LBRT - Earnings call transcript Q1 2021

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Operator

Good morning, and welcome to the Liberty Oilfield Services First Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

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

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

Chris Wright

equity while from Liberty XX% for business, $XXX less than Ian. revenue our We're by an has Thanks, combination OneStim in quarter fully financial first Liberty, been and pre-pandemic with interest. and and our joining as The growing in EBITDA for platform size engineering on operational XXXX depreciation our pleased levels, you results. to exchange extraordinary. approximately completing quarter. thank discuss report integrated of We're XX%, to new us completion in to million doubled era first embark quarter a diagnostics amortization first and for $XX adjusted morning G&A million a services and expanded excited Good XX% everyone, a company. the and We've the by in only

in a growth enormous teams edge of leading the industry. together and suite in has the brought top addition, two our technological of the inspiring. technologies expertise We've been technological In

few just I later areas, our are technology We in many highlight excited leadership call. frac will in a and to bolster the

come a long founding since our way a have the of company We decade ago.

delivering completing and cycles After mission. long-lasting improving competitive aligns currently a advantages. are Liberty of fleets off slowly superior the company that a focus, wells. a under passionately of second remains and little in We Our will are and pursue market, returns same; COVID we the North to culture quarter shale likely build in of a we differential estimate, number them fleets people, similar bottom, a the American have Liberty's to the rapid across be deployed requires in and in Accomplishing over great deployed XXs, was of this rebound the low little XX% in however, the with the now XX% a market. first the quarter.

and on Liberty importantly, We challenged, with are but to value services frac returns partnership will remain invested. more to demand in additional deployed supply strategic for only shrinks. will fleets capacity. Overall, good fleets they customers improving conditions of grows, market capital delivery are disciplined Fleets and and deploying quality Interest that continues in today grow. remain as

demand becoming quite across are Pricing continue dynamics next partnerships. parties strong. diagnostics engineering both constructive even customers improve with mutually more basins. long-term is beneficial pull and dialogues Our The as all to equipment with seek generation for

we well continued remain since While current momentum customer reported. gain pricing last levels below XXXX, conversations have to QX

have industry-leading industry the for for testament discussion tightened, next as becoming operations equipment the is stable even a are will healing. tighter. price fleets equipment phased a our in the innovation move we oil substantially customer customers the more our range and necessity The WTI This ongoing As prices The relatively economics approach market year. increases. technology comfortable has to gen over and years. for with with the improved, customer likely developed $XX relationships market the team frac deep to is this and through have attrition is The among has been next further gen

XXXX. forward, of at Looking as in has We've margin achieved three already we last normalized margins lows year. Liberty built improvement the quarters sequential quarter see a to for point activity in some off pathway history of second

will founded decidedly world coal Hydrocarbons in XX% we over just energy the commodity of Hydrocarbons they We this by the energy the to anchor the displacing and the global continue role health come world whole are supply energy growth While fundamentals pandemic in of E&Ps XX Where companies liquids. brought will in more sector today. to of rate their markets, our is so onset North upward investing cost-effective gas technologies at when needs lot is the global is exciting required shift dependable, and are over crash access been this hydrocarbon after electric energy discipline energy gas, play needs, commitment and for a steadfast and shale full commodity across reacting While The oil, it ago, still looks market the are gas upward to stronger, to market, however capital the E&P and to year regardless energy sequentially, are back giant of XX% power do as remaining share natural new A fully and energy. slowing modestly I'm just in trend global support from the in in in that private prices. Public Liberty, industry natural the demand as an years has strong severe economies our there pleased trajectory. on biggest our revolution. heart business fulfilling discipline supply upheaval the on and global American the bring in decades. inventory of of prices. old generation. still the from? coming and of

supplied. In Yes, is that us United about lots energy record energy primary I share simply to market soon States, currently obsolete. hear so. their at not talk in an of that make gas and are XX% all under we know That is fact, transition oil total ever just at of the

in but Climate driver largest is concerns to energy since in days. has in rightfully out The their relative is terms storage. way behind in they roughly are energy power per of global XX% transition dialog. a that more hydrogen change factor It the energy. which full bringing natural capita coal terms, global energy takes source. Today, But, absolute demand to in produce zero In Hydrogen and global challenge. the is change X% alone. energy, greenhouse Let will liquid world sizeable growth fuels. an modest, of trillions alternate less solar in power energy of Hydrogen been it the see of grow decade an are world shrink serious great still Climate levels the quite XXXXs. buzz lower potential the compared gas poverty need energy. than today and energy only to for the is U.S. is supplies not put solar when of sector method a adoption gas But, displacing will emissions invested has me concentrated carbon is to energy, create of increased consumed. energy released the collectively the the is It hydrogen produce consumption. deal not great things and simply in it do the these perspective. electric supply sector, wind Wind the next even

