Earnings call transcript Q1 2023

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Operator

Welcome to Liberty 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.

I would like to turn the conference over to Anjali Voria, Strategic Finance and Investor Relation Lead. ahead. go Please

Anjali Voria

Good First Nick. welcome the to Thank XXXX morning, Earnings Energy Quarter Call. Liberty you, and

Joining us Financial on Officer; the call are Chris President; Michael Ron Wright, and Stock, Chief Officer. Gusek, Chief Executive

from would like comments could involve view forward-looking risks These our include our about Before we prospects, may differ actual begin, to all results expenses some today the participants reflecting statements that matters revenues, and cause remind to forward-looking future uncertainties of that company's materially statements. profits. I or

These the that beliefs that on are earnings filings. based subject in uncertainties public release detailed statements and company's reflect current and other to conditions certain are our risks

Our employed and may measures, of employed substitute on today measures. capital other measures include adjusted are operational for cash GAAP pretax and These including on return similar not return comments and non-GAAP to measures companies. a capital non-GAAP EBITDA, also not financial EBITDA, and comparable be adjusted

net to this and reconciliation call A on the earnings adjusted in return of are discussed its adjusted release, EBITDA calculation presented the of available the website. income capital as Investors on is pretax company's of on employed which EBITDA Section and

the to over I Chris. turn will call

Chris Wright

morning, for operational Good thank Anj. joining quarter results. and and us Thanks, for our you financial everyone, XXXX first

pre-tax oil profitability, energy delivered employed the quarter trailing which consecutive Liberty prices across volatile on million was share resulting an record stresses and adjusted financial sent of XX%. $X.XX, This in Adjusted ripples EBITDA of from is quarter, with our our fully navigating of of capital outstanding $XXX first XX-month per diluted earnings sector. that reflected fourth return sector

over billion, year. $X.X was prior quarter the the a XX% for increase Revenue

meaningfully growing, to the per earnings total and share count. via unique opportunity profits grow our We our reducing have both our today share

share was count. Our this XX% one-third average reduced share growth earnings nearly quarterly from quarter per in sequential

in more financial our detail Michael will later. discuss results

of track an average delivering market. Liberty proud of executing at levels. the impressive overall year for are XX returns We than team record has significantly the Liberty higher

in Our never players position competitive with has with significant advantage been focused is and discipline. and leading and consolidation on returns investing our a stronger industry larger the

Supplying positive position modest the is for company. the critical in capacity to mission coming in and a putting our quite generating a implying return to cash today flow production We with world invest is outlook industry strong the years and XXXX oil us began free cash business and gas in shareholders. and spare

continuing retirement we we while of $XXX to buyback strategy. invest dividends in now reinstatement cash Since focused our of XXXX, shareholders returned, in long-term through program and July We of our have the the capital advantage. growth return competitive are of authorization have X.X% in outstanding remaining and execution million opportunistic to of of and the shares, expanding on our $XXX our million now

markets, discipline our execute global to The the the relative speed price, believe in will authorization stock is stock buyback Three our from the the severe be the on energy energy we to crash widespread onset we and the value at of driven in intrinsic on pandemic sector. of by which years in be. now dislocation what

US majority gas activity frac today's are predominantly maintain the record gas production American simply of required and gas levels oil days to the oil oil today's maintenance Canada. in The and levels. production production North and The just over. supports breakneck large high is contract and of growth activity of

course, this many Liberty at quarters. with top are have risks. align recessionary our today performers. excess themselves strong in In margins our markets, healthy Service longer, been for challenges now the natural ahead, line like customers we for we demand to customers are gas seeing as of sector in Services margins there want will with Today and steadier episodic perhaps have that be more E&P experiencing levels,

is flight of a industry part quality This Trend. to broader

We as and powered how older both these digiTechnologies Liberty retire a transformational We natural we profitability frac change offering pricing oilfield The actions from in this leads believe at in our the the our will gas customers. is undergoing and and for maintaining long-term diesel and change. equipment. Liberty returns invest is lead will of in way to support forefront strong are

hybrid We state-of-the-art this first and electric Today, our XX up suite digiWire solutions shift wire line digiFrac deploying industry's emission including generation, solution, lowest were electric and of with bring efficiency thermal fleet early together driver the the highest in power fleets, our mobile innovation our best ago. our industry dual-fuel digiTechnologies, of the years first the of digiPrime market.

developments This suite Innovations or integrate customized with to can full for type we’ll We of including digiTechnologies a gas, partial CNG power. Power customers. Liberty grid with solution. us of can either gas, or digiFleets allows fuel deliver provide technology fit-for-purpose LNG fuel new We with our any

with pumps operations. first to we the completion our During digiFleet, no comprising first, quarter, digiFrac disruption electric deployed

time crew and that to milestone plug of X,XXX a We time operations. of XX% over are the the reached announce perf of quickly pleased available with minutes or a in pumping achievement day

our of will part month. that digiWire next As the deployed alongside fleet new unit be digi suite

are We reactions by excited customers. from the positive strong our

modular fashion deployment be maintain rollout. schedule the will again efficiency digiFrac second in underway Our that this will during deployed quarter, completion a

rate XXX% and complemented of will hybrid Houston. pump extremely source is we if SPE Conference Frac power, digiPrime to primary engine will, you electric digiPrime as gas at X horsepower X use or in also on location unveiled revolutionary, February, the base that In natural by transient pumps efficient, an control. digiFrac our precision the load we manage

