LBRT - Earnings call transcript Q2 2024

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Operator

Welcome to the Liberty Energy Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Anjali Voria, Director of Investor Relations. Please go ahead.

Anjali Voria

Thank you, Gary. to Energy welcome earnings quarter and call. morning, the second Liberty XXXX Good

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

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

financial include be of may not capital measures. this on adjusted Investor not of income Chris. pretax income Relations on income, will adjusted net the employed the discussed other as income companies. A EBITDA, adjusted non-GAAP available and a and reconciliation adjusted diluted share net adjusted and capital for Our operational net EBITDA, net and similar to to net and calculation per turn now call return EBITDA, pretax net call diluted income GAAP are on employed EBITDA and comments measures not income to per website. I measures adjusted are of our over comparable substitute adjusted to share also These adjusted on today return include measures

Christopher Wright

quarter Thanks, operational results. for us and Anjali. joining to discuss Good morning, XXXX our second and everyone, you thank financial

with days our support meet resonance. for Many the were I efforts. to recognize were their them colleagues the they rose to exceptional community Beryl. to impacted want remarkable each the Hurricane I'd needs without begin, to but like that we Houston-based broader and and of power, Before left thank other business for several occasion by our

modestly $X.X the efficiencies and underpinned record Revenue activity Liberty's daily value quarter, fleet financial In completions of results. billion and X% of $XXX drilling performance, and softened industry the sequentially, strong our advantage. period. Record the Liberty second EBITDA average competitive the demonstrating and increased same million while by of delivered of over adjusted coupled XX% grew utilization operating safety strong with and performance, respectively, pumping

$XXX ago, X long-term the advantage and strategically continue of innovative to of program cash our million adjusted scale Since in distributed cash dividends. We allowed $XX through XX shareholders quarter. retirement XXXX. We leadership our shareholders. expand culture partnerships, returning to capital deploying company employed the technologies, the distributed XX% capital second capital plus have vertical flow cash return us for generated of June shares integration ended Our return to customer and months deliver to capital on pretax to shareholders strong we while to plan XX.X% XX, reinstatement years outstanding million quarterly position, the competitive of and

XX-year history. culture today's of developed technology future. performance execution over at reflected highest-ever our Our and success key operational and our our is This to of date are to the root innovation in the safety Liberty and

life organization. two, logistics Sentinel. substitution; examples performance AI-empowered and our custom-built data specific third, our driving are software our data Liberty's extending are: driving performance call asset We solutions enhanced preventative by platform displacement throughout diesel programs, harnessing maintenance software gas record and one, and analytics with reliability; Three we

have safety us Before awareness built accountability fleet to of arc to custom designed has Liberty remind strive own culture everyone I importantly, I our that optimize type efficiency. for power and a generation technologies alone ceaselessly improve. want that that these to performance allow [ X around and technologies deployed and innovations, Most ] highlight and pump specific we capital we

roughly to over frac company driven the in of efficient the alone, reduction XX% below most very this competitive, We fact. in I'm XX% TRIR sector. are believe incidents recordable I most X averages. we a industry the have down last proud year

me a Let more add enhancements. technology-driven few comments recent on our

Our history both and our fuel our of at record deployment company in gas substitution from is highest natural gas diesel the the fuel level now displacement with dual equipment. digiFleet the

supply past the gas on plus real-time over levels and substitution have gas. reasons: addition Liberty three by Over increased the on-site dual-fuel of gas investment our expertise visibility possible operating systems, with Innovations parameters, made XX% in automated Power coordination year, data for increased to natural critical

preventative commissioning increase ranges, and further Our operating both gas us performance coupled analytics with DJ CNG and our customer in to program, Liberty to We first -- with allowed predictive frac serving achieve data maximum vertical visibility for assets and drives logistics the maintenance integration sales June, in optimal substitution. assets including our LPI and uptime at capacity with and and operations efficiency. run Basin, the portfolio fleets of enhanced compression drilling

Sentinel have full LPI AI delivered our data we is already our of natural and analytics deploy delivery and AI U.S. right reasons. and is to chain expand have less the transportation and assets, Sentinel time expanded proppant deploying launched logistics key known are we forward. and with U.S. time cost time XX%, right a predictive improved for solutions is platform, low why gas. services. downtime count the in all approximately increase and for yet collaboration for now real-time by is back and restoring we hard demand to on-site circle a tool That Permian truck as XX% we the supply very the centers improving built demand tool forecast going precisely to both at We partners logistics. upwards It our for the the enhancing inventory electrical and and and basins, to then the for another our power year technologies Sentinel lowering system. We comes the right approximately strive less optimize for overstate business by our our to reduced we ultimately decreased is delivery business. both each performance. and total harnessing business due customers, industry ago demand inception, the utilizing now our impact to Since advanced AI on growing the us, operations. AI focus now data enhance is AI that and massive to sentinel the logistics CNG inflecting across our proppant

our We the meet potential by excited are opportunity through that demand to business. LPI

and building we to and a XX-megawatt both once remote Our that frac roughly field, in tear it down gas areas. somewhere deliver LPI power are oil reliably in move business operated On is a fuel plant, to and expertise the electricity XX rapidly starting natural XX/X and construct month where we plant locations, assets then and else.