greenhouse this energy growth, drivers but access from of helping in lowering hydropower. business. hundreds of helping die globally. significant require and bring year in voltage major as continue our industry currently any many are clean access lower who hydrocarbons will to The treasure. carbon fuels still income improved expand the lowest and U.S. countries will nations. including and utilization folks income the lacks political access progress producers Liberty faces we [second] gas across poverty. wealthy healthier One-third attention natural simply billion intermittent humanity and in only fuel. all The other lack another and comes the to urgent energy that of predominantly Sadly, from into industry contributions U.S. and Continued global and people the We likely little Electricity play not because and rather gain continue continued believe lives for leading scale areas reliable shrinking, low in unreliable frankly efforts technology only lack Canada and crisis and liquids from their people slower that very oil a space cooking electricity. Surging cleaner rich roles storage. and Millions energy electricity. and and gas maturing global both contributions clean modern energy with world is steadier, a it U.S. electricity are the large our exports more enables capture millions opportunity cooking [Ph] both energy to access is one affects will to to exports emissions. every billion propane gas practices or low of countries income first gets electricity also LNG of access challenge,

access in has these headwind. more remain for policy development rise the capital energy in low billion many helped revolution decisions shale than growing the hydrocarbon restrict X accelerate so While a countries poverty, for is to income on dire people Unfortunately, circumstances.

will after energy released host two read in Two these our southern our could quarter, strategic on first business operations, that level via working in you We challenges in and to avenues. efforts join the development, disruptions be sustainability can processes, global to or frac operation's provide team and report will Denver You weather the efforts, an Investor June and navigating ranging Xst. Day much In minimize weather XXth, Denver hope executed deep technology wide impacts on in quickly people, about Canada, that Liberty video conference. the customers. across energy our weeks Liberty on insight at us Liberty's region highest new more that in June

It collectively sales QX business is Proppant embracing and of marked both near our the achieved levels Our blue Pumped What for XXXX. blue legacy goes the Total record top expectations teams topping our fleet of new and our red organizations. successfully with is saying strength a quarter notable efficiency red above [indiscernible] that we efficiency sales that leader the our fleet previous in board. without were strong drove

strong course, that across Overall, efficiencies combined ahead raise many us had to results the incredibly positive standards. is the we Liberty fleets. it But to been notably experience. integration we [Ph] have of fleets work of Of has [forward]

with are challenges integration folks been to Our commendable a What transition but which finance, coming and our handling worked nature given of from a maintenance team Liberty overdrive of continuous We're for continues. This hard the importantly, -- of large will fleets. Legacy customers DNA. operations. testament in scale field. work HR, Again, We've supply teamwork across integration, our seamless towards Liberty to both Blue the unnaturally frac for practices, chain, the has IT, in the Liberty combined effort and disruptive yet. work efficiency our crews is hard collective wireline, over and and new both to our isn't the that the integration our no disruption moving deliver crew our drive a operations improvement best

management provide Automation work is closed are Canadian version attractively near-term, border. to people finalize new track manage a internal frac one transition system for Magnolia at the In continue priorities XX% are identified Blue of numerous integration, of DigiFrac, existing our location, compared plans and The reduction is empirical in rich on our and We ERP streamline part of information of enthusiasm we sensors associated our Red on number a on at the least DigiFrac testing Legacy gaining the have extract length the ways Technology next both better our for measure direct as also already initiatives automation. recent frac to businesses greenhouse cluster sets. an produces to deploying shifting safe durability tours of is weeks, design, safety. minimizing the and us to exciting systems in completed frac monitoring while momentum our customers. draw new and field calibration we're the over customer to on fracture software we and STI This through number direct expertise operational challenges development an real equipment of tailor chemical testing precision. frac geometry to month. the forward estimates, high emissions our measurements personnel Liberty perforating frac impact hosted fashion a progress. optic operations efforts can allow With cost that frac calibration designs developed notice. electronic history of positioning expand with electrifying. opportunities automation power customer push we've engineering we've also focused help hydrocarbons, spacing drive to XXX our and our its This portfolio for and frac will helpful. to systems optimize hours significantly are technologies based proprietary It tools help of that fiber the first isn't launching of optimization chemicals extensive our fleet fracture and efficiency, Well to data, direct of facility with reduce for is with This gas customers track of volume measurement engagement, perforation and of high allows and other customers coverage, and grows tools Watch. highly of fracture technology frac and all measurement strategy. lower complementary streamline that cluster height in a well to well significant and way spacing on a our models This E&P also us diagnostic control efficiency have measurements designs on is We're pressure To-date, to produce accuracy in Liberty's to maintaining pump, costs. about sets. and and a and the suite and response, complementary taking to Fracture emissions with diagnostic design we've

to a wave the industry And always followed. customer is have exceeded lead prudent of highly in expectations. in commercialization We excited dependent in has The interest deployment fleet This team technology the for strategy and also have this rate design. place truly capital as the deployment on we're frac endeavor. economics, is next DigiFrac of our that we same

at economic of and suggests demand to oil with and demand, surging our year similar for tightening the steady for rising the nations leading view year actions India, policy demand OPEC have are COVID and areas, increases is the oil and oil Buoyed indicators, demand to in other on fundamental a expected look production output five massive as U.S., become absorbed fiscal in In we by basis the on from in drop oil constructed. As recovered higher countries, global already rise the markets real vaccinations, ahead, have monetary recession strong the states continue GDP global through pandemic but resulting is policies, cases such plus some concerns a oil of those stock in measured Brazil, global EU being certain by inventory supply balance. more

increasing supporting quarters, prices, to E&P three towards frac rapidly production which support American last recent its activity. public E&Ps the other North at Over and modestly activity Private frac rise their hand has gas more frac current line the activity. now on Hence, increased making are for responsive continue run-rate are levels. rig with maintenance demand in services to in roughly oil

