RES - Earnings call transcript Q4 2020

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Operator

Good morning and thank you for joining us for RPC, Inc.'s Fourth Quarter 2020 Financial Earnings Conference Call. Today's call will be hosted by Rick Hubbell, President and CEO and Ben Palmer, Chief Financial Officer. Also present is Jim Landers, Vice President of Corporate Services. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. at for provided up to be questions. for will that you time queue Instructions to that advise is like would I everyone, being this recorded. call conference disclaimer. Jim get us by the will started forward-looking reading

Jim Landers

Thank you, morning. and good

call today, to a order our few Before we that about begin I to not that talk to remind going we're are want company, things in you mention facts. our historical

at unknown release forward-looking call, be risks. in today, non-GAAP you press to statements loss, other the net XXXX those this be EBITDA on operating compare periods of to outline of performance today's non-recurring of operating and refer made known conference consistently like We're of risks, XX-K measures over that adjusted various that number items. In adjusted be these I'd which will can allow non-GAAP loss and These and on we'll to non-GAAP to regard nature, release found measures are without www.rpc.net. performance. EBITDA. website could along loss, because Some reflect issued to and a per be with all they share, several earnings filings us call our public today, our measures referring adjusted adjusted and RPC's using

is covenants RPC to under addition, required report financial to In our use compliance with EBTIDA credit facility.

loss if of - Our calculated. you're and our which financial share, seeing non-GAAP these how reconciliations review to the release these measures measures. press they loss, nearest contain interested Please disclosures press loss per release website GAAP are operating net in are in financial

www.rpc.net turn call CEO President, our please would and I over to yet will website Hubbell. now release one, the press our received copy. haven't Rick once at again a you see our and for If like

Rick Hubbell

of This Jim. our press fourth morning in will RPC's the quarter for quarter and you, we discuss we a earnings XXXX moment. Thank release issued

is thank XXXX. like from positioned I'd their efforts though, start working appreciate conditions. company of We dedication. year to our Through this improving your incredibly business our challenging for we to employees Before through benefit

their are paves the and way Fortunately, This several been in COVID stages vaccines hydrocarbon distribution. demand. of in approved now worldwide early for recovery a have development

opposite On a plus” potentially supply to several quarter directions. This lack upcycle fourth drilling production experienced sequentially our in A past base in discipline. RPC's are activity oilfield the for years. metrics. confluence This the the levels several of improved events “OPEC heading and since time lead declining would could we an first supply of and demand consistent industry. side, with key have investment appear XXXX, in

discuss after will results this provide other and more closing Palmer Ben in CFO, detail, some financial Our comments. which I'll

Ben Palmer

you, Okay. Thank Rick.

to For period million the adjusted of to Adjusted compared fourth the $XXX $XX.X to fourth to to was quarter pricing prior $XX.X the lower year. million fourth Revenues decreased year. same million activity Adjusted $X.X of of for in million loss to the for levels of adjusted an compared EBITDA operating XXXX, $XX.X the quarter million and the of prior compared compared of prior year. fourth year. was $XXX.X quarter the in due prior revenues EBITDA quarter fourth million decreased quarter loss quarter fourth the the the the of in

compared expenditures. revenues Cost primarily fourth revenues quarter quarter a compared prior was in $XXX.X year. reduction of and million to XXXX, or the quarter the quarters. of previous the as in primarily same of levels XX.X% decreased during capital These compared the Technical and XXXX. adjusted in with $XX the the Cost administrative in activity fourth fourth of cost equipment of quarter Services lower for prior to due RPC decreased year. $XX.X quarters, loss year. to quarter lower fourth and fourth $X.XX depreciable lower of the to loss reduction for $X.XX in coupled primarily year. expenses the from initiatives labor reduced services amortization plant expenses employment quarter or costs, the loss resulting previous in share, XXXX, $XX.X activity decreased the For result of Depreciation and revenues revenues of $XX.X Selling, $XXX.X Depreciation fourth adjusted share $XX million primarily to charges lower during in million due to million reported per quarter cost during initiatives. a inefficiencies revenues per year in operating of recorded compared prior in decreased levels, of XXXX, quarter to compared of significantly, million, our of the to the XX% due to loss declined property, XX.X% quarter segment of lower Cost year. general compared was XXXX the fourth of of quarter pricing revenues and fourth operating the million decreases in the expenses of fourth $XX.X million decreased revenues the fourth prior million this percentage fourth the prior which RPC's consistent a with of to quarter as to due asset RPC's to the the and to Segment quarter compared in increased impairment quarter the year. amortization prior

in of operating was quarter the decreased operating an year. Services the the quarter same in XX.X% to quarter quarter fourth prior million fourth compared prior profit $X.X year. in segment of $X.X revenues the Support compared million of Our the the loss Segment for to XXXX

