TTI - Earnings call transcript Q2 2022 | TETRA Technologies, Inc.

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Operator

Good morning, and welcome to TETRA Technologies Second Quarter 2022 Results Conference Call. The speakers for today's call are Brady Murphy, Chief Executive Officer; and Elijio Serrano, Chief Financial Officer. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Mr. Serrano. sir. ahead, go Please

Elijio Serrano

beyond that Good XXXX thank like Results this statements contain you Joe. to be TETRA's forward-looking. be to for Second that These statements may call Quarter are Call. of of factors. conference or control TETRA are These the morning, you, are based subject may you deemed and and which risks on based to by certain made joining assumptions number remind and statements many uncertainties, a are Thank I are on a company. the analysis and would number of of

You and statements that such from are performance, may results of differ materially future the are cautioned actual in those not that projected guarantees statements. forward-looking

non-GAAP accordance public in course EBITDA, our number. context or the refer complete numbers. non-GAAP substitute margins, of may for prepared website information Please within net net gross EBITDA other for reconciliations be to the as for adjusted release adjusted free ratio, yesterday's we financial considered to period. not financial to cash financial adjusted flow, numbers financial reconciliations refer leverage should our are debt, These call, the the addition, the In or EBITDA, liquidity in GAAP a and GAAP with of nearest to results of press

I encourage today. would In later to addition that to to our now yesterday, be Brady. that you call to over filed also refer went press we release announcement turn XX-Q will out the our will

Brady Murphy

update Elijio fluid turning current and the second cash before Call. sheet it the Welcome on Thanks, and the an balance Elijio, for discuss summarize Second liquidity. I'll outlook back good some to Quarter TETRA's provide well discuss highlights to flow, sample exploratory our Earnings to everyone. morning, results and quarter, XXXX

results our our milestones in opportunities second line some carbon the financial quarter, low exceeded expectations. expectations, our on while For with energy were key well

and crew our frac that which active crew North grow fifth market. business of On frac above margins revenue Our was for the annualized faster quarter. count, continues straight peak basis, Flowback than expanding QX to shale XXXX, the America active Water the of while rig of the XX% & per a

impacted bromine for The While of from X-year that Russia/Ukraine XXXX. are the by XX% margins target cycle, the a brine year. very as high adjusted territory growth to used supply concentrations business disruption an due was a still chain last above independent by overall study tree and results chemical values our our a multiyear in conflict, to the continue subsea deepwater forecasted and orders encouraging, achieved announced signs show European well segment report in supported test by EBITDA the markets both we values lithium fluid exploration with the offshore

second impact the $XXX,XXX, quarter second of majeure of from part meet backlog. energy the included X% $XX.X force the as XX% a and million into to are revenue of Eos up pace Overall, Russia/Ukraine of declaring impacted European million first ramp they gains key of flow conflict have $X negatively to following to supplier XXXX. past of result on the investments. from each losses unrealized investments of and million quarter quarter and grew charges, sequentially quarters Adjusted Our million was the of as on decreased mark-to-market XXXX $X.X storage expected electrolyte $X.X by unfavorable and a net the second continue as that continue aforementioned of to of long-duration quarter their for pure doubled deliveries their our X EBITDA which growing the quarters because at

but $XX.X has EBITDA was improvement a sequentially. majeure currently since and still The of would XXXX have to reduced of million. million, from supplier for the the the supplier been from activities TETRA, strong operating normal $XX.X quarter levels. from million force Cash impact at mark-to-market European $XX.X Excluding losses, resumed volumes second supplying

Our far second first quarter cash flow exceeds results. our quarter pre-pandemic XXXX

our I'd in well Arkansas, fluid bromine. lithium our sampling to the detail, in like Before own including discussing results brine from segment more discuss results and where QX certain rights, financial exploratory we mineral

for to leases Smackover of holds not announced of company's exploration subject Arkansas. and we agreement. acres previously focused and an The the XX,XXX of the brine Standard to last areas on formation the bromine where on TETRA of geological the assessment Southwest As in completed net preliminary the consulting bromine of approximately XXX% by TETRA the net Lithium XXX% within third approximately independent in where acres technical targets holds in quarter a year, the lithium all assessment rights brine of lithium rights, leases firm lithium XX,XXX option assess

liter, contain technical between to million For X.XX XX,XXX of targets equivalent. lithium on and between range, identified for and XXX,XXX Bromine, a bromine XXX the average brine in assessment bromine. and to exploratory tons liter lithium estimated milligrams exploration of These and based target and X,XXX target And tons brine million estimated carbon X.XX for lithium, exploration contain per the respectively, per concentration an of the lithium milligrams bromine.