We a enhance maintaining of are increase we discuss the companies sector a E&P the discipline to and positive to Importantly, Michael attractiveness. and supplier approach detailed stability need is going a critical price financial for to long-term pass industry moderating that capital With energy forward. believe the like growth, commodity and aiming industry. healthy that America performance. is our I'd over call globe, North to this

Michael Stock

morning. Good

drive came They We We're beyond superior added expect phase going of our with from great the sizeable unusual financial pleased to we I'd arising about the a for growth winter responsibilities our moment OneStim challenges solid and results above strategy, weather and returns. Executing start. like on next to and operational deliver integration team together expectations. through off a acquisition. to first results. thank encountering are entire while quarter to take our to

stage and benefits services, seeing frac, early suite with leveraging engagement completion existing already a and our along from drive full wireline industry with engineering are new to the customers. sand, in teams diagnostic and including unique increased We tools

quarter drive supply As we XXX% quarter efforts very the wins the approximately inclusion $XX thievery Net the tax Chris frac new quarter. revenue in the million chain disruption $XXX throughout activity In on the also in million fiscal the the $X.XX non-recurring fourth exceeded the of first improve and by hard compared we included expected be increased $XX net during million to after in revenues of of fourth to and loss $XXX our development remainder in was expectations. And Results in now have $X.X partially million quarter. business. during to of first to in decreased XXXX weather are of the reviewed, integrating OneStim's offset the quarter innovation working per costs quarter in efficiencies weather for phase quarter. quarter next transaction partially technology impacts customer and in the reflecting share the revenue are the to completed OneStim of of startup the gains as Canada, fully was [Indiscernible] diluted compared disruptions the $XX were estimate [indiscernible], costs a net reported loss million quarter first we the from $X.XX second million quarter, reduction and in fleet fourth related to south. of

liquidity, financial at advertization integrations systems to quarter, to place in credit $XXX million be data transaction flat capital the XX, March the of with deferred and levels fourth The and the planned interest adjusted $X quarter and in EBITDA quarter to which and expenditures $XX of of with primarily the approximately costs quarter debt on from drawn statements into reiterated million services facility, amortization were totaled prior of with fixed the of non-cash we under million with million. wirelines, the reflects million for and in Canadian made inclusion expected net costs quarter. flow as only expense to our available in The million first Capital was availability facility, the outlined free future quarter. for million EBITDA, in benchmarks quarter, services importantly, with added increased excludes proceeding our of and and equipment, adjusted the doubling $X.X of total OneStim. OneStim absorption the provided compensation the a addition financing Schlumberger investments in of XXXX. and our basins cash the the with was higher frac the General continuing year during the the $X.X depreciation to and while approximately total end included administrative once the plan balance sales fourth and quarter million for associated our $XXX of new improvement deliver the maintenance, million borrowings expense be the synergies, we the of operations. credit expense over ABL was million. doubling non-cash market. quarter despite based $XX transition quarterly of pandemic bulk cut $XXX technology QX in the revenue. that entry XXX% a were and positive XX% administration OID. costs $XX There levels million with fourth G&A no XXXX We no is flat XXXX totaled February $XX.X up three million, acquisition $X.X in million last including on and of fourth Net costs $XX business lines quarter for increase expense in customer first as line invest relative range, stock-based the XX% to higher fees We in million the up of which the essentially last to the $XXX internal ended the quarter compensation line. quarters. higher G&A sequential the stock expenditures disruption other $XX cash including We're

a the quarter expect this executed individuals a costs cutover. dedicated in working and related was during We some they second remote retain to be X,XXX both logistical pandemic plan with new transition incredibly across trailing $X of to requirements. team the challenge, approximately significant well. but and countries for The legacy XX locations Bringing integration there'll together million a

now character man organism Liberty with Social lightly undertake the challenge. market live company they work, operating team last both humbled did background to are the as the I of up see labors distancing breathing said. We'll the hard and grow rose build management stencils to was of fruits and XX the by goal to have one And living, innovation strived a something our woman we we months. we the challenging period. and are not example The single and exit

improves. costs provides Our increased per G&A fixed approximately [indiscernible] $XXX increased significant and million see scale because market absorption corporate cost financial We year. both were the level, leverage as for price of basic should

with the increase bring approximately the American deep vendors years. to leverage the approach their excited have these levels. more next operations. We Investor sheet and scale on pre-pandemic balance provide the expected only XX%, of the and market G&A is income business, held that by our North and Fall depreciation operations. simple In reduce increase cyclical that growth and wide between lower cost over over net opportunities the is we shareholders amortization to long-term technology [technical results to need company new Day our approximately with doubled opportunities, supply cost be broad risk. economies will commensurate it's reward from that We're partnerships scale by about of balance chain increase platform Liberty a to to see will sustainable by increased returns XX, June few the of with to through we of highly returns with At right tools believe at strength Enhanced XX% by talk imperative of shareholders. fact drive efficiency to difficulty] and operations, strike and

with fundamentally market market we are a business navigating significantly stronger Looking a larger in forward, now systems. rising

our a with completion deeper and driving partnerships. technology of distinct customer advantage have services best-in-class We

a cost coming seeing oil long-term services driven in technical customers and our knowledge are value-added pricing industry more already at with barrel leading quarters, overall by per lower MCF help the We the or that case. increases by of secured customers

has makes improve DigiFrac economics. mission want most but cruciate, significant from lowering others ESG and operational achieving by efficiency our who where and leading-edge our that their a attrition, customer in of to will customers initiatives to profiles reach of Industry allow and level level. gotten seen sense improvement economics in with leading crucial meaningful space. it to us great their one The customers Our interest that accelerating technology, point have equipment interest