XXXX $XXX.X and higher expenses as by activity. sequential higher $XXX.X increases lines service activity the Now a This to materials of XX.X%, quarter. quarter fourth the on due was most of quarter and activity million XX.X% the increased million from with result during a such to segment expenses. revenues Cost supplies of in in revenues fourth increased of as $XXX.X prior levels, completion due to which RPC's increased basis, maintenance $XX or again million million to

prior XXXX quarter during percentage and general primarily operating to EBITDA million the As an during to the quarter. the million prior RPC quarter, $X.X certain fourth Technical to of loss of an over in Support was of activity segment million of RPC's million the cost the $XX.X non-cash slightly charges $XX.X million XX.X% efficient compared due loss and fourth a million in impairment quarter recorded more XX.X% the by $XX.X in in to quarter, to of revenues These $X.X the loss million of prior stock several quarter. prior XX.X% Chairman. an to operating recorded of from to accelerated the current $XX.X lines. decreased in loss incurred compared fourth due quarter related finalize $XXX of XXXX prior in and charges $XX adjusted of increased fourth EBITDA XX.X% Services negative of million quarter. from the segment or was prior to of million quarter the to million quarter. million segment revenues to quarter the current in higher current in in quarter operating from the or to vesting of compared in million the to XXXX, incurred administrative fourth loss an settlement our of cost a sand facility. leverage $XX.X expenses Technical in million labor the increased operating in included adjusted $XX.X $X.X $X.X service $XX.X death $X.X the Selling, million revenues quarter. by adjusted due including loss Services $X.X decreased million the in the increased revenues, narrowed the revenues levels quarter the utilization. of the quarter. XX.X% in million pension This former costs, quarter. of RPC's disposal RPC's during the other RPC's $XX.X to Services third Operating

of million. third closing existing back maintenance At end quarter estimate So as growth quarter, and fleets, quarter, be expenditures that, approximately be X $XX.X capitalized million. currently operated for some with our utilization. $XX of pumping to were Fourth during We XXX,XXX RPC's remained opportunities. approximately same quarter, will it equipment the turn now capital capital comprised expenditures Rick XXXX of This I'll fourth pressure remarks. horizontal primarily horsepower. over the pressure to XXXX With pumping selected but fourth at the the improved hydraulic capacity RPC the

Rick Hubbell

you. thank Ben,

we recent past. visibility the - XXXX into outlook. prices As Commodity have in than greater the improved our in begins, recent near-term customers and activity more have levels constructive a have

quarter, We'll while capital conference we activity to fourth this relationships customer questions. we management clarity for year we to However, will operating end free. plans into for spending, expect lines At remain thank was not and of XXXX RPC's our million balance we your like Currently investments. as up and low profitability. fleets call And expense returns the continue disciplined progresses, improve for remain remain until to and the $XX.X increase time, include, justifying debt equipment we us joining acceptable discipline. our capital cash of for have will for this economic continued RPC's levels the open at I'd committed the to you morning. scrutiny

Operator

question Fargo. Your Instructions] Chris first [Operator comes Wells from with Voie

Your line is open.

Chris Voie

morning. Good Thanks.

Rick Hubbell

Hey, Chris.

