LBRT - Earnings call transcript Q3 2020

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Operator

Good morning, and welcome to the Liberty Oilfield Services Third Quarter 2020 Earnings Conference Call. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. And please note, this event is being recorded.

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

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

Chris Wright

everyone. the Good to difficult with demonstrated an challenges, downturn, our results quarter In pandemic through business. together the Liberty extraordinarily for hand-in-hand our applying by work principles industry core to third family gas meet and an a oil The came and global of time industry morning, our working our resilience midst of the near-term customers.

been. Our customers have have conditions challenged by we been as as current

battle in this together. are We

and we to Liberty this top-tier trying Completions customers, share of Just of continue at are growing expected pace our and during that. results or times. the strengthening outset is QX business of year modestly activity market reflect with our as personal earlier ahead our downturn, customers. the relationships with our we lives, and the percent grow broken with is relationships our strengthened

a gas crew developed The Shale, the geographically gas Haynesville an also strong The an major first operators. basin, marked of being by entry with third a existing Haynesville world-class our customer. resource, is into quarter advantaged,

in flag plant the Haynesville. to excited our are We

third a frac. operators our people execution quarter. safe with to. total was facility, has and noncash room further long-term building from team's our been Michael including Liberty's and items, $XXX our our decisions QX was the oily team share all off third pleased of abrupt North a Our million, solid eyes results end quarter million as been that accustomed we that they the excluding as frac all during downturn, quarter were XX restarted to Because under the while the following the remind availability the $X Cash severity September equivalents improvement investors an incredibly million base. liquidity, how And of the borrowing basins credit of the second I of keeping at quarter. has of million in second the $XX want activity EBITDA, and cash hard to worked challenges navigate will adjusted $XX the halt our critical leader macro customers have All coming in the efforts future. these never American easy. served improvement fashion with our quarters. in the for significant advantaged Not our improvement of shortly. take volatility, goal in for them in into financial near-term Despite competitively the results, of albeit have translated full I'm much top-tier are this

solid which business sheet requires and longevity a liquidity. have for Our strong centered balance and through building always strategic returns a goals on been cycles,

our the with and that suppliers are positive the customers, from has reception OneStim We received pleased investors. deal partners,

we've far work the and integration are conversations our so at done We OneStim. colleagues with excited preparation by

Let team. me OneStim. X briefly our Bringing has discuss together these energized businesses

early its stages. Our integration work is still in

future technology, opportunities. people, effort This Things are quite in with assets, immersed technology strategy framework. our progressing are huge huge well. and alliance is We on discussions a

solutions are even platform. designs, there our better it technology complementary how say simply with the and opportunity the deploy excited are by we're our Suffice databases for opportunities pleased supercharge to offering. future tremendous an technology to are completions We service Liberty engineering that innovative to and for

on details more in initiatives out roll near future. specific the will We

again, transaction. this was say technology major the driver me Let behind

perforating also comment and excited the any are the complement to at too specifics It's more We by point. simply pump mines. -- wireline down business early to sand on this

the the expect We transaction towards close the to of end fourth quarter.

We likely already activity at much third quarter received Frac a that pace, in antitrust at market clearance. modest find supplemented We a rebound share. continued has exited gains Liberty have the higher more we began. activity which the We year. see towards the end to leveling decline level of of quarter this the be modest than expect seasonal QX, activity now off until

we furlough. no For fleets, all increase longer the anticipating quarter. active from will in pleased I'm must of XX% recognize and acquisition the again by for to than by family. made greater on of have share the now are any we -- OneStim, thanks the third average give excluding those frac quarter, great the employees fourth ones that sacrifices Liberty I

of on Liberty quarter, today weeks is flat. building completion will however $XX, growing bottomed our catalyzes to While dialogues. frac consecutive to also the the ESG onshore innovation XXX with recovery, further. somewhat advantages take levels, production levels activity catalyzing for about improving spring prowess barrel and even around growth. of competitive bottomed ideas looking for a below we healthy oil. central to still cost place Hence, X today designs to The this. after better Those also gas low are are X we of our improvement active oil change. the to the of and were producing industry we Crisis relationships the prices a too to future active conversations new oil bouncing a have count expect are well unfolds. been and for more Customer to Natural customer next months Last has Oil customers. are rig a our discussions increases the Customers with of that at Liberty have activity see and is hold we prices. industry. Current engineering reality are that responding U.S. accelerated than are further level time. discussed prices but around it year. U.S. activity the count from fleets, likely greater and road in an lower part spread modestly gas

We the are working hard year. to our release ESG end the report of first for

the We These to this our are I the days anxious to fresh, family. Michael. and now industry turn our Liberty exciting to are call candid perspective issue and bring a over growing for times. will on busy

