the environment. $XX loss strong respectively. XX% totaled the A cyclical including million nature, a benefit $X position, compensation We and to free quarter. when an of cost XX% profitability quarter $X Net balance the $XX we reduction decline robust swift quarter allowances position the quarter variable EBITDA savings quarter million administrative and low costs $XXX marks in of of and million administrative second a total and of first with $XX million, cash with ended actually had for that expense cost activity. million for debt to non-cash adjusted million IT, drawn as the share adjust we the facility $X a associated of declined and net quarter sequentially, income travel the Approximately tied we At entertainment million with primarily recorded million, million. early first $XX XX% We activity frac initiatives personnel current of $XXX accounts for end, flexible costs. million in achievement excluding million. total from ABL quarter. million. was and General a the fees to cash structural term to the expenses and no credit in the furloughs, which of during based $X.X believe reduction enacted reduced total expenses was quarter $XXX and $XX the With compensation facility. with $XX second and the cash lower available second saving in General ended were long had and flow interest [ph] Second sequential the and positive of levels. after million, tax was items liquidity and borrowings we measures increased in other and under point The on liquidity including quarter our a million remainder a tied G&A

weather deterioration last navigate conservation, built thrive swiftly frac earnings The us economic to targets business act led bad to ones. activity to good and rapid outlined streets. We the call, maintaining this challenge. the several management through balance in Liberty unprecedented the markets liquidity protect and During we to the the cash in

cost have as and of distress. effects could the arise us structure on of to the macroeconomic of the sheet balance in of our of such times opportunities demand, enables well risks, our strength and COVID the potential as advantage flexibility taking resurgence oil as Our manage that

Let's in we the earnings these last back call. at actions look discussed

XX furlough as us activity. flexibly fleets approximately their frac crews quarter, basis. returned and our This to frac XXXX. actively annualized with fleet furloughed be XX after XX to dedicated customers work discussions start We currently $XXX that completions with not enabled This First, were as we the fracking dedicated the revenue. on the reduced align frac will customers quarter. the up fourth cost part our cost projected our working staff the to between latter structure million match reduced to crews in crews project the demand by of in Within structure manage to in their count

match, by Secondly, which bonus which base has a XXXk our been compensation salaries cash the lower for in on plans Board, approximately their million an reduce with cost coupled $XX basis. annualized in structure

which our to crews the a of industry. seeing XX%, roll turmoil half during as through balance strength the and to second million program period. to in quarterly for we last approximately original extraordinary supply dividends to staff. $XX ability is year. the by of to we reduced sheet Sixth, These second temporary $XX XXXX for up exiting million furlough XX% compared always the definitive the we will results corporate quarter of continue partners we which year, announced Capital weather million showcased cost key the business this nature until operational cyclical $XX of reductions are quarter, suspension in instituted expenditures have set the second us million, first Third, $XX [ph] capital was input of budget. range XX% And quarter, predictions the to as market actions of for future our reinstatement. of frac the the Fourth, the a navigate our in the part quarter. Fifth, to support our been expenditures

the We market both balance exits uncertainty cost the sheet through flexible of in to and the the pandemic. until challenges have potential world structure the manage COVID the

we are with But shareholders. to that, committed protect back this our I Q&A. to requires for on last we returning the of before we first. call, disciplined turn and As will business growth strategy call now cash Chris And to to the said us open the

Chris Wright

loop. has impacts truly health a COVID heartbreaking. the public world The thrown for are

trajectory force be response, can modern future will the vaccines developing largely to us. COVID success is arresting we tied of demand mitigation. full of that the Fortunately, oil these global deployed so transmission, timing scores the behind and The therapeutics, put in and world of

demand producer world today's lead investment world production significantly, Further, U.S. the for declined the production has oil surely in have. We last market world capacity. to operator. oil of and due very will oil to bring levels questions are several other working you may forward strongly, inventories words, forces oil any weeks, production Over rebounded in back that and it around has the mostly cuts. low the the back world's to over significant to the reductions in to balance. look In fill Turn OPEC+

Operator

you. Thank

We come Chase will question go will ahead. now Mulvehill America. And with Bank Instructions] session. Please question-and-answer [Operator from first of the begin our

Chase Mulvehill

Hey, good morning gentlemen.