Chris Voie

grow, is quarter, do 'XX pretty capital source fourth in be building there? the of a a I just anything can you cash give a there given working course that the working you capital. headwind First expect Is curious on on build revenues little as declining strong. guess question, that? And Obviously, know, the or unusual to big you color over

Ben Palmer

question. Yes, good

that, about facility cash that did lot of tax but on executing there the us bit was lot benefits. we that generate benefits little a sand of the talked fourth a to did cost quarter, of a mine sold, During we it

$XX tax sheet the on notice balance income You'll have receivables. in million we that

mean because those that finalize nine-month benefits, over that Cares large over collection the we of were of Some kind fairly next you amount able of and it'll closing from to will of it'll majority the receivables and generated that we in expecting months nine I is of tax of being of in come think but be the Act, but steadily know, that chunks, timeframe. vast also the come the Chippewa generate we're mine that a

AR. that's Also, our the - good because absorbed our of degree the trade so in cash to increase thing. was obviously So increase a revenues in an some

expenditures, a balance - expect to So levels - cash remain to forward. know, with at we're expense capital will you we even in working maintain and the the strong cash cash balance very we to know, growth on expect capital, higher - and on you management at even same focus the continue going the our these expecting despite balance or

Chris Voie

well. And little if mentioned whether you more you Okay, some could my then as And bit companies visibility that the second the pricing there's just a question. where from growth or progresses, be for growth growth? as been know, expect is any whether that for In that. to regionally with you XXXX release, E&Ps, from, thanks coming coming private curious public you improvement explain maybe

Ben Palmer

different Well, from it's come a growth a the of - customers. variety will

We of we - Province area anecdotes improvements, of And the certainly we relationships and that feel on obviously public larger hearing and certainly people to we but in any or - pricing. we disciplined, have don't it. comment we some E&Ps But remain be the to going think in aggressively But we happen. are to that'll an that that that have discussion with. have Jim presence are industry continue key to a more we're We to make position both West Texas, there's can briefly ourselves many pricing and seeing in a hear improvement. I'll increase pricing strong add

that. So an we're upward pricing who's in along, pleased we're trying assisting We're to move. someone and maintaining to trying with as be having play very viewed

our sufficient we count So thus, know, the We reasons to anymore deploy until work don't at contributions. remained steady. able want are you get fleet sufficient has to one of were

have slowdown. about better so think fourth especially discipline. even visibility XXXX, in didn't the see here normal do quarter, So it's do early again, the We we it's given good, that we all some

So have the we first the didn't slow quarter. in ramp up

reasonable off start. we're, know So know, you we're a, to you that pleased

generate a strong, we're quarter to So should continued able quarter to to be some the be first strong be - results. the be first expecting

we to going slow it's So upturns. we're - than steady to more - and expect other going but be

ourselves. So going of to ahead react what we're we and to see not get

there want to is on? else you Jim, add So, anything

Jim Landers

be frac whitespace it not publics. customers the lot and much past know, has companies it this is to and a in more than our Chris, visibility, it's you mix more except Jim, much a less whole has private in of tend that, calendar small

customers other the know, early cases you they're that the gone now for where pricing have translate do not, have price doesn't see service pricing they're improvement use today into it's of P&L, lot price we but yet financials We them. improvement in have sign. increases, on a But testing, have any you to good providers we doing checks don't and an

we So are think where that's now. we right

Chris Voie

helpful. Very Okay, thank you.

Operator

Your next from with Stephen Gengaro comes question Stifel.

Your line is open.

Stephen Gengaro

gentlemen. morning, Good Thanks.

Rick Hubbell

Stephen. Hey,

Stephen Gengaro

Two kind lot of don't whole or to the us assume of revenue things, the perspective. one, if question how next will not the you incremental bigger a guidance on we giving be any segment second three that margin picture over you're think mind and see If But, four helpful. breakdowns from performance? should pricing administrative, that we quarters, going then a about

Jim Landers

is one you. for this me Stephen, Jim, first the let answer

So RPC to lines consolidated quarter. the of for revenue about give by to I'm service for I'm - percentages going on fourth our

at XX.X%, So consolidated revenues. pressure largest pumping service is our line

of following Coiled is tubing X.X% quarter revenues, the that snubbing have of and of X.X% revenues, tools from And off business kind was downhole tools was at revenue. was a fourth which X.X% motors, the of at was revenue of rental you which revenues. Our second in then nitrogen in of of X.X% was third as there, percentage fourth it largest consolidated quarter. drops XX.X% revenues support but service

Stephen Gengaro

- Great

Jim Landers

about second - question your And

Ben Palmer

that then with EBITDA I expect of and but knows in historically, improvements, know you that hearing you normal absent will things environment, will standpoint, improvement. we're you strength And the what But are you normal. we've what and some to think think, increasing of back margin's the some be of who market, know, know, we - in XX% incremental know, price and on and there incremental the typically experienced know, margin XX% in that, directly, the timing a revenue be, sort you looking I the

that close busy myself, don't remain expecting, We to busy, We're to road. hope to wait, we that you where want time sure straight that are maybe get helping currently. price later. that's have ourselves, it disciplined. the hard we're us not but trying know, and we to at forward and pricing that uphill want We don't to We're expect we not - improvements playing wait revenues. move repeating our a we the again, hopefully this with get And of vest. in not improvements But just shot don't this and being objective get working make sometime work for get point kind to winning of is want as ahead to we down

Stephen Gengaro

Very good. gentlemen. Thank you,

Ben Palmer

Thank you.