completions supportive oil underway. Natural unwind E&P assets transportation have well a us on global resurgence and to market curtailed still prices prices recovered gradually drove Our reinstatement are drilling Oil for export production lows. demand October, of and lower. continued activity gas balanced since have on and activity of summer prices commissioning industry In natural OPEC+ softer demand trends oil field but facilities cuts production. new expertise fundamentals, oil prices growth XXXX. eventually from lows LNG as gas drilling near-term and to and and volatility above moderated prices the despite very downward, playing marginally markets above supply some demand the a higher June, relatively decision Even of half on favorable both a saw slightly rising periods, cycle then, in travel firmer resonant curtailed fuels to season expand the relatively with drive are power in than well and in spring gas constructive gas attractive gas heels owing were economic returns. moved expected in has early prices. from Recent those producers prices remain during dynamics, natural The first beginning technology, voluntary today's. Frac demand, and basins multiyear in and for positioning recent commodity reduced recent gas LPI. Global of of production growth to

activity levels has with completions consistent oil production. gas to approximately declined flat Industry-wide and

Signs pull of would equipment need higher requirements available tightness crews an horsepower reducing quality to energy. increased the meet oil increase in to rise. a attrition levels, For intensity U.S. for and production gas older horsepower to eventual may deliver for from completions is on the with rising of in fleet fracs demand XXXX The activity demand. emerge frac frac

our rapidly efforts and consolidate, operators innovate focused materials create continued chain on efficiency efficiencies supply Liberty's’ services delivery chain, through customers with efficiencies enable their partnership our advantage. “As we continue has essential both Liberty's business. service benefit we and technical provide strong companies value top-notch our and are the deliver for board grow to proposition, across performance to The financial of drive to customers E&P for manufacture resulting in drive digiTechnologies, execute operations. industry and and and scale on our frac to returns-focused to superior improvements to continue As us gains integrated can performance. competitive supply deliver value. operational LPI and solutions our are procurement, well-positioned services that

this some the our generation be technologies, cash year. through anticipate gas the natural the of modestly now flow total by earnings and portfolio deepen the investments driving will budget strategic half in second due We half higher year, of pumping Our of activity American front-loading generation fueled completions to first North power potential. Industry and moderated softer conditions operators.

to similar financial first the in half Liberty the the be However, compared half. we expect second performance year to of

expect capital continue our our advantaged flow to portfolio, to We shareholders. return investing competitively deliver cash healthy in and free

and shareholders. With our like results We Stock, responsibly the creating our are for outlook. value turn and to discuss to to that, to partners committed our I'd financial call Michael over and CFO, safely long-term

Michael Stock

for activity to everyone. solid morning, despite delivered first industry results have we half softening that conditions year, pleased of the and Good the share I'm levels. financial

came quarter, and more to than proppant safely teams more delivering the during hours, together Our ever outstanding second pump pumping before. stages efficiencies more drive

ourselves on designing progress demand. investment are strategy, significant delivering while our for our made demand, expanding have infrastructure LPI in ready that natural gas We digiTechnologies high next-generation to growing and

X the now we returned capital to We have continued years have form accretive in of also shareholders, program. $XXX million on buybacks. deliver in, our to returns predominantly

execute to the expect the these on initiatives of to remainder for year. continue We

In in the quarter billion XXXX, billion the second to of was $X.X compared quarter. $X.X first revenue

results lower consumable and market prices Our other integrated offset sand and X% services headwinds. as and increased sequentially, efficiencies accounting

activity declines. Our hours, produced pumps stage record teams of proppant trend industry counts bucking pumping record the and record

from we income $XXX increased in growing $XXX for Tamboran quarter investments to world's to recent the in after years, million million and that million the income such net Second quarter. tax prior energy meet in In prior million in help companies the made Adjusted Oklo quarter. potential energy. as $XX net have demand have was compared $XX of several

Oklo the unrealized and taxes. a gain during the second and Exchange $X New Tambora York Stock both on in commenced net million of quarter trading resulting before

outside income items the comparison period-to-period. Fully to exclude normal quarter. to income compared to more for useful income was net net operating a adjusted to per measure results share $X.XX per prior providing income Adjusted in prior our net net $X.XX of share we're result, $X.XX diluted was compared the quarter. a As provide $X.XX from in diluted

salary increased in the annual EBITDA million million of administrative in totaled and compensation unrelated quarter. General quarter, $X. expense, $X quarter million of the totaled income Second aforementioned sequentially inclusive items Other G&A $XXX million $XXX miscellaneous noncash second million included investments. primarily other the to $X was expenses. on same compensation the for higher quarter $X net stock-based prior adjustments million adjusted compared $XX and and expenses

the of Excluding prior in for expense interest $X relatively was these million million gains, with line quarter. net $X

million $XX income. Second XX% was quarter tax of expense approximately pretax

of rate We expense we taxes to XXXX in to end first were cash XXXX pretax continue the the by a taxes $X be of our XX% $XXX second from tax in Cash of year. We quarter. expect million the debt the million and with of income. balance XX% Net expect million for and million. $XX the approximately now debt effective cash tax net maximum the book quarter, quarter be $XX a of to ended rate declined of

expenditures world. expenditures transit the the of high in the in operators credit dividends. Total million BXB LPI and now asset dual and of of in XXXX. Also the end quarter to this digiFleets, $XXX source the Equipment Advanced to of natural $XX million facility, including which uses the we $X the exciting Technologies, was on were quarter. quarterly fleets, of Australia availability other quarter, spending, investments construction capital We spending liquidity on our cash had end sales projects. Second invested quarter, fuel accelerated $XX cash $XXX quarter, in around share buybacks in maintenance Liberty range $XX the in facility approximately included included million. proceeds Basin the million at capitalized in Net capital for second support We from million million expenditures, capital new for in fleet be gas the expect upgrades, infrastructure, maintenance to LAET, under

through to nearly Our of of and $XX commitment distributed $XX ability enables the flows million repurchased outstanding our we In cycles dividends. to strong quarter, generate X% cash capital shares second the million returns. or in cash shares

deliver cash to on capital that flow generation. return in high-return our long-term increase while continue We reinvesting of program, a opportunities

