TTI - Earnings call transcript Q1 2024 | TETRA Technologies, Inc.

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Operator

Good morning, and welcome to TETRA Technologies' First Quarter 2024 Results Conference Call. [Operator Instructions] Please note that this event is being recorded. I will now turn the conference over to [indiscernible]. Please go ahead.

Unknown Executive

Thank you, Constantini. you TETRA's thank results quarter and call. morning for first joining XXXX Good today's Murphy, are and speakers call The for Brady Chief Officer. Elijio Financial Chief Serrano, Officer; Executive may you I to be earnings. forward-looking guidance, may that contain financial to statements projections, and this be would deemed that remind conference profitability like including or are call estimated of statements made which and are based and statements based are TETRA risks control the on These beyond several several are certain are factors.These of by uncertainties, to assumptions many and analyses company. subject on the

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

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

our will turn it now to encourage you Brady. that yesterday.I filed to announcement, addition press In we XX-K over release also refer to we our to

Brady Murphy

Fluids while call land the outlook. adjusted first update to our Adjusted balance welcome strategic grew was financials results, year highlights first quarter TETRA's quarter rig our provide an and Completion and $XX.X on grew Completion Thanks, turning XX%, update were Fluids was Gulf for down and duration XX% behind levels segment.Year-over-year, first XXXX. slowdown, quarter in Products Products Water line an & quarter. the services everyone, We customer to strong XX segment, were Elijio quarter with to the start The slower XX.X%, activity discuss business one quarter. margins first adjusted deepwater results weaker impacted the benefit quarter U.S. quarter and quarter Services, that first Water of second earnings had in EBITDA strong point Water EBITDA sheet before revenue of and experience which Services. to costs some [ X% versus & first offsetting an our our call. initiatives and XXXX carryover to million ramp-up in the margin Services quarter to Julian At in the Good ]. Flowback operationally quarter in our the did summarize investments XXXX Water upcycle & recent the we Water Services anticipated offshore expectations provide the our the same Sea.For Flowback Overall, with with to XXXX our capacity well TETRA's and time, lags deepwater at first a year-end our EBITDA quarter I'll for some rebounded. morning, over count offshore as activity of effect first and Brazil, Mexico our the fourth for higher the which prepared SandStorm strategic during North a through driven in longer continues & outlook to operations serviced Flowback on by our the

more the XXXX complete will of financial year quantify be initiative. mid-teens.Before will at both SandStorm will of discussing normalized quarter, the like Flowback, our each second Water the margins for to with benefits highlight to the to key us to each allow progress I'd expected that a to regards made that on initiatives. and milestones recover we've levels with the us Services be a to to more details segments, including activity Looking operating strategic

in for of plant, the of their planned our ZX like result first informative material facility. which of of would solids.We're term. the encouraged to should Feasibility Bromine using shared automating to reuse also Permian area The running, our We very Report, need making proprietary production version solution with Arkansas On ultimate XX,XXX article. our OpEx improvement year, operational commercial demand a project, sales barrel coming we sharing TETRA.In to deepwater taking battery dissolved our first highlighted for higher of will hope for automation is progress Fluids end published. is us place have expect the Journal move together desalination fully Basin continuing on this in that in line. legal usable Because beneficial we hopeful South commercial Eos from June, to There projects our in TETRA's terms second Street the sharing of of will article day in lithium we're be storage Wall targeting for the zinc challenges by so conditions project delayed the with the optimistic which sources. close bromine, encourage close half side, bromine which with projects, planned much reflect We're electrolyte demand in we of they're in these pretreatment By to on are capacity the and this of and venture, the we're meet project significant account ExxonMobil. continues the be in dispose has very the and with include with the financials, The first first their Board contract up to you requirement. for Definitive the the expected Eos, the our in reuse a both XXXX. these total publish near is line for we And the solution a the our the process remain to economics this lithium that this from investment the to weekend's give first water.I to be and to with previously bromine Texas slightly, updated in read approval two into which with electrolyte produced joint opportunities as to tying be answer Mexico we weeks, CapEx Completion Basin but bromine XXXX to of expect Delaware contact expect build This New disposal what energy and the areas X-year water overpressure pilot growing Eos to discussions that a technology beneficial needed of the place financing wells operational is forward material project.We're half that to part