results the lower feet, and to was and drilled well depth top, is recently total total the very The penetrating drilled perforated The formation. depth collected concentrations X is a a of for in used liter, was porosity fluid across zones conducted Our Smackover XX,XXX the where groupings above of XX% middle consistent target. XXX all average perforations. in acreage on X TETRA well lithium of feet, exploratory good retains of which and an across exploratory zones sample of to selected the by rights test the completed primary samples XXX% milligrams with all per and XXX results concentration independent labs, were of results with lithium X fluid valid yielded

look study, the expect third results, have to For which concentration. is we X% milligrams forward we completed liter, target independent very these was in average and resource concentration above quarter. X,XXX are bromine, to exploratory the per the the Obviously, encouraging which

full suggesting remember encouraging important is can we it resource reservoir many fluid report However, are samples. and is the anticipate on final dependent of to these impact not we geological the and parameters, that

As very bromide, more a bromine to a recently and our ongoing our energy is deepwater recovering manufacturing produce of PureFlow, which assets zinc as and [indiscernible] to as patented oil long-duration completion With offshore potential high-purity bromine storage. energy well company. in storage as part growth extensively used fluids and a is extensive demand, these gas to reminder, is for in the process part business markets valuable exponential key access

trading in the Wall as the ton Journal. metric reported at course, of is, yesterday, of as per lithium, As which $XX,XXX Street price spot was

we to $XX,XXX ton is market While calcium the in both in the be lithium downhole our in infrastructure. much Mentioned their supply internationally large will international first a is chloride use calcium press revenue is acreage quarter. will we agreement we of to this of this price, application economic of received, have the on chloride to the PEA quarter, for represents believe operation. This bromine, incremental that per their Also for for third new expect of X-month with quick order reported and add our a well producer shipment processing minerals, in that year-end. delivering an price spot that we It an for a have assessment completed release morning our where lithium intention we of same that a that producer product lithium public-traded selling lithium preliminary plan executed our which lithium first the have market was in is before to average follow a global first we to future. extract and opportunities same follow-up have

the land a ago improve activity to starting sequentially for and segments, North America parts our Water turning Revenue & XX% Flowback pricing Now continues increased XX% and key as of with from business. year Services. to

than quarter margins and was quarter significant second The EBITDA integration labor our rig modestly as equipment. the we in lower, while which crew gain is land target of of compared and U.S. the business fuel, U.S. XXXX. quarter, since to revenue inflation, investments technology ahead highest third our digital quarter very XXXX, earlier XX% expected to active traction, of and second for continue With count XX% the frac to respectively, during of XXXX increases third price despite quarter the full and adjusted of achieved continue our for stay second still XX.X% year the

be plus margins our that early Argentina. the in facilities quarter reflecting to margins, third the launch the benefit above mentioned, quarter expect of major previously We second what I production of of

the with to of leading frac patented share and additional U.S. is unlikely to and continue water SandStorm until broad best-in-class fleets management profitable our sand limited delivering business integrated capabilities market grow While water XXXX, the of TETRA grow customer management acceptance through gains we technology. by services with growth model, recycling availability market recently

help the produced costs added gallons new address and our from alone, water ago are a reduce recycling XXXX. quarter customers XX% X quarter. demand million in significant with seeing to second first year XXX up We seismicity we in second for disposal the Permian In the XX% the and quarter, recycled events recycling projects increasing of up from

at be plays higher increase shale of yet in major in the utilization And Eagle technology our and scope new were we the exposure, than SandStorm and for quarter. technology Argentina. independent quarter, across to Delaware had end award fleet Basin the up for wellsite their Appalachia. most continue a supply excited This that we our the North new of impact operator our in play. expected to is during will awarded and the of We well super I'm in approximately personnel reduce a for reduce adding quarter, [HFC] also more for for we SandStorms Ford drill-out a second largest -- rig and a American and to pricing customers in continued the the SandStorms, economics. demand the work more of TETRA and to auto announce reduce large downtime by XX%, second meaningful a producer trial successful our third by XX% technology Without