technology gas fully hybrid and chemical the fan a powering backside, minimizes additions, hydration units, generates run consumption, data electric to capital. electricity sand digiPrime, and fleet stores handling configuration digiWire. also emissions This and

the in gas-driven operational for field in supply technology chain power we further industry-leading As and that fleets technology generation ensure put the fuel over even performance. equipment, control that drive is having improvement the undergo transition to secure this to the fuels Liberty priority we Services best these a technology, our

to on own performance their manufacturing integration sand, must vertical Liberty realm our logistics, in lines and our alongside our launched drive design within Power boxes, expand and frac efficiency core These operational and capital capabilities. We strong business. business two check Innovations returns

focus of and primary the services initial gas LPIs natural the support towards choice. fuel be field gas that as demand secular processing will on CNG shift

will efforts. completions uninterrupted operations through provide own already acquired delivery and of We are Haynesville Today, fuel leads, the frac customer for needs. and other Permian our both both and organic we drilling and fueling in

facilities To this with announced expandable transportation, and Energy, logistics, accelerate together expansion two Permian sites acquisition brings Siren of natural CNG business. services. compression well Permian-focused, earlier installed pressure and reduction delivery integrated month, the we and a gas its compression Siren site LPI’s at gas

needs our Our strategic fleets CNG. customers expansion to reliable early power digiFleets for from plans, include our fuel other a growing and dual and

our We CNG to our order expand trailers, grow equipment and and basins; fleet compression gas have treating our capacity increase in on other capabilities. of into processing Permian the expansion field and

that industry-leading The also oil fuel for access and Dependable is power demands energy to the for returns. fracked generation industry and critical drive to are field efficient rise. Liberty’s the highly on performance operations maintaining beyond

fueling power thermal our operations opportunities together find efficient our and We integrated technology logistic efficiency, expertise industry-leading and leverage generation high-return services. compelling expect – with mobile to to

power only with compelling may will that et in in capital deploying opportunities be mini arise and We cetera. selective micro utilities, grids, the highly emergency datacenters,

hydrogen, components The between to logistics designed is with deliver as critical and value these platform greater to us well as CNG. synergy our RNG Our position assets. also capture

think to the out. Today, deliver day We to are fleets base chain in logistics in load components to the market. our enabling supply day areas versus produce performance, a and reliably continues provide efficiencies and our necessary team of of supply what critically for fleets are the and cost-effective support outstanding of chain sufficiently what supplied our about

in markets natural widely are LNG a of export service now transitory areas to persist gas on high-return invest ahead beginning in quality. opportunities. in to highest of show doing that continue Mexico relationships, By anticipated the we and with customer will Tight of the growth. will frac is wave signs markets dependability based a North build but Domestic promote likely pipeline We so, strong efficiencies softness slowdown, elite America.

vast services with Today North rising demand by our basins expected the some period. strong weighted for today's frac floor transient levels basins fundamental majority to this during demand oilier simply toward are maintain confronted strong gradual The from are The and emerging calendar remains oilier is for services. hydrocarbons working as of movement frac is markets to production American and outlook in a gas oil China. supply global in constrained implying recovery

demonstrated and with and demand oil the Development have the turbulence. oil sector largely companies on heightened resulted cycles. are amidst fall E&P In unchanged prior strength rough discipline, demand North perceived roughly recessionary a E&P stresses aligned has production early financially financial pandemic prices. economic since years been in healthier companies as programs oil the American risk global relative today spring, in and in to are

and pre-bank see ahead markets reliable the members a ebbs with dependable, always ease we cyclical digested flows are news like multi-year will expected to but offer sensed stress showed The output economic falling Concerns who drove levels. prices favor plus have and and resiliency, unique, that collective most back Russian a a surprise in solutions. upcycle industry, coupled companies supply for oil proactive as data

on us innovation puts focus offering class and elite Liberty’s reliability. technologies differential an superior in

and of continue broadening building Liberty us operational, offerings unique technological, to cultural Energy. that and We advantages are will markets enable the service

over to results. our I'd Michael that, financial to our With call CFO Stock, turn the discuss like to

Michael Stock

fourth work on Thanks, the profitability quarters deliver months company Chris. improved that return the efficiencies. we’ve XX%. a our testament I high morning, Good XXXX, team to start employed achieved history, a consecutive share our hard trailing last building in everyone. momentum on record the to with an am to to quarter of off of strong several pleased of of XX We're in capital

us Technology the We The and drive customers. of of us expansion on to our leading our priorities our offer with coupled for of uniquely and to new strategic to us with both Group, strategic industry return our keeps offering win-win productivity profitability our that digiFleet capital ahead continued LPI positions solutions balancing delivered investments program curve.

return, $X.X delivered results. a while now year in rapidly a X% We declines territory, induced XXXX, reasonable year. expectations In the sequentially first service built make in and of our the businesses. able reinvesting on where back the Post-COVID billion. solid pricing their are stable on financial revenue prior last foundation quarter companies and moved increased to of to Pricing

First quarter compared in per cents $XXX share tax $X.XX, diluted the million, quarter. to fourth income income increased net million fourth of quarter. in the net Fully was after from $X.XX $XXX

compensation administrative General the and compensation on and the non-cash with quarter, million legal primarily $X expenses million in sequentially, in first associated IT increased stock-based stock-based $X first non-cash of million. expenses. quarter annual and included expense, totaled $XX G&A grants

the to extension and Net interest our expense pre-tax $XX for quarter. the loan million and Tax term ABL million, associated approximately fees included facility of our $X related of XX% facility. for was $X totaled retirement of approximately quarter This the expense income. the million

expense for to tax XX% expect to percent be approximately of the full year We pre-tax rate income. XX%