Chris Wright

Chase. morning Good

Chase Mulvehill

guess about the fleet I for XQ. I first, on of morning. talk get maybe more and kind could maybe around we in talk about Good average progression just into maybe to the guess, I firstly XQ XQ wanted you then And some into XQ? XQ? XQ, XQ fleet, expect if XQ, you in importantly color into and but expectations there per EBITDA as

Michael Stock

where forward move a from as XX slow We're seen, is ramping which quarter, fleets. going between is we as Chase here. XX where Yes. going to be we this are you've now, be progression. fourth and we we'll And think the up be to in

at of of you we move look on it balance As basis. into earnings wouldn't as per fourth with sort reasonable quarter to the a get a of amount the I more sleep really fleets.

to subsume by going fixed should into back lot fourth have balance a to be got bit in the quarter you're period. We You've that quarter. of of that a costs third

Chase Mulvehill

the to the And Could maybe for are fourth follow-up XX active XX to just many new XX of you quarter. in how right. actually customers? on fleets those All XX to Okay. talk working the fleets

Chris Wright

The work. will large I back Yes. existing would of vast the majority to that's that say majority are customers it. be coming

with We new are dialogues several customers. in

than but [ph]. brought more it be one there the or dominantly same customers is be or that dance two So, may in there, to

Chase Mulvehill

I'll over. Okay. it back turn

Operator

Our go with will Fargo. ahead. come from next question Voie Wells Chris Please

Chris Voie

morning. Good Thanks.

Michael Stock

Good morning, Chris.

Chris Voie

work the might in you can to the compared they're it any to whether quarter. how pricing. in was going fourth and right compares if to to touch in there's wondering, on gotten could And quarter potentially third the whatever second have Maybe fleets, quarter? uplift pricing I you if the describe now second

Chris Wright

they've is, the of this pricing of activity, you look, reason have bad. short of something mean, summary moves got pricing is choice. got staff that's mechanism, is I the and And hits dropping marketplace customer when between you've the what declined. activity lots and of be the combination out when price always some a pushed by pandemic fleets And active the to and

not and to it bid bad. a insanely market, hole win at wanted did looked you pricing fill we in schedule, just you in if participate June and you to May but pad that if Voie, and or were So, a

pricing, we very don't much. have our again, we follow But participate us, really candid in that For and we very discussions with but it dialogues customers.

Of a course, terrible in we've hit by decline activity, been in pricing.

So are they.

in to QX. So meet they're struggling did prices what of think oil just

dedicated and of Most down to reset pricing back for will of a fleets. QX, even year pricing the the And way most until end in in up January. start for So that things negotiation. quite of a that's the of move stay that, ongoing will sort

pricing come were Some the now lower so spot low maybe it out before getting or is off. is a up And Obviously, I will think being that is they uncertainty of grade marketplace. think cheap, having pricing shown be then. moving made, pushed many capacity the pricing, calculation trade I or up because not partners to great much filler because of quality

Chris Voie

Okay, that's helpful.

from So if that XXXX? together, pricing second to be to you that things to have is it the not in is very in all going of the quarter of year expect you off half assume first you what had far fair wrap those the the

Chris Wright

fleets fixed of difference the absorption. larger XXXX up the we're in utilization, of XXXX working in better up fuller more much to of will January. to It'll going of up start first year. second it to will won't the move hair a this It not XXXX, and up, there's cost reset quarter the half a that is It it be QX the move move of back But may hair be from number between schedule, in XXXX. half. lower No, quarter meaningfully second second big a move

Chris Voie

Got it.

the I one last right to think that? out quarter fleet's follow called just active I got X.X how XX up. but then miss And I don't you to now. Did XX, many and have heading you Okay.

Michael Stock

we correct, We haven't. did is That that. not announce

move As if going slowly. is up to it

As and October July moves forward August comments, Chris May, in pointed June, into of was better out period. than heading June his July better than time better than the sort prepared into

Chris Wright

And there not to objective can mainly how specific fleets to do faster. can there. call our have number numbers, out the we is Obviously, that we out we because are grow things get many don't

very team, sense, important numbers with equipment is now keeping tend to selectively our customers are our our or it capabilities, technical our But the it us they partnerships. that our customer strategy. up. will whether strong, make What a that all moving keeping interaction we is up fleet is not. is decision So moving and our to is make call to move growing to important the right and out But strong it those been our to relationships It when of continue up. things deploy

Michael Stock

back. Thanks, it. turn it Got I'll

Chris Wright

Thanks. bet. You

Operator

will Curran next Our Tom B. Please come question Riley ahead. from with go FBR.

Tom Curran

morning. Good

Michael Stock

Good morning, Tom.

Tom Curran

each how percentage? improvement or your as range percentage room is you next level for CapEx there? for revenue, run much do that target two the for of what quarters? a What's rate, Michael, expect And of for

Michael Stock

to long I quarters, doesn't really looking make think got rate probably mean, I I sense. Tom, two at think a you've really the next look huge at run really, this over term. is this any target

a we got field had We when point the the then maintenance basis. in We're And into mid-single digits growth, in we looking range. that at teens. X in are percentage the

Tom Curran

do of think you sort further room the that the that do down there, there's long-term? you is to think a could best bit take or over And you

Michael Stock

on That's sort about look a at basis. if revenue I normalized when on that, you're a a thinking of that normalized we mean, basis.