Michael Stock

our our dedicated activity business industry. months these Good our changes. levels, morning, everyone. financial customers' structure our It And results the we to second cost for and with projected align been challenging X quarter, a in transitioned has reflect the

of the end active during XX activity than our slightly quarter, levels fleets, projected we third the of in quarter. ahead us higher or were prior the to which expecting the quarter, middle These improvement now is customers with pace our guidance our partnerships the we of In During greater the achieve to growth in in the see second month-to-month top are fleets. allowed of period. well-capitalized to fourth results than average pleased XX% trough frac dedicated sequential XX

of costs in the loss third related after $XX XXXX, quarter. and increased And million was reported the cost the in a XX% prices costs second quarter, of from stabilized, commodity Severance diluted in quarter. at the included the quarter. totaled were improving per Fully share third For per $X.XX in was net million activity the million return albeit quarter. backdrop loss net million the revenue diluted second to a tax $XX of share as sales for $X million in the the net steady in ahead quarter, $X quarter second during $XX the million start-up low $X.XX fleet from quarter, loss reflecting loss third $XXX fully And of levels. the

from $X Third quarter to second million loss a the of a the adjusted in cyclical of in improved quarter. million $XX quarter low EBITDA third

employees the anticipate This as modest maintaining investment measures results. aid Fourth quarter the as as taken circumstances and include General third furloughed of administrative higher in to the employees. gas a X% expected borrowings oil $XX on on cash, year, operators quarter cost timing maintenance increase with liquidity the we downturn acted our uptick in cost-saving the increase cash be recorded of our a in continue Third million, are quarter for EBITDA and $XXX activity bittersweet. million modest ABL We to a second Net $X.X and fees We million working the quarter expense the on have when staff, $X and in furlough. we early the by a oil and liquidity related expenditures fleets, driving return expenses and $XX expenses and the of the volatile, XXXX for Capital million were driven from the $X.X in frac overall no a costs CapEx quarter to in during were was adjusted $X historic We acquisition quarter this excluding Results swiftly well drawn general returned transaction in production costs million an were personnel continue position tax primarily balance onetime third third strong quarter, by expenditures $XX The expect million, quarter strong quarter, certain items. quarter full in $XX the a sheet. totaled shut-ins administrative next-generation million other including million. fleets exceptional fourth of the and benefit curtailment from managing to $XX balance in to general of and been conserving items modest an second of of in the including our no of facility. quarter quarter. second million, positive basins. increased in reducing capital range. in a completions and noncash million to capital $XX of income $XX million expense to the interest totaled and ended corporate OneStim associated due primarily after for expenditures in circumstances was highly activity, quarter following administrative million increase as and modest

goals in the to prime a as core us future. executing also Equally to that take is allowed We generating stronger as acquisition superior to in challenging The opportunities as believe advance we catalyst Our it very navigate for our OneStim of make past. us will years OneStim improves. serve returns cycle of advantage will allowed have a a the principles market. example us importantly, of

of we to our acquisition frac discussed, our and remain integration Chris the track. As on business expect late in close Schlumberger's quarter, efforts fourth

have with a technology innovation. on investing focused on been long the focus sustained We in future

Q&A. for even believe will with back And the For platform. we deal, Chris investable strong before a we to greater we open call that, through can deliver turn shareholders value this I our now to

Chris Wright

While full of the demand the last shown a April months May. and several uncertain, global oil rebound recovery the have in timing dramatic in from remains lows

in However, cut threatens efficiency a in pace the this recovery been resurgence has industry and future improvements. there COVID now the Against backdrop, demand. oil a to concerted cases effort across drive of costs

among effort, announced XXXX trends across Devon-WPX oily These Chevron-Noble, will we Pioneer-Parsley that likely consolidations seen we've oil the to and more E&P significant of and operators, basins, part gas into come. including the As several in Conoco-Concho, expect industry. and persist

We operators other and plummeting a of or will will downturn. expect decades. the dramatic and tragic a in activity. world depends officials recovery the normal Organization doubling rate, the time. This larger side the emerge service take companies World that expect a from on reversal the scale poverty Health return over A best-in-class to global on previous rebound full-fledged of of global poverty of economic

people's of the out is that more oil of One growth getting middle to a class greatest life. demand middle whether moving is poverty, lives around for class of world, or up rising the entering affluent better the drivers

progress you century these to our more for look of long this today. both last may fielding what that have. what oil gas. joining been We interrupted. it has trend economic any it to and simply of abruptly you All world's tremendous for We industry again, reverse and more the demand to us people. well-being Thank means means forward The see the improvements the of for importantly, for questions

Operator

Instructions]. [Operator from will our Gendron come And with today Wolfe Blake first Research. question

Blake Gendron

driving impact through technology the review gas follows to can equipment. and I see it's do appreciate throughput, still early and OneStim the easy that what and through efficiency still going in days I the oil line. your know with of commentary there about It's and scale with and the EBITDA to pretty Liberty you're terms globally. definitely

conversion, In you of would have terms some to equipment. cash free an it seem opportunity cannibalize

do bit little extent equipment side what with equipment? the maintenance kind savings and Liberty's varies my this at look think cannibalization on and a the So is, maybe be forward? of of OneStim up it basin, year does could And you the on by question equipment both now you as match next CapEx well the moving