First end and million. of quarter $XXX $XX net cash Net at high million $XXX executed the to quarterly in adjusted fourth million of the with quarter as with XX% million our the million even dividend. debt levels the through cash We $XX the towards million prior EBITDA buybacks entered teams and balance the year of quarter achieved $XX of shared $X increased increased seasonality. a million from of our sequentially $XXX execution normal from

$XXX $XXX year ABL the our Total the loan, million capacity of in of liquidity facility million our end $XXX provide In credit reducing - In January, to rate. million. the under conjunction availability we quarter amended interest to ABL at $XXX a we increase million. expansion, the term our borrowing with effective at our end our was retired including facility the

GAAP projects. the other expenditures spending million related capital Net maintenance approximately from There on which a million were included to basis in quarter. digiFleet $X dollars were the first quarter, of construction, proceeds, $XXX capitalized costs in sales asset and

the was dislocated Net XXXX, repurchase million the take a we $XXX a returns to July in for share the was shareholders share cash installed improved market. advantage prices from million vastly In in to program $XX quarter. operations of quarter and

we a to $XXX authorization generate and first our our reflecting strong to upsized of quarter, flows. million free conviction our the ability During total cash

cash the million X.X shareholders of returned quarter, the quarterly share per shares and our dividends. repurchase fourth the share of total $XX a X.X% of of first a reinstated $X.XX into last which represents year. $XX the quarter of shares, the also in of million balance in quarter In the outstanding to was million we returned We including for dividend beginning

months. nine the returned now $XXX shareholders have cumulative We last to million a in

program, capital free reinvesting industry-leading while We with and flow. high differentiate continue return our opportunities, to growing an ourselves of in return cash

growth and stable softness the and We're expanding the results. customer the second of results, ahead, solid quarter, quarter pricing, quarter not a sequential our achieved on in second markets demand. first impacting the Looking in seasonality, we solid modest base gas we're expecting significantly normal, seeing in reflecting

suggests as But market activity early exceeds into their response to oily fleets gas of basin the visibility demand we a from half into will basins near-term few likely year our supply the second in with Liberty gas the shift slow customers conditions. larger

Our general outlook remains with for commentary. quarter our line year and in positive the first

the per we As capital expand free we of cash priorities and to are shareholders. return our generation to navigate earnings with years, maximize balance investment; to support allocation upcoming well to the flow disciplined strength; capital positioned sheet share;

ahead few a I will it of turn Q&A. now for Chris to back remarks

Chris Wright

U.S. grids an we scoff that destabilize $X also at a economy. lower posing to lifeblood and is electricity offer raising Thanks higher the the network Michael. trillion prices on and while prices, power a surely offered electricity of quality service such If a our foreign would modern

we build keeps factories electricity density, this spend no, the incubators same subsidies is in Heck sources. our billions capacity trillions dispatchable the also energy of not evaluation passage that supporting lights of that unfortunately of receive forcing forces, and political generation absent low The likely thoughtful road last miracle retirement running IRA the electric reliable dollars unreliable life-saving investment of generation life. fall, on, down will draw uncapped with will are to of dollars the of heading we the bill hundreds is

We know dissection today's it See grid detailed The recent electrical lead California, United a where Kingdom follies. already in policy Germany, et by Schernikau Unpopular The the as leads seen Smith we've unfold for of cetera. this book, Truth and

We are trajectory. and industry, this to we squelching are on. the passionately jobs outsourcing current industry that this opportunity sadly, and impoverishing it is vocally impoverishing course But opposed

advocating will for We correction. course never radical stop a

opportunities will see who to highly those dependable, many that likely solutions, business attractive With reliable, it. without being said, to operate cannot Power. Liberty power Innovations supply simply

mission, Our human our bettering better a lives, business energy. and advocacy are be around energy and centered more

open will questions. for your now the We line up

Operator

Thank you.

Podhaizer, be will question from Please ahead. Barclays. First Derek go

Derek Podhaizer

front. guys. up good Hey, Maybe the markets addressed we gas morning right

talked from you quarter basins maybe So, fleets about oil next gas some the move basins. into

You skip bit. but your it early talked can a little visibility about just maybe we comments, expand on

just to of then profitability these us and case the get the mean can the walk your back out. what for want activity magnitude right handle better guys, you year. collapse XX what move Maybe it now and levels, to the come potential through you rigs is There through the just try in year? year be year end we for rig materialize, to fleets as a Liberty’s the Do to half could profitability on the and the expected XX of see count decline

Chris Wright

tightening a markets. is is, was but the went a ever to it’s by XX% than that gas industry of if X% see pullback from that market less bet, markets. and Look, activities totally our relatively is marketing pullback, We for rig fleets. the activity third, that's or You XX% that a magnitude even Derek. movement the Maybe a meaningful. of was market, a demand frac pulled frac There it. market in We'll decline modest, small gas industry-wide of in X% back in

to wanted were pursue capacity. to oil had that for unable lack pursue of already that in probably activity people markets, more We they

outstrips this in even of Liberty, fleets of the market big we for Liberty, in ways. are have. One demand So couple for we will gas the number is, end one the a manifest there

share Liberty. see that from see in to little would customers existing growth of to market So bit more going like we're a of

basin. we get we'll other that one, alluded, Michael fleets move a people table the to been probably tops Liberty Otherwise, as two at another have And fleet pounding move might and a fleet. to