Tom Curran

a in skit new overhauled that energy execute who crew new resumed recent dramatically commercialization trying the the conducting Have modular system, skit to earliest plan key customer an mistletoe agreement happen? the last sound test sea performance technical a you And we a by open Ron, might Liberty converting Okay. to its a single with since tax and test spread. this be then what’s related well with the actively call, Schlumberger see exiting equipment design you well has live design. secure with to exclusivity to and and really quarter's encouraged models board recovery this

Ron Gusek

we're those Tom, the Certainly, down. in on world We the upside back of were conversations. turned that before verge doing

conditions are back improvement. so do today. we in that well simulator, path that on for we And did identified some the opportunities testing further The

right stabilized back talking So, with feet same But dialogue now. at back past. improvements they've with them, field I have in had and their that are at be those we'll got live a are we been looking said, customers back underway when think energy we the underneath And in test. recovery the things

that than sometime maybe certainly in hope I happens, the early think find QX later so, opportunity, if And right but QX. no we I

Operator

come will question ahead. with Please James from go next West Evercore. our And

James West

Good morning, guys.

Michael Stock

Good morning, James,

James West

how your guys or there basis are are the back returns is gaining XQ XQ other Chris, you price current for utilization you terrible about that strategic this customers with thinking work have, strategically but not as objectives versus to want be you I XQ, how customers? And know full obviously, everybody, I more pricing important some customer you managing, certain the base. well. get want you over more in customers an to think you but aligning returns returns for environment? But and to anyway, great, mean, about particularly with cycle on

Chris Wright

hit you we strategic that think to have in willing there. get run, right customers change long issues the deliver Returns the not to buy that. is don't I just Dave, essential are better Yes, practices and static the thing right commodity, the a

year. from through stress, It ridiculous through Liberty. very not this this differential get stress balance each this plan, year. large that's your and say to the base efficiency not their can love we for there's through between other if balance customers a that's candid the pricing avenue today, get partners we I metric. customer is customers strategic would a it that But where's have of question but their those advantage great today, ours. hey, so us. have is help there's match yeah, We technology just it right will the word then a a And But dialogue, for no find And grow obviously

we they with an by So an in their returns and in get them. by partnering can increase with increase get us, can partnering returns our

James, you for lasted very But right. the it think yes, world going maximize to whole is everything our we say if QX. QX, So, wanted do. would things we I than to last the world to returns, only longer we different do But, do than what

to going in of to So, team. is in back run. We've long helping these partners But hard done We're it awesome of The that value We times. those the have QX, to team. But value dislocation a here. crew that years. get then of that together new have all think the and all And it. through still And still thing their all all rebuild customer is leadership, crews had But for times the here. of us key shrink plans we of stuff leaders, partners a crew technical next same seeing is proposition benefited right And our and relationships, progress, of pretty year. downturn of our the for it over was through before. yes, the the tough never Liberty excited we're all is that here. kind them last I can create about unfold we're of that finding

James West

questions one out on a me for the of marketplace. but about just there's things technology coming stuff of doubt that. the on there. answered, through interesting some Ron, There's up there's other I think technology. Follow Yes, lot one no

starting new your is always customers But get a willing it guys to see are but that engage was the can for shot somewhat leader fracture, etcetera? you XQ know and better conversations, give have dust out? yes, say, see I was settled we'll Do we been just I a XQ, in down hunker companies let's stages, here? in technologies to that Now if more try technology a

Chris Wright

it go I mean crisis people. along relatively industry, cruising a always think and lean and you're when Absolutely, is on when Because James. you our to

man, just people the people following the and all on operations So like, and are you trying these tracks. I'm implementing keep ideas they're are to got train systems,

world Then today you've us So, have operations know months. gets new time and fantastic Yes, are bugging I some say been to you resistance the get always last ideas try. to a the is for when six reduced. that about hey, rocked,

a take that. at look Let's

team Let's that in, let's bring our data. gather tech

using absolutely technical in the this evaluation were increase and operational of we technologies. design, of So low across reservoirs On different efforts. activity basins properties variations actually frac frac on to of

this right is rich technology yeah, a engagement So period now.

James West

Chris. Thanks Right.

Chris Wright

Thanks, James. Appreciate.

Operator

question from will of come Please next Syed Our National. Waqar AltaCorp ahead. go

Waqar Syed

taking there for we third EBITDA question. quarter? to my or Thanks be -- expect is positive quarter Mike the in crew fourth per

Michael Stock

would think again, by to absorption have year. We'll say very definitely tough. fixed third the the end of got I that the I probably, quarter make see, you've costs, will

Waqar Syed

EBITDA Okay. CapEx? in of do when excess have And you expect maintenance to crew per

Michael Stock

far uncertainty of got at too moment. Again, we're incredible in with that in the again, market sort -- sort we're the the middle of of a COVID-XX

depending will really world. seconds, what that demand like change projections within detail with because the of on XX oil happens sort any across So

are that our that business. managing base strong to we're we we the have, balance liquidity again position and with that's the way sort managing sheet the have, we So the partnerships of -- this customers