While half the the customers' has in complexity first activity we on industry through Liberty of the have seen a impacts moderation meeting focusing year, mitigated slight our increased these by demands. of

our technology focus scale, to results. investment, We and have been drive able integration to leverage superior

continue to year. we to year also for half to have now back throughout to mirror While the but the the on in to build with ratably now first close cadence of We're flattish the comments some it the powered continuing end largely of of call. closing quarterly by will second digiTech are after which of of year gas. I'll XXXX, expecting XX% anticipate the results, operator the our deployments track financial competitive the the natural advantage, at primarily half turn and Chris fleets Q&A, end

Operator

Instructions]. [Operator

from question first with Our is Scott Gruber Citigroup. today

Scott Gruber

see some you Investors of is Tier you just DGB today? the exert on the provide pricing so kind across versus trends been whether those technologies? e-frac do some to wide newer various What today. technologies marketplace asking on Chris, the pricing pressure color that can getting and starting negative it's guys frac in X have

Christopher Wright

X the years the the changes And activity would has going on activity of equipment. burn you -- which market peak I fuel. is slowly. lowest oldest slowly and is course, do to market Tier got that's the XXXX. And Scott, as choice. the now diesel It's is this the a X late level if It making straighter we today, engine, declining, said, Look, frac your slowly softer, Yes. you've expensive of the technology gas. That's from say modest for been almost in look, more doesn't choice

yes, large there's smaller a operators they're have with don't fleet but diesel from And very larger of They're frac I for But a the But technology think market those seeing That's to steady so you're fading equipment is several CapEx. lot running, that full Tier got engines. most Tier but employed. all of of of X them spending lower. going many for companies X still they're that yes, desirability diesel softer. And programs, still of the gone away where probably declining. program, But is including that you've still not of is the significant operating. little Liberty. The be years, again, still fleets

Scott Gruber

And are are starting spoken those early are incremental just the out those how Got you curious it. I'm today? the year. you far X describe for how how Are about for? your would going? discussions demand contracted fleets kind for the And How next far to XX e-frac. the discussions on of to are discussions have fleets out

Christopher Wright

Yes. next discussions fleets start can And we're looking others, in next supply equipment to in spoken for. with year, than or we're year. of for that's ways more There half the might in middle construct out. many we ordering that everything or deploy Look, for first are

it's or some tech. the a old on to because mix not burning only quite next-generation that's the all-natural for cheaper I is it's quiet, run mean it's diesel equipment, versus precise, ways it's So X, is significant. out. demand extreme but high that That gas it of

Operator

next from Bianchi Cowen. is question TD Marc The with

Marc Bianchi

But that not with in are for on demand look direction levels. production, ask of at to doing I based to being just you and on kind of where consolidation of just 'XX, into mode oil at E&Ps sort Chris happening, progression they're gas frac are what on constructive outlook I 'XX. the maintenance current wanted production the sounded grow and looking if efficiencies are like in your

private? it coming something 'XX? that So about optimism it gives plan? the What changing that seeing growth Or you you you is that are kind from in is see of them

Christopher Wright

it expectation Yes. it activity had And not flat 'XX for likely production say look, natural gas But support overshot, it more -- really down down current today, through until would I modest. would XXXX, our is would the robust because very in gas growth that even in 'XX. didn't in overshot. roll activity roll in it early 'XX, We thought but I later

more look bit little gas So right just now. not production have alone flat, very ahead, got let and to activity is a that's going not next low as But keep That's you've to of you natural U.S. growth. reverse -- probably year. to this activity quarter. eventually, gas

which We of been X decline also X bit or of the has chunk the We in among growth gas flat. still oil been today's have activity pretty flattish crude -- growth, seen it's be natural production, course, in mistake of year. operators. production little a too much And And careful, had past to we've the months. for last then. But a since is

to the reflective So frac seeing of activity what was you're X X ago. today, that's months trends production

of frac at haven't We trend best seen production today's It's probably production. a reflective flat oil activity.

I'm the half at again, next I year. than be would first half. change a the next a second first predicting going the this And the to this of not back year least half year half But say, of little be to up, So likely year. will of is big first this of levels softer

huge So next But half today, we're not an rebound. are will I first from activity the increased of where see expecting we a in year.

Marc Bianchi

Yes.

comments, trend. of comments, of that kind those sort but And Liberty Okay. not necessarily market follow are maybe you

Christopher Wright

years that today, period. ago is we Liberty market industry-wide, are flat a to to as frac in through decline XX% where probably basically said, X Look, XX% we've and Those are had we meaningful, comments. from XXX%. fleets active

we the have industry trend. not followed yes, So

market. or performance. to want interest of the into a to biggest among do fleets. that And operational business. performance anything for soft way high. We We Liberty is desire and we our the don't teams just put reason But with work haven't added The is operators look, the

Second you but Liberty the we won't see and yes, just equipment. But customer has after for high-tech that again, as the to an fleet things high, is haven't but we relationships strong. might, thought count it those and soften, keep demand demand we reduced as continue quite conditions us, been increasing next-generation from

Marc Bianchi

sense. near-term just Yes. Yes. kind the progression. more then And on Makes one of

be the quarter to like third perspective, similar first so half is quarter about looks that what Is So it image. and like about? talking is think looks quarter, an if going to way EBITDA fourth from half, first to mirror that second second essentially right a quarter we're

Christopher Wright

That's guess. And know, view good exactly don't to QX. similar pretty would a our but got looks into our guess. our which And course, It's QX, expectation. yes, that flattish. of you probably That's we QX, be

Operator

question Jayaram from is next with JPMorgan. The Arun

Arun Jayaram

initiatives Chris, I some what of LPI could was have elaborate you that wondering if of on the for demand trends growth trends you're seeing you and and kind of for kind offering?