for the FEED advancing development the operating Finally, we lithium finalizing side, the joint Brine Unit. Evergreen the as venture agreements as well joint -- on and the continue negotiations study

our We continue advance to work to ExxonMobil fronts project. on many with

joint year, transformational company end Collectively, benefit throughout we a quantify Lithium have our venture that we financial as these to and initiatives FEED expect in the the for we the to represent of and Before year. they are the this complete Evergreen milestones the will material company. place evaluation completed.Individually, key

our Mexico representing the driven fall-through EBITDA the EBITDA revenue XX%. in from of by & to our XXXX.Adjusted in our nearly XXXX quarter basis the of business margins sequentially growth and $XX.X Mexico. East. Products unrealized million sequentially, the losses of million Adjusted Chemicals and solid gains Fluids first particularly to Middle the EBITDA the fourth compared XX.X% of quarter of Gulf in Now X% Adjusted improved XX% periods, driven $XX EBITDA when margins operations, points stronger Industrial offshore increased Fluids in XX% turning by XXX activity sequentially, Gulf excluding by and of both of in segment performance Completion Completion segments; increased

wells in bromine-based XX% Completion the Gulf we of the As estimate of Fluids. used completed a deepwater reminder, that Mexico

to the which with our CS is The to the revenues has we're discussions the activity addition is another that major So our of segment; for Gulf of years anticipated to outlook Flowback different CS as evolve North includes projects for projects million been Neptune.Regarding as for million job in $XX early continues fell continue for that CS are discussions two the demand different our of year-on-year. scheduled the in Completion higher pipeline Mexico & seeing are moving projects year-on-year, high-value by Services with forward.Shifting for the Neptune our Neptune, while by in of million super deepwater projects of many to the June, TETRA majors X% Fluids, improve in several super a two confirmed of Mexico decreased in or Water Gulf bromine-based $X.X $X.X increase that EBITDA for resulting in adjusted Sea 'XX. 'XX globally fourth in highest quarter in operators of level

sale project EPF costs revenue Services sandstorm quarter lower EBITDA rebound X% $X.X year, slowdown, revenue fourth year the resulted million margins we're slow activity we resulted Water and the a Water very to start margin to flowback & by the mid-teens. the start-up X.X%.Despite Flowback lower the activity nonrecurring rest the rebounded first margins of in for encouraged Services in of higher as in Combination quarter-over-quarter. from outlook lower the the about of for water activity lower adjusted expect quarter or to and Although

expect in segment We to for activity in resiliency our growth also the XXXX. of revenue overall encouraged continue remain and single-digit

water and confident operations water continue water and management we're and trends and treatment spills and and more value operators in favor. work to produced produced transfer customer recycling, our risk the As frac utilize of these time, of the increases.Over more technology in automation will profile their increases through

to those produced TETRA recycling balanced be Additionally, will continued led in have water while gas gains the markets SandStorm. by TETRA share believe services, significant with not by management water exposure markets, sand does and softness our we in market

driving on it for margin cash to additional allow some our XXXX questions. Elijio maximize flow.Now open we'll up us I'll commentary on and with Then for over is to results. will capital efficiencies turn priority to strategic that Our provide returns to operational it automation continue generate and expansion meaningful

Elijio V. Serrano

you, Thank Brady.

base as equity delayed the drop $XX.X for to the Europe.We the business issuing by with feature in have included business expect chloride $XXX fulfill calcium quarter down much this $XX capital come this impact lithium that through of of from an projects. $X features Also, our further will flow monetize timing the of materially the Arkansas inclusive Arkansas are as inventory continuing excess self-funding from project. available the capital that XXXX draw delayed million that resulting the end and sales our the we fund in stronger We sequentially term plans cash not XXXX. build deepwater of revenue First almost base the cash working to the for the of our will seasonal Northern offset quarters Liquidity week accounts our receivable possible in million. million. requirements increase for and of from million, quarter. calcium nor from of our to our chloride of remain of to in cash for our TETRA to was of year $XX loan peak no expect as included was the we increased cash adjusted of use that cash that operations bromine on And free the draw coming project.We as capital of inventory inventory the activity progressively in investments opinion this in Northern bromine consistent We investments. approximately requirements is free as million will This drawdown be need for our Europe. of intentions the was from of revolver bromine a our capital also Arkansas And million free flow due flow $XX the