Michael Stock

Blake. a very little It's that. we Yes, Thanks, train a take run matches sort And of what of up Michael. of have. drive bit really. to well, very the similar I'll equipment They sort

One key when looking are points systems, of at decision Ron as bring. to have we're of think we looking one the and I far things at the as team the just that is control

have, We the green have think, standardize across about equipment in And the great XXX I tagged system. we'll But is itself pumps. shape.

order. a tip-top have in of we'll So running lot equipment that's

of stages for at of capitalized significant We maintenance have reducing going and equipment, a lot that. will Still be will that the available cost forward. a looking in amount

equipment I $XX somewhere the little I But lot curve, savings that's range a bit of million $XXX at. that year. highest to probably would that the slower going Probably of end million in probably to over at guess smaller you years. sort and of the comes bit look of, the next of back and XXXX a spend in of think to imagine, As XXXX the be there's then announced, is reduction a out in third a amount of can X little sort we've a amount XXXX. through bell in

Blake Gendron

about Haynesville and characterize pad Maybe comparing frac Haynesville Permian yourself. that entry have Understood. our fragmented from the work help nature ones customer. hear was and in the opportunity like standpoint, wells to don't operating of there maybe respect piqued to actually wondering existing companies maybe pad would And the our with with region. of the in like obviously, the upside. you in are opposed can to a the a We respect if us a was I'm lot configuration nature you what what an the understand efficiency Haynesville private work pretty maybe with because the interest, also, impactful pad large and just are some Haynesville the as view, the there. illustratively just E&P an public throughput to OneStim, there it's

Chris Wright

Yes.

Chris. is So this

contributes So high-pressure to Haynesville size it's the deep and is means the which huge highly a the it But basin. overpressured, resource. of

which So psi. means pumping above XX,XXX

intensity. foot intensity in recoveries or is reservoir And is so dependent the high frac their it's Haynesville. highly So thick, pounds The pressure. and per are high frac the EURs upon

it's So basin would like been pads. a Midland I and going significant-sized as well, to on gate. private without than the last, very forward I there super And the intensity pressure, of are hear say, for the you perform new there's Permian. team that number number boy, for the to And But would yes, and of say, of resource And it's frac it's publics. out operators right it there a each Basin. arrive Delaware We've the Haynesville a like average so base tremendous. while. proud higher is a than looking as sizable -- a But We there's well in more outlook strongly in outlook at our there. the high base

facility. with customer and doing we yes, has they significant very work, as a and we with some So presence have will next a a year. busy been there, you arrived there, great said, be it's And OneStim

long, see us long Haynesville basin I for for yes, time. So going as significant on a a

Operator

Chase And our Bank next of question Mulvehill America. will come from with

Chase Mulvehill

increase fleet dig I on lagged in revenue I count. your of The in kind So improvement a little guess want bit average XQ. sequential to your

of much of So utilization how versus you could kind mix? that maybe talk

Chris Wright

our high. profit was QX percent sort one, Number pumped inordinately in factors. of of big two self-sourced There's

means lower. same itself in revenues the are amount frac that activity, of So for

QX, in work work other have of The of QX, that and going at a the was on beginning you is work, of got from continuation you've lot QX. a

in again. of got Where fleets, in better all QX thinking and a on likely new kinks mostly environment, up into shutdown. and QX getting you've you beginning pricing out the going got QX are on at the QX. one it's work do running of things fleets as back here, a the operating you've So quarter. got all pricing you've and And than cylinders you're average course, of -- of of lower smoothly day working as launching

Chase Mulvehill

kind carry Okay. if Perfect. question then QX. And we of this can into

go your to average that utilization obviously, XQ guided than How XQ? between fleet you've we the Given XX%. about into backdrop, relative think moving we up of count pieces kind and as more should XQ mix

Chris Wright

XQ with activity strong level. into We go a

the So running likely setting. throughput -- revenue high fleet more positive in are so QX, you'll likely fleets see into fleets going per you'll are at -- a at that running

Chase Mulvehill

last on seeing Or on still you Are pricing. today out And there frac is the Okay. pressure it down actually real the one, quick, side? bottom? pricing

Chris Wright

reaction at terrible. my you first Yes. pricing it's I is say frac say would bottom. But a we're when

Just an it's lot a almost industry necessary thing. what is marketplace. of right a of out It's now the capacity where pushing there's excess capacity,

yes, pricing yes, So going right it's down. not very It's tough it's just, a now. But bottom. low at very is