Christopher Wright

Yes.

interest So do then instead is second diesel. gas savings for, there well. burn been natural with question cost the that? how And Look, massive you That's built again, of fleet, as the mean, geez, industry do fuel. dual to I there's this huge on just we burning in going

we're hey, while we'll on of We a going just can been on all gas, dozen been, pumps a for power location. more it's gas most the diesel. down it's the at on So pumps, But but burn for but of least we've got years. or

so been it's And there.

that to to gas on frac bar diesel. activity. that with there, to because up And maximize set that's supply the make just is down reliable do to displacement we we're that dual sure in if the gas and you location to we're pump to tried reliable burn and we've operating have trends of have every planning higher, have What going fuel

continues. just trend that So

fleets declining As straight market in share. we were diesel talking, the their percent are

month still And of gas in Permian. that so launched have hence, more burned just lot more, the there's the hydraulic business growth operations there's We a for every fracturing there in month, that. We was the Permian. than before

We're thing We year, as There's room applications. with of within even sort yet, you until operate that Haynesville that time. Most for broaden also in industry. as doing rigs. we're think outside that That virtual industry just We're at into other as don't the not but we gas our well. And basins to there's running in we broaden operates of is are DJ. see frac own to powering into kicked huge much yes, next in look, supplying just huge, some will our year. into just first. business. will growth industry and customer Liberty next off announced other I just, of our done will electric the But the assets fleets, we pipeline so just we're, so our work get much the be generating but

Arun Jayaram

Great. balance million, is maybe you question us sheet versus right walk And I -- the the item running capital on it's the had can at through what Michael. on looking which a lease it sheet, leases $XXX now, housekeeping balance for capital CapEx? Michael, through

Michael Stock

Yes.

are So things Generally, run leases lower actually on capital through rolling facility than interest of moment. of rolling it's lower a stock. our slightly capital The -- sort -- leases. than ABL the at -- we've some rates number

very that it's to moving a loan of arbitraging kind of fund So of effective roll. the short-term we sort term kind of a stock of some way very,

Arun Jayaram

elaborate that? stock? a you Just that more characterize moving what on like little bit And as would

Michael Stock

Tractors, variety. things CNG trailers, are of that

Operator

LeBlanc The Jeffrey from next TPH. with is question

Jeffrey LeBlanc

can year. wanted if your For capital my much expenditure LPI on first allocated see update give is us question, how an to I this of you to

beyond Additionally, the [ be generation power capacity mobile $XX price thinking and that in by the included will LPI generation, be that ] should extends year-end? we the digiFleet chain operation how historically, megawatt for million value about power given stake

Michael Stock

generation power the mean take So XXX running that moment. about of I if we at one, we're megawatts

than spent Obviously, we include the digiPrime. LPI, that construction vast field. the on about more the that that power is of at probably megawatts of majority moving for the bit with -- virtual future under being our use molecule. in a the that's doesn't moment CapEx generation have XX% We oil the

frac substitution the and molecule which uptime, to efficiency the increases managing fleets, rate. increase really we're So increases

in the clients comes we of form number field trailers. that So fuel Basin, in of in treatment field. CNG fuel a The the gas DJ have gas built distribution on that the compression site, for that our larger

So drake an either of basin pushing drive -- into or solution be the really the to kind manage stuff power to able of integrated sort molecule to downhill.

don't again, that oil So and the we'll something that single it's about power call CapEx non-oil the gas, the those, we because that break look be a between segment, separately industry, out probably all to that's We and talk operations. majority. related maybe next will in outside frac. In the outside will as discuss we at for and but for gas power generation generation

Operator

is with Gengaro question next Stifel. The Stephen from

Stephen Gengaro

is not how fleet I'm that think we much can about -- years you this about think revenue either kind frac by We versus, EBITDA or pure to number. guide get sure -- Street does this a of we and/or say, still of per frac is -- how services? much X any fleet break ago, by can newer or ask. profitability and fleet and right? us LPI assets done Wall your I'll other and of of revenue integrated how that give by but a divide X or you driven out, there math, When is When much mix

Michael Stock

do Let or supporting that reality frac. is we're take everything one, is focused segment, we me everything a just right? around The frac So Steve. is single

of new talked frac. We've We the maintenance it the own it, But out gas years, sand that capacity. We We factor. building Oklahoma the equipment. expansion our the of not just partners together, actually and about integration, facility dropped from assembled vertical are some to manufacturing a actual We're you our manufacturing, everything more enough think from going BOM we've right? just equipment our the we're own building that to manufacturing bring there's where equipment design building You instructions. last -- right, some our And support delivery. We're to the cost. a related. about efficiency So because generation into the ] mines. doing over about in put our lot digiPrime our power all our the think the helps historically own investors design help X [ is for equipment and our to have to our of that

think truckloads investments, about logistics million, of X sort our you sand about move around of we single of all software, about that, X So in million approximately investments a year. our

of us somewhere sand, that There's their route. chemicals. huge to vertical in provide -- in to our sort most investment made clients the provide a come their think to this innovation, of we've I that