would and slightly of by Lithium Compressco acquired $X.X cap includes we to holding loaded also The the Kodak have very that securities. are feature in are of Therefore, draw good now trading quarter, our end mark-to-market acquisition ratio many on on growth we flexibility that without within of the entities marketable Compressco. million putting gains This expanded the and our two as we share volumes for don't XXXX. $XX we weeks liquidity, seeing. execute Kodak Services leverage with with Kodak gains extended to is over million quickly control. CSI these to holdings strengthening cash The the of which interest believe the in loan, pressure recognizing utilizing favorable have that was at addition us converted global over Standard volumes term initiatives.This having maturity [indiscernible] providing into loan attractive are can been billion, to TETRA. January was XXXX. easily In In term Kodak we Gas loan are rates appropriate trading market of reported more shareholdings very $XX a completely with includes our or anticipate bromine the mark-to-market delayed our recently Compressco.The our given price the our CSI and January, net our spread term At that balance prior be X.Xx. and to project CSI case the until this monetize the our our would sheet us refinanced quickly as allow further are first

Let key on quarter from out items believe by our I me to close results. the summarizing first what focus everyone should be

XX.X% mark-to-market Completion margins Fluids EBITDA First, segments performed Products without the of very & well; adjusted losses.

Neptune $XX to above getting a million. our into seasonal second the of going peak the about chloride discussion Mexico. seen from will visibility and Gulf the long especially adjusted we've of catalyst be in business.This Brady projects, CS best quarter we talked are when is in time. quarter EBITDA in the of TETRA level visibility calcium We the This a that increase see second

we year prior our with to message. like expect cash million, said this flow earlier, $XX Second, above I consistent be, fully free

prior have invoice first between flow higher end.As We of previously I'll end free January our $XX and million to data as of was to that at to free flow, the that equity-linked we quarter activity very have towards can we discretion as XX% no and March And than The and any project borrowing the then bromine point, allow remain quarter those. quarter fund everyone marketable spike a revenue that when completely the use confident that a collect around capacity cash mentioned revenue. our securities, of plans security. before cash year.Third, monetize we our free quarter. issue the did expected, a lastly, was us requirements remind we our investments under EBITDA cost Arkansas not generation holdings our Standard expect in second $XX expected deals addressed. we this our fully The quarter work had higher been that cash rebound Lithium. have the by fourth raised to time zinc & Water flow base control. in for the are bromide mid-teens adjusted business concerned Flowback we And the services all this the with selling from our the electrolyte quarter. as I'm last in million cover about first for in the Those to in volumes remains we margins the

discussions it updated work remain to also economics sharing ExxonMobil ExxonMobil the the changed in and us reflect further and to on expected, CapEx JV and give Our closing Nothing project comments. of me with the quarter those.With with as as of bromine continues turn on executing instead that, our tone on for negotiations expected. on with confidence clarity or direction and back let Brady the our initiatives

Brady Murphy

Okay. Elijio. Thanks,

for anticipated The second markets closing, Flowback a strong both with and business segment, anticipate quarter in the strong slower but for we Fluids So a of off for the start rest start which do year for with we're an a & Water segments. operate. outlook our Chemicals remains good in the great we to our Completion & outlook

position million to balance value.With to research strategic up produced The We provides close of have Arkansas further expect strong to drive and our to to solid our open solution, that, questions. water our plus business a free XXXX we'll reuse with for combination these us liquidity.We of cash beneficial advances continue sheet, growth the now investments. opportunity continue shareholder partnerships our strategic flow it fund long-term in and base from anticipate growth generate to $XXX

Operator

Rice. from from the [Operator of comes Martin Your Instructions] Malloy Johnson line first question

Martin Malloy

us may wanted -- some it seems and Could you information going timing by on have where more like discussed maybe slipped you what's completed FID. the being It ask reaching I previously project. lithium morning. provide from about some Good FEED project the of is the to about there? this with maybe