became quarter production add in early the X and that starting operational July, facilities of and full revenue will June quarter. Argentina our early Lastly, EBITDA in and late third in a

and award an first markets, normal due -- the were lower first We in Fluids the of early from in the partially fluid of a Gulf Adjusted first for result, these into quarter X% international that expect complex, as the forward Industrial quarter new Northern first in the and million offset to an and lower our the some XX.X% Russia/Ukraine quarter. sequentially lower in second saw year. in seasonal underabsorption we The compared Completion was plant. the Europe facility to resulted the Kokkola, albeit activity quarter. than of production by that increase from shortly pulled adjusted we Mexico EBITDA Chemicals XXXX our supplier, start-up levels revenue Products business, conflict quarter from as increased margins impacted our additional XX.X% previously EBITDA Finland markets of Russia/Ukraine production sequentially were reported as sales $X decreased & from

While Special levels. This E&P for of category. our stimulation Engineering Award fluids -- awarded quarter, XXX% above from still second clear the to phase. XXXX supplier to Meritorious that the for our Innovation was efficient the or used technology a increased walk level since has completion brine fluids, in drilling clear Advanced a fluids drilling not transition in it muds Displacement of highly is brine completion is TETRA for TADS, the to second back quarter, production normal Also, the Systems,

we of the customers where continue and Neptune We have list their most offshore on engagement friendly completion. to for growing option TETRA environmentally is projects good a best believe with CS

mentioned to CS QX. quarter, job in Neptune previously be completed is schedule on first-generation this TETRA North Our Sea still

new & look segment XX-year we activity increases, customer third towards high and pressures. further we based expansion see Flowback awards the growth despite expect of our on Water margin quarter As XXXX, inflationary for to and

normal Completion Northern due third business, disruption. the at & Products, the seasonal lower quarter we our least from European For continued with chemicals aforementioned through the to see production Fluids volumes will chain drop-off supply

that awards activity, Overall, Services, chain half continued overall including to our year and in previously demand deepwater despite the management we a our expect strong Fluids supply For the for us the & Completion second we from contribution headwinds communicated. the team solid quarter. inflation navigated disruption, of Brazil Energy

frac to opportunities activity Our margins, us the capacity. of the while additional to grow crew due lack and modestly customer technology investments giving expand are paying off, levels grow

contributing and Our minerals focus creating which company energy with growth chemistry much carbon the on already critical significant for are is expertise, low to come. opportunities requires benefit markets, and financial more

every XXXX, quarter to opportunities. with excellent them. and continue to employees onset COVID-XX, reacting earnings condition the have done and collectively global an market markets to adjusting job management beginning find challenge, existing for products, of has and the We ever-changing new our which a a to and contribute the broader different Since high-growth presented base market quickly a team our

to then I'll information, turn some up Elijio additional it provide Now over questions. it to we'll for open

Elijio Serrano

you, Thank Brady.

$X.XX Second of quarter share last per earnings loss $X.XX the a first the compared quarter adjusted to in to in was and second compared year. $X.XX quarter also

The quarter nonrecurring Adjusted million nonrecurring of first this up $X.X $XXX,XXX in and second year of the credits quarter second XX% a net is for EBITDA quarter benefit last $XX million the of of included to quarter the $XX.X was quarter of included year. the items first compared million expenses. from for charge second $XX.X million in of the a

our by partially losses loan mark-to-market to quarter Compressco a on swing non-realized of the from The in and our at in compares Lithium. gain investment items gain equity $XXX,XXX of unfavorable This CarbonFree. million offset of quarter from quarter Lithium, first Compressco mark-to-market second equity convertible These CSI valuation holdings second CSI Standard and the $X.X a an $X.X this first holdings million to our year. Standard represent of included

without to first $XX.X adjusted losses EBITDA quarter second quarter, both focused our in gains the of of performance these you first quarter were mark-to-market quarters quarter, impact the mark-to-market second million. the compare If and the the EBITDA in on