So It’s I have the us, probably collapsed oversupply we since not that do a But dramatically. is prices would say have impact gas, the significant. meaningful This meaningful. if natural of macro. on

and a not, large on I insignificant our It's world. not results. Liberty’s drilling financial would the say business, But frac not in in impact

Derek Podhaizer

to be around Permian Permian, over of May Great. I comments your dislocation we've the mean, heard market. That's the moving some peers right. this good from All color.

a specifically customers your the see Are agreements that insulation? bifurcation that talk you think to Permian fleets your I maybe you the around you could Permian see spot with little more to or given maybe in market dedicated starting some of level bit? Just basin?

Chris Wright

to meaningful that the much few more customer. players not than We layer have fill a for on we Yeah, latter. dedicated we more seen of in up different seeing smaller We're yeah, us. fleets the full-time in where not a are But activity market. work months anything the in others spot one different All just five there's are either saw - four, customers our meaningfully we do ago. that to than fleet. We're players the Permian

Derek Podhaizer

I over. it turn I’ll Great. appreciate the comments, Chris

Chris Wright

Thanks.

Operator

Thank you.

Next Goldman question will Neil from Sachs. be Please go ahead. of Mehta

Neil Mehta

Yeah, good morning, team.

want bit cadence profile. about any year stay the next, you And can couple the prices builds of around you spending CapEx commodity How and of thinking numbers next are the talk digiFrac over about guidance, if a provide Just to little this years? here? capital especially

Michael Stock

EBITDA QX. approximately down XX% we – XX% should this would of going year and guidance true. EBITDA reiterated I think be doing were holds to I Yeah, that next from Obviously, say that to year, about we XX% I Neil, of reducing

Chris Wright

best bulletproof balance a chunk chunk next. of is shareholders world at us of might at digiFleet Michael want profile, return just if the we've just CapEx, them our capital. Yeah, a and balance I is strong, whatever we for And - the the to just sheet to in says for got fit opportunities to that that the but demand how that maintain think for are throw is that we’re what allocate to to capital

Neil Mehta

the follow-up. the Yeah to back earnings talk you you Shares Can your were power underperformed quarter. to aggressive and relative energy guys in the of course this in buying that's fourth relative about - year. the stock just have over

So lever of uncertainty in use, talk that and buybacks about the macro? lot use a to continue how balancing as against a you'll economic you

Michael Stock

the our is at of That's team do. we motivation Liberty our management here to right? Yeah, job. share, works look the grow ultimate everyone for Liberty or every that motivation what value for buybacks That's that the

the advantage, since a delivering strong of - do part when opportunities get years Liberty capital we we other when ago, at to at that. XX back increase many that that delivered And on going prices so attractive is amount we've that's but to do there core that company relationships, the average we ownership buy founded the ways get shares competitive customer by stock message, return and building to a very share of we're each prices, heck, attractive retiring to of above

sort the special strong of in we've a we're business. scenario right into We're business. XX And a where now, years very got

we're sort is the established So of pass mode Liberty growth mode.

we're shrink So of our share a as size base. our percent our compelling with for have a opportunity CapEx needs business presented to shrunk and

to that is opportunity going going as there. we're heck, as all that be So, long we're to over

Neil Mehta

Michael. Thanks,

Operator

Thank you.

Marc be Cowen. Next question from Please Bianchi, will go ahead.

Marc Bianchi

side are market curious was know how investors for your of Hey, because the XX of just a thank replacement. it supply-demand the lot hear want long guess, demand there's are There of the to on to those I that back seen for on be and disrupting the fleets bit, into many sort those and a of projections not? I is you. kind some I I incremental whether side. what have market to maybe or coming supply will know, go don't debate take been I the to I've - you how balance, about going view

Chris Wright

a is That good question.

- do own for sort so our own get financial and we of bottom-up it's time math but marketplace, numbers results guys. we're the But take extrapolation. see projection we But the flow do some know, fleet just frac and to obviously, You count. going I to through. our

in every basin. We have sales representatives and

where running month. are many How going our running in How be to they're those today? What in own QX? fleets are are next to and many many how coming fleets from? running be to be have running are We QX going going

about or of are will probably dialogues, and So little looks fleets there's hit that XX have a I have that the ground half less It little hit half - frac than the more that math think those our half year that under customer or ground will construction. than our next like actually the this year. a planned other from

you think now. XX fleets year? So, the do XXX There's right north frac of this hit running ground fleets

fleets equipment with marketplace if XX flat the of Even this strong. that, average equipment, of instead are band-aids of XX is market on would good. fleets to the going arrive, fleets equipment to people the fleets of worth but supply and hey, incremental, XX XX, hang of that out year. band-aids, are not of it's XX, with new Maybe much worth pretty you half on equipment, this would Economics - XX fall that People that's exit of hold say, fleets a year. XX, XX fleets,

only And declining work. because will last hopes and Wishes really don't that if band-aids actually long. we the out supply adrift of it Equipment continue marketplace. at so be would rate, a

right the macro pretty So, now good. remains outlook

Marc Bianchi

‘XX, wanted prior of that I about seem quarter ’XX, Yes. XX% slide in to you were helpful level ‘XX sort deck Chris. of said since question, guess, CapEx five context, beyond. down which million EBITDA follow-up out I another CapEx in That's seven you Michael, a guys put $XXX $XXX beyond that think to to to or million last be of to so talked side, where the above really the about on ask would over talking and to you I you years,

of into those sort numbers to then, maybe talk does to CapEx, the ought about, play whatever that, that be? of sustainable And But sort was what just what how meant show? LPI