Operator

question And Cowen. will Marc Bianchi our next with come from

Marc Bianchi

hold of on curious progression of my kind what's of prices But quarter fourth a the sense sort most I over drifting made based I from oil you know the have the guided to perspective here. activity and were flat. those sort production to here. is guys needed of comments kind market on XX% maintenance the of I'm about sort of lower commodity here and of $XX expectations for kind mean the

you've what here activity quarter? playing fourth business see sort broader curious, kind that your just sort of head 'XX? that market we weakness of into of how you And does I'm for forth the do how affect So and put commodity into as price

Chris Wright

or or exit consensus say did will If commodity prices December would months ago, say I definitely we hold at this lower the impact activity. would look would sense rate. the X I production flat broad was U.S. X Yes. at drifting

the softer some that But think next next year will we're we of are activity or seeing higher, fear I given prices that, I'd oil oil still levels get sitting still to obviously, on higher production. say and tone at oil -- see next activity today. levels prices we the see expect Oil and, likely year I than maybe U.S. How not mid-XXs, activity increase see stand significantly you'll are later today, scenario. than we that's from today high flatten that of think, we're to it's in we where XXs are there, think I average prices. on as one prices much depends they today. are in smaller increased year that's I around a where we where If but even

Marc Bianchi

incremental. then terms of I furloughed in And sort leverage in weighed In in out that margin $XX light look was Okay. a or your one, we know the terms here. kind of just sort of leverage. which workers operating your EBITDA the margin of leverage of fourth works of this the restoration kind be some of just should quarter, kind improved there third XX% If or XX-plus at margin of thinking to may mid-teens activity of leverage quarter million, What I the on in to the have increase? XX% percent

Michael Stock

stronger back going find QX Obviously, some in to also we're acquisition from from go. into being brought into that we run quarter It little transaction and little heavy in and Yes. the with the going should a were costs to costs a bit be third we furloughs, of the of relatively brought as back to going the furlough. Everybody as dealing probably we on some we're OneStim than is flat. came quarter the be fourth

Marc Bianchi

things, normal then like of deduct a your would And that. Michael, unusual on from given absent for think the we points If we mentioned. So be just what can a about, maybe what incremental business? these that just about follow-up you all the -- to think

Michael Stock

I at into too of the target Marc. moment, It's that. go a Yes, don't think much just we'd moving

a we're as we're very this, very, Sort of out this of coming unnatural coming off still sort of really trough.

cause to more -- the probably normal else. would probably about confusion incrementals is than anything talk at So moment really

Operator

David our with Anderson And will next from Barclays. question come

John Anderson

you the Chris, talked it prepared guess, reason want more remarks. I -- of of it oil together. equals it these bit a can on What's But So your talk between a you competitors? think about putting kind the to you counter you bit this? frac Just I of it of of about sort become them, how plus E&P how just space. ask to less a it's this? how surface, me of there's consolidation seems in another when of your maybe ultimately in months, that a to XX What's about about and hit many find programs investors, It you that sort off Does about the seems -- to we'll kind X the to shakes couple guess the see those comes because than next a talk the playing on something X two dynamics for out, all I so out. out

Chris Wright

Yes.

Of be different. course, all they'll

there's plus. and a negative I a think And I hit. think you negative, the

companies. You're for play, They're to a combine X in X grow agree, you're going less going two. This for their cost, lower than their OFS will X, CapEx, a the general, to sure. overall CapEx, I shrink be space. efficiency negative is that's to And get going plus --

and service got going to there with companies. The E&P bigger, likely scale. we've side flip have of we is that. so stronger that are companies world, our of technology-heavy mix bigger, or -- the to live partnership with to is that's be And we're stronger And that going

kind also advantages think Liberty. So it it in business a world, like I a that of competitively

Michael Stock

what therefore, for will from of survive development the larger it And oil to -- who have an can XX Lower lower got that, of term, in at and lower to access from the capital of I economy sort -- -- sort who've allow makes scale, along oil Canada follow-on got who does, U.S. think sort drive companies price. so in of think I think, I this is it sector price, in gas and more a just more and the well, impeditive long a

hiccups us the term, even therefore, the right, have you're over months. actually should though some may long X advantage we next So over

John Anderson

clearly for you well. seems Yes. Right. There opportunities as No, that clear. pretty are

So of bigger a separate question. a question, and picture also kind

be trucking alone. sort I problem don't know thing solve. I'm say your Liberty operations. safely just competitors. feel if or helping than do can of software over internal It's potential I'm potential mean, chemicals, or see sand, as curious whether that's of programs wondering efficiency generally digital to of manages of kind is winning step speaking. that stand for where for operator supply complained an also that the chain, kind of any if where all advantage those we these on operations, the One us think more cost just work. a you something the trying I you I of water, Taking have your all chain is change profit account, you efficiencies that into same of wondering supply you in a to of And just of here? it's that But a XX% is out? I'd on overlay third-party it's the you're if kind

Ron Gusek

Yes. This is Ron.