of of the quarter conference several included in is Brady is first declaring fluid basis force included second this the operations chemical $XX Standard shares we mentioned. when each adjustments that a total In XX-month $XX $X.X the The quarter to million late and Europe quarter, at with accumulated over price. amortized then at year, consistent in proceeds. result Lithium Standard keep that received $X.X with share share, XXX,XXX mind we that relative Recall also and second adjusted we up the quarter flat first a in Lithium of shipments mark-to-market shares Yesterday, those significant of quarter Standard quarter cash our a majeure approximately to I million was per value $X.XX Northern negative and second impact as sold Lithium per April, price the we closed the earnings on that the X.X on offshore And moved first that share, $X.XX And Lithium about communicated of the Brady price period. million with and last our million as supplier industrial $X.XX. do Standard generating expectations a call. quarter EBITDA what

million operating expenditures million from $XX $XX.X improvement the an or expenditures was cash first capital the in $X.X was Free Capital $XX.X $X.X million flow quarter to activities cash Second million, were cash an $X.X of compared assets improvement of of million from quarter. million the of from first quarter. cash the activities less quarter, sale net first from proceeds second in from operating quarter. the

capital to able $X months, TETRA in and This in manage million consumed first Argentina capital sequentially. SandStorms, expenditures able was production early quarter. up $X we're up And expectations clients quarter. paybacks the when million facility. our ramps X% our that first than quarter better after the are year early points to quarter, during quarter and revenue working XX the XX% a second quickly to being cash to total the significantly We cash on and we capital to our the production period sequentially, revenue in those the reflect ramp-up in in of second facilities year generated up cash in of projects to margins monetize with expenses -- to with the the total good X- increasing X-year capital are that seeing with within buy Working investments

was million do was at second while demonstrates second building taking the excess significant at that negative, the million, of be the of quarter activity this are for it million. $XXX we're in drilling cash was costs $X flow improvement unrestricted availability XXXX. ratio net under quarter. has national to third some fourth the end economic debt We quarter, the fund million to without resource million, issue to in account expect strong $XX be the unrestricted quarter and million deepwater $XXX end X.Xx $XX incurring the assessment. the inventory of X.Xx, in plus the after to the a oilfield be in services end is value half the revolving Total the Liquidity of design test leverage but and the high of and an generating having should debt end cash in well, from of the engineering an availability as strong EBITDA in and of credit dilutive the of was flow our from free $XXX Arkansas end business of study so. carbon initiatives low even credit outstanding June, million improvement XXXX, the of highest Liquidity At start-up $XXX quarter This the high was and of from under quarter, year Free was debt down doing facility year second study, into preliminary formation chemicals our cash first $XX net At and to the cash in incur defined the facility. million. our first the Smackover equity been was since a a to cash reduced free of front-end the the industrial quarter. having the or Arkansas at

a well exploratory spend our in and preliminary some on first I incurred in front-end that to in this cash of and assets second our FEED, initial or half an investments drilled year, the study resource to We've towards half engineering make to building are the already continue economic We Arkansas. assessment. liquidity we'll move mentioned study the design, earlier cash In year. of a costs

at can Keep This acres of allow high level cash look profit good we news loss taxes bringing to low-carbon us that to our very of in everyone that improve, back $XX.X business and supporting bromine and our incremental from the lithium the issued to additional With Formation. remind Brady. to for States operations have initiatives. carryforwards X profits. that, PBT consecutive details I'll metrics. filing gas encourage profits the and as quarters, offset the million oil to I and XX-Q million over time Smackover This tax today year-to-date. from industrial our GAAP now also We release mind financial quickly the will we of fund a flow federal for pay of have read and leased more that a turn it $XXX chemicals before forward some our for to expected investments everyone is have today operational this all from conversion PBT we'll been in continues or and the positive future be we United generating from that later and over and in to

Brady Murphy

Thanks, open it Elijio. We'll up for now. questions

Operator

Instructions] Rice. Martin [Operator will from Johnson with question Our come first Malloy

Martin Malloy

potentially? about about of in is I The here? was And process. the be you the Or more maybe chloride? talk lithium localized the extraction to a expected preview first calcium use it the that widespread have is Could question chloride potential calcium