Michael Stock

balance strength obviously, demand that is production. really very but that cycle have from where sort brought I of Again, we disagree came like coming have the moving is it that replace growth see it Tier-X. replacement that's the with not the of really That really staying depend that on here that with slowly in oil up majority being to just of say, shows market the supply/demand where market, sort we the the of XX% replacing the as I currently was to will like to the is the sort we know, market number. of oil a major like digiTechnologies sort of from

And far so, a going we came see as the together, as years. those general came is a pumps with drove increasing so Tier sort which of to from And market up no, of Those profitability. speak. sort with numbers the strong and And reasonably that's steadier over next be and numbers. numbers own of where drivers two replacement slow those few digiTechnologies, one why we that's obviously jive X to other,

this which beginning in part this revenue year. the of that announced the hasn't the Siren LPI we of at we power. deal, CapEx beginning year, catalyst the generation It speed the generation in quarter, we've split changed was LPI budget of the which the that but this the and going was up. closed we for that Obviously, did to number, earnings

that? I compete to to business. to anything strong think augment it and base of has we as Chris, efficiency returns add of had capital our at is all all businesses, we'll when very, do want the you very LPI has for and do has look our to

Chris Wright

it’s think said Michael. I No, well

Marc Bianchi

want year, CapEx I would can think number sense guided that it's The you $XX to Michael, just of And the, just million make the to acquisition, confirm. for clarify for this outside they - would I I that's LPI.

Michael Stock

Correct.

Marc Bianchi

Yep.

Okay. Super. much. Thanks so

Chris Wright

Thanks, Mike.

Operator

Thank you.

some Stephen Our Gengaro question of next Please, be go Stifel. will ahead.

Stephen Gengaro

everybody. morning, Good Thanks.

Chris Wright

Hi, Steve.

Stephen Gengaro

me. for things Two

half I you is utilization, I pricing reasonably think and you evolving are customers? Liberty’s market think? how obviously, the with first, sort conversations if you a away fleet the walk about How for when it you price you the how tight. willingness and/or to next we - you mean, about look assets peers? And that? when Liberty’s think business the to than like year give prices up How evaluate this year, of second seems when do are And how and about think about with at think balance should think that do demand we little how should of your you keep lower versus think we customers

Chris Wright

we're with customers most have our look, dialogue so, in years. Yes, our for of customers. been constant our customers Remember,

a partnership gear. we're So, in

the better, You'd vast safer? of for, changed of is, do how in drilling be plan about more better surprised, do our course, have get but things we we going customers efficient? are that How majority we How dialogue operations to where be? the might with programs, make do assets

that's human is course, in like mean, all a bit this lower XXXX. all, undertone, have little But And higher an of suffered that's higher. XXXX, not industry we the this but slower sort There us. price Right? markets, customers moved whole crazy every hangover like for XXXX, I was Liberty, of from always Liberty’s XXXX, just overbuilding would that and price done would of - we in just just nature. at it's in

have year in excess out really Those or burnt last fleets only two. the gotten

a excess we've hangover. So of had bunch of years

our that. needle their the equipment. for build Now right And But a now economics. CapEx our well is new which of to have certain their customers for lower There to customers. mover There's to on cost, improve we equipment. amount biggest there's returns returns drilling

burn fruit more Like and last a gas frac is power low burn fleet. the diesel hanging to

You switch A lot unreliable. transportation save to can wet on where and is at sand you costs sometimes gas substitution drying of to shorter.

two-thirds it get costs. have other don't and third only just We're barriers gas the to reducing knocking or of over you You these burn have to diesel. pumps the

we That's LPI. into went why

for pumps. day, all for enhancing gas all saving reliable our every have return a and of us. huge to have day That cost opportunity is We for opportunity customers our

price is But the a discussions, but smaller of are dominant dialogue. a sort pretty So sort the much is of those stable. frequent pricing today,

coming. this, others say, held that of the we year, pound XX% to our but are last partnership. weren’t longer played probably more in the back bit We're end call more QX at for gun flesh. We earnings good. game. Could in is that end little heard a maybe, last And the we at Returns people's certainly and we a head. of got our We in QX, us price for fighting we said

Pricing good immediate customers now see don't for right change. right us Returns is any now. to for I for that our horizon flat are and

Stephen Gengaro

you Chris. Thank three And are of your out - and the look at we if think at if for integrated like, look are look or looks months, out question, about, you of services medium strategy, vertical, Liberty? two, integration term, initiatives all out do well offering? term XX what think of it, my strategic but also the second Liberty color, sort sort the we fleets Great. about we there like? when LPI, you site longer years, we we think are How Is completely additional your should