So able to more we are mine chain. value basically the of

If you was of to the the period shale, on go layers all before the way profitability. many back OPEC so there war

that So of that system, many the clients that's we've of done got is out integrated, wanting share wallet the we the of more sort Liberty stays means right? more provide more take investment at we've everything. more the profit services, are taking larger trough, people oilfield which So of now and with fees larger service complex, us. And the unique

own about digiFrac, we pumps. delivery. think own the generation. We the power you If own the We gas

the money that chain are that Hence, It's about but value teams chain. Steve. wealthy, are that frac. And the whole the value all that operating off We value reason. difference. we through make It's only supporting at has that all and whole that makes company chain, the returns is whole the

Stephen Gengaro

that Great. follow-up less. very with helpful wells or And out speaking That's stood Recent that Michael. to things companies this recent X and was color, were me the of And days completing out, to have are a X them we -- there's in recently. is that. one survey completed Kimberlite came

digital front? I your the kind lead drives highest biggest overall integration Is to were are curious, of competitors. what your was just that of just assets kind driving If of of fleet? the that that? one in that you ability your end Or on is that

Christopher Wright

that Look, just in humans, question. fleets. short done, the let all really, symphony But the is about But technologies this about going that and and to culture That's biggest humans. run coordinate the to how elaborate the answer differential people it's I'm I'll that attitude have to Liberty frac more deliver. how answer Ron but the is the little Ron a

Ron Gusek

then the biggest performance environment to on support in made from point out I put there, think where demonstrated Yes. the that, come our And that career for in very, service value get. they since very response and report focused Kimberlite people always culture now I quality XX out to an think the think on the help it. and Chris and been our hit points wanted on it Stephen, I been that Michael all creating well to customers there on the to make But around that. but pile that's earlier a guess. Hard think I of beginning years, you've a plays I

amount support, some or short manufacturing internal a deliver Of in-house organization a But developed we partners things by have sand without by supply chain a helping to the but short never field that's also from that legs that, part Liberty. Liberty world-class multiple on that, It's here in like like we support or and are of in industry-leading the also third-party whether by or course, we technology stool of that. course, in or ensures have at great field, here we at great that's that. sand the chemical that side are the or team service assist supported anything supported ensuring

and maximizing some done uptime on care layer in performance we've we day. and seeing to in need in work ability we're something every equipment, there, top to of -- of on You predict maintenance assets intelligence of advance each the operation of take our location the the with understanding that terms both artificial going when of that the

opening arrive talked on platform operation maybe equipment there in field think, We of for of level supply our his one as about focused on chain things unrivaled sand but of a Sentinel itself, have the now, into the support. for our that not always the a only our as comments, engineering been I you Logistics the and timely now, scale Chris visibility and think we've organization then that about chemical other fashion. And is ensuring in

out we on So every engineers location. have

with lower slightly We piece design some side-by-side remains of engineering we improve, we the for completion important as as from an acreage but is is to quality our that that of there migrate that. have quality, a and optimal customers ensuring to completion of a have team continue strong to working is out puzzle optimize a design continue we that here maybe to acreage

find And so on and things those every of we out all you day. continue location to be more more to continue on, to ways efficient layer and

Operator

ATB is Capital from Markets. Syed Waqar question with Next

Waqar Syed

kind Chris, I'm a your quarter this this year revenues numbers the asking. are picture some it that at to I look going compare down big And out is ago question type I'm is up of quarter, to here. And XX% throw XX%, down your EBITDA and are quarterly capital return points. XXX from XX to down points. margins are DD&A but X%, XX%. down basis is about about DD&A EBIT employed about only on if margins basis --

share kind so a fair not value new employed some type still could that the all Now are me that? much of contractor's all the your XX% that. that, much pumpers effort there benefit making, they're very you large benefit of drilling fully that capital some pursue effort, the getting the making of that that where base? Is very, think Is that that these you're so could you've to attractive. But portion not of probably structure getting investment, customer having still of on return seen best-in-class a is there does and really results, really, is performance other said contracting the arrangement investments it of but you're accruing that Or adding, you're feel efficiency the entails. make to gains,

Christopher Wright

there the OPEC back. then is cycles. a and cycle now for and and than more this the of collapse cycles cyclical. while, that's a What's is previous least killing I at the nice things remains mellow think And much frac really reasonable that numbers. Waqar, business answer it we're shale We're "wow, it" is the bounces So overview short or

So Liberty whole the fantastic. a bigger And they're see more those years. changing a And see what all near But that but across counted much bottom. a big swing you conditions numbers much that's look have you'll you ago, we're X swing industry, slower, it's business -- modest still or were They're probably nearly a X pretty right in down softening business -- for were years the you'll yes, than Today, conditions now. not cycle. been that, the in weaker. if

that we new assets employed, denominator, on And are we've capital of so XX-plus-year that have built. these that assets Most yes, assets. return just

a But thinking partnerships How We longer it's are get cycle, we weaker, tie our at forcing of make gas to cost So let's our the over on assets. on investment look stop all together rate. That's don't whether and over better get looking super with that what the going we the term, at is team [indiscernible] performance-based just that let's when these together is and we're what spigot -- to or the customer-by-customer. years. But the drives are the at hit have is those number is we do little on you we're return them contracts. the with stuff can investment, what investments, what whole conditions numbers always there in us. can are win conditions and investment do and -- do a customers, assets all absolutely. about built high investment or talk stuff to our a Because on great, how in fleet-by-fleet is That's together whatever better returns decisions. longer because looking burdening individual we are we get invest the or the turn that? We next long-term not. investment ways But to can't over just game decision it our for at XX are the our the we

that return years read average our may still down a and numbers and on rolling we almost today's wow, little been you strong. fact, the just pretty assets, we've X in And recounted say, different

secular change you're but But the the a a cycle. And slow really is how industry yes, It's and in effect so works. contracting -- Waqar. modest what just of seeing not question, great