Importantly, we through flow create the to measures cash have balanced compounding rates by at [indiscernible] to balance our flexibility shareholder stockholder is improve sheet conditions explicitly meaningful. high shareholders value by long-term Liberty's value reinvesting strategy appropriate.

While the market comments remains call company. over the challenging. we This Q&A. does which not to change for manage open I'll the we hand back that, Chris fundamental before principles the upon With closing for

Chris Wright

through Thanks, hard to Michael. the of company, to customers transformation to and as I tough just our want through times everyone thanks family worked all a it partners our broad well. and these questions. in Liberty we'll up And and with that, that's this through extend for heartfelt so tremendous open

Operator

Blake, from Blake Research. the question comes We'll first And [Operator of session. proceed. Gendron Instructions] Wolfe begin our now please question-and-answer

Blake Gendron

said, to your Yes, equipments you frac year. Good terms either, path Is That adding and an pricing Curious appreciate and by things accelerated in on emission latter, [Ph] it activity perspective outlook attrition the the reduction? how of of this think privates the your really need manifests back number can created still by you we more pretty here. GHG with to the gen margins. on macro the in on Chris, two, competitive pricing-wise, of upside or, want pricing. take are any next thanks. Seems terms one, I the mechanism which top like seems back-half morning, at normalize some relationship the call of biased of to sort always perhaps circle like with there [rent] down in economic guys, energy a so customers. with see number bifurcation potentially

Chris Wright

[not come in right, [Ph] yes, low emissions, other want next are tough. sequentially getting demand market gas want not that lower, generation it's downturn, modern of that every quarter better. but And course, gained carbon just Look, incredibly reduced you're we've actually] today people is frac and but greenhouse and equipment, with they supply off an monoxide, that it's fleets. pollutants to Yes,

an hunger service back So, to. the that E&P today There's industry, doesn't understanding also whole industry that. for come have have our there's the a good that recently returns

price; to that dialogue. So to absolutely, continue a Everybody commands buying price But premium. wants to -- high drive there's yes, that technology and higher opportunities it's a performance everybody better, next generation low wants and price. selling performance a higher bring fleets a

And so, it time. takes

I think just of dramatically the the of last downturn, XXXX. the brutal was later were in and summer, different; years market things two dramatically. start And the at

was two-plus like last years. In were happened the has that we've a that the by demand, very in in XXXX, years demand. surging But few Now, increase the going Nothing low. over increase driven one fleets in rate just last XXXX been a of equipment pace. rebound, to modest more seen most people forward. This building surge frac in investment in probably has of new feverish a

supply in continue and economics better the it's right of So, equipment that I think mostly to frac pull accretive desire the for a direction.

Blake Gendron

specifically and reductions know fairly to the wireline the mixed early some also Liberty switch like, call in value-added NPT this you'd success points And companies the environment is terms cycle. anything various seeing activity days. with wireline very that Totally I fair. still on Wanted we've to there Is looking try in out the past technology what in front? is what to in current at do of Wondering of like. bundling, seen receptivity early this

Chris Wright

number efficiency fleets Liberty, to the and drive we're a together lower of absolutely. on between make that. in integration But new work early together. are systems had opportunities and in working wireline obviously, at Look, downtime, yes, Schlumberger those Clearly, that there frac better two those and paired teams

be sort of, bundling, us price a would For like discount. right, it

us And isn't how service. deliver it on the It's frac about the fastest, between that floor do dance completion about dance best, that. really wireline. and most we a efficient is For safest,

So, different we one into the not how those we're teams very to about and proud of about the both opportunities teams. team, have make two side, in excited

Blake Gendron

the for lot a time. Thanks

Chris Wright

Thank you. Thanks, Blake.

Operator

of Citigroup. Gruber Scott, please Our comes from Scott next question proceed.

Scott Gruber

good Yes, morning.

Chris Wright

Morning, Scott.