I a hybrid think we as see model. that ultimately

Of are the of piece things. make mile where opportunities that course, last opportunity, than there a And I a to decision you going particularly of in better is software a piece think see person.

for place not So of places. example, about talking sand, being to true do that trucking But if Permian, That's XX% the we the were could be absolutely case. around your point some cost the business. true every certainly a you particular basin, of in maybe that's

those lower the cost as to be make that comes who trucking you effective mile during trucks allowed piece, And out the turns utilization assets, think enabling last driving. they're trucking about opportunity more time so to to in those folks those of own yes,

piece lot get software terms is limit an times a do value of Artificial optimization human. a some be we a But very, when to an We means that requires needle efficiency And that replacing degree our the relationship suppliers to of have intelligence feel, at of and will exercise. I there's can the Liberty, with good. able on move so the And in very place we computer or think challenging. what a what to there.

with have to have replacement no pick through and supply with a conversation call relationship issue, a up think a work like. know look up that the phone, I there's pick able for or whatever the you -- being challenging might somebody to

think both think opportunity pride I and it's there improve but so our software customers see on going to we a suppliers. relationships with of and ourselves to be the we And efficiency, I mix ongoing

John Anderson

than So a our Roger, position to this last you're like we just curious percent I'm curious I'm about is number? x say, a related XX%, -- Is more where can you competitive XX%, selling XX% this in you x a in if point? of a how it competitors, advantage. can of that, now that percent provide think kind cheaper hey, that mile terms

Ron Gusek

Yes. but exactly know I could I don't that quantify what no question. that is, it's meaningful. There's

that a terms and huge profit chain confident that to side. our be an supply else's, I generally looks carries lower in reason you've differential of self-sourced of And on weight. customers I to we the amount the everybody advantaged are that's can I us think seen convey we think think end

a confidence supply of function world. relationships our we a competitive that, we have of I them that is that function of to to and have, chain customers think have and ability important our that is we the scale function in deliver have, on our the is it's in ability a a focus

Michael Stock

we're getting. things the that one That's of

geo and of loads in manage able around being able One OneStim that the across the sort trucks moving and of things and sort been be related company sand software new on we'll love to that of are they've is getting efficiency. conjunction we with sort doing the artificial using then intelligence deal, efficiently, scale we really of, Ron as sort of of leverage stage the the would some work say, to between some and actually again, software to that, about those time increase the fencing

key They've customers then really to a and thing. years. investment it take commercialize this thing done to over help it and of it's few put think the to that a I them. lot able out be our last We'll

be them to demand largest going scale their set are larger our Our of costs. help customers of lower and the

Chris Wright

In the Liberty we've enhance when mine is, running through and efficiency would tight, we grow disruption. our What There's we've to customers, addition our to robustness itself conditions. ability we had recognized our that reliably are on of of to another to that and competitors well. working The -- by operations bad, prided markets all mine have the has robustness expect say, that cost, and continue more our goes appreciated systems reliability. down, are keep as weather advantage a goes And down, hard are stressed. supply much I had to downtime is is chain

Operator

Sean next Meakim from will Our question JPMorgan. with come

Sean Meakim

So to the Haynesville, the to Schlumberger's take avoided Chris, fleet enter going their to to dry basins But not and footprint. you've you're move existing gas on to surprising, follow-on is date. the decision

about timing that You and what of markets always in countercyclically. invest Could gas-related for activity? try talk we gas signals terms your to entering just outlook your of dry

Chris Wright

the it mid-XXXXs. bet. basins. in technical about maybe 'XXs, began revolution the shale You the really until gas Look, in late innovations the nobody Really, the heard

rocks move gas is small So it very through it more to and And microfractures. began smaller, there. molecule able pores and

were flip massively turned so oil or then that oil weren't limitation. it the there. in be and we that of U.S. up improvement gas even a to basin. originally, go ramped very So God, the out would be that it's how quick learnings the fast to the production not But would big it in sure Thank is good side

started So Liberty. we

easy X pretty A, it natural count that gas And the U.S. oil let's While gas. its at shale reason other win those long-term were it's gas It's export net besides decline on just last to of which and technical it investment the the displaced. bullish biggest to we we rig oil big then in grow. all that pretty little easy years. harder likely a it's natural the be versus future, count in we and oil, -- the fuel love it over basins natural And is fleet little basins, would producing load. could a to saw huge look revolution, bigger for would cycle oil. difference today. importer of the the export But a and rapidly, importer has gas the in is world. major started a it the factors gas, And

to of fair Now of room exporter and to third-largest a LNG capacity Mexico. the we're world pipeline growing actually in and amount the run

So gas the infrastructure happened. to the decline that And in in market count time in the happened counts, has rig fleet build decline grow gas basins. to major has

after unfold, massively many hit will we've But rise today. increasing is guess a see not how we from significant of And our it I declines, depending So upon of things the may large, percent suspect bottom. the they activity different in In gas in activity didn't was the even different those that basins quite basins of increase. downturn, depth marketplaces. just was the if dynamics, years

years. us thinking have Multiple gas we've So talking customers for been that. to multiple talked and about about

in to grew to gas So I we the we X% XX%. acquisition, entered of our were at Permian of last timing, basis. the would the we from OneStim share say, downturn going the on move Permian? market because totally We to independent did the Rockies when enter Then the the bottom