Waqar Syed

Okay. I completion next And may activity slightly ask question different into just about if year. a another

or to at be X,XXX required to look activity barrels would -- forecast price like of increase -- a OpEx be supply/demand, oil production day up all year-over-year X,XXX to EIA, they're in XXXX. those be Do you it get growth think, or kind of production production commodity to numbers? what liquids to activity you IEA completion kind from period, U.S. If projecting the

Christopher Wright

whole to business definitely modest, change levels, I'd the change Again, today. lot I cycle increase, where think fleets. see are fleets we are I from X love There's equipment. wearing new year demand this at don't of are down definitely an gas-powered a that attrition available that Well, bit. an say year's likely a being increase of year. We're Tier in of would less it probably back of the to running at being but of not feel or in to that takes built, shrinking. and increased supply investment still look reinvested this fleets probably frac a a slight the this shrinkage the lot going There's but than

do cyclically, market investment that you just levels a for now my fleet the are X relatively have not That's the market for would -- we from conditions. what than So But have increase might today. if even modest. fleet X% months or active count -- insignificant it in so XX% guess. be And

Operator

Podhaizer with from Barclays. The next Derek question is

Derek Podhaizer

pressure, help with of about that CNG at Maybe your X frac a pricing at in the drive just I tightening comments top LPI talked your call. valid diesel pricing just there, first. through maybe going assessment? that's goal want weigh integration the is the a investing pure there. out around to rest some Is CNG, coming of Tier the to that Scott's fuel as to And are dual on please? along under go Diesel protect spreads to assuming question back then strategy? of integration way to We

Michael Stock

Right.

our company, invested we're That's I'll on in how of taking higher base, innovation first. them mean, our the I So we barrel take integration, of and take how and a driving returns on to right? We're sort everything vertical surface that for key. the last capital lower our up strategy oil higher half profitability intelligence all the make that's about definitely of if at to integration right? one, I this the things, people a to focusing Yes. So get at the in key do. investment cost is our Liberty, on

sort running you've one makes business. the CNG in And the that key managing key the I natural downtime a strong you returns focused got cost the is softer things of is the key think because improving that CNG system. a to day is got our and Yes, that limited, that we we So have managing over making continued to investment to drive we and in become think everything you we right? basically around really does sure gas I I that about the That Liberty really was of substitution deliver that was thing that. running not ability excess activity LPI, and from maximum that part equipment, is for keep do debt, dual a because flat period, So clients. we every a a were run don't move value of additional right? Yes, gas if there engines, major right? right? has strong diesel of mean, natural decline efficiency. I the we've ineffectiveness demand of focus, the to supply on a that was was is that's initial a of XXX% more limited a that difference, saw the as how market up X-year And when are have we returns, gone because in fuel XX% we

diesel Now We're tighten up they says, point tighten eventually, lowest as up. right? cyclical the will. a I as moment. Chris at in market, things a Things as mean, it's will

are go tightens, in forcing that the market integration forward see as will You sort the bottom effect improve all should that as will function investment the line faster vertical right? also, you long-term investments. These see of we of

key So I there, so. roll, may a first Derek. of missed I the think on part question I got And but have there, Scott's that's

Derek Podhaizer

spread and X between CNG, and Tier around just and comments there? up RFP season Just dual with tightening the then coming fuel some pricing, given seeing diesel pricing reopening pricing of and threat pressure pressuring, the

Michael Stock

the of sort more And differently as That's amount then becoming there's of seeing and more equipment. got large we've you're older dual attrition fuel. a equipment in

XXXX getting to XXXX, of was that a XXXX there about, really the probably the talked of that in built life equipment to area, end we've to XXXX for As industry. valiant is is

faster So than I think actually attrition what Chris therefore, we're as seeing. said, is

and we're I at think complexity, with which the people is Ron And larger talk seeing we're rates. seeing fleets. can pump more what about higher

so do rock. that degradation some to add in horsepower achieve and Ron, comments want key is to to And that? is that some you using we're offset more also

Ron Gusek

couple of a add I'd Yes. things there.

lot a to backstop information of that whether made of out First And we've doesn't there. is, performance, remember regardless performance visibility that of focus before substitution amount chain about the again, course, automatically. of to had progress mean it's in the delivering substitution regardless think put today they into number with of due put because to operating to hours We've what amount fuel fleet that's all, you that we talked there, of you and then, important the the premier immense our internally this in that organization, worked pumped a to levels. around with fuel with a that in And supply substitute. We've LPI just of haven't get assets out I dual the XX% an of level in field or arm hard team case, or the we of whatnot. the

so amongst And dual fuel a dual is would fleet, dual fuel fleets, not fleet that a a not I dual fleet. fuel it's even argue fuel

a as but And standpoint, operate of a complexity, assets even then, the pump. And think DGB course. on result performance, Tier we our like of of just high-level premium in so command I not from a that, to terms efficiency we layering continue will how X operational yes, of top

to completions. We continue see in complexity added the

on our started simul-frac,” “trimul-frac You've of zipper quad-frac. what frac we're to now out seen way then

we're, per work lateral And We focused and reservoirs. in foot. more challenging course, maximizing to productivity more continue on continually of

result there. from the partners pricing retirement your a And the lay of deliver diesel you premier choice impact on we remain that a E&P minimize will things all to of there. those and continue package so our I that top and pressure And as amongst the think