Brady Murphy

they've first plant But two been plus lithium combining single FEED Martin, into of XX% actually -- those site. standalone. a as efforts all, we're you operations The Yeah. or for and both bromine know, done individually minus

integrated type plus/minus announce integrating we clearly, that discussion. work now get FEEDs joint the through the is of get we lithium place an to which an our before savings into FEED study this operations.So type necessarily to would completed we're -- And that the been schedule, FID sides the studies completed but to the us two and although want in can is integrated do to benefits objective a and to doing XX%, our of get plus/minus so next those a decision. allow have mostly will to wouldn't negotiated say and FEED we I venture And realize really XX%, have individual that behind before FEED both we

Martin Malloy

wanted sales my ask then build your have with of question, guess talk Europe associated about Could the collecting would the of But then receivables XQ. at XQ. And you I follow-up Great. the chemical drivers of during working Eos might ramped during that Northern very end some strong. usage Typically, inventory are business to just capital you the XQ? the capital up working about and maybe -- on some

Elijio V. Serrano

question, Good Yeah. Marty.

As seasonal for we in the almost peak ends begin soon inventory as immediately, the Europe, coming peak. seasonal building

in as was inventory build onward through March building soon all and the last start from started inventory year, way So April. over then and we we shipping July it as June

we So the That's second of in then the quarter, we'll the convert into end receivable cash. convert that seasonality into during tail the we the quarter, the and peak second and quarter the into And expect. inventory that receivables. third

$XX over million in free coming we so be putting point expect to strong to that expect year. for flow cash very therefore, quarters, us So we the of the the the

Operator

from Hallead Benchmark. comes from line next Kurt of Your question the

Kurt Hallead

kind desal we my had this a having here the on good on attention something with go, water road think month of other ago, the customer know you in earnings place And about is that release I seems kind Permian But when I'm but now. hopefully around guys talked you -- include dynamic. So got that's the to your like I this of time projects. to wanting of

happening kind about that dynamic maybe out ago. like for bit of what talk you you of even flesh can -- the So were than looks about a talking little is month just scaling this it a more and guys us sooner

Brady Murphy

on the project. I very that's We're have agreed making, Permian, very to pleased financial we the the the conditions Texas the essentially, relates and produced think, water commercial South We're reuse see with for Yeah. -- very of Ultimately, for will that Kurt. This pilot recent introduction as that's else projects a not we think terms us. types beneficial mostly market important as so progress we're biggest positive it as where the run discussions of step. those going for an getting aware place. see to of in full or having We've year.We be, actual first anybody a

see So this we positive.

We of two the conditions of and as are regulatory how imagine, terms And the agencies that the it relates specifications the projects some to used tying as is water. the between the and to can starts legal involve water together. you

where where So that it is But taking see from a had overall, very we done first hoped, we big little positive project. going. more as we're time at than a and the we're had maybe just we

Kurt Hallead

going kind to signed of then it referenced and but then it down on pin going, I something of that get a going another term, taking Permian a so it, about follow-up can maybe mean or that hard to the year wait just -- I year kind to get year just place something take to have to is near it? mentioned the to referenced in contracts in you timeframe. know a -- that. pilot just not the In context get of is you is these Okay. you you're the And Does

Brady Murphy

no, Well, the to year, year will I a have do project. of we of well much is to started, No, equipment the definitely a duration the once pilot pretty ahead pilot no. Permian said starting we start be for that. us but the pilot get we available actual delivering When

technology need. This -- that pilot here We time that produced vacuum we've at been the for center the our some water would have KMX equipment actually we involve membrane essentially now. running research distillation through

So finalized both of no, to to races the terms contractual arrangements weeks -- next legal conditions off I the would and from few there. completed the these and within have expect

Elijio V. Serrano

just where pilot And project sake paid. we Brady, this will the a for clarity, get of is

Brady Murphy

to commercial expecting of And is all Yeah. a -- benefits at Elijio's This we're pilot fully now from. our are point. where point essentially, pilot the are project projects we commercial