Jim Landers

Stephen. Thanks,

Operator

Morgan next question Stanley. from comes our Lynagh with And Connor

Your line open. is

Connor Lynagh

moving single-digit Yeah, the of run end thanks. I'm don't I trying be wondering Can two the just revenue revenue to had sure know, Can the, know, sequentially. year quarters help could But third ahead if quarter? know, we the it should of quarter the I yourselves. is quarters? what you've seen we understand, you was know, leaving we get activity dial lot want there us the growth just rate versus, thinking appreciate in be first in to sequential and you bit. ballpark think you over growth? of about expectations you you've maybe XX% to about a couple a you pieces of anywhere of make the Double-digit? you close past little

Ben Palmer

question. it's think quarter, seasonally quarter better so a be Yeah, that a adjusted. little will than valid We fourth first bit even

keep of growth, don't is. One we've QX. usually going mind, you of improvement right a the was single-digits. revenue than on. as fourth be discussed, But, that couple is, this high as quarter we improvement than we've the impact pronounced you see pricing now. got a of lot continued might know, year in And in things know, We it in XXXX, seasonal know, bit So a less we did for in see you

one the that got utilized fleets Another X field, they're pumping pressure this at and point. in highly we've fairly is

lot - So you we can but we've a can of already in know whitespace that. calendar, the we eliminate more done

So pressure we're well. in utilized pumping fairly as

it at wasn't Some couple some, this know, have left. of but grow of bit still weather iffy a point, winter a impact improve we some, businesses months other can in the fourth can an little you really quarter, is

think a together way would it. single-digit that and maybe growth revenue to high all put be about So know, you

Connor Lynagh

very helpful. Yeah, level here. higher just that's Maybe a one

is, you a bit of the generally RPC So, customers. maybe smaller have private speaking, you know, perception towards a bias

guess, repair you the larger here. And is, a to large grow there's been much swath that me can if that is, public that's versus, correct sheet know, E&Ps, privates certainly some lots I wrong, thing be know, know, You you you but the appreciate on balance of the wondering but one talking wildcard we're and choose course, to will I true, of made argument how holding we've discipline been capital required. maybe about

of So public of but couple how maybe, E&Ps you private to groups or a would you discuss, characterize desire know, capital year? increase to spending the you want there's this smaller

Ben Palmer

right private customers tell E&Ps, have Well, large and ESG the can it's want whether of have in or know, able say or out need I also feel have that amount you have to to they equipment hearing you or they they equipment, certainly to we're they can small you that that they want they want, know, our or locations. from in be mind that that

know, of that responded have of Tier it we in some in the that, of was XXXX, - directly that to back we that equipment to with X you added So, anticipation or equipments. some whether the we

desirable know, utilization high So our is level. that's customers, been, to working that at you and very a

not our of is and our all to earlier but plans, you We that have equipment also investment, know, big It's dual-fuel those customers, of capacity implementing significant and converted Tier some that small. continues. we're and effort to desirable

going requirements forward. So capacity us continue meet give it'll to we and is think benefiting those to that additional us

too the or complete that you improve technology, But hopeful some and we return-focused, We're the that back the now, commitments are pricing it's and newer where are new with we take believe it's to decision. not will responding, to decision. to again, So point customers know, we that's from improve easy and make things we're time environment, get we and for there. adding that us, to will fleets early about right an announced talked clearly going it's get

remain So as we said, we're that in disciplined going to regard.