And first business, so in had we for the and capacity. spare time -- our

so Permian. entered And the we

that since and fleet for Permian. of the as downturn, the we moment brief last Here set depth time a was that first the where well, to the

During is this thought timing gas capacity, enter we had we spare obviously, basins. the good and downturn, to

we that that time. third point makes customer So in, is entry at sense in makes then it the that which a ingredient, that's was specific that believe solid,

are. I we in would in say sense of be OneStim the in fact, So deal, we the Haynesville yes, fashion the would today, the without same

to go -- entering and quite from just we'll scale Now we'll quickly.

for I answer, long appreciate the Sorry but the question.

Sean Meakim

No, answer. it's good a

think really context are about more understand traditional to looks a to what just relative fleet? capital little a And the to think outlay helpful. diesel curious And you year? the next still digiFrac, how contract securing just you track like I'd firm I put for thinking fleet we out bit about this is be type of deployment the a that then market. before

Chris Wright

Yes.

that little So a fleet It's significant inside of But there's tough the that say dialogues different about tough of we're time. may it's profile interest. I'd a marketplace. But much it. technology, point emission be a in marketplace. too because at different in baseball this

in say And arrangement reasonable us of the of with commercial right could success quite in of we But months. that be it's as and building fleet timing deploy end that technology digiFrac fast could the the depending that running and the to next What in front sometime And that to be XX likely, into truly tests. the so upon a would arrangements that, we next the be it's enter would we is of robust right our we we're in is in happens. us a a I And parties. critical is and critical deal We'll not the the commercial back sign the efforts, development engines that. it field few can believe be to are certainly months. differential end all not how that --

Operator

our And Riley come will from Curran Tom question FBR. with next B.

Thomas Curran

my have been questions of Most covered.

update the a acquisition affect of continued your and of deploy merged regular VorTeq system. integration So out to then with my terms your is might timing then the you live technology well VorTeq OneStim I'll and you to us customer involvement Would the with that year-end? this specific of turn others would how before does to roll how one technology which on initiative well on across and the please topics, term, longer of the existing that And fleet? both in that then follow, trial intend your an plans,

Ron Gusek

Yes, Tom.

for upside right to on turned away fact, So we I'd well down and technology in the weeks putting say our were world on out doing well so. way from before that maybe live us,

of set on to we sure success that again. to out make path We're do ourselves back for out up the to trial want we that. course. go We that when have for we're So looking on, right candidate

team working at in sales find the the we partners our find that. so E&P Liberty that candidate when And out the get technology And opportunity, is for to with will right here the we right and plan a like evaluate deployment that, commerciality beyond for make Once done technology remainder the and there. the testing we we've that get the of to then of we would through the field do that.

we We know that again. down working today. sit that's to we're in to So hard yet, that date get don't a the field have out but find spot nailed where that

OneStim didn't outlook really acquisition, on the change it as far our As VorTeq.

OneStim together and been team. was had mostly recovery for were course, That the energy working time. Of long, a with we're independent long we of

in Of course, with own parallel us. had They're moving forward. they their efforts

I that we think different around we use and thought both little maybe a how deploy had technology. going we were were how to going that to

across we evaluate in continue chance a that consider around deployment, once now. performs bigger with get finish with We footprint we it field, have line the we make a final to the how then obviously, And on plans had that to over and the there. decision little that

Thomas Curran

your it like able you year-end? still you're follow-ups be this to across Do looks deploying when And to underway then. to to -- live first to evaluation, are to -- before all entire or intention if your is expect going Just two frac requirements, is your well comes technology get and then meet you satisfied, the it it commercial open fleet? the

Ron Gusek

well done go. in candidate out end think the certainly the of it right comes for And actively before of now. we'll the we certainly We're up, that, we how about terms right year. have So to hope when looking that

testing all alongside a on of the that yard Having in short with typical we've other through the the our outside notice. that, through been technology pretty up. do getting to of comfortable ready and in rig been work rigged relatively are We we're

so So candidate that it's find quickly. not a time-consuming effort to if we do

valves the as type pumping sense using probably pump, end where system we'll end deployment, of much fluid wear we're we than design wet the the crossed, we pressures we that a that and the see at elsewhere. others. the there. of So makes the and think seats there do more That's we're tear of really places function are of VorTeq There are the fluid higher than on ends, places And job of fingers before do on about year. where then or

-- so the And decide factors that to when be of gate deploy that'll we where we're prioritize it'll so. we do ready out ultimately and those VorTeq if

Operator

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

Christopher Voie

pricing you not per think sounds I in said the going So should expect fourth fleet be you and down. quarter, higher is revenue like it

assume in So is $X it probably should around to the that third fourth fleet, GP be reactivation ignore third it quarter, fair million to was that, the in Is per think quarter compared if the fair which you to that higher quarter? think I underlying costs.

