DWSN - Earnings call transcript Q2 2021 | Dawson Geophysical Company

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Operator

Good morning, and welcome to the Dawson Geophysical Second Quarter 2021 Conference Call. Today's conference is being recorded.

As a reminder, statements made by management during this call with respect to forecasts, estimates or other expectations regarding future events or which provide any information other than historical facts may constitute as forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which the company is unable to predict or control that may cause the company's actual future results or performance to materially differ from any future results of performance expressed or implied by those statements. These risks and uncertainties include the risk factors disclosed by the company from the time to time in its filings with the SEC, including the company's annual report on Form 10-K filed with the SEC on March 16, 2021, and any subsequent quarterly reports on Form 10-Q filed with the SEC. that this incorporated refer release morning in morning, please start regarding the issued is we the and statements of statements. forward-looking the note covered as by call, call to please statements this company's those Furthermore, conference contents this the company's press

company's Dawson minutes current Mr. make to in to call, website at GAAP release, non-GAAP Company. which measure the Geophysical www.dawsonXd.com. turn earnings the any to The applicable is not the reconciliation like a call ahead, which During this over of is call on Stephen scheduled Please references go A the conference Jumper, and for non-GAAP can of found company be measure company's guidance. management will XX of the located copy now Chairman, EBITDA, the I financial President measure. a sir. would provide CEO to will and is

Stephen Jumper

Cody. quarter Dawson Good to morning, welcome and Well, call. conference earnings thank update XXXX you, and second Company's Geophysical operations

As President company. and Steve CEO Jumper, Cody Chairman, the is of my said, name

Brata, Joining Financial Vice call the is Executive me Jim President Officer. and on Chief

Before start the to a call, things we few cover. just

And be XX, reported advised information listening. of replay longer on only this if available Investor any said, no Cody therefore, the Relations to call, of of to a as accurate you are like be to XXXX. it the of will As speaks at via Thursday, today's going www.dawsonXd.com. listen website August by today, company's time-sensitive webcast may time replay you'd call that the of section Information

ended financial quarter second XXXX, our results. Turning to XX, preliminary June

reported the significant compared ended June XXXX. quarter quarter to June $XX.X company revenues $XXX,XXX, of a for second decrease the ended XX, million XX XXXX, For the

company million the XXXX. of June loss share $X.X quarter For XXXX. quarter $X The to net of $X.XX or compared Canadian negative acquisition operating the the reported United States common quarter. I EBITDA the of quarter quarter 'XX. the stock common ended million low quarter. the loss will second financial EBITDA XXXX, then of in Canada ended and one turn for per XX, low XX, to call have outlook of in challenging in season who outlook of crew seismic concluded remains I at crew first potentially on during for the one fourth fourth the Jim? return anticipates company the utilization now the third our final midsized XXXX review $X.XX the $X.X June seismic for XXXX, into currently channel crew. of income of data periods XX, of count U.S. positive with stock of per the with of of to not currently or the for share million The a company reported compared the the net reached data during the did one near-term remarks a million in second as a $X.X information, company crew for half over the point XXXX results, some or June activity operating and company Canada operating Activity will in end either Brata, acquisition levels quarter control of quarter the U.S. during ended the available the Based Jim and as will second

James Brata

significant June the and ended quarter to quarter second million $XXX,XXX, for Thank XXXX compared you, XXXX. Steve, for decrease a of $XX.X good were morning. Revenues XX, the

quarter the amortization expenses million, challenging with crew. half Canadian of the A $X.X An second during in of the $X.X and of of XX% a in million, outlook million of million The provided or Canada the the $X one were XXXX. operating in in morning. to second quarter the loss data As $X.XX share as XXXX. periods the in million $XX.X in the quarter in this either of the of remains not of a our to seismic XXXX in XXXX. XX% or crew quarter was channel quarter the the XXXX second the XX% currently $X.X near-term in Cost quarter. during common million $X.X of currently issued a of quarter. concluded decrease seismic Net reconciliation was the morning, our million with one available the quarter same acquisition loss company XXXX. $X.XX of activity compared U.S. XXXX second $X.X the in XXXX, of XXXX negative second second Based the compared second net at million in fourth of of General administrative quarter to services was decrease during million positive crew quarter of expense the in anticipates U.S. compared share potentially decrease in to second of earnings season per XXXX. acquisition quarter period this midsized EBITDA of EBITDA in data was end release Depreciation EBITDA the Canada income company one in of stated company for in crew the second operating did the release of and XXXX. low information, quarter $X.X common million on the same of same utilization to have issued the and operating first compared compared U.S. XXXX per $X.X $X.X earnings or was in