Kurt Hallead

color. appreciate got Okay, you. I that

and the lithium maybe you Now in as incremental maybe up, you requirements. as investors, talked -- the again, for flesh that also of having there guys I out think about you when you us talk the share with opportunities. could dynamics just share a And the CapEx as now well potentially expansion well? about [indiscernible] for bromine integrated of the prospect reduced following out facility anything were front on reduced Is

Brady Murphy

end the last -- early first the piece And then optimistic follow for a the did is hopefully, That's targeting. of targeting. our FEED what JV then mentioned, materially before No, and first as the Kurt, FID having report, that, is be of the Definitive the comments, will as third We've CapEx we lithium integrated of standalone as as we finalized in from and would to last in published, the a that finalized. get sharing to will the we same. bromine we that I think of benefits to mentioned well end both that we're next hopefully have the get we the so like lithium sharing our done you OpEx.And message agreements is an -- of FEED now In and do on financial still we're most the that That's I've FEEDs, bromine facility, and in Feasibility we're likely in improved summary June. that, that step want the the process terms bromine we And would quarter. what individual integrated our year published by FEED see as DFS pass of think the we the of year.

Kurt Hallead

commentary more, your right? the you maybe slow, in just then can in single-digit your business, follow I And off year up percentage Okay. one that. growth that expect referenced you if Started water still on but

So meaningful there revenue second lines rate? flat pretty is increase going there's it growth quarter for in where then in single-digit you there remainder bounce from to this of a a is going be potentially year to of or the a dynamic in to and the be the kind steady percentage get that revenue

Elijio V. Serrano

steady we're continuing going completions increase. be site It's the have. we automation relying that it's to and on reduce not We don't drive a or such well rely higher continuing deploy -- to costs, systems to continue on manage significantly margin We technology as to to stronger profitability. also personnel think the the activity to fracking SandStorm to our the at our

Operator

next line Your Daniel the comes Partners. Josh from from question Jayne Energy of

Josh Jayne

those upcycle. Maybe remarks, expectations Could your bit talk see offshore as you've Sea, you multiyear strategic over in more couple ultimate you your Brazil, of about for first, for prepared what and mentioned the expect next prepare investments Gulf Mexico, to North offshore an years? just in a of you

Brady Murphy

calls that to Yeah. percentage our meaningful XXXX capacity, of impact. prior we previous investments, We've that Brazil in by not additional continuing expanded acquired market We've These our capacity. earnings cash significantly. see we've flow in are grow so mentioned actually which our a

plant Completion completion market; very in the Gulf Fluids position -- own higher acquired what same longer the prepare to again growth. We Newpark's as And and Mexico.We the for what have term plant of our in made to we a high those call added we there -- we North acquisition value a Sea. then a density for strong smaller the or have facilities see

the seeing. prior a were bullish cycle fortunately, as we outlook we those market. deepwater we're of period And the investments look growth very we're each anticipated on So that that forward, continued for

I both over to deepwater the rig said the are four to activity. five and XX% XX% another seeing next years in think Evercore Rice growth

Elijio V. Serrano

those into Josh, We in also last Brazil moved moved and capture example. addition And still opportunities projects, some to a that of into bit Brazil we us some some inventory upcoming incremental inventory blending that regions. inventory would the and year in quite I address to of capacity, an add of as allowed have storage we significant the to

Josh Jayne

And then follow there. to of sort up

projects mentioned a QX your operators. How also scope in with prepared the you've you of those? pretty completed Gulf to of couple And compares Mexico a just opportunities opportunities say in remarks, about over more. in about anything there 'XX, last couple would line. little different the in years, of were there of Is early You bit those maybe 'XX talk the of two those

Brady Murphy

Yeah.

mentioned before, completion. -- our above Mexico Gulf materially job Neptune of is your we've completion As typical deepwater normal

projects. Mexico, I think if typical $XX are you've those margin continuing quite of like in Neptune Gulf CS get of outside each seen on when I Those, good we're to type for where North jobs Mexico. smaller, but revenues bit seen numbers Neptune jobs, of million still would the say, we've past, Gulf we've a Sea, of progression job announced with the are somewhat the of profitable us. your we in Neptune deepwater And quite do

Josh Jayne

may. just more, maybe if And one I

prepared ultimately could was but Could as across will only also expand you for expand much margins driving automation. we to remarks a of XXXX, on what about continue you're something move XXXX? your that benefit see in doing? on we One through expansion bit not the this margin talked things how And the based you is more, into