Michael Stock

on a obviously. small assumptions. just assumptions I of those lot one, mean on But that would logical. based that that you set yes, given of be mentioned, It's But Chris, the parts moving set small was

No guidance. So yes.

We profitability as you will know. not give guidance, so

Christopher Voie

Sure.

landscape now there's to band wondering in some pricing lot now I'll are quarters, question tight next is previous is skip in up to right going then you in outliers. for think mostly do there that, what situation if of Maybe what's you obviously, messing still are of around, bidders could describe be just right undisciplined well. Well, that pretty a still? tight to then XQ EBITDA. I'm Okay. the pricing about But bidding switching band people with back a as few pretty now? the my a hold I want right to -- terms other

Chris Wright

But potential partner other them that make are tight players it's that sure. from a way band the are bids there not often, great have But think off that limitations a reasonable for some reservation, characterization. I Well, us. is that for usually,

say, fair I companies. else, general, So successful general, the there's the in even they're they lot everyone a cheaper bids, amount better though a than in may cheap with crazy of, would be not

last doing that. have a making upfront, that apparent it for more hammered that You're there's reason cost of if there's And been of or I X and the really experience And the a maybe home last E&Ps, that made like reason the that. even the months. partnership, someone's X players, in the something certainly think cheap to the partnering with a X it looks weaker maybe months

Michael Stock

now at have players while pricing the the of tough definitely -- more moment, market exited around that of left the ill-disciplined I'd just are very area. sort is say, So some or

the is The staffed fleet the I whilst equipment pricing say the other majority there's available, working. the the tough now majority moment, and of at fleets a will is lot that of are are probably thing -- of

X service that. next from a companies have would to over where disciplined. be if going what of the be to going I back, relatively you to new months. just and the indicator see to expecting majority environment hiring -- with happens tells that We it's fleets, X So expect But industry are pricing of they're any return interesting new again, to staffing be be to the going it go. don't logic will

Christopher Voie

third costs that's Okay, Do helpful. in the $X compared sneak in the just the little here. And reactivation you have I in one on if fourth quarter? one quarter view million a could to

Michael Stock

we Again, Chris. relatively be should the quarter, through Yes. flat fleet count on fourth

-- that to will year. through to Again, got smaller you've be a bringing go smaller almost next as basins. think a in I that we back the really remember came screeching were we we and into amount much So numbers halt oil

almost So restart we in this sort during had a like this -- almost of significant QX amount to really companies were year period. restarting work of

there definitely et inefficiencies, involved that, in costs So cetera. are

Operator

And Partners. Daniel Energy our next question will come from Daniel John with

John Daniel

been fleet address But is and I you apologize dropped dedicated know be for speak don't what if got And I what moving of today are, around why addressed. bidding dedicated advance. has opportunities can in to already driving inquiries expect so early you my are, you here, because I the question on of also XXXX. would portion sort will, into volume, your QX? if the to

Chris Wright

seeing ground, love the what's John, on that you're I always the road, on happening.

drive over pulled connection because safely you So maybe sounds good. cell your or

where is spot. that we what majority year season. say this versus next level is dedicated. activity schedules annual earlier, is year, that maybe If probably I for not, that, look, their plans I an bidding of this work the would -- is John, early see from is pretty on basis, next an then, of question RFP you yes, probably made people's year. the sort do large people slide. And If today. so you it say And our what And next for I it from would prices biggest or that percent asked increased And cooperative, expect sort oil of is of very that as of comments they're dedicated true are work is

you strong maximum us, for to win so us a very for the a win For, the that's throughput be preference. want and customer assets, your through

don't or a else. together, that someone then and areas Of to full we course, work and we lumped that in certain what are is they there do get with we it other basins partners fleet, blend try have try

Our weeks for dedicated X person. a -- person work. this But months very high X it's this and other -- of high chunk fleet this work for percent

John Daniel

Okay.

me, similar that for what of and can make you don't data on can pumping you at have able comment you you if -- share not. on the Schlumberger I day know one sort And setting? Just you to or hours on exist more this per look the But when in get your data been disparities get fleet, fleet?