Connor Lynagh

expand for and points on the I bit could less you near-term the question, of building maybe sort of know, on if sentiment. of thanks. but the you little sort one expectations question, just a is guess activity Chris's just growth just, Yeah, in of customer

know, you of the But from you the of from group? sort lot, lot appetite the do of side couple sort on smaller we customer be if you risk look obviously, over there'll What know, a public next - what's your activity here? year or the quarters? Or, at think thinking You E&Ps. a hear your book, two growing that of that

Jim Landers

through. You know, one, being - psychological that think nice over clearly a a we that that's to so what hard break was, barrier do is oil $XX

speaking not some we financial improved but returns, level has that activity. know, a $XX of You think of sustained

If it, too you back the to $XX oil to not think XXXX. not getting strip on showed longer, you us know,

So, the the of of that's I you company, smaller animal don't on We have spirits that spring great nice some much maybe, surprise more think visibility. a know, but questions. really

Ben Palmer

prices forward, trying going the more I June or public. think get things our on the whatever, figure private don't comments, in door on and recovery come “Please through up, via we and we I otherwise, And want commodity the you or out”. down to discipline and we're think sector, not saying you clearly E&Ps are guess that, our headed read I across capital know, May COVID knocking know, to you out people our everybody's have saying, and calendar there's of straight terms

because have work know, this So until at work”. level comes additional sufficient to what putting the to it that our know, that's will expecting right, you are that out comes count or right that significant to that at equipment you us we're fleet us back point solving that, fruition, saying, least not definitively a we a it's to “pay equation, to anecdotally, addition that now, you know,

say everybody would how similarly is I that it's the across disciplined. So industry

Connor Lynagh

helpful. Got it, that's Thank you.

Ben Palmer

Sure.

Jim Landers

Thanks.

Operator

Holt. Zurcher question Your Tudor, Taylor next from from Pickering, comes

open. is line Your

Taylor Zurcher

like equipment on at Ben, Hey, to your any talked any want thank suggest your response reactivate additional little to you that's you. equipment fleet not pricing expand about to count where wouldn't try it's bit It seem improved, X. stayed additional last you last quarter there, I sounds and until at or a that reactivating you today.

understand, understand for you more? and us to field, help X Is looking is a just us something know, that bit in out the little fleets what into you could Just get else? X, So it just you're pricing? help

Ben Palmer

it's busy. others. it's can have know, say that the of lines, better work to is would getting obviously get. not service after, go We're you about we returns. our trying with some generating I about across Yes, we obviously than all Again, work the best that sufficient all It's

so marginal, a do where we be more and to, difficult to moving you So right, that get that's ago drop was up opportunity But that. you focused that's have our to to we'll are have we have the there may what to the may needs out to know, customers we're working, taken fleets few you examples have that's, do that try on know, average levels. you be that know, know, to on we'll continue very always done there there's have and at we an can, many work to average, we selective, months have of any opportunities or work that to are

to to have a have it, it, put whatever have call better want it, we'll it, job, So that to want to call portfolio we'll equipment or unstuck additional know, or pricing, amounts call sufficient work whatever we you characteristics. before of staff of you to we have call you work,

moving right, our we're we're make to - busy is to want to know, we to have financial staying respect more results and to forward, that with that work steady, just we getting sufficiently You not want we're the we'll progress feel our results. doing contributing be that

Taylor Zurcher

free perspective, goal million like in around cash balance is of where it enough. last fair flow it's at $XX flow maintaining goal the you the this cash the of now sounded section cash for in From and for talked a Okay, call XXXX. call positive Q&A about XXXX, the

cash for XXXX should still as working read to capital trend that So the target build free may is that we positive higher? some absent that activity mean flow continues intact to happen

Ben Palmer

yes. the X. at Yes, would we was level And comment least stay my of at

Taylor Zurcher

That's got Okay, it. it guys. for Thanks, me.

Ben Palmer

Thanks. you. Thank

Operator

And Energy Partners. your next Daniel comes question from Daniel from John

is open. line Your

John Daniel

the for you detail. thank Guys,

picture of where thoughts see if But activity big a come we're participate from the the is are together here. bit improving an sector? industry OFS Whether finally just elusive, gains a to you envision, question your Sort or slightly to in year OFS pricing standpoint, on choose we the stable a not, scenario this that? you and consolidate within

Ben Palmer

Ben. is This

to there You point that whether highly of know, certainly where was everyone discussion was uncertain would back when a now. we right year, are that about lot we get about last the

think there's possibility. always I a that's really

out was help less than to say help I individual will companies. it's the know, would some today, months ability costs be, But industry, can wouldn't doubt consolidation. can critical be take that it But - six You I could the there ago. might

time not happened, transactions if of it So it continued it some grind those a and I if types wouldn't additional surprised be takes sort but happen. be of to slow for shocked to

John Daniel

you've not? So fixed deals us change or you step in to being seen increase

Ben Palmer

recently, say not as would probably many. I

John Daniel

Okay.