Brady Murphy

manpower our every of working part been business our of now Water on manpower-intensive. Yeah, of can be side around end The as absolutely. to a for XX%, somewhat water a automation levels a XX% believe, strategy. objective Services The the a cost. roll And technology. both Water we few introducing early to of of Flowback We're year expect the above would margins. in a the again, at automation similar reduce and our automation by where part aspect only XX% of fully It's we we've we're of with Water to the XXXX years. enhance Services are great job.But Flowback fairly this now the our And days that, key the margin by be Services XXX% services side still XX% way intensive, technology of up on is our automated Flowback our manpower the side. of bigger is out We on is we to end operations new

Operator

question Patrick from the of Your comes from Ouellette next Stifel. line

Patrick Ouellette

Stephen Pat on Gengaro. for

I you there? that can then we when profile the about Neptune mentioned the assume thinking XQ, the this, can CS margin business, about Industrial quarter? European believe given falls had overall Chemicals think seasonality but how in we second job So in And the

Brady Murphy

job. of that a Neptune we in before This this is have fourth job. Gulf but into are secure necessarily is we and visibility Mexico quarter, Neptune Neptune Neptune job but that North in year, between not of will early scheduled potentially optimism. early But in all a have job, but Gulf not multiple 'XX, XXXX that I'll period, job. planned if for is wells a the of end not a deepwater 'XX, we take 'XX major, and this a do that Mexico time Sea We maybe and type of super the optimistic June

Elijio V. Serrano

second with quarter. in respect of favor items working margins, the our our Patrick, to couple in we've then And got a

the quarter the slowdown. into been monetizing The seeing inventory about be then very to we're expecting and Europe one also structure that year onshore is quarter third Neptune the that services the in U.S. also attractive. what side consistent our we in that quite the quarter we've has second expect EBITDA before the in strong. management being we're the with we fall-through And the with Therefore, first we Sea of second puts we year-end cost high margins last talked Northern on that got Flowback that water Brady margins. building start up North project

Patrick Ouellette

mid-teen right. guess the for in the margin All you water second year out guide margin the the the given I and holds how gave back drop quarter, reasonable do is so landscape it have the half? of playing the think this is rest or on visibility you to that here

Brady Murphy

rest said of we Yeah. we as in We'd slowly that that probably that the we need We depend go build fully through take to would place, year. But of that some to as would improving on on second a but would more the mid-teens. our quarter the that going equipment through go is be we automation expectation expect getting year. is be the --

Operator

the from Brooks of Markets. comes Northland Bobby question next from Your line Capital

Robert Brooks

Completion Fluids kind So States deepwater in business, small especially surprised was decrease completions in really XX quarter. but of the I year-over-year the the International the it, Completion United that given there's in growth by when strong of Fluids piece

there you Completion and XX did So deepwater the quarter just that those 'XX? could discuss would despite first in slowed many help contrast why deepwater completions International to guys year-over-year just how with the completions maybe Fluids you

Elijio V. Serrano

Yeah. the segment that the Remember, looking in includes chloride results if the you're the business. calcium at Bobby, the fluids offshore both XX-Q and that

in seen year not that to continue this a slowdown we and international will oil fluids the offshore be expect strong. And We have gas business.

maybe slower. there's ask Now the question is side no our but indications international that from separately, side the

Robert Brooks

mention Sea a I North growing have that or no the Got then press just the kind on and pipeline going the in given know the highlighted piece bit you I deepwater growing was guys But it. just back Brady of there. that what's Brazil in touched of going And on a And your And market LatAm the Q&A. Mexico piece and kind Suriname. excitement prepared there's the of Gulf specifically to and a Guyana outlook, release. of obviously, remarks is in -- in in

maybe that of the I'm then prospects Sea. just the just looking noted contrast curious you the Latin more maybe hear detail are And with a Gulf in little guys on how Mexico strength in so And North and American have bit that the in to region.