Brady Murphy

the actually here Yes, in provider, lithium U.S. not it's international an

to the is on provider calcium here application will use by the broad in in And this so And results applicability But think first be we're a this with for and of chloride a U.S. scale. we that we their the working very have more it's encouraged not process. provider solution the this -- what seen

Elijio Serrano

an their order, ramp Brady Marty, about As months, of they're in up to they've X us facility. lithium mentioned, for production given

Martin Malloy

the help on Any been the maybe that from plant, raw Okay. deferred? just would chloride us Finland add demand able And key the appreciated. the outlook? calcium And output talk production for to could there side for on the the about material? essentially that supplier be you give on supplier has that, there provide materials might opportunity the it you plant situation to raw then just and be another can Is

Brady Murphy

appreciate the fortunate situation. guard bit today's a probably a came are all caught commodities, up off a as us even Yes, other can pretty that. global you are as Sure. imagine. in conflict aware, I fluid pretty that, We're Obviously, is suddenly little supplies. environment, you're yes, it's And Ukraine/Russia there commodity. This fairly But tight. and

for is given not for when solved, not us increases, they perfect get still but but replacement. the just it's demand an the need exactly the The we've we ultimately, still that volumes visibility We for are that production our anticipate full into So have We getting immediate European high, front. quarter, But projected successful which this clearly with as think has products don't levels extremely helped both been encouraged need. were terms we will that to now that. energy. third now right as price the we of logistics well very which can in we inflation on it's

really So material no and This side. is being get as to can. that as up replace the just no chain demand supply quickly concerns -- issue and on we able running there's

Operator

next question Stifel. Stephen come Our Gengaro from with will

Stephen Gengaro

I So us if out here. curious help could you was

I'm the margins, right, quarter? forward. impacts going is you that on how the the math some of minuses. I about we that lingering to other your of the think And sense what -- think and normally issues. But when supplier that maybe in the were you continued lose normal quarter the business. second thinking in your I EBITDA saw some there's just quarter, excluding the I noise about quarter, business, and thinking of commentary us looking then So you're from of I third if we're given we're Can curious give like the third pluses European business, XX.X% mean, some some at noise, the fluids second for the the some the did

Elijio Serrano

Steve. question, Good

or Northern QX from drop Last We're it to QX. $XX.X seen that chloride Europe. $XX.X million we've historically, dropped million off million So a QX And our quarter comparable to increase about down coming $XX million. year, that addition dropoff, calcium comparable million our of expecting to PureFlow, in sales year, in then sales from a mentioned, as second an This was increased uptick of about activity. sales market $XX the million. lithium. that expect we've for $XX chloride QX to with some by with in we $XX of the into be some that at production activity deepwater partially calcium Also occurring such offset

QX $XX million year. million comparable dropoff So to QX last $XX to to

Stephen Gengaro

took the XX.X% is Great. out -- And that fluids. I if in quarter, the the noise progression? you in How think think about margins about were we should

Elijio Serrano

losses So those second without out And the the the or we be should the sorry, second quarter turned around gain XX.X%. million to quarter mark-to-market that $XX.X I'm had numbers. -- be and

Stephen Gengaro

sort think that in XXXX? I And you you in then spreads Okay. that mean, expect to you'll the should rise I about on half and some frac this the based of a just benchmark use to sounds some where like we a in of your share one. business, Water of and also final can Do continues the kind of & about of then outpace you year. guess the the year work as gains. as outpace think share there's revenue talked going not we just activity that opportunity When there just back second the then lot one against growth frac Flowback gains? half It increase backdrop in

Brady Murphy

gains sustainable, to recycling those the gains historically maintain think the in at those made we are we look space. share crew gain continue to have just We've on you if gains. mean, frac also a basis, that continued I Stephen. Absolutely,

on not in is the kicked benefit us. that the -- actually, getting second we've Our that the Basin the sandStorms, year any and of our We'll in said, year. the crew that. of as in major date I've largest just Ford benefit see activity. award frac our not the any you Delaware largest yet. seen off with Eagle -- as pretty of mentioned, a half half of flat that to super We'll real We've for second pretty see seen Argentina

yes, So the outpace certainly anticipate and year well. frac this definitely the for next of we second will would activity, half we into as year