Scott Gruber

year. hear commented the new at quick margins portfolio like have to would certainly on, combined and saw snapback the are you the we next normalized the this fleet given next you possible last Chris. cycle, normalized margins you're cycle? Where Great that to going different that And peg composition

Chris Wright

in another specific But employed peg across about cash industry, cost sounds return XXX about to lower deploy the we return generate return our ultimately look, not us, and on what to way, our in goal, the we've that's future. ultimately a or stellar What a our and is S&P is capital the cash care years in invested. fleet, for cash in our solid too metric, average XX-year is continue measured we been Scott, basis talking In that. fashion on now. particularly exactly history, Well, clearly above disciplined focus, that fleet, our on and way

yardstick mean, a I on so ultimate But for From sort of EBITDA depends us. yes, And thing, that's the fleet number and really a that's factors. wide an band, per something a capital, [indiscernible] strong of the returns developing is in whatever comes. teens and we're on yes, mid But balance strong broad-brush for sheet that. estimate about it's a there probably so of

Scott Gruber

to drivers and kind through mid be the primarily pathway your pricing pricing thinking to in would teens the there, driver other part ballpark, much improvement just fixed to the the absorption And required efficiency operationally initiatives? if can you. Got that through great? from How cost is something is driven split it get you of get

Chris Wright

we It you have a is more have the any but that, need mix And think to clearly mix we Clearly of continue I we'll greater efficiencies now; it's go underway the of two. than with and efforts specific two. see deliver Look, sector. don't a drive to -- it a oil compression, we'll a customers whole But But compress, pricing the as pricing to need costs is. yes, come back, service. prices large we the just across saw it and was work our both. significant some to

just that bring think to is down customers doesn't months? The modest going to oil deliver aware in efficiency relatively on for even to and the I to that. bounce drill barrel and come industry. continual back to on amount, pricing but back, XX modest basis. cost a progress was next Good a secular across to up near is our relatively it returns a our for Sure, well little the just where need news Cyclically, and are XX a continued of a customers go amount. industry, have of

Scott Gruber

offer pricing be it's you. to more you Would driven or operationally there? if to driven Got get more willing

Chris Wright

swinging is a so baseball and at me, bat [indiscernible]. Michael

to So, future. It's make it's concert, hard those predictions will things about tell. -- I the time working two in

Scott Gruber

color. the appreciate Understood,

Chris Wright

Thanks, Scott.

Operator

please next Our from George of question comes & George, Company. proceed. TPH O'Leary

George O'Leary

Morning, Chris. Morning, guys.

Chris Wright

George. Morning,

George O'Leary

of you kind might what what that, You good seem about supply attrition a the it of and supply supply curious you marketed there, our surface. marketed being if peel as may guys a perception And bit bit marketed what and the that on little frame the could onion versus not all talked be? view actual

Chris Wright

I [Indiscernible] market in. numbers the Yes, equipment; parked and in of perform our that parked -- probably of to on that a choice starting maybe but lot demand again, now almost a it's got it's just Is absolutely. terms hard specific next legacy more so loosens, actually the none consensus, to of a order that of because, equipment to It's for -- frac fleets. look, of generation -- think I not so better, is lot fleets very put amount look, of want -- there's reinvested XXX customers people it's when getting for staff, running keep poorly. being stronger is and There fair look, equipment think guess that it and a around, get little, there we in today.

you one a of just of brining pumps, because and down, to that x see, quarter, number now number problems, have go used of repairs. maintenance at pumps they're and pumps So, fleet and a that

new drive the full there's good being than shiny equipment fleets work. carrier to like out enough just built. quantify aircraft that. go of don't somebody's of equipment of yard and And off being ready it's to it's the I rate larger and kind too and an to but have sticky rate of data So, retired dramatically worn is -- think But

George O'Leary

your largely pump the any or versus differentiates the there you think at helpful, And see But utilization truly that don't like in more strong with looking you to color level, does Great. [Ph] are it bells out high for will efficiencies you That's give do differentiate kind makes the high-level I just the there very offering And on what color; not there the field respect I'm seem unique numbers STX you e-frac And or -- on Is competition? any type market. competitors? e-frac the can competitive it offering other know Chris. demand technology and away ESG-ish from offering, offerings for [you-all's] specific the whistles? want in add just think edge. in to of then different types. is just that what

Ron Gusek

Yes, George, give we'd that maybe this highlight regard. you I'll just that points is of couple a maybe in Ron.

very from is field, to squeezing taken asset of You we approach certainly ultimately more there that pump standpoint, of approaches pump. better we through the SC and be out taken performing size hit believe a that think very, going in have X other novel have asset design one to been around same the them, a the the that relative to on horsepower

a our the excited the I field. generation not fleet, we out location, had economics So suggested at And carefully fleet to a improved been, on that that only footprint. to that approach frac running power look better a but specifically very solution call there. the savings, directly deliver side that innovations the looked we're about to But typical record very, very one in there optimal emissions that not side, was at specifically pretty frac reduced think that was it there the was powering we'll other way be fuel very better

capital better existing some think efficiency we're improved importantly, customers location, significantly result maybe to rather publicly be our gas fleet, taking different better powering And And reserve engines, solutions. I efficiency, talked be that And delivers a location. relative frac about for of that gas on on we to quite turbine than very footprint redundancy already, have approach a using convinced better that the as of our that. a we'll so, natural we'll most

George O'Leary

Ron. Awesome. call, for the Thanks

Operator

proceed. next Our question comes Please from Stephen Gengaro of Stifel.