Brady Murphy

Yeah.

in where is our operations. our have So we Brazil services base

to And in seeing, market capacity growing the Brazil. what additional with we're coming that's grow added we've so where

the part our but So the customers. that do Completion opportunities have we anticipated we major biggest growth Fluids currently deepwater see our They we markets. in of our that's fully have sell in place, In are to of own service customers, operations our providers. to Guyana, not do some

which through markets Bakers the where is us around the the Halliburton, And sales operations. of have bases our we don't normal those place, have for so likes own participating be in to Schlumberger who and service and operations will world we in

Robert Brooks

going that seems something getting XXXX commercial to XXXX that's XXXX. more -- wanting in the missing happening and project. Did then first It It that something? I now was the that's confirm seems beneficial a Got it. I sense. And to a it one. Makes like I reuse was over summer just up like running not the event seems right hear like so or

Brady Murphy

Yeah.

construction where think work. and plan. I going be get fixed the contract we a This fixed is civil plan, there's in period we a X-year there some had always of will articulated be to first that time place would

we like So few a time. in not a this operation is can weeks' service deploy

time be [ this running That's months X always to lead of would So X actually get facility our been up plans. there in to a ]. and

plan. part on of financials impact was really our in our the XXXX So terms of never

With project tying of and now first in with in projects the will we've together Permian, these be as the the up that likely, the running we developments, this commercial latest pilot XXXX. see quarter mentioned, most

on we've see for we benefit that never will the in So but financially planned XXXX, 'XX.

Elijio V. Serrano

is barrel much what XX,XXX project And project South commercial on that mentioned talked the The revenue on will Basin the but project, a earlier, also about about Permian this obviously significant generating year, to a pilot one repeat begin day scale we've we a on a smaller scale. in scale. that in Texas

Robert Brooks

it. you're the same beneficial on help Okay. that with I call. of how know discussion second you're and you you I with then I Got mentioned reuse just the that press that reuse. And for discussion much the plural. fourth couldn't into be it kind release, see on too reiterating beneficial operator, of I change on verbiage stated operators, in that.But but know was guys the quarter a kind might sticking this, the reading to

okay. was I wondering just is So --

door you help way? near-term operators dive up how using more yeah, little me maybe So more project -- that bit that Texas and is of Permian South could tie-in kind into a First and the to just the understand there's seems in then guys a opening and it are you be -- technology more -- setting this this to now the to and

Brady Murphy

Yeah.

and are South been that ran Texas. in with projects So Permian successful the published two pilot South now -- that operator pilot ago, with results the we we the years our we've Texas our

deep -- have And relationship we so working operator. a this with pretty

did expanding we've other almost interested are there Texas South projects ago, sure, customers successfully beyond relationship now pilot with feel the to two that -- that every about Permian finding a operator now in that leading-edge Permian. we're years. that a in technology. say I'm this operates got because the future coming as being we're include be, our for But is lot discussed, There years into discussions mentioned, would so solution. will of pilots over the we We and kind But in position are over many reuse that Basin the are that And discussions. we've operators.I are a beneficial tested are have of we commercial we

Operator

from Instructions] the Moore Tim [Operator Hutton. from of Next question line comes EF

Timothy Moore

Just your Brady the first I development in remarks, following plant approved, think could bromine vote you it do that that mentioned up can February? timing. of which prepared on in like If it seems project, half heard or by the be on you the ground the break XXXX. board January be, should I it's you operational think Because probably

Brady Murphy

discussion Definitive those continue the have Feasibility from plant approve have we to doing. project, location. have look Many or FID XX% and Study, to already preparing approval will our before full our the But long things site obviously, greenlight we with we our an are items, completed at of minus we plus Board so Yeah, Right. Board. lead

those maintaining that full on first of anticipating have support and lead we civil get the and items works board we're we that. ahead approval a on to to XXXX, want do even jump are our and eye So long start we FID, of half

Timothy Moore

of the long And lead support those for That's nice ahead great color. to board hear that. items getting

really working a one-off. first Elijio. the should and improve quarter to capital hear was for that nice was It is question Next the

You explained build chloride should that the seasonality inventory calcium unwind.