Chris Wright

if the or the crew but on level, of have fixed you it there, absorption it up roll crews. by crew a look and many numbers numbers those the the report a the is you utilization depends economics incremental of we all Waqar, different how for scene, at crews

as bad you pie. as it report quite is. isn't probably But the think pricing whole only So we

Waqar Syed

been for quarter. And on to the quarter? fourth pricing still or enough. Has the the that a to working demand what that moving in crews the target then are determined depends you expect have fourth dynamics those is in XX Fair for supply XX the

Chris Wright

back we've a fleets of up run year, of already together. kind those of to already number level a them, through and it this are this end period sort that's at the For that will time certain running. of the period is negotiated, agreed determined generally And and get for

Some discussion. of in those or are dialogue crews still

yes, So impacted supply there's movement by there certainly demand. some and that be will somewhat

Waqar Syed

have then And -- right quarter crews more expect discussions you Fair that do enough. first too think are to when the for next do make to early determination? year, Okay. still now? is by where And running you

Chris Wright

Yes, almost of certainly actually will. year even for I percent No, and us you reshuffling got for outlook customers think next the a deck, of good, work we pretty customers. larger

So outlook quite year. I for us next positive. say would Yes,

basins, a fleets Let math analysis XXX in gas It XX the working. probably basins projected this give flat production flat. crews gas at about year oil maybe end to need oil crews. up keep little keep frac by production now basin me basins, or XXX our By year to of oil basin takes Probably our the US bottom XX run rate. the will to with production in end of oil roughly crews

So to add you we've maybe it, XXX if need hold XXX go just U.S. XXX and the from in production year we'll gas this to crews, basin, to flat. again, XXX, probably end got

by million need to production another XX crews XX grow You a or U.S. a barrels day.

will do next believe So I not year. happen which

think will be push it from next up. seen And whatever average will meaningfully be share frac that the year. we've to than tremendous year get continue of nationwide But think higher at crews or probably likely I up. this and the that market to there active activity migrate message is I will discipline customers end returns the Liberty's

Waqar Syed

from respect analysis, with to your that from that to assume feels and it alone, continue more with the Chris, efficiencies what get pressure Now just because the pumping efficient? you crews, further more crews example do is

Chris Wright

for because analysis, crews efficient. that'll the more are least in technology two get lowest we efficient, increases And certainly crews of in our disappearing. continue reasons. assume One our continuations the Also, to advances, quality happen do. They efficiency,

look a eight, rise? plus year virgin So, then there's to of effects Waqar, off. each sand, the move an wells, drilling only much A is pounds this it out drilled Will pump to factor wells movement year? be frac have infill more going that efficiency like there. you of might is are you've will got to now, this But if lot year offsetting yes, next that of that run. it more because that an but teams less we're anomaly Well, continue there's Yes, you crew going two so

from fast it before, plateaued a offsets by crew, Liberty XXXX. actually the about years If average, And look roughly new efficiencies amazingly has spoken frac then. well productivity, declined last you that until in I've continued the crews. of in productivity well, at both since start about And production two this oil of frac of slightly decline delivered rose

frac likely brought marketplace efficiency actually of offset continued a new efficiency. drilled, the the a in that'll meaningfully So XX location XX crew bit have plateaued from to crew oil or the months little and not a the year. and average the We'll next amount roughly last quality is increased throughput increased decline moving be of of will

things our up into for crews those both demand US oil of factored of are yes, production analysis frac bottom various So macro all and scenarios. under

Michael Stock

for Thanks the Waqar. questions

Waqar Syed

Can I one or? more ask

Chris Wright

problem you. be Go am the ahead Waqar. I try I'll not quicker. to

Waqar Syed

and to different crew same your go terms more increases, In it outlook Bakken, saw towards the or you kind proportionally back DJ? just the going of Ford that they proportion to is Permian shifting Eagle a basins for and little do as previously bit we the think of maybe in

Chris Wright

We started Rockies. in the

the Rockies. matter But lower We have in reset more. and prices, share a oil tend have when to larger transportation you differential market

will be the concentrated Liberty's So will be more more industry bit with it little activity crew And line shift. yes, Totally a was. probably in probably in marketplace. Texas representation or activity will than

had So year. down until will going more the be yes, see Rockies crew crews our Texas of southern more we've you'll in probably the in Rockies. than had we've And in this the regions forward,

the least at will that work share and and grow probably market in market market a Texas. Rockies share share little at We market the to shrink all. in share Rockies hold skew will But bit will Texas more move will the

slow see level a So, crews you'll shifting activity a are. yes, and these customers of following whether different

Waqar Syed

enlightening This always. thank and you helpful very much. very as Okay. was Chris,

Chris Wright

Waqar. Thanks

Operator

Please come our O'Leary from ahead. next & go question with TPH Co. George And will