months decrease the June loss June a compared the X was months June in $X.X in million million EBITDA June an issued XXXX. months XX, and the $X.X common compared was to the million, in months XX, again, X loss the or XX% for period XX% common the of a XXXX. million $X.XX same for X this ended Net million ended Now the June compared XXXX, compared $X.X $XX.X share of X for months share XXXX, $X.X X X per $XX.X June were for were million for I'll million of for the XXXX, ended June income $XX.X XX, months the ended a XX% same million, was morning. ended decrease XXXX. administrative services XXXX. earnings of period months decrease to or negative $XX.X $XX.X X XXXX. XXXX, XXXX, approximately X to review a XX, same reconciliation release And EBITDA $XX.X EBITDA ago. XX, to million for net provided months $X.XX was for ended per XX, ended Revenues our the year XX, to million the of of General XX, positive ended June some compared period expenses in of results Cost

I'll to Now items. some balance turn sheet

of we XX.X:X Our XX, obligations million, and with leases balance I'll remain sheet operations. debt, under million. $XX.X of as that, continues was for back financing XXXX, had Steve approximately cash call short-term turn to on our including ratio $XX.X investments some June strong. comments working of and capital And $XXX,XXX, And was to current our the

Stephen Jumper

Needless quarter you, to challenging. thank of extremely was Jim. second XXXX the say, Well,

first spending and Exploration focusing range and companies for quarter and many Despite ago, increased the in the periods XXXX XXXX despite to in oil companies hedged announcement approximately OPEC into recent response mid-July the in low spending through count keeping our oil pressure gains activity companies improvement first We in around XXXX time of a quarter production spending have well -- U.S. schedule. According $X variant and year billion, the into during the earnings on count recent data portions delta uncertainty slightly our such the current discipline, for operating, only Dawson through COVID-XX but on contracts this of be levels. showing deployed U.S. seen XXX, are count, adding anticipate totaled for spot out from possible half as of of years U.S. activity. oil XXX continue the with path as their X flow. increase point at half release, prolonged to hedging X $X.X upper of year we fill of quarter entered time ago, the IHS fleets crews to standby well levels on continuing hydraulic quotas E&P in below operating natural in and a currently crew the the prices pullback quarter below prices in The but in XX crew second fracturing modest a production project XXX% improvement oil said, second effects the same continued weeks, that efforts is the of service of the rig above of is well indicated price as in at overall true of increased to seismic that as precedes this a during X reflect production levels That levels ago. of economy, crews well will terms capital cash shareholder third midsized seismic gas the an typically concerning XXX the second losses into last market, there of below below with The further the deployment XXX. As returns a acquisition plans downturn. channel which data acquisition prices. range, on capital the mid-XXs the

earnings release, lag seismic As oil demand activity. we to first continues the discussed XXXX data service for modest behind in quarter services recent increase in our acquisition

in seismic recent spending, could are projects, certain and these have for upcoming a are implemented by typically activity in response maintenance preparation carbon In slight activity a in bid times, continuing company. the and activity for low scope, to company a at for operating bid difficult are repeatability comprehensive Included acquisition significantly request of limited fixed the activity in levels capital new projects. in uptick Canada capture levels. smaller experience to program reduced anticipated increased remains the Carbon capture in and response budget expenses equipment and for U.S. While the beginning our variable to opportunities encouraged the while data season. inquiries we levels, offer

maintains the robust quarters addition, client and and company the commitments product The capital to ongoing during expenditures first safety XXXX. company second quality. its of and made health, environmental In relationships program, its no

for XXXX. XX, in initial As the earnings of of company's $X budget December XXXX million release, approved Directors has an Board capital our stated

with nearly earlier, sheet strong of $XX.X XX, Jim notes working company payable the is remains as June XXXX. million cash, investments of short-term As cash company's restricted finance as The XX, million of leases June with and of XXXX. $XXX,XXX capital stated debt-free and of $XX.X balance and

in to drilling in ultimately overall combined the by increase oilfield and believe the the that and improvement seismic employees, While questions. for ready in today's Cody, likely contracts shareholders conditions remain unwind, hard data conditions the in recovery challenged data toward a are the of will we through and coming remain acquisition encouraged thank sector. valued and both we acquisition market economy and with activities, I the so And for difficult hedging work completion set ahead. stage The are trusted seismic service with months, as better customers these we working sector. success I are times our that, the in recent

Operator

with Instructions]. Berger Capital. We'll Bruce [Operator take from our question first Turnaround

Bruce Berger

your Steve, what just cash burning in can't strategy is, keep a obviously, $X.X you wondering quarter. million

for see over work cash quarters, few anticipation what your So as losses? the are you next