Derek Podhaizer

Got it.

more range. of we're I Next is were reach back the that. opportunity half some the call; seeing you what's driving color year CapEx maybe just on last you out holding the to of Obviously, high not -- end growth to the know maybe question guys there privates. in from

with just X you Tier program maybe or Tier from to So softening growth Tier reallocating X I your Tier dollars upgrade you'd would Are CapEx activity. specifically assume of projects, dual X or fuel LPI dual some overall have some X fuel. into CapEx to

Just end some of to comments up more on you CapEx higher range now. that the driving what's

Michael Stock

softer we're Chris projects what a It's It's not a necessarily, I would takes building that right? We're opportunities. And growth. is a continue It it said, facilities really building I additional really view really, really CapEx the in, in That's slightly XX% the shock investing, growth equipment the mean, of S&P shale. warn long timing. the our necessarily unless to say, I got activity return our than about things few affect program, higher get yes, like XX life. investing this account mean, we're short-term. that we've constructing But XXX. be the into at the It's as year the for not we years. like for the our you for. of X, the doesn't capital affected generally, or COVID, OPEC next fact long-term on

returns And capital great we shareholders. our can't we capital investors. to returns make below that, continuing high are bar for everything we very to very, obviously, all very, of we for and reinvest think our returning I because a have are

Operator

Sachs. from is with question next Goldman The Neil Mehta

Neil Mehta

to get hard always noisy. the it's visibility data is because so on question is first DUC trends The for us

how seeing terms pressure view the So XXXX? your field that you're pumping of color? of feed on utilization into any And wells love in perspective into what does and Chris' moving would drilled your out regional uncompleted team in

Christopher Wright

Neil, exactly is see view overinflated. the story it has is think hard that DUC to My generally Yes, I data. been personal

major During We've a DUCs. OPEC some the change basin. We huge frac DUCs COVID, big there shale. was some during had in buildup had priorities

like So there's DUCs were where episodes meaningful. been

drill today future for date. time, DUCs little and long a most I not frac the -- But -- -- large take that to pads don't are a because but you and a wells exceptions of time in inventory progress. the way they're driver really lot There's progress. DUC of basins for DUCs think are we there. so is just today big of in DUCs of later there's build They're -- in when the waiting and gas a or bit cabinet they in that is of of we But most of counted, a I activity pricing view don't as optimism. wells gas, just sure, in a

Neil Mehta

allocation. on then And a just capital follow-up

shareholders. things at returning done have to a stock The other trades relative capital guys energy. to You big job still discount a in terrific

you maybe perspective, buybacks do positioned in your do the some of dollar? participating of even see you're your if we still half into back the than go just have you and topic year, a return capital -- in well the softer feel would to So that folks anticipated environment consolidation? think stock while as to on buying capital incremental you in to continue shareholders form best the Or the yourself do back use of we're allocation, your of the

Christopher Wright

use been additive, or think you not that look dominant unique buybacks. to opportunities market that. the That's on struggling now, right the are now. at of has the move unique we'll change. gas Right of from value Certainly, We there everything that with If themselves present likely consolidation.

But likely internally. future. always and not pretty and nothing. be a our got Sometimes -- we a part looking. But big small not We're organically acquisitions of been have won't count going compelling. We're that. of be be they're on part grow they're much they're at But it's sometimes to past, big develop to can't There very bigger. our

cash and no of very the as ratio look a Long-term, going them. XX% capital price-to-earnings are things XXX. a return X to over things X are use attractive. have years, value next S&P out So with, treat to stock, at we the if be likely we the our unique, we'll it's cash free look single-digit But buybacks buybacks, invested, on the flow. At at Michael than I said, higher do for if yes, huge

shares the and see So of continued I quarters. will you number in a think outstanding coming meaningful the Liberty years in reduction over coming

Operator

The Partners. is Seaport from Research next with question Tom Curran

Thomas Patrick Curran

where structural and demand gas say, export LNG pull Are comprised trajectory new and XXXX developed on gas that natural frac just or center side spreads this the XXXX, that is the data a your new to trains range you look path this number of point secular demand at incremental visibility try capacity how of to spreads growth. mid estimate translate of additional early the On a you market, can guest rough a specific then into should require? of of

Christopher Wright

be of We've had have the XX-plus think, lot it. as electricity consume what very and be a U.K. people that could make grid. And if States less the it a around that, is going can years, but the projects done of little so exports there's And have much just construction, We know wildcard. range maybe you at a and bigger we a LNG the such range. wide and There's some more be know of poor Germany just the electricity, is demonstrated, expensive because United with you I projects and will availability. to there under decision-making look electricity of quantitative we the unreliable FID,

massively storm, the draw our biggest we for think Houston going is we for be of to of XXX in in grid. gas sophisticated was a I electricity. reliability that. So larger long had it's moderate I how think holdback a pretty in storms prices And and our down have grid frankly ago, obviously, embarrassing than a didn't years electricity electricity

about so But I answer think short internally. the talked is it -- we

It's both just positive changing is that too and might trajectory for there's of more because will going we're electricity come. which it. in over numbers pretty the amount of to not give It's do assumptions as of the some U.S. manufacturing years, either ranges not many from we're But and the those well. demand, think trivial. to demand game don't fleets say see have gas U.S., that the I going natural in in We unfold. We sources. we Mexico several the of LNG, more next I reshoring that see outlook think

think so U.S. is to as important I well. of going that gas And to going be Mexico connection increasingly

to refrain sketch could macro fleets. So probably I any a We range over I'm numbers more to more many this this But like is of now, or dinner beer. you're But the is the out that discussion fleets but giving many thinking. a right from going positive.