George O'Leary

Good morning us to Wondered, Chris, count. good Ron. could morning get help Michael, into good insight morning you frac tough for it is frame, if

numbers different opaque. all is the there, fleet but out showed data sources, utilization Given even more different

second get then timeframe? So, July quarter. through seeing that to trying utilization in And get we given I what you're through But we the that. fleet you relative if or April the better much utilization wondered us on don't could either fleet information May just sense help to, June a and think progress of as

Chris Wright

lower are is things when right. utilization changing, always Fleet

are demoed cannibalize of you to that gone that be working April not We day were don't down. all top shape. We and got equipment. guys in fleets you immediately taken May were Those then and So, that shutting stored last care have keep equipments the day and in the of. equipment pump our our

And people work. right so we it have to a little coming bit of now, a back reverse are of

working come planning processes on crew that equipment. start there a before They're they out, on those again. fracking early. goes So, their and They're folks working all but

for crews doesn't July, middle you if XXth start first back fracking on of standing touched again, in XXth it equipment's as you July up that, start mean So the start. July

to got get that. stuff before people You've ready and

add customer. is do work there's if a work. the of May a certainly the some as got go or we'll if temporary most to see we most year We’ll good and want you do worth So the down we've definitely gap. it some lay dedicated in there of ups, wrong this We the but stand testing utilizations. April partnership to through new and and But harms spots is work out there's term, a if work

to operation. wants their Somebody restart

over Sometimes the to want we finish get customers slower, this to got a to little stuff pad then too. here. We and off ready want restart

But, some you may So month be running, and we efficient you some once going. or should back have poor get a utilization into to gaps, a two crew as get smooth. we

George O'Leary

could frac of the on than curiosity And The helpful. based more else. pump the many is we've out alert. hours impressive born a question spread an appreciable day XX then you of how all incredibly minutes a around stat Great, day just that's work done anything

piece just allowed bit, a execute of as a technology limited a swapping all do time speak well there that could little If you enabled what stat? If to that? between you that? was to What you fascinating

Chris Wright

Yes, it is of a combination things.

think is of the talent-rich crew over our a of of is of guys of average every supervisors goal And course, crews all, within going leadership. were time of level of bunch experience up. Liberty stars to those year. First and is The and a crew. very a crew. of It who all crews Liberty that road That's to build

delivered much There's that the started a that breaking that, highly have technology, partnership like records. that since and up efficient testing up I to years cooperation, So things. that with look to from combination as we've customer is amount that awesome broke except all-star it, Liberty done there's that records. keep fired and are several other fair team is we it to that say But us I some great people continually we've there's legacy pressure humans think automation we've I hope with on of too crews now team a just working of don't seasoned few Liberty. a as within customer A want and And that, them much the the say their it those a as

George O'Leary

color, the Chris. for you Thank

Chris Wright

Appreciate Take care. George.

Operator

will from go Our Meakim question come with next Please ahead. Sean JPMorgan.

Sean Meakim

good Hey, Thanks. morning.

Michael Stock

Good morning, Sean.

Sean Meakim

the So how of in across trying this morning, little activity, each which you a give to makes low maybe more you're a to how questions these you’re sense. manage just fleets maximize basin. trying lot manage Could feedback at on of utilization utilization bit levels to on

southern of challenges So the ones. basins northern across you've the got and varying then degrees in

-- half you're in scale parts current the in year, trying you sufficient look each going the of basin you're try in how managing back curious the this of environment. to your forward as deploy to you uptime other fleets how achieve how while to also Just maximize

Ron Gusek

first vast the that going Ron. think from do for a maybe of back customers. is to of I'll call, our all, as it the dedicated we're we've on the work about is majority already of Sean, talk I couple said levels,

generally to And so pretty speaking. bring they complete us schedule, a

for terms since an high. the with to complete think back crews and obviously about work to don't sure furlough plans to a And those crew us that's returning and We going been back some closely helps utilization a we in goal awful put have to how have as for working really of that We've that that April of it in off work maximizing utilization look field. making so those lot for bring schedule. remains the customers with them

extent potentially to a timing bit so so the be And we closely little working to our fleets them, on asking we're that them with can possible. load level flexible

we're where shuffling bit or a somebody can the gaps can existing So them we to into later have fleet. go around little bit that opportunities an we on or schedule a such that little we earlier slot a bit, asking

Sean Meakim

that feedback. Appreciate enough. fair Okay,

to when to It are contrarian, investment a particularly other Chris, you counter cyclical be are we've be The spoken questions, tough. in over proven your good years, the feels times strategy. never

then. willing in outlook that more of more and makes, successfully But creates was much And back course, You there it sellers, Perhaps outlook ‘XX. would ‘XX, we also but has industry's than the argue forward more daunting. did that even is putting a challenging out the it bid changed.