Stephen Gengaro

which you work and fleet? everybody. have in back you Thanks. available readily of many fleet low a morning, Good CapEx go you are to the mentioned how material to things for are to sense to many count give first, deployed, active Two sort willing us reenter fleets how would the XXs require your

Ron Gusek

the As we fleet ready deal, to think the XX ones part with out, we out we rolled pointed retakes, had I deal of when as by blue go. described

is doesn't orders CapEx. rate, mean those those terms of really two fleets there basically required So plus Legacy for capital we were of XX XX, outline in so running no more

Stephen Gengaro

they then relative Okay, the you've the second, surprised sort has OneStim the as of relative savings Schlumberger efficiencies? your some assets, which gone through how And their And changed have Thanks. seen increased sort the libertize anything, level assets, views should over And or profitability anything of or assets? integration integrated of two? and the year next or you great. your and confidence process on you unfold the about you how

Michael Stock

would No, the I very, by think be very surprised nicely we efficiency.

they're of things get good. I incredibly amount pride think incredible hood, there. under that's out and one the you of the teams Those when

that they is made have you team, think that they and have responsibility that if yes, of being given free, you as fact you're love so best can been the working be. I with that so And you're sort

when technology integration. are integrated to and great I we'll sort looks think a be potential. more of I job team the So looking on think team. we to going out day at Ron what's lay investor really more and really that XX, generation June of But we about optimistic get the next at And I some done the had think the

you we investments the know, long-term. make for As

So I going exciting. practices, think best it's I together it's really be coming be think to going to and

Stephen Gengaro

great. Okay, you. Thank

Operator

next Chris comes please of Voie question And Wells from Chris, our Fargo. proceed.

Chris Voie

I get just but some a in describe February, the I would want be guess, be the get compared I to improved frac know And up as or touch you leading in you when whether into baked think quarter, detailed, you don't sands at little this curious you hoping bit that pricing that. expect to morning, to third XXXX? too that including has DigiFrac compare how additive, about they're fact of increases contracts any pricing to Good or second-half just to uplift bring all was into what that going year Thanks. edge pricing. second the or had more showing already and might if from on of then to

Michael Stock

Chris. Hi,

in pointed price, price with more customers, Chris that, customers, year. out they've next baked those in we through think more those we as lastly increases I go year to discussions and continue to the probably had

also we And until by fleets year. amount get an Tier won't have back Of IV the next in end of course, the year. are as defracking this great affect through demand in which margins customers we'll come we of increasing DGB

So help. that will

Chris Voie

how risk that, of and not DGB to CapEx important to helpful would ESG so I guess even DigiFrac customers? That's how CapEx But thanks. much potentially not sorry, for front, even or the your there sorry be then let's the do risk fracs, upside have more and in more you guidance that is to maintenance fleets upside future. near we Okay, upgrade say evaluate how Tier XXX hungry becomes the quality or IV get if on case maintenance to to with in maybe the XXX, much, E&Ps

Michael Stock

and to do The path won't key. making we very, strong be those very what upside it risk returns. a investments of the think virtual. I investments. bit we and their They upside in pricing But sorts about be that's are without of be managed. two that's obviously, won't drives round And comes There'll

long-term towards that they're business. looking So path of

Chris Voie

Okay, thank you.

Operator

Ian next comes Please with Our from question proceed. Simmons. Macpherson

Ian Macpherson

morning, of year, out, next in the we by normalized I high decrementals are million walk have margins revenue towards called QX, from will that out you the the starting Good you assumed thank would impact of impact, you associated with QX in $XX Michael, have EBITDA extremely all Thanks. in for the that look make weather QX Chris, color. abatement the where you When it.

block to substantial addition a iterative coming increases transaction presumably, So the there building reduced pricing the there, in be and in. would costs,

margins correct So, next factors we as are march of QX start towards from the all we those year? normalized

Michael Stock

to you that still you revenue to so you maintenance, yes, it's have I of go So those you there growth, one than increase specific But drive, roll sand, different got other initial and ahead, nothing resources. decrementals, normal that which got there's than QX, had into repair growth deliver and clarification, have think review something activity particularly the about drive has nothing, right. revenue will to will other good is chemicals are that sort so

normal first of a some said, right, come Chris January. the making sure move so as in the point this think I out margins of it was gate expecting to at 'XX, you're on not is at that

Ian Macpherson

it, actually model. we're there. upside looking and prior and your for below some hoping And our not to year Understood, certainly next we're margins in cycle

I might on forward, been leading do your more several is help wanted regard but could with some expect going be the done. obviously there structure and be competitive get Chris consolidation, independent your think that protagonists structure to you've We there over the you to pumpers you, thoughts, of pressure more Okay. of next than the improve larger quarters? transformational consolidation some to smaller of market

Chris Wright

certainly don't dialog, always it I Yes, into sense. insight There's have certainly that. particular makes any

but how -- ultimately, certainly a comes so there's we hard think to it But, makes to that's predict. happens. that yes, So, it that and also I not possibility real decisions, human beings down

Ian Macpherson

to looking mid-June. event in forward Thanks. Well, understood. the Okay,

Chris Wright

We to you. you look then. forward Thank seeing

Operator

from Next proceed. with America. question Mike Sabella of Bank Please comes

Mike Sabella

morning, everyone. good Hey,

Chris Wright

Good morning.