Ben Palmer

many quiet - bankrupt whatever. people think people have or or I gone either Again, gone

June quieter to you not I but now. right think was mid last it's know, and, was active, certainly certainly a now. quite from November as year little It much

John Daniel

are thing we'll and sit companies That's owners, the want see do that they creditors Now, not? or become run question down is, see. the restructuring, you really I to guess

Ben Palmer

Yeah.

John Daniel

Can - you

Jim Landers

not And if dragging book. John, be Jim. just not Why this it would everybody's is it? around keep Valuations compelling

John Daniel

too the out earlier the costs get business, need no you take flip such your really to Actually we that can't side Yeah. point, pricing. is, making of one's money. it's to and any And fragmented

through for like needs costs, Just Input it something moving you're costs, Are now Can pass the know able costs talked are obvious - to Jim, walk you what cost? one? that's as all trucking kind Or you asset going that just we I that up seeing recently. customers? to fairly from through of an stating seems us are you leave you mean sharply to right to happen. input

Jim Landers

about we brings for it started thing. see possible increase is Increased that increased some so of that to expense. be seeing component - little increases bit. Yeah, with and - the will sand, coming of that price what's a maintenance are or of some we've utilization grades type And know it would costs

our we supply you it's at issue, to are my a people because where you costs And and issue, we in say go to now can are our management able that be doing back earlier we do - So, go pretty and that to think do right comment to testing, customer are least “Look, can demand see a increasing”. And customer should can you have buying you input say, to that at you're sand that. too. position costs it. increasing. it's that to the But are historically a and management have good We're also

now been with logistics. they've customers of know because a know, You more what doing lot

we and think we goal. it's can So certainly our

John Daniel

Can know comment then Well, I was? that okay. missed you what the you. CapEx. on And housekeeping thank it, just Got and you the us tell XXXX

Ben Palmer

XXXX? In

John Daniel

just I got 'XX. in wanted I No, XXXX, XXXX.

Ben Palmer

believe. I $XX.X was million, It

Jim Landers

quarter. For the

Ben Palmer

Yeah, the for quarter.

John Daniel

for semi-truck. the year for the And

Ben Palmer

$XX million.

John Daniel

me All right, okay. guys. for million, $XX letting on. Thanks

Ben Palmer

Thanks.

Jim Landers

Thank John, you.

Operator

Wolfe next Blake Your Instructions] [Operator Research. Gendron question from comes with

is line Your open.

Blake Gendron

thought a into thanks. fuel Permian Yeah, announced morning, upgrade. context your us way a walk and with to upgrades build build capital know, than guys. conservatism through should approaching having you a dual think the And years - here, what versus half know, low Good I about DGB know, to just peers want that, know, or that build XXXX And of the pricing the this that upgrade that there you in ago? appreciate lower one year economics about pretty threshold but you new a that is from new know, the you can of your we we say is meaningfully had thought dig a new new you perspective? we mentioned, maybe of builds, capital costs you're you today equipment it, a you two for

Jim Landers

we because is really Jim. Hey, doing build Blake, can't costs, aren't speak We this new any. to

equipment So whether I tell where higher are lower component or so - is, can't or costs you that we sorry. costs

dual a quarter. fuel planning think one an the won on you existing doesn't we and fleets, work upgrading first all to have diesel we We much. Regarding dual are because fleet good, you of upgrade And proposition are fleet the that during to completed it that that do might have to dual - not win one on cost that another pretty fuel fuel allows otherwise. economics an

for in argument, - same a is idea. a pricing is good you. cost does the in development utilization, let's an for capital the utilization increased it sake it it's say And the It's but of get the industry. a So it just for