Chris Wright

that. that fleet. all like So look, throughput and basin look stuff them, depends that I'm at. everybody, customer sure there's on the we third-party data and on -- And just with have on OneStim data There's with we don't detailed

a yes, for there. comment So now, great interest down specific right too us us but and that's obviously to it's to on

John Daniel

me Well, put data this. assesses data your third-party your about you third-party performance? it look in that that? let How's it performance, When how accurate at and how is -- assessing

Chris Wright

depends on And that's the funny. source. It

use but is data trends we third-party just third-party data where So aligns data. internal data magnitude own the we their in obviously, not -- in our with

some have data -- shown are those confidence that reference and people's reasonably in probably third-party and their people presentations data, So our we accurate. us probably heard you and is stuff, where that

Operator

with And Ian our will next MacPherson come Simmons. from question

Ian MacPherson

and downside just Haynesville into appetite equipment. given for Obviously, what commodity Chris, remain move market we've We've a fleets? poor, your ahead between given incremental with continue the seen recovery playbook of seen just gas that of of the the ahead asking case, the redeploy right you the for oil. direction Michael, worth the about to your But strategic But level, think, even back of old good divergence be ahead of of maybe with in the and you've difficult tear consolidated and putting those fleet this be your notwithstanding the but and And and year, trade-off wear year the in OneStim wanting pricing next fleet share half margins margins, I count, share on take the to of to slides also acquisition. total the when on to because the strategic increased would the very if remains reasons recovery, unprofitable the the market, to contribution incremental adds. activity tape.

Chris Wright

we pushes assets market high think for better, about that's we -- Yes. we activity. We or Strategic profitability our very is share about an out, that because which that with hire, makes buy the for or on Certainly, uncertain that seeing we our that grow share [indiscernible] we want long-term bad us, -- customer but the market definitely how may that Liberty may market happen, has certainly us, sense going which their Liberty and so they're people wants and the itself. because we No. weaker activity wants Customer Liberty, goes it's not driver not definitely it. and customer-specific. compromise want not those. that program, reduces returns wanted Yes, for profitability? strategic they player are a we'll reach a us, do outperformance go we of a in do really we're to to a but pricing there's a can reason

open dialogues. We our we're with those our we're suppliers customers. and with and pretty you, have And We're open open.

is drives people. the frame to -- and who assets might go? where going that for That's relationship, really yes, and be back And getting longer it's and those driven pull return customer, will by little good softer, ask are you deployment. So on this whether question, but we things very is that, a back those this bit a our time is good relationship what things or all over what certainly where pull

Ian MacPherson

insights that And unfolding That to you makes you it willing with to activity sense. to the how if see and any OneStim then me. for you're cadence share Liberty's, be privy a share into relative you'd QX Could to QX if follow-up from us. as

Chris Wright

looking -- certainly plan. lot similar of as ago, data, were when good about the a share don't they to their of I know say a we it month Heck, number at a fleet would they're the at But running and we us. downturn, a even the details projections of can't clip rebounded any We rebound ourselves. well. They pretty out

Ian MacPherson

parallel would similarity -- through a might a that reason fourth Substantial arc the quarter continue then?

Chris Wright

know. don't that's future. know We the We because, don't at I mean,

Michael Stock

need the until ask you we [indiscernible]. to want if the know you Schlumberger say, to about really close to something like fleet, I year,

Operator

from question will Bianchi be Our Marc follow-up Cowen. next a with

Marc Bianchi

for I from of come hasn't this think guess, thinker a think The it on a calls Chris, sector. up and up thus happen obviously, in good leaning you're it's I earnings here, reason I election, the far, regarded as as there's that the should. industry something any government. what left to to some could And coming forward concern further and

So playing you around how in maybe out, a democratic that a do more curious see of just win contingency kind doing and And you guys see you terms if Democrat anything Congress? planning of that. are

Chris Wright

hard, But predictions Yes. It the are about matter. does particularly future.

have say would election on sort So what set that I of as presidency you of We wild you don't of claims activity in a -- federal we XX% of always roughly Senate, various mean don't well for you turnout. But always heated control -- elections. different, after rhetoric don't the we elections. been more sober see has policy. have the know what at or and very activity And -- if know, And somewhat lands. look you might

drilling Now on that, Mexico. pollution. emission, gas greenhouse produced the things it's gas or in change there's ago I increased else. just the wrote editorial what regulated and increased we federal to it like be lands, consumption from for permit at And It banning Look X somewhere in if clean, impact. tightly up permitting doesn't all. backlogs an things would Heck, can you U.S. demand Because of New on oil moves stopped at where and say weeks sure: there. X built production

everyone. rolled on free has Mexico tuition What's royalties college out funding New that? gas dominantly for federal first and and lands. the Oil

the running But think election know not in by the suspect people as over the as most So near happen. in be industry, are much the years what's emotions level around. the and I as few impacted next we will our term, at don't going and activity to least outcome

Operator

seeing closing at over time, the questions. I'm Mr. would remarks. no turn further for I to to like conference Wright back any And this

Chris Wright

these the Liberty everyone the to want thank thrilled tough times. time humbled our our resilience an And family. have thank I'd in Look, today. about face whole partners within thanks together. Liberty. their to everyone thing say for customers. and attitude just with in board our people our suppliers, I I and of we're all same it across be the character to shown be interest these for and again, I'm partners the that and the customers, challenges in

thanks, thanks for everyone, to So Take industry, and this today. care. time their fabulous

Operator

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

this You may lines at now disconnect your time.

Liberty Energy (LBRT) 28 Oct 202020 Q3 Earnings call transcript