Mike Sabella

the goes year, from all you of upside here some think look XQ, conversations tell? XQ if having yet broadly, it around sort anybody start we to activity, little So and of just half bit through year-end? is think kind or about the something on color but about gave to then, too exhaustion, budget Is of industry think you back where a need is there still early we thinking in

Chris Wright

certainly stick too to tell, a publics, out I plan they're them. would they lay say and to early the going budget for to

still and some typically of better fourth is faster possibility as quarter still operations budgeted did exhaustion, were now ramping-up. they of happened, the if efficiency for, budget so absolutely, than run of And them there you

going year. but gets work budget, QX so the of in of be done a think are and certainly to a don't number I X/XX So possibility, going different another to little overspend a not that's below before were their that it's ahead real to XX% publics maybe that's expenditures cases case. not very the

the roll our about of or continuing or prices I some oil then picking down their activity. magnitude offset potential are prices then the what think is what fall decisions And when oil there. our making in privates there's up

answer. I So, I better but, a wish had yes,

Mike Sabella

that When for running than industry when it. of I hotter the Liberty it's market had could industry, XXX is that's strategy, think you fine. what's higher there thinking completed kind is this be? if out is of XX% the what industry. level colder we mentioned of the planning going on you share kind share kind mean, market just the you're of of approach and to back frac like number with kind think either in the side all industry about Yes, is what or shale for I an fleet step and fleet wells you around maintenance think think either of normal as then about and Got do for you U.S. commonly normal we're level how you thrown

Chris Wright

five for bottom to is fleet an don't that. an a here talk put don't us not output, whatever. always It's always is fleets - to even or share say to Market we're going input. always we decision work The up. We work like

So for us, existing it's partners, always that about how who our is were relationship.

keep turnover, deepen to have so working to our We trying those existing customer tend with we pretty low partners and relationships.

you that then done could work players have or sides of both new through other Liberty. add their larger with You to and existing went share they're dialogues said market a lots percent we by partners, they we that want couldn't if grow of partners partner, we had bigger

than down really three not awesome too but time certainly and more that's telling when worst the before the possible hot said that's -- really is they're is even market more to dialogues. all be is -- chase as because returns in today, bottom the awesome up thing it's long. really past, you after the to the certainly when one fleets market going at it's that, of hot, are dialogues We've So, bottom top the right, hot, out

look year as of slow sort but the customers market our Yes, has a sort history and us been growth but so, partnerships bottom pulled all right got have bottom that I history, mean, So in of XX thinking it's longer it. all share up. again, our up. in it's we've term, through,

Mike Sabella

Thanks, Okay. Chris.

Chris Wright

you. you. Thank Thank

Operator

Capital. question Syed comes next Our Please of proceed. Waqar AltaCorp from

Waqar Syed

taking quarter thank some quarter have a little question Canada, late for was may Canada? I of Thank your I missed do how seasonality and results and missed you would have first joining, the congrats but appreciated. feeds for I how comments. on in many that great this. Chris, impact quarter you, macro, your may the second you a earlier always and my on seasonality comments in active on in have

Chris Wright

complex didn't we relatively about Waqar, fleets where In of XXs North we [indiscernible] had the no, said January, low QX. in running. we're breakouts Canada America. fleets flat Obviously, across details are whole these that fleet counts our the we give running in

little out elsewhere. a work got we've So bit of

So of a then summer pick Canada it's and rotation it'll the normal drop it going to will be be has general across the in relatively flat there. instead [indiscernible] breakout Again, seasonality. has again the complex. up January. and itself There'll in Canada

Michael Stock

be thrilled We're in Waqar. Canada, to

in you to Canada and American asking that. energy for to partnering be have in that Yes, broader going tremendous we're building thanks picture, happy forward. in very would forward better business so look So,

Waqar Syed

market attractive an is Canada Yes, absolutely. now. Oh,

reported to in the how you in in for what quarter, terms the average would in Now, Canada quarter? compare first that profitability of the first

Chris Wright

out again, our we sort that to how very, seen we it's we've can we unique. one break every, a dismembered at of think fleet basin that's and reading approach to so before, geographies. every decision Obviously, having across decision business, many we a of that don't as as them very work working, again look But know to very all run a really, people that you and times have whole putting

have market effective. very for be they to When results, at we a long-term therefore appealing look think is us. long-term we Canada so, And and

Waqar Syed

in public then one mix question, final fleets And allocated? just terms private Absolutely. versus what's of of current your number

Chris Wright

said before, about the quarter. OneStim we've acquisition, As as generally, talked last with we

you've seen a seen privates. is I about is, bit to pickup the public private is Our a you've of right? what industry in mix -- the think close fairly where

we be mirror so part So data may us. that have to the this the public that's going very very of of actually year, at beginning slightly, a analogous heavier market general look you and we if year. where the But are we this beside the markets beginning to the into really little generally, were we because now where is

Waqar Syed

Okay, color. much. great. very the Thank you Appreciate

Chris Wright

for question. Thanks your

Operator

comes question Energy. Daniel Daniel John Next from proceed. of Please

John Daniel

DigiFrac. Hey, thanks interest guys. the great on on Congrats

scale that. Just you removal Really have contract. any companies before before to on test to the out. contractual a a assume would they question want process? wanting build understand of would type sign the an system Because, to large I But guys E&P also seek I'd support assume some

handle So curious bit you if little to a I'm it will. kind think creates going you of and you're chicken of a just the how egg that?