So it. ought do to we

In being give e-fleets, our money in We just customers all it just like we seems that efficiencies the to we terms gain expensive. situation where them. for too spend of the don't

before So that we something that. change did would to have like

Ben Palmer

And looking our is industry. team you the various alternatives the know, our in at that team, this is the, available are Ben,

from of some convertible you the expanding idea other would hold, the you do say some assumed know future expand to further equipment are knows and technology you we is runs that that would fuel kind our do with costs, running can't other our desirable on dual that's have we're, also our you to we're contribution think that's of work, equipment is is for indicated know, available an know, know, know, customers. how because, it know, we we who that the So by as we're going ways and equipment we no because have know, numbers, we margins and you it you capacity but of commitment but and many earlier, what and I a making we about we're have what right, the take, what based actively now

Blake Gendron

totally dig with know, that's Is supplies fine-tune or pricing a sand to be and versus fairly to fair. this transitory I detail. found it you Want I that Yep, the in-basin respect do you could bottom would in you white appreciate in-basin, that elastic. sand northern into then is commentary. may we've structural think assume

quarters. as a and So not if there, here not tightness it's perhaps there's as this coming any theme structural longer-term,

Jim Landers

price any we Jim, sand. increases for in-Basin You know again, of it's know like, don't

Let's and remember that activity completion historically drilling remains low.

might I of you lot of And plenty shut white, have down grades But, there. sand any for supply but quote you a up in northern mines price. there's So can't there. of increasing know, be that

increases of wants And so price customer We and our don't to people, know, preference cetera. talked don't operations It's depends think demand, it we result any we see any what, back sort in et which from customer would in-Basin. white on in you to northern increase shift there. secular

supply and issues. in don't So shifts very based the price just a momentary on any see you market, know, demand tactical probably we real increase just

Blake Gendron

New now. Technical Permian lots and overreaction or that it, right Mexico just equities federal that One move question high-level I other specifically lands, playing it everything and in, for the the years, inventory conceptual could in you, moratorium directionally administration an just made of through if Services? the neutral rationalize positive if with activity, it's makes some going maybe or from you sense. know, been Delaware, your saw the Biden over probably of be negative you but but as in the you plenty of of certainly Not sneak And a Got operations? side to out kind in there's for the E&Ps on more, the what's necessarily balance. that's would the mix that of frac, Would coming say basins the away maybe

Jim Landers

short-term fear, there's to a actually what this New point, is, Mexico. move know, mean. would hard a at Like emphasize, it's it's say, some we're might you though, moratorium. some, from to And the great We the operators And in lands there question, about certainly won't as away permit over it's - that's friction be here. and federal drilling probably talking hard for want that what this this concern vigilance but I short-term, say some

which it, in you activities our in of and you of in has and wells in some there we in February, certainly in the complete there's on too in work equipment always been part - the areas. wheels still is which Delaware, other know, concern, complete, at Permian still part instead world, least the but So say, we the But we were of had Mexico. the going can know, will - or eastern middle the, can, certainly New the as we being we'll to we drilled, our

unless non-event you a just probably short-term any So about think might friction happen. that

Blake Gendron

Appreciate that's guys. the Thanks. time, Yep, fair. totally

Jim Landers

thanks. Blake, Yeah,

Operator

Syed Markets. from what Waqar ATB Capital with comes question next Your

Your line is open.

Waqar Syed

running expect in taking to good CapEx maintenance my you where you Thank What's for be it your question, morning. productively to XXXX?

Jim Landers

Waqar, this fleet. fleet. per is know, that Jim, per at million we It's, you range somewhere in $XXX,XXX to it's have $X that. this less $XXX,XXX point, It's than

Waqar Syed

an number? quarterly annual that's or - number that Is

Jim Landers

will be annualized. That

Waqar Syed

or sustainable that's think the right? you this that is Do is okay. not, active - Well, fleet, for

Jim Landers

It sustainable? Yeah. activity We job lot it on intensity. Yes. know. Is depends and don't a

move probably would say. I it's up to from going here, So

Waqar Syed

equipment industry? stacked No, is because, something of on structure you you it it in know, take because the else equipment low that's of some low or off is going the

Jim Landers

be this Well an specific answer. would RES

our a As we've the up our half ago. fleet, average year of know, of lower disposed a was today equipment lot than it a age a lot and you is

that and horsepower So pretty other expensive, maintenance. equipment, newer you much doesn't that got equal, need which they, have they things our operates when we've it's know, run well. they certainly efficiently need we X,XXX pumps, but something, more Also,

bit So equipment not previous lower. was that utilization. utilization let's is a on But fourth good also. maintenance you lower to some had quarter that that And, nice CapEx forget know,

function So it's variables there in newer CapEx for a But move equipment and maintenance that are a and of around. that number, us. really can utilization understand lot it of