Chris Wright

The years. we I get We at give pitched every can the few - there there. out – best look we’re all is, input deal last

a a We those. of organic. in is we two whole across acquisition a haven't LPI there's ago when an downturns, time launched do supply of and of compelling do year will fleets. company. But was opportunities, we in been large fix gas unreliable over Most organic idea what problem to

expertise. Midstream in brought we And

figure little ideas bit? right technologies or in humans ideas plant competitive right these than there the got of and into We looking marketplace. and are you've in differential the all way ones But advantage there into a compelling a But to current Are technologies in to most bring ground are future either there's surely. to compelling today's we’re always and something our developing might run economics Yes, the which that are dig at the expand there. in to sort the out things shoulders Surely. offerings ideas. other improve more

to we slow and Will we to driven competitive Yes. our So, Will industry we're advantage grow company. to Yes. grow we of a we're our industries and business? will lines by going add seven try base be we always peers? our above Will evolve? of possible? Absolutely. returns on But versus not Yes. as steady continue share business continue broaden earnings all capital, per as fast delivering sort to

we, those specifics. giving doing But So, any we're I'm release just we not until more them. really don't

Stephen Gengaro

you. Great. No. Thank

Chris Wright

Good question. you. Thank

Operator

you. Thank

Capital Our RBC MacKey, will Markets. Please from go Keith next question be ahead.

Keith MacKey

recently consolidation. on seen Street - up E&P in Wall down morning. buying stories and and thanks the activity larger or public could their we There's on customer private some E&Ps acquired Hey start E&Ps written the good lands. about rig slowing about Journal if been we’ve talking Maybe consolidation, just the

Can mean that E&P versus think what you for thoughts perhaps? consolidation give us ultimately or Chris, just, you would Liberty think some you competitors, more where on

Chris Wright

say, in general. would I

normal strong I dialogues consolidation. the a periods cycle healthy. business probably in before There is now, going there's you about hear with more that business consolidation. of a aware stable those periods there's are think environment we're It's prices more right on active fruitful it's for where lot where a part it's them. less of We're and

again - it's we it's it's think think We healthy. think good. We

to Liberty, today's For move of, opening in go to a stronger think, and company whether in there as sort of get comments, our is is I or a fewer players, upgrade company partners, you mentioned, service world. we big more there a sort you're midsize

for it's Liberty. a In a for positive positive It’s trend it's general, So, change. trend certainly industry. the

Keith MacKey

how mean margins? - can through on what you in pricing? just to Or pressure pass context pricing or and in Does we some should be there's mean the of to follow-up, take to stable you that cost pricing going thank increases inflation? Okay,

Chris Wright

to going be bit it's of both. Yeah, a little

you to always of better. through. straight passing trying we’re those are sort ways. get many that If that also we're buying different inputs There's of a a There's inflation-driven, efficiency with inflation just backdrop we're

can more organic sort lot a little efficiency outrun a of of So inflation.

yeah. So,

I think we're of across flattish, flattish it the viewing board. sort

Keith MacKey

but So, could sticking just XX% Michael, are EBITDA to Thank talked one just about it, year-over-year the you XX% for more you. you quarter growth, I can adjusted last clarification said clarify? And if I with that? in? you sneak you think guidance

Michael Stock

Yes.

Keith MacKey

Got it.

very much. the Thanks Appreciate Okay. comments.

Chris Wright

Thanks.

Operator

you. Thank

Luke Piper will Sandler. Lemoine, Our Please from ahead. next go be question

Luke Lemoine

Tier to digiFrac you Chris, you about the digiPrime as DGB. how how are planning into about fleets But talked over pumps? characteristics pair morning. And and replacement you could may these your guess, these pumps your to more with versus with how talk pumps digiPrime about about X time along bit X conventional DGB, the pumps. a fold be good little relative Hey, think I performance - you Tier

Ron Gusek

said Chris digiPrime like is in so, Yeah, remarks, have think you power. Ron. it’s to base Luke, his that load

with with lead course next-generation. the would entirely X pumps so, Tier us, to fleet, we going in could really if electric do it DGB anything – were digiFrac even And pair means or well But that. dual of equally to fuel digi that X pairs it our you for that Tier

troughs just the transient or those fracking. peaks Really manage kind the and something load world with to along of come that

you then to So just and top that the of something on power day-to-day delivers job. the of load and location want a in to as the on XX% of horsepower we base absorb that that ebbs think of that we require place flows first put

you delivers, it so to a in you get use of but efficiency of it you have then, And that natural just efficiency in – as brings really gas, think drive you terms we're when it it, just the setup terms of fuel. about when incredible you the mechanical as up benefits brings obviously moving

profile fuel And significant XX% effectively to Tier you and in X improvement so, economy. we when to compare DGB, in something like reduction that call a XX% emissions what

forward step us. for big So,

Luke Lemoine

Ron. Thanks Okay. I’ll turn back. it

Ron Gusek

Thanks, Luke.

Operator

you. Thank

ahead. Citigroup. will question Scott be from go Gruber, Next Please

Scott Gruber

mean Yes, Chris, market math good to about impact if supply compelling it suffice to kind I ask and back could - the dedicated just morning, the market does the your want Obviously, come to pricing. pricing. and with but your it to weigh tight, really just that morning. down sounds relate weaken on would the curious, here, macro good staying how spot of I'm from impact pretty morning.

to pressuring to start level your from kind if drop cycles superior tolerated healthy and sustained your Curious on, would spread had what some your does you? happen would any spot to at pricing? And to reasonably I without have of assume be you color pricing, concern deflation it could given spot if efficiency. spread past what

Chris Wright

quantify, fast – it's on they're service because possible customer, the think, I the pricing, done. it not how on stuff to provider. move depends spot depends depends It get to there's to going

same companies discounts just have providers huge get other to the job. to to provide Some

different players So spot. is in there the

into not It's it's but factor, yeah, don't or a insight visibility we our have specific that. enough yeah, So, impacting Liberty today.