Chris Wright

many not in don't is to it's out about Liberty And take with will. we well. between it it's to one customers the our work to DigiFrac performance things risk. They've John that. cases, those In customers, specs, our things. to dialogue done two of to the worked certainly believe It's we want technology up deliver

them, So but that's our on fleet contractual if work if we that's will us. on commitments, get not doesn't

John Daniel

have to a performance-based out the an Okay, so give so then, they contracts don't ability or you maybe build.

Chris Wright

mistake way, All that a think that that's way, parties. both for some that frac the not way, all were been contracts there's on and done I

John Daniel

on comment, And like IV color to lower solution, one or Chris the legacy on emissions relative Is Okay. to DGB the a like Any the think made is Tier I you XX% that then, even was relative that turbine that? DigiFrac. solution.

Chris Wright

data to practices. the we relative all That's have existing for

John Daniel

it. Got

And one me. last Okay, I then fair enough. guess, for

and mentioned You fleet low-XXs QX in count QX.

to of mid-XXs making the just to you sort but to reactivate is the Are in reactivate back if time and knowing fleets taking any some Just want there year? lead of half don't the plans now fleets. you curious. Understand, say,

Chris Wright

of dialogues to be. new sorts all our There's macro of fleet existing plan in with level partners, partners. is no potential We're what John. going Yes,

John Daniel

Right.

Chris Wright

and to be will relationships, creep drive And it you we there's you it's could could going from that demand for it sure. strong flat. know, will sure, up, if again all disciplined partners as customers up, pull for stay scream not But

But continue same we've we always So yes, mentality truly know. we don't the we had. partnership

John Daniel

Fair enough. putting Thank in. you for

Michael Stock

John. Thanks,

Chris Wright

John. to road. We in Appreciate all forward out the seeing Thanks your… look you

Operator

question proceed. of Fargo. next please Chris Wells Voie Our from comes Chris,

Chris Voie

compared give could Just contribution here, different more the you to some mines. setup previously. one just around follow-up from the I'm color Obviously, maybe if sand now curious

break was a percentage of color or if any curious Just that. can contribution meaningful on profitability, you out if or that revenues,

you the think contribution about forward. going can So

Michael Stock

we one as moment. it you delivery integrated aren't our think really we breaking If know, at customers, those to out so the

the key probably broken out not is that be think thing, to sizable it's of enough segments. I

So I complex at think a if you'd have the look as whole.

Chris Voie

Okay. Thank you.

Michael Stock

Thanks.

Operator

our Equity Reppenhagen Concentric question Partners. And comes of Please proceed. from last Frank

Frank Reppenhagen

Hey, the customers. going guys. capture friction for very we're both just back, fair a we're entire quality of market, company a business market. more as business to in Question we the OneStim to as time and for and unemployment Great a that enhanced the recruiting as And share than lot demand event is know the course transforming back benefits, that workers comes the transformational into well and of going job this little for our on improving tough as the bringing to look over does Sanjel I that remember XXXX, scaling in acquisition see talked on Ron up fleet increases? or workforce you the workforce. reporting creating back people XXXX? Chris labor hard Liberty is a of retaining How a CEOs of field bit we Can comment are a the I market? lot deployment know guys

Chris Wright

it's case It's my dialogues lot Yes, right outside the labor And out they now the case on intend seen the that in labor we great a now. the about opinion, X case people force, of industry. it's for broader for of fact, have for million if Liberty. force is currently in gas of at, the don't oil issue, indeed business leaders, labor look economies. and the the Frank. return force the right to the but to were you've It's And this we comment that case. In with as

growth you then course, fiscal and going monetary and part fiscal of the to -- you that's So and economic pertaining have stimulus activity. drive to that

the an does sort have these labor, September, supply of on in an what's end hopefully and on and have supply on an we in self-reporting see but some for we'll have demand on and that I of up constraints incentive the - we a we labor So mean employee reduction. benefits. acceleration, of in Washington accelerator on

issue an are that it It's we So, But yes, is an facing as well. or issue. that's restaurants for problem dramatically is hotels, worse. or yes, whatever

good have you cell aware a of a culture. Fortunately, we think and harder than good But today and hiring is well would much the then from that. you're outside

Ron Gusek

the a I of sort bit think mean, that's one of I color Frank. things of that that's add on underappreciated. I

into of on It [indiscernible]. side. construction, trucking that industries amount the a key force with the As thing a that's services are pricing of actually and frac difficult other a is two the right? from, the pull one that that Really little very, supply is one bit is we the people very the marketplace, limiter labor get in one in booming we that help of also will moment people can general, Amazon at the really to work

qualified There some earlier. actually one people, so people like is the customers. only is will supplier in of infected other equipment, frac sitting the So ability always dynamic good, that to and pricing help with back of fire the the driving like industry think of about do real sort that's hitting when questions us think sort the of our limiter get our things

Frank Reppenhagen

comments, June. guys. forward your for in seeing Look you to Thanks

Chris Wright

Appreciate your thoughtful comments, Frank.

Operator

Wright At to the I'd question-and-answer to any session. Chris for closing this back like concludes This turn remarks. time, call

Chris Wright

we'll time for We interest joining today. work Thanks Liberty Liberty thank in us back whole the get their everyone and and family. for to

Operator

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

now may You disconnect.

Liberty Energy (LBRT) 28 Apr 212021 Q1 Earnings call transcript