Elijio Serrano

second would we year the items quarter, & And Marty, at already Flowback. year, if generated other EBITDA a annualize -- of result $XX.X $XX as million that second a in the of entire that Water year I those you thing EBITDA at that And year based the the right EBITDA million $XX exit online this got in show in indicated bit run million run million EPFs rate Argentina being rate we're rate we've million per quarter. that a on the higher $XX the last will And we've per year coming that $XX EBITDA for a add than the quite now. it, from we're is

Operator

next will Hutton. from with come Our Tim EF Moore question

Tim Moore

next sounds be free was quarter, lithium maybe be inferred that late assessment your level the but Congratulations by -- might that flow. my year? And the there early nice of the could the resources September. is for by that still see completed carbonate equivalent timing. cash a comments for report was the question just on end the might from My adjusted economic then EBITDA It it understanding maybe of the in bromine sometime finished year, like preliminary be to and earlier to first is PEA I wanted clarify to

Brady Murphy

Yes.

know, the bit And completed So the with mid-September probable type the we've we're technology before cadence we you of report will of is year. we a like highly be really fast team great third final the there's early -- assembled time certainly that. that have or is complicated. PEA that end The we believe as provider resource end bromine, because feel more risk as first is associated inferred PEA, the doing the with lithium, for track resource The hopefully, to our no quarter, before be completed mentioned, that. we'd frame. a -- mid will the think still little We

that lithium are that. great the we of certain a we with. we out to got encouraged with working have still direct partner -- extraction We technology very that We're aspects But getting. prove partner results are

investment. to delay don't our we bromine So want

do So lithium time. we're trying at to same the

sequentially. early to fully And based we're to bromine. going, we on we launch them year progress do So we we the the the pace that PEA make next are, the following if continue lithium expect will for that the in

Tim Moore

terrific. That's Great.

Just switching gears.

to water penetration? I automation opportunity with sense quick how remaining my good get in management it BlueLinx I kind in runway? of a can staff But of payback in up around the to went integrated and project For us field still of inning give head mean, far given it's you improvement. Is fifth that? to such safety your XX%. just saw of now? a Is you reductions wrapped control maybe the I'm along for up systems, XX% that trying it kind a are

Brady Murphy

a out in XXXX, That's XXXX. end of question. rolled great We the this

into are a we years this So couple of now.

think we have growth the the of gains benefit the of efficiency a bit integrated from. because that just operators quite with still work I

labor As you is real in now, a can right imagine, market. issue this

can where are And with coming customers so fewer far jobs run people. we

model So market room than type would to we still at still we've that that us. believe less estimate to the significant of grow pretty that's XX% only of some available got model. share I we're

Elijio Serrano

out What and we're a drill new beyond up and technology, and automation today so. automated data points in personnel you drill that introduce that reduce on is doing was the with have new is our focused we above drill-out And this and which referenced couple we a do BlueLinx. to technology the with have what plugs, of done automated the press technology and release,

and what above the doing with beyond BlueLinx we've we've been and been a doing So this new SandStorm. with is what technology

the of another in efficiencies So market. we're the this that is to bringing series

Tim Moore

Yes, see nice That Appalachian. great. for the was to

Is you opportunities you on just besides maybe any the look just mentioned Water topic. to a huge discharge which like out as some technology Can water that it seems opportunity other produced if quality, press XXXX? that? & be elaborate regulatory Just maybe EPA you Flowback state for to and the could converting water in move there good surface market the towards release, agencies

Brady Murphy

as focus of next recycling been that's absolutely, part Well, capabilities. evolution Right. our of the of a ours

well. be We're able to the as that announce things reuse. we'll it some that's We moving that very weeks out on regulatory the to we the like we forward that to have think coming to relates as moving enable And as able agencies pace market. they're beneficial in staying closely connected to be

So next causing some our that Permian the headache customers, in yes, question especially are the there's Basin for disposal. no step. seismicity for The events real is

And And on in more the so come we coming step no that, I the weeks. as question, said, think, to in the that's process. next