Scott Gruber

the Okay. tracking that do of stage of you you're portfolio latest you expansion pretty yourself for that to And able next bring? then, counts guys speak and I good job here, can a level just mean, to others. on efficiency

on at that the as and present kind of of seeing delta could what Just widen? think, to expand you're commentary kind you you continue a portfolio, continue to how

Chris Wright

Look, Obviously, as quantify, as hard just today. of to at team. Again, we proud are we but the big since record ever profitability. started company. we've incredibly our high We're record revenue, been

average every record we the quarter. yet was all But across fleet a average last fleet performance of the have, the

get that piece and believe. passion culture, humans, I people of is the So - and biggest is what for

headwind bit diesel So mentioned we LPI, been I that continue little to it is training. a mostly needs gas be enhance mean, get to We has more means to a with they efficiency, of the burned just supply burned.

going training, on many we're of gas. to there's just factors there. switch to natural so So that software more But the technology

keep People culture years Liberty. always plateaued. the that’s but low-hanging pick the But five it the you We’ve hey, we think said, maybe asking, of people, that's just up. but drive to ago, the of some and that's fruit, humans continues

reasonably go it confident where up. it's know I'm goes. But to don't continue to I So, going

Scott Gruber

directly to And more a there's spread? wide benefit which into from LPI do diesel you the contracts an were incorporate you can gas firms ability think

Chris Wright

huge gas your and absolutely. driver get next-generation the cost, fleet fingers between that but is can't and snap of diesel it. these Oh, biggest Look, just delta you

equipment, that for different different engines, frac converting. have You different fleet

You got to supply it.

to the You way got efficient supply it. most to look at

both that, and thing So, of customers. that's for a us wins course, our

goes we're the both equipment, that do benefit sides. a The win people it. majority it's for technologies, us bringing obviously But the because to to the of

Scott Gruber

great. Thanks Chris. Okay,

Chris Wright

Thanks.

Operator

you. Thank

Next question go be ahead. Roger will Wells Please from Read, Fargo.

Roger Read

do good cop Good question cop for kind you morning. Yeah, question. thank you. am in bad going a same of I to the

is, downturn little how if XX% drilling decline part and to XX% say, one question one-third in react a the natural gas outlook You you gave so, is worse, of might that? your gas bit for to a or what instead decline, the first

The asked gas a to morning, consolidation a assets earlier, about this second part company is, into buying E&P we U.S. follow-up of Japanese and large the saw it is in a question some ironically,

near-term chain, So the the sort the issues of the to maybe might to affect integrate think its you tries way do rest beyond world a, as gas as low how of LNG positively prices? related get through we that

Chris Wright

will one I take the first. second

But, gas outliers tremendous the for emissions. when over I a not Ourselves here. number burning for and It's it's gas cleaner and the clean, also is mean, emissions. outlook of decades we’re I lower greenhouse say and reasons. mean, tremendous Greenhouse what just not I It's simply natural lower gas coming clean,

are it's in of air the burning source of for last, the in it's America. is big that a driver The States say and Western quality. Asia years ever last and XX sort is Latin smog biggest States. the cleanest or been but That's United and the that from of in to air blown in That's risk the United emissions greatest the well, in the quality it, greatest cleaner the as

So, that clean pro I is coal, have that's to natural clean slowly more of air. that air, gas brings power everybody switches industry and over

gas in gas none. natural reliables, the Japan electricity, of source bar, moving energy source around. So see great of is fastest a natural will you growing last has obviously, XX the years

that the getting they're hear lot add wider growing energy again, U.S. is to on ultimately sources is Where small far by race Where don't and gas. percentage-wise next more produce a in few is We from? the tremendous winner that it, things Gas a value, is the world more in about used percentage-wise. decades. great? of place likely the Obviously,

exports our meaningfully. to Obviously, grow going are

is I So happening. that of think all

positive. All of that is

bigger Some will be LNG. will chunk The pipeline to be Mexico.

gas just just of export for So they're I a think in great productivity got producers, position, ahead capacity. but

gasp significant early take markets the in demand So, - growth see may in XXXX, will the growing for are that where as for we take that that export as long that a US. going to happened

that we and than deployable elsewhere we've don't may easily know. markets XX% of meaningfully affirm customers. activity, less before But gas us, great again, well, The as for got it's

but it's for quarter next, to hugely significant the nothing not or two outlook one over not the it's years. So, Liberty’s business

Roger Read

Thanks. Appreciate it.

Michael Stock

Roger Thanks,

Chris Wright

Yeah. Thanks, Roger.

Operator

you. Thank

be will Riley Tom ahead. question Please Next B. go FBR. from Curran,

Tom Curran

questions left morning. LPI. just related I two to Good got

venturing including of pursue to fuels? So internal first, potential organic any expected Chris, other that technology side, the own alternative you've perhaps LPI activity. just business’ development But into acquisition future undertaking spoken types RD to of its or on is

strategically, of growth as across LPI's do the source help natural solidify for expect then choice electric the horsepower reciprocating industry? you gas-fueled And to engines power