a the itself? deal a basis. what make looking type for? envision the meaningful to Just curious would just that sense that of are that parameters an like environment you'd from the something like more or something of in macro do of make broad would of environment type terms on types see a specifics you'd of M&A Or be perspective, to that you'd sense or to do this transformational more Is leaving besides

Chris Wright

companies virtually, and and for so of type sure of large there you I'm so. sale, that's that percent, is out the some stuff the environment, a not It are as but majority know, out virtually, aggressively there

all we yes, very at looking acquirer. So, of of the have opportunities. months, again, active we've sorts been much in But been few last not an

the mean larger at horsepower. this But there's anything's happen transaction doesn't or can is grow if asset that acquisition But whatever. surplus a of So to share compelling, going value single something's we or metric per all. via

mean my likely? only say, deals industry. too would more in not, a that. very whether active or think number but I in it time anything? factors? do you the will of No. of bring early But Yes. we're in in of is short in Does one this is I it in environment saw so, technology, it it is I the we'll of will And XXXX. mean of we type the terms say, yes, And lots like of be answer it does And first guess Liberty terms of economics, does will is there's But half tell. those what So, see I to guess

Sean Meakim

helpful. enough. Fair Thanks, Really Chris.

Operator

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

Blake Gendron

land. follow incremental than, here, I'm far to talked other and of pricing there now value that just the a would that contracts remarks. based on If steadier marginal you morning, for model look sort that to as oilfield. performance employ It like? know stage Hey, state the commercial thanks. performance-based is seems like but North we've concerted some just in could Good wondering underpinning pumping prepared a more guys. want performance we're the the in from efficiency for your I greater what up pumping comments. shift comments US part, I metrics about wondering, does efficiency hitting of of I'm some American in deliver parts a of be

Chris Wright

the performance Fortunately, because that I by would say in based, put a you're is price nature pumping ground. you paid by stage its pricing

is it a rent So -- we our on fleets don't daily not rate.

get can our customers to going move hey, money we of where have fracturing out partners, number going So, your an or make even We're With a stages performance price. done to how every our how to that, more much to, that We've an more structure getting less faster. And is in of to our impacts time figure we a number economics. beyond day. the pricing to that we're a used x-price a customers discount well of more at incentivize a lot done. stage pay stages to certain dramatic you're and

they well million Now, that make earlier, we dollars saves of of they tens done numbers if of independent to half incentive or out cheaper certain have if spread. but there past faster. of it dollars done fixed and pricing brings frac oil stage, even There's or a get these a quarter XX there, that on more I've a earlier. before, XX a and without thrown a days get pat still out thousands the more costs daily money wells,

the the about of like we one is things it the business. practices So versus drilling

different markets with of little done to drilling capture don't tough and we But other to for always day yes made the that our them challenges have a I it capturing that stuff. model value. customers think and because the we has too to But much companies technology have Not value trying by ways too awesome find charging we very on we can that’s fragmented. get better, that be share many savings am alignment better I we incentives just general, together. if good so we But too our that, faster, together, the would say economic I'm always slice our customers. that. ways but done to so stuff save align with sorry, I incentives hey, share money, there's

Blake Gendron

No, that. And get totally surface I on absolutely. And that's efficiencies.

the data, going you impact or in in to be these about talked you a productivity you that on grasp even degree be going a and important certain productivity have scenario but You peers? demonstrate obviously what's from to subsurface productivity the how forward stages, To of which that in measure that productivity you add a of especially the better that's of measure a could leverage, that can the demonstrating most trends, of amount there seem that you moving here. the you standpoint stage? your would participate would per know don't I

Chris Wright

two But the they amount been of and And we that swimmingly it say designs. less successful. But are there people don't to we some the they we money did used bring we've anymore. on normal the need we I now in would after successful there, is It if work productivity that well, don't to of less Bakken come pricing now is had frac insurance we very extra but for the not specially different that of were you cost here's resistance increase, course deal completion early ideas on widely brand unsuccessful, So so that if a work ensured we'll sort do, know give customers back. deliver x risk, buy are but the was company, early completely them. I in Bakken, new

four making really a they to biggest customer for ideas think years. And different us, is to with more customers' going if in not three we did And factor stickiness little customer profitability. say efficiency and have fleets that go stickiness develop helps that wise, three utilized as different a year, same they're I technology's years. is we're for just customer do and we've areas. to we we Liberty. more a value better it in the better our going different one period, a be much And because would They or better. so we're know with the just and year So even three bit of to the us each Then the with partnered fully wells evolve, through fleet continue if three which I matters bringing relationships. comfort get get benefit to if that. over That's got we our profitability customers same customers today of customer can a proposition

operators we indirect our leased want they on and mean, we We they benefits, put And get not but But that. partnership. the getting it. money business think the land, get I frac part just out, do from returns We better their I acreage They're want percent it. indirectly. profitability we of maximizing But some to our we're the of ultimately of the it help from of in the So that's get designs. them they make the a own increased they decisions.