I'm capital can million us year it be $XX to spending? this you think you project development just rough of range give wondering, would Elijio, this including maybe for year? million a be Could what So $XX expenditures the

Elijio V. Serrano

from could Arkansas, then that that free range CapEx, we cash the So flow $XX million. the to we the in business. believe, to base anything of spend base million business with intend And be cover $XX in we

Timothy Moore

Great. Great.

cash And so rate? or when $XX above base Arkansas business flow commentary, -- you stripping were spending that's sounded the we about clear it about add the like some think -- very to excluding million for out free

Elijio V. Serrano

lead from items. we'll That's long any including fund there, correct. And of then investments, the Arkansas

work on million we're You in the working quarter, around that lithium saw and spent and first we that both design $X for engineering bromine.

Timothy Moore

questions most addressed. lastly, my helpful. since That's And are just of Good. already

Brady pretreatment like pass more my you move by they produced filtration ] have month the you to guess and For next out capacity what the can on but on units than the organic I'm you reduce how duplicates size high the the sounds rig stage topic, you favorite the compound I could you to the additional year? look longer.So desalination are get water. take a second KMX mentioned, now It [ side optimized to -- to you equipment, and membranes those one really KMX do constrained two before protect stuff of as commercial probably equipment around pilots pilots one total or wondering, your or get [indiscernible] the earlier, mentioned and to

Brady Murphy

want our are of -- we that giving other the utilization discussions that the pulled are Yeah. the I our that have. and demands we getting also doing those having samples including from every that to Tim, taking are of we're results.So a where mean and them pilot lot maximize on on contracts discussing subject through have pilots. that's process unit a for we we're units Even of water customers we we day, to some trying pilots,

feel are But that the type we've work the our at will we're now get of is We commercial full we right discussions Texas fleet, moving certainly having. that obviously, engineering our those expanding South pilot done, contracts for commercial. our priority main we're look already because to

Timothy Moore

Great. you'll for the be That's busy thanks really rest year good of I'm [indiscernible]. the sure and elaboration. thanks. Well,

Operator

Stephen. Your question Stephen Gengaro of comes Stifel. from next line the from

Stephen Gengaro

average is the but the pretty a about So I you million. around me. has and big $XX -- you to about talk you two lot Can quarter directly covered a not have comment ask things guess thoughts I'll you I'm just want range that? on for second that consensus any sure this,

Elijio V. Serrano

Yeah.

of be quarters the three North there's out the and Sea. business, project $XX of ramp-up working different think million I the of materially in onshore us in quarter. habit indicated there's costs giving that the a in are both calcium-chloride business made not mentioned that down or year the north coming either the second we've that Northern that Neptune specific -- to in and items So the in favor, guidance we earlier unless propels We've the our there. Europe Those something

Stephen Gengaro

think look both the then a the and to as there for bromine you term you needs How when impact the might fluids -- operational of side. for And business being as they be pertains Is Okay. and -- that? your expectations what takes volumes there that we your likely it little at longer other bromine this one core served Eos are available? get in the are about facility until Are How any ramp. should Can to new your -- XXXX? on point margin?

Brady Murphy

Yeah, Stephen.

So know, decade. we end have as LANXESS the this with long-term of a till progresses that you supply agreement,

supplement pricing. supply to spot market on terms with we pricing also favorable that that. But have We have

bromine stabilized. prices current the have get quite few Chinese ago additional slowing with to market needs. a bromine bit, least Fortunately, economy rapidly pricing has market our from spot the at we're years to reasonable.So been were meet a rising spot They more able

bromine, we considerably ramp Now hope to as market our deepwater and release also report show. Eos that the to we will need continues boost Arkansas progress, starts up as our margins and to will will our DFS

we get additional margin point. benefit, that So an volume that's when an obviously, and additional to

Operator

call our to questions for remarks. concludes There This this would to session. question-and-answer further Murphy like back are closing time. hand Mr. no the I at

Brady Murphy

for your very participation. Thank much you

keep where very go with our and strategic good reiterated progress we've about initiatives continuing as our updated we you we're with Thank we we at will and feel and As to times, XXXX, quantify you very business XXXX. much. as several we through through be

Operator

gentlemen, and Ladies you this for call. today's participation. conference your Thank concludes

You disconnect. may now

TETRA (TTI) 1 May 242024 Q1 Earnings call transcript