Chris Wright

wins. infrastructure do? limiter We're The problem, gas States around do infrastructure. in infrastructure you world countries, building better India in as by The it pipeline spaces to gas there's many it take is moving of but this the then see United to other we is natural with around. just many the just just has gas expensive what that build huge moves and blessed U.S. gas With It's plans so to awesome way LNG more just countries. LNG, natural other which the and

is a sort it is, for a just It's a of And what a that build transient pipeline. pipeline. pipeline pipeline there's or it's before pipeline make consumption a LPI virtual it’s sense to doesn't enough

making we most as So to amount on predominantly into and type bet. that, better of working - in efficient, gas-powered are transport technology technology, and those pipelines, efficiently storage to vehicles we in trucks natural the keep absolutely you nearby want be you the more possible tap compression that

as growing opening a And just the to the have logistics sadly are. electricity units remarks, and as there a opportunity, said business gas as well. it is And see to thermal we is. in have business transport to we generating as as wherever we supply opportunity rapidly gas highest hydrogen, we I be natural efficiency, said we mobile growing electricity, those a reliable yeah, But source business and going well. growing RNG can obviously And

Tom Curran

Got it. Makes question. sense. Thank you for my taking

Ron Gusek

Thanks, Tom.

Operator

you. Thank

Pant, question America. Saurabh go Next ahead. will of Bank be Please from

Saurabh Pant

were the undersupply a XX quick release Hi, you wanted comment in you to to I'm clarify trying expect demand in gas good remainder just on basins press XX oilier think that. to a through I your about larger likely Do the offsetting basins. think, the put basins. hi, oil had I potential the of context think robust go in morning. in up conditions and year? last I Because you I quarter talking to into the fleet had clarification this the basins about in oil I a softer demand

just that with comment. that I – square So want to

Chris Wright

now Yeah, roughly let our is look, right outlook flattish. in me basins those

fleets little see overall, are to above going you But $XX? remains are that margin economics there and a Probably. hard probably a basins? $XX, the flattish. the where, bubble little the oil was in oil on there to Yes, small above more privates if more $XX On roughly is get above is private activity frac maybe activity now

Saurabh Pant

Okay.

activity, banking Now cutting is And a to even that's of now add wondering before seems the it crisis. right? a helpful, banking us upward while slight because don't with little oil crisis, - margin the level was But I they if right? had pre just thinking to activity, I bias? it activity bit flattish. like they private, the sounds you're on back Should that

Chris Wright

from Yeah, look shrinkage from correct. privates last activity were growth over companies. multi-year larger larger that's because think ago, they and months, a I been the meaningful What’s a ramping and they at up the plans, the XX XX a privates Yes, companies, last were rotation, months happened sort of activity of than XX a today. story a the are larger months slowly much percent activity of has of

Saurabh Pant

me. clarification yeah, yeah, no, Yeah, for just another absolutely. quick then And

normally I in would from tailwind think XQ quarter, on are mentioned You seasonality is sure XQ. always the is favorable we page. just to seasonality make to going all the same second a

Just said quarter? the you what in want to you make sure meant second that's normal when seasonality

Chris Wright

there the in seasonal Canadian is the have slight from downturn I Usually US. movement. and world correct. That’s uptick the a positive a usually the side seasonal of Generally,

Saurabh Pant

okay, okay, perfect. Okay,

it Okay, back. you. thanks I'll turn that. for Thank

Chris Wright

Saurabh. Thanks

Operator

from next Daniel, you. Daniel Instructions] go be Our will Thank Partners. question Energy John ahead. Please [Operator

John Daniel

Siren LPI, outside eventually of be Guys, a to timeline when serves might end-users press providing industrial me memory gas, to good things morning. just correctly you and If provide can power the you oil about talked that? release you or able pursue the a bit on my

Chris Wright

for now and it’s assets is time demand something we've together. now as at we’re we're within for But business the looked pieces seriously tremendous. our look, right some bringing the John, frac core So - building obviously as more we're the

already a that that's for. we're now everything building got right home is So, spoken you look foreseeably

it's longer right There a in our May opportunity, But investigation I give not it's hesitate happening few it's term. the now. frame, that's short to but not our look find to it's medium quarters. specific So, be but next term, - time is there. the opportunities to in

John Daniel

then, they Okay. country come Got of facilities had And to across for the you number that it. decision Siren, you? the evaluating? optimal facilities. you are the Have still two the or What's

Chris Wright

still It’s Delaware depends it far Midland at apart it there. on the different the - sense facilities have and A volumes to work. enough they're makes simple got the got and evaluating that is, Permian look you location you of and

want bringing versus traffic to You you do don't truck sand, the but delivery you infrastructure still nearly optimize cost. gases ultimately costs have

well right one a one basin. starting but do the Permian as is big basin. it's thing It's this, And to for just to us but as basin the

John Daniel

time the in Okay? build actually And if go decided live? to a decision from facility, you the to what's new

Chris Wright

it's Yeah, months. think, around I six

John Daniel

Okay. all I That’s Thanks got. me. including for

Chris Wright

John. Thanks

Ron Gusek

Thanks John.

Chris Wright

Appreciate.

Operator

This question Chris answer concludes to over you. session. the remarks, our back go call I like Wright Thank would Mr. to turn for closing Please ahead.

Chris Wright

possible. jerseys, want everyone in ecosystem family to a thank Liberty and our in suppliers in everyone for today life Liberty’s Yeah, everyone's to I this you everyone interest our makes our the within that time and wear working customers, just energy broader life liberty thank business my and and broader their the,

and all in look to to months. you we talking Thank forward you three

Operator

you. attending Thank our for concludes presentation. This conference. today's you Thank

disconnect. now may You

Liberty Energy (LBRT) 20 Apr 232023 Q1 Earnings call transcript