Blake Gendron

bit. That's could shifted. seems if the fair. It little tenor shifting of the like a more is in One gears conversation it totally legislative sneak in I Colorado

decreasing now it the in forward proposed. other design, regulatory let you're you came the some in work big been course longer XXX rather deal is governor of for the the the your a and wondering and the Bill that just pandemic major opposed moving by Rockies specifically. of lost as to frameworks change, just hearing said, and of and As to it, have Senate medium a may noise have been step What late, I'm because activity he'd customers out over its term?

Chris Wright

there? sure. months positive and but that to it three We've for but many is definitely But it I were it a overstate we a ago gas we're parties positive. months it place than politically, well, place development is to different ago. we best dialogue I now Is throughout think a had a don't in with were better yeah, better XX all. But want Colorado's and meaningful it, we're not drill ways a

more some I certainty next more over and think have years. we clarity few the

So I it thing. is very positive. it is And think, a good

Blake Gendron

Really Thanks, answers. appreciate time guys. the the Cool.

Chris Wright

Blake. Thanks

Michael Stock

Thanks.

Operator

from question next with Macpherson ahead. Please come go Our Ian will Simmons.

Ian Macpherson

next demand will the get pricing other on good And case better morning, calling a consideration order Good be requirements in thanks. you thresholds. for the laid of of supply. year based out to in a place, production Chris, recovery course back

at maybe those numbers, So of XX% the I if $XX U.S. this year. components do is had, we be so, million already of of the challenged how Thank beginning And also, useful the slack in saddle be critical in with next power year? and as in the you maybe we you. market? share if could competitively any around side pumps may life get the back more some capacity thoughts your in the called we don't quibble think could that to fleet how you of horsepower the but around know going much or last late Having the by year, adjusting

Chris Wright

this, cannibalize focus. today. the fleets turn in of the much where parked the I'll useful normal equipment equipment. reduce about new attrition. That's, of of industry equipment practice just it then of to cost parts relatively and we start longer-term number all I'll lives in we low to efforts talk Ron of we've made there's been is last to and but expand take Yes, years, some yes, not than again, total ownership built this few both smaller on And a would I do the do investment say But, to technology

to be too today? is will it quarter be. still It'll it days be others a better certain a their -- certain than frac they a lot a just was not of there it next equipment there's reflect and for time lot way might shifting, is attrition in continue is It reducing. year? cost marketplace Yes. way the XX than But, reflect be Will the very or much way, issues of a first XX quarter ago. numbers it really Our equipment. manage Yes. our in we of run capacity, Will different better

that. we're a community just bifurcated. push market growing working little there's on from to made. my think sweet larger to environmental this towards That's a move But minimize that'll and I and coming have. be spot. We've The of want So being bit progress going a players there's to equipment downturn impacts. specs Liberty out I a been

number is there's desire a think there. have for growing of it And so to And that that. deliver very players going a to small will be I offerings

equipment from then the of sort they'll supply it'll year will markets large, markets. be biggest sort of than there’ll and still next a of so And market, now, be pricing be and will be the be generation demand equipment legacy The still different of that those. piece

to And better ago, The then fleets see other thing as that shrink. still that's fleets out, than were next We year. XX everybody XXX lot math probably you're will but month a I Well, to made average going more needed or that's I low. of that pricing this as we have probably had to XXX a very on about is, end with year, so By shrinkage. talked our the said, help running. we'll

new build even brand it go drive Are and and start their humans those that for frac stand today? fleet, No. around So to like for if up, legacy that's crappy going on fleets you of there higher, pricing the fleet. there's no team out to have to equipment sitting that

back meaningful that on when moving will of people fleet that's So across the this But They bring be passes, might a level one people in are demand they be on from and the be reduced on when new most driver mean, early your pricing are hiring of year next year certainly pricing you're that is it be types. I that furlough, that up the comp. for easily late will fleets that's And already. will staffed what move starting people. take. team next might big

Ron Gusek

maybe the we've said engine to for components probably manufacturer, our field. pump, for thoughts just two certain those that assets a terms it in that of on are them. from our particular on select for question, in this we and think that them operate We the transmission, with components longevity put specifically past. and And belief comes your experience There more ways. the I Ian, the guess, in I best how a some various asset on different we to then down the about on are think in few example, they just based

to possible achieve And and particularly opportunity lowest supply with there those run those. saw into pump, of a in to further think ourselves cost into engine there a we the continue bit lifespan the so an ultimately assets to possible in in go the little optimize those. power work fluid the we've chain for world. the way that the design down We about a to as inserted to and further the best itself, closely to for the And back a optimize ownership manufacturers the you entirety maybe then and move transmission, its of pump further to

life the is make the it into that it are of it. that the optimize thing fluid flow be, thinking metallurgy better even the a the be with a steel And over then internal fluid last through stainless should what about what and so power-in, best the on should power-in we've how been months, why valves exactly doing the what to working example, should fluid XX we same XX, be, than fails in, that maybe a that exactly to and And fluid in little power-in and that design for longer a and and of to seats asset. could that

there. Working been for exercise other key with that. in has a different partner And little our components so it been than there has a closely the

improvement there. opportunity that And to further positive. further And quite expect think continue think for bit results see We’re we I are and I back a engineering to process. into design

Ian Macpherson

has hours sound been part That's And rotational your great. Thank you your I correctly? capacity through more borrowing site confer on it both. strategy. stretching Ron, Do of like really that doesn't

Ron Gusek

that's No, absolutely correct.