Tim Moore

that. what That's next end the year investors, of terrific. I'm be by double-digit good some level highlight achieve sales know growth the there year summer. up were most enough very is Are this hung concern of And $XXX XXXX, year, mean on by capital prices to to there for you It in you? $XX to will above spending that strong million, really I oil? Is next $XX do investors could oil looking out price mean maybe question just for And Towards the revenues like and seems I to on back it's $XX. forward when then. could big your there's be of XXXX, well any $XXX oil it customers? my was I thoughts averaged

Brady Murphy

it's the are able the companies to get mean, that brought to shale if at the returns customers. before efficiencies, market. the cycle with the us But into budget I like the have customers make like right for Yes, you in now obviously, our look we plays

inflation. still have to we overcome Now some

But would think on our our that's that firmly growth, for support crew big still certainly a and with the $XX a both double-digit continued have. issue I count projections business oil we for frac believe in industry. I $XX,

Tim Moore

carbon. to just switching helpful. in CarbonFree be large Great. inflation the by an [indiscernible]? is the pilot for seems That's there would has uptick like very It SkyCycle and emitters given interest question been And last How going? plant my low

Brady Murphy

Yes.

We're front our with stay the the multiple engaged on cetera, users end because on their be they're costs, projects, of assessing that. logistics engaged they're with continue Clearly, them we end negotiating would component CarbonFree. projects. very cost, to obviously the et So what those plant for with

capacity. for when because difficult -- us. still very announce they're and we're very them it's exciting that to for they So still partnering taking a lead that side lead on for of will it, opportunity very in But -- supporting -- us project first partnership with now them their engaged the and much plant

Operator

from question Hoh next with ISI. Evercore Our come Samantha will

Samantha Hoh

services Is and curious up. with this topic. on especially fluids any product kind will CarbonFree last all of ramping you of sort stay just from to versus peg new products of I'm that much and there just think Eos low-carbon you Maybe that? way year? a and can contribute can you the to how year to these this kind way quantify -- growth like Any of number

Elijio Serrano

Right.

past Memphis PureFlow in Eos to believe that of in I and quite real mentioned increasing and in very sales the there we And has Eos. production were quarter. product a in this PureFlow high. Brady and going we've this our and West coming strategy sound mentioned quarter to ready that than year. shipping the contributions to So week, are them. that be we volumes to shipped Eos tons that keep few fact, were the from third the the And last are to of quarter the second Brady were a quarter, the to majority the first materially in of revenue go higher be earlier continues That's third being year

Some speculated $X between and million. is have the somewhere $XX that million revenue

pushed not number, on have strictly and that's We that PureFlow. back

now addition country calcium we for lithium to to of in now production chloride that starting overseas. morning ship PureFlow, this a we're the In mentioned

that the in from are going to impact numbers X can I So materially this year. increase year. think coming those be the And those main

Samantha Hoh

wondering the I more heard Water rank more -- recent like or you are wanted recycling past any in business. contributors? also that of Okay. need Flowback And I actually? sort the Because steel service which was if -- & out you've I that lot the think like Is where recycling a need products if which about do for called And there to It within the your you adding just lines recycling segment more -- I just are but biggest years, to guess spend CapEx just SandStorm, like could you're products. work of talk other seems the your segment. over one fastest-growing I was thing you

Brady Murphy

Right.

But I business the continuing fastest-growing about are gain sandstorms and SandStorms question recycling. no X Flowback to So well are as as And it, will segments with add market and less we for more so recycling. capital X say technologies share those with we require investment. X-year and as long are returns. continue yes, can do today we capital, those get than being fed our of both for paybacks to our types those capital we as Water some of & will

Samantha Hoh

you're in the over about of CS third think Sea? quarter. -- Okay. or I in guess, What that year, you're the you next I now anticipating, what what completing is some at especially project are Neptune? Well, right doing -- heard the the the North a project a I as FID

Brady Murphy

Right.