Stephen Jumper

is low to but down, We busy it some of going and as right the to anticipating going having be of seeing entire have based but any to believe We was we did have crew we're say the said, XXXX. Canada crew that in the going quarter the the that, is during season we're year crew QX, hopefully end on Bruce, and at field. We operate low we're the operating into I have season will periods point, -- in point that going guidance what drift this we -- the to start a the an earlier utilization, of into do think from year. where It now. type keeping a this as first not I to through in periods forecast, said, we're that and of U.S. I anticipate not quarter.

balance So effort much implement as sheet through the is to to to reduce be as of closely. burn the make it the back 'XX. we'll continue We cash continue half every going position possible. cash certainly things watching the and to and And difficult are

Bruce Berger

terms of units doing of or are type you type work? it carbon are Is in Canada? How of utilized work is in the pure What it being exploration just work? the

Stephen Jumper

past, in recent work been the primarily entity the heavy the -- part In -- the going Tidelands has of that in of Most to oil Canada -- basins. we've done our and back the days well, been Tidelands years, and work it's in in component of mining. to these around the be Most the days Canada it of has in But of nature. on is heavy the regards is done some off-season sands. work oil in will off the potash that merger most the X Canadian

we in and that natural what upper in are gas some don't course, the know Will and been open Of both U.S. up in for the heavy effects we'll natural has the low Xs. sands. see. recent history opportunity what being more and prices Canada is in activity the U.S. is in But both Canada of basins, in oil gas Xs

Operator

Potratz next with from question our Investments. take John We'll Research

John Potratz

going Or you're going is contracts to you What business into working yet, the that outside about work capture but sort that carbon many are amount of there? in general area? do your And interests be your is of have the sense don't to carbon area this will there? really geological that you be there getting capture COX, reasonable any you

Stephen Jumper

into good in Jay. we've projects and Well, like question, capture in done down various Wyoming Louisiana places believe I some places. We've some the in executed past. carbon

square We they carbon as couple our be to U.S. most typically XX-XX hundreds. are fairly tend capture They dense miles into are are relatively will smaller They There'll XD nature. a more projects. typically repeatability. and inquiries to in surveys, of as involve land-based of opposed seeing be

wells to that do. it's have more looking We that identify means to, of feelability proof. then to formations what what of are and level and identify hydrocarbons the reservoirs for of and be they conducive some of to normally is that This so drilled conducive accumulation first a storage, extracted. is try the escape or of could And which we have -- structures all, is, normally intent to opposite one, to geologic kind

X some then point is conducive any been survey, But to time fluid evaluate second the there is in has Phase see movement And a reservoir the identify geologic fact, some over and to so follow-up And injection. activity we're if at level front. of if subsurface time times, will some be potential reservoir -- seeing repeated in there, the many to there.

the potential basin. capture certainly, carbon is offshore think in I for greater the

Some of to people data. carbon will the do that capture places want have existing

But next onshore done some capture technology generate activity turns multi-client the so easily through in both past, that. the we've in economics carbon years. offshore. what we'll very And But how the that our helps moves just databases, and the this this of few see and over develop and to

John Potratz

you some So might of just as E&P don't have oil you It's that -- that business, it correct? endeavor. -- as if get you not projects the big profitable do of is get exploration, a with

Stephen Jumper

be is point a it At going this It's is level, Correct. -- to there'll which smaller activity typically, in crew. time, encouraging.

come channel more maybe than crews As off up certainly they some existing as carbon and a would financial address capacity some additive projects from people increases, capacity that have doing utilization the equipment we the times and improve our stand-alone. to be energy from standpoint just source capture it and pulling count by

to a we'll So that I to certainly will I it's all think be in. and pursue a that business be benefit involved And involved. to continue think something continue

John Potratz

good. Very

the in for another looking and Sounds for lithium, potential and there which looking be they that exciting. there's that go very there the any batteries formations little mentioned on Is thing United is in U.S. going the we lithium might would at lithium exploration need service? geological There's -- for States.

Stephen Jumper

difficult geophysical and inquiries some use for little bit type lithium. had different loosely you're somewhat and formation similar of it's identifying using that not type. a our It's coal tools. not some little for mineral technology more it's -- of have into accumulation, a looking We that is to looking conducive for to geologic identify to scenes you're a trying that actually It's

aspect. from had that, the we've And I to had fruition lithium really around don't inquiries so we've some but come think anything

lithium a this the I and done we've factor helium, I'm at big around we Now of be the us, geothermal, in around past, be think for Jay. those things but things like that future that a types would would will something bit wouldn't sure point things, little in

John Potratz

as and parts wanted the but some of Okay. just parts just do Well, your ability changes, sort other don't -- of to take life it's do the take and I well, of see business business if off to that.