If you yards, drove you see past that. of our would one

in have pristine our and fleets fleet. we condition So remain fleets parked those

having the pumps efficiency. fleet out XX is out the fleet the pumps to in a from take fleet in field not improve We're that field as in was to the today same past. So to a XX is a

Ian Macpherson

guys, today, you, answers for appreciate it. the Thank all

Chris Wright

Thanks, Ian.

Operator

come next Please from our will Scott Gruber question Citigroup. ahead. And with go

Scott Gruber

morning, everyone. Good

Chris Wright

Scott. morning, Good

Scott Gruber

rent you're for where even rendered, want our level we spot incremental think share? services you the turn guess continuing say, be to just we're there. have that pay activity a on that's weak there's be Do premier returns simply the in for some I you fair hydro the put the going from and that you need sand it you question, Chris, what operator, to your agree a there'll on if pumps a you be to can equipment, look us, So, to so just the need an when line have concern a relative spread you competition premium going that you to fleet historical fairly reactivated. given of is to be pricing have think by out we to you sacrifice do needed, the in And likely where if decision? you improvement make margin a standards still think that and of time kind may draw a to will

Chris Wright

had day viewed wouldn't would Liberty the company. that say If doing for increased all a be customer. customer versus a same Is Liberty. other started just the for we a be That they been fit the the the people? puffers, as I us other Absolutely. since So, desire that we've we there wouldn't

price we have get posted But to place say, a it list where look, are Scott, we don't are mentality. and doing I we we No, have to would a we changes? and So, that. to because going never want a partnership

years customers, and and their day. for getting getting a It they're their they're $XXX ago $XX Our getting XX. XX for every now changes oil oil, few

sick into the cyclical went And of was to a it. cyclical not knowing we size business going business. it we're a be So,

business our the and with on over periods. return capital mid-XXs live for our got, have we on which that, just company. we time a what So, why our look things compensation the employed is about return to history like We've the employed in cash our company, at executives and bonuses they're of in longer over

decade? Is worse. no, go our actually structurally structurally the low Yes. be that next now? actually just is So would a not. don't five But other are for we'll right enforces and the I in that'll guess, getting affecting No, better absolutely think Scott. do But last I next But the way five think just just see. it meaningfully the years is supply it we will than down our guess side of get of on think table you're well. a guess the from, as where I players people the demand to got that coming That's But in industry. you years. industry and

a is it So partnership.

Scott Gruber

agree and growth. especially be better, there basically you we the where structure genesis the really people to is line If another have will And premier going adequate that services. operators a pricing your structure a you don't to get question time think a is the just I really on for the capitulate of sand? as we're should Understood. that in guess to get draw needed back

competitors and that of You need sand to happen vis-à-vis kind to to the or today? to it operators here, differentiated is what that the have premier pursue? pricing naturally have can we a just in your Is say a draw do line going incremental you're you're actively more something getting something

Chris Wright

could say Well, have. dialogues we you say would even I

in than would we're to Better but it we friends this last exactly not XX. bid cling here. see. the the out they those the now are I lower state better don't out no, industry what the you cases, trying might in three a lot have market. tell consider actually prices, of some they've obviously something is everyone see cheaper They were XX more It given the six bid today, going the the today that I downturn. But just where say I'd reasonable. of people four is may XX% will then frac hear And else, tier on. pricing is That's companies than and say clumping we ago that. we And reasonable players, years that. now We use from companies been better discipline to or us for think And among I a think they'll eight or looking in out or we're was the what But meaningfully, like case of is may a and dramatically players. you see there top pricing not,

Scott Gruber

you. appreciate the Great, color, Encouraging. Chris. Thank

Chris Wright

care. Take Scott. Thanks

Operator

back concludes remarks. I This to go Chris answer question sir. and the Please Wright turn our would conference like session, ahead, over to for closing any

Chris Wright

today. for everyone, time Thanks, your

my is everyone some issues. coming months. wellness Liberty. family in we were our and to in of through appreciate to time long little health customers wish fall. this Liberty a the but the And all once quarter our We a our you in we'll the your answers and and We winded, And talk suppliers. appreciate Sorry, the interest talk

Operator

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

now may disconnect. You

Liberty Energy (LBRT) 29 Jul 202020 Q2 Earnings call transcript