still we half in operators. the starting Most the the advanced of that these will the So be first year, quarter with the get high We in we think, that again, do there'll But to will determined this half I I that's of Well, in level Sea. coming or with longer-term year. of have next think, the next That a opportunities job some discussions discussions a second will be actually off to in of projects that's next year. Neptune horizon. cycle in third say, more customers, we're we we're with deepwater, North be executed really know kick planned additional year weeks. into is as be if don't confidence still

orders probably on I at of that's tree high tail take is a terms activity. leading the the X-year for of completion we're to off. the that going really, You've I to really be edge that subsea I the side, the And And timing seen think And cycle. unfortunately, end anticipated now deepwater start tree. forecast subsea saw in

it there us, a is we coming. for lag clearly So see but

Samantha Hoh

deepwater some we're is environmental majors you who risk those geographically. very And are to to use perhaps suitable Neptune? that, other really look Neptune markets for see What very just West of recovery for the expand given Africa, example? do seeing sensitive think and Could we

Brady Murphy

Right.

Neptune. North Neptune. I think in after Sea using banning to it Mexico. and we avenues will pressures really, up be markets, Not the clearly Brazil much some that, the seen the conducive which we West formations, very to where and both sensitive -- highly are in have Samantha, markets. zinc to other see relates deepwater of wells That's more down the So and as these Gulf their of I comes spots for of Africa opens but resumes it most zinc so of in But say, would yet, pressure higher

over for Gulf the of and primary, I to the Mexico, Sea North months, Pacific, next would XX Asia be say, Neptune. XX with would opportunities us

Operator

from follow-up Gengaro Stifel. with a is Stephen question next Our

Stephen Gengaro

other have questions, I don't you So two if mind.

can in of having and And obviously, revenue with like has Eos and like sort it to maybe or the ramping? can expectations, since is going add insight there, a their hard least give involved. seems the Eos is was add be is growth? on your kind color of that the their watch to production throughput, any there the et at things a their have you trying -- is first volumes one the doing. after question they're we're there's you confidence is out what ability and at XXXX. around to the confidence And because guys of talk might into the a volume all PureFlow traction any of there feels The to has side? about of getting it tracking you But Can anything what are revenue But sort That plateaued renewed cetera. it's was that stabilized downdraft level that to confidence consensus your you PureFlow

Brady Murphy

Eos, I I can because thing a they're customer to only want The Steve, ours. for say, but speak key clearly, of don't

encouraging production. they're I can't projections they're we are, on the they'll progress, real. that From it's but We whether making work and our to have PureFlow. putting visited the very that good achieve they demand see are putting they and the in what up or ramp question to facility comment up their not It's consensus ramping there's lens, opinion. putting that for are they're no in because very investment our plant the in,

Stephen Gengaro

another helpful. you're have you another storage with a maybe other companies, conversations for private And similar product in at updates least about That's battery Great. talked application. maybe public for X front? Do that taking you on any then maybe and

Brady Murphy

quarter. something they've have to deal in we with the would be we completed maybe Steve, them. do We by expect yet, thought announce their we it now. not third engaged but continue to Unfortunately,

Stephen Gengaro

maybe Arkansas? Lithium in that one. being makes any Okay. that the any have obviously but traction direct potential, thoughts that's you reserves And in you there then be progress prove increase done I've And heard viable? the confidence just of any up lithium then Because And Do there's around still add sort technology. lot the forward? have used one final made of Standard work extraction being you has technologies we can and there kind a as move there's to that of level and to

Brady Murphy

researching a question of great are we lithium spending extraction with lot a that direct providers and landscape. it's No, the one time and Right.

the direct lithium companies. using of extraction, there's pools is two direct And commercial engaged let with application not those today their lithium are brine First me all, here direct two in have clarify, people U.S. But tech. that we today essentially lithium extraction. using even It's on been [indiscernible]

be reinjecting using downhole in a the back a actually will in Arkansas. in but it with working, for nobody providers that off that is a and will bit But into Standard commercial that little very have know There's do that formation. pulling case application. we confident environment that's brine we it's is adapting what's environment a we applicable feel basis in continuous described the from So that be well application will commercial technology same the downhole world technology from I different we Where than today Arkansas, Lithium. the and the DLE in the

Okay. I quarter call. we second we'll much our very end think interest, the your With and Thank for conclude call. that, you will earnings

Operator

This will session. the Thank taking our today. conference. the for you will conclude question-and-answer event conclude This

disconnect You lines. may now your

TETRA (TTI) 2 Aug 222022 Q2 Earnings call transcript