Okay.

in The and you that to quarter, money other to mentioned, be move. is the cost. able thing spending only lot a quarter you out this quarter, maintenance look was the were be go your of of during at the My ready sense the to in equipment

little the bit have of in might during the was going be expenses that that at than So your maintenance quarter, shape. way incurred would a is forward. great system a you sure higher Would to that otherwise maybe looking there make on fair

Stephen Jumper

we've what expense a certain equipment keep with done maintenance ready quarter in characterize the to would level I maintained, regards to deployment. for of has been

So we types in channel will maintenance the and is up those costs accordingly. or Certainly, of crew future, count -- count level further energy as things. to go and and sources the deploy maintenance the going

And think quarter characterized expenditures materially we the -- wouldn't maintenance as so in I I have our being large. have

maintain continuing, it's think limited to equipment deployed. always go downtime that's as our when are and I have, we has to ready we

maintenance increase expense I over as to continue anticipate level would deployment to So we increase. time, some of

John Potratz

Okay.

chance So it's just when move you for being a to ready get contract. a

a competition are are that's you what are so that you any get and Okay. contract Or like? -- out suffering also competitors seeing prices marketplace? cutting What finding harder it's the is profitable? the to Are in they're seeing you

Stephen Jumper

say has issues its market and everybody the landscape think geophysical competitive to XX, difficult I been year. Lower I changed a in as hasn't worldwide. had markets the it's last geophysical worldwide. don't well much the as think in really -- that the The stretch Yes. The for

I increase leading see think activity, we're indicators to international in beginning in the some markets.

some think world, seismic around the that are to improvement marine but indicators anticipated leading increases starting least at the marine around we're we're the in surveys yet some of the world. we operations, I level quite or seeing to see maybe not

competitive think landscape the don't has I So that all changed much.

their everybody. the restricted in on we've it's is one, think base. here our client levels to just QX as I of QX, flow. that for stay be ago year and cash focus they're on off. continuing a within market contracts, addressed of the spending really, It returns, into we'll it's keep behalf they -- And hedging them spending both, affected is and entered difficult a certainly levels shareholder -- -- flow. to rolling cash have have continuing They're issue Many

And increase in things among particularly some conventional activity, been bid so that in players some we are of private a slight up. of showing the have and -- more seeing increase few kind

So on everybody I they're I it's think don't tough right think now. --

John Potratz

-- But representation? out you you've positioned prospective the you seeing well. there or survive yourself ago. that fair Is are are and clients maybe today to you didn't see prospective months do that And seeing X a work X

Stephen Jumper

fair. in are continue rig ago, they're count the to think and time fleet but want where emphasize, were an hydraulic seeing that's XXXX. that uptick are at fracturing significantly I this to the Jay, from just both from up I year we they down count a numbers

to through certainly drillable the to to work count it say while And this where way, I'll prospects. just be inventory it's of rig a -- it while taking well, so the needs isn't

that's seen for could have we And And a We've certainly in bid. have bit to and things next more few it a market yes, of continued increase, the be that to bit come activity have or continue on not we're us I having challenging happen some in it's and QX. that to schedule that, a happened so to again that seen slide little level going think to two. us up quarter a a QX. say But seeing little few but in the said to projects inquiries

John Potratz

what out something this is very moving you for to Good. to I'm innovative because like forward it's because then a this think ahead. there Actually, things I very you that in is it brought do about myself. next undertaken about think glad get from Thank not us life very look the and quite differently. you're having to often being And you've good does you sphered quarter, some would hearing differently. to things lot you much

Operator

Company. from our Take JM with & Cohen question next Jarrod Cohen

Jarrod Cohen

was question answered. My

Operator

Jumper does That the question-and-answer turn today's conclude remarks. additional to like conference any or for I'd over session. back closing Mr. to

Stephen Jumper

thank I quarter listening of second Well, all, to call. everybody first in want operations XXXX Update for our earnings to and

shareholders. Certainly our As of always, thank the hard-working want clients. and employees our we're appreciative very support to valued our of

sum some geophysical going be thank sheet to with in positioned to activity. QX it people staff and low you to future, end the inquiries again on for it of of we this to to balance our see that out. it we're up, we with forward beginning And in and of encouraged our QX. to the equipment once times the are the talking terms market We're to respond was base And to Just by continue the difficult have is you at point turns. a come Thank near well and but you. that, when market look

Operator

That you. today's conclude conference. you all do We your for thank Thank does participation.

may disconnect. You now

Dawson Geophysical (DWSN) 13 Aug 212021 Q2 Earnings call transcript