Waqar Syed

Fair enough.

now? the X other working fleets, versus the the average X what's believe Now, of right not are that working are that I fleets age

Jim Landers

heavily number obviously, would bought with larger pumps the in so I a and utilized. they of that that given say, XXXX are specific we

third the the the time, newer not there's slightly using But of at horsepower of the not all X,XXXs, that other quarter a disposed pumps. of the that vintage, in similar equipment - are So equipment average not non-XXXX lower. working back ones age that than we're we're prioritized, are point in the 'XX, we other the were

all they're reasonably comparable So therefore. and

Waqar Syed

an would what costs then be the incremental fleet? to additional And were reactivate enough. you Fair

Jim Landers

fleet the not be comes will well, - the that maybe first back obviously, Obviously, lower.

You know, question and things needed? their costs but the and like it is like not could much maybe be things new - costs be it's should would CapEx It that, that of it be would obviously not significant. minimal. not cost and training the should hiring We, significant. employees - be if Definitely how

Waqar Syed

be like active after without, you to what number after the you start have know costs you X that And place incremental go in capital? know, fleets the fleets of you up? would significant activity, it Or how could many

Jim Landers

or have I done currently, the in year half. total we've XX fleets know, We of - lot put we a the past and field. don't can't over of you know, a we could XX total a

make give - last that's a in the more the So that But sorry, lot I'm doesn't overall, it's the best week not put than can a impact cost probably we field big economic the difference. it I will first you. week.

Waqar Syed

Fair then what kind question, your Tier of just percentage would of by run X horsepower, you last be XXX,XXX And hydraulic one these enough. know what, engines?

Jim Landers

the So X Tier equipment X we X fleets Tier now. right have

Waqar Syed

Okay.

Jim Landers

of working X Out fleets.

Waqar Syed

And how fuel? Total? would be dual many

Jim Landers

of the Dual fuel, at the end total we answer of of a fuel separate a quarter. pumps is will quarter have first and dual end at first this XX

Waqar Syed

very That's much. helpful. very you Thank great. Okay, it. Appreciate

Jim Landers

Thank you -

Ben Palmer

right, All thanks, Waqar.

Operator

Gengaro Stephen with from Stifel. comes question next Your

Your line is open.

Stephen Gengaro

but customers, think for far asked fuel dual talking It the fuel for taking utilization or when a people on, to but there quick evolve as negotiations, you go and will the as just are the one, I what one in as and right price e-fleets, now, like et pricing anything XXXX? get But paid discussions? on helps we ultimately impact it clearly fleet is the you seems does a of with yet cetera. for through do how that you conversations dual to bit that follow-up. bring little ability this you Waqar the was capabilities, about you're a and going value Thanks hit to earlier you when mentioned lot the drive

Jim Landers

gets you doesn't pricing, is Jim, better this job. just you it Stephen, get the it

an So a just And bit. I'm stakes increased if that the capability. at it's dual term, having little it's fuel gambling employee table

Ben Palmer

it'll And I I I of the and to know, different, you if think. extent to think difference, there a are that began a think when pronounced couple things more tighten, of when, have

part at up for it's the most to I in think tightens, think impact some on this or a at point I have as industry that think power important I said, more across pricing to the think it the, you'll point. you will at game. point it'll the Jim fleet as become this the pricing be be, But it need I really little

Stephen Gengaro

appreciate the all on gentlemen. color Okay, great. Thanks. the I Thanks, call today.

Ben Palmer

later. you Talk Stephen. to Thanks,

Operator

back for Jim [Operator time. Instructions] to Landers questions are no remarks. now will There this further at closing call I the turn

Jim Landers

you the talk in for and good have who will listened Thank we you and today to well. you, day questions thanks Good Thanks. talk to as soon. to Hope a everyone. everybody for and

Operator

Ladies of will hours at and within www.rpc.net conference for gentlemen, call this two call. completion be concludes replay the of today's Thank conference following A available call. participating. this the you

disconnect. now may You

RPC (RES) 27 Jan 212020 Q4 Earnings call transcript