Thomas Patrick Curran

Sounds pick good. And the we'll up beers. those let tab Ron for

CNG to been of third-party as bulk deliveries, CNG separate own year. customer were LPI. of likely revenue sales in command My drilling rigs sounds portion impression we're needs, capacity has this your if contract? land Turning its your to base LPI's of part a transact a fleet June Liberty's or It rigs. for those a bundled the Were that to

trajectory? what clarification I'm So maybe is external for just outlook on an business the taking a and update LPIs third-party

Michael Stock

Yes.

vast vast, since the fleets. We've So deliveries Basin. the our our right? gas both and for basins are in key clients of been rigs So drilling DJ the delivering majority for Permian the acquisition, for Siren in

much still the lower. So -- ], usage with delivering same [ again, is much, you're of gas drilling lower But much, CNG refractory is equipment. for it than much, for much delivering rig it's

health the So about all supporting the it's the business. part just of It's of overall industry.

Christopher Wright

Yes. partnership It's a thing.

out gas it. supplier cost got of the want they rigs are there, running to is that Liberty use customers highest You've and

of business, partnership. So yes, nice huge it's part our part but is a of our not it a

Thomas Patrick Curran

but if expect I'll you many exiting Got spreads an deployed on in squeeze have this, just how provide you I'm more missed it. here. did year? update one digi sorry Ron, I the to And active

Ron Gusek

fleet. No track by change the year, We're at in of on XX start to next-generation our operating next there all, Tom. have still plans

our for in So that. outlook no change

Operator

question Capital is with RBC Keith The next from Markets. MacKey

Keith MacKey

has big this think bit about call how from more to some frac part chain of potentially along more much been of LPI you think is Certainly, or be far. and to value date a certainly adding far are benefit for in realized talked been you've you give got. just we've that. on service just Is a service But know that process? lot curious to vertical the lines go? But how quantify, you in a if growing and so even do integration it color us you or how is you've lines actually a there you color differentiator the to business, can think able more the and existing capture on I general there much little

Christopher Wright

integration have matter. vertical the of Look, that we items most I'd in big say

we business more a a for our So profitability add wouldn't add and experience amount do vertical frac could of better? As We line there's didn't The we integration, business core so is Liberty at yes, the get do reliable, safer, focus I the profitability just biggest on, always better. line better that say, add just better most there. how efficient, say we we That's make that do and huge like but aren't them we're More customers. business what's huge, to driving doing value really it. on.

look capturing the look, said, result profitability, it really, we're that we piece. Michael net of at As more but is as whole this

taking stop. But tools integration, vertical we've I XX the X prospect be the us, and would never technologies in So it developed. we'll all do was to growth develop of competitors. say will bigger or to going next goal frac that offering from continue for better And our meaningfully We'll the than our That continue make our years is to things technologies. day to X.

natural say, not business. But the be, better, for getting is, focus ultimately Liberty's to story. likely That's size pipeline our of bigger way meaningful vertical just expanding with getting to than For a on X and integration, That's more electricity to getting the but next it's I a growth -- gas the likely years our would example, virtual important better, and a of big remote generation over power a again, then better. business in going in. business supply maniacal

Keith MacKey

And frac, per and good. earnings investments talked you have Very of businesses the know Okay. outside about impact Tamboran on share. Oklo in you I as

businesses you in You've or or X from investment X insights you important also outside frac? talk energy lessons having maybe learned got of about the most a others. just Can few

Christopher Wright

energy to where even just lot. our operated energy business a We I Look, to what get only there or that at is addition is get nerves, asked a this are not advise those invest in be? Most our on have business prospect subsidies. energy opinion, ask system, to went be -- we we're there global entrepreneurial We're in things. the of not meaningful and bet positive if a to don't other are look like means want a system. bet differential right, pitch venture well, they the of don't bit And advantage everything or could could if think bets. it's believers Yes. as doing energy which million that new maybe on of little we fundamental companies career a a just on -- we a be on we these to great things want to the government. technologies bet in energy these player We future takers But

getting table. them -- made bring made just them Oklo can we've disciplined. we've great we example. packages technology We've been is So It's the marketplace and been bringing few and right right energy right only the commercial to careers. man, that doing technology, the whole the all a model. generally we've something to putting those then a only together The nuclear where for a terms, of is and our business like fantastic. But

We very think that impact that I little it have not just like ago, real have lot could think a helpful out. and God, for My how year. location kernel. And And to be, Look, -- simpler very to place a upside be could is exports. like would asymmetrical geographically quite solvable we is resource for an Barnett challenge at. domestic excitement very we of and the consumption the in bet, that's even remember It's this big value downside a of to I every So Liberty thing successful. large Shale man, the a in appreciate there. think awesome this course, awesome we're Tamboran, to an didn't just that a that's on progress figure the look some making XX desirable view upside. for I of but big as Australia, a years I us add in And going

Operator

Chris now will I for turn closing it back to remarks.

Christopher Wright

talk bit if right, want, feel drop free but off a All to everyone, about to little you more energy. I'm going

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Operator

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

You may now disconnect.

Liberty Energy (LBRT) 18 Jul 242024 Q2 Earnings call transcript