TTI - Earnings call transcript Q3 2024 | TETRA Technologies, Inc.

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Operator

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

Julian Higuera

Thank you, Vincent. Good morning, and thank you for joining TETRA's Third Quarter 2024 Results Call. may call Chief Murphy, to to Financial that conference today's and Executive remind be for are earnings. this Serrano, that financial Elijio Officer. I call and forward-looking, speakers including are be guidance, Chief Brady Officer; you or projections, The may statements profitability deemed estimated contain would like factors. analysis and are TETRA statements based These by are on made certain on assumptions several and based the control statements subject beyond of several which and risks many the are uncertainties, of These to company. are

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

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

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

Brady Murphy

and Third looking third to Call. more before some Quarter on initiatives perspectives update Thank you, to quarter call our an Earnings TETRA's provide from quarter on everyone, the XXXX. third over Julian. and with on XXXX to turning morning, summarize welcome financials details discuss results additional some Good I'll forward, views and highlights Elijio our strategic

EBITDA flow, due achieved expectations. for For quarter Fluids Services. completion cash & lower Products of the disruptions the European margins XX.X% the adjusted quarter first third Completion second adjusted well peak million performance of year-on-year came with on seasonal our business, and is as our despite Flowback Mexico our Northern EBITDA We & underlying comparisons. as of consistent hurricane in quarter earnings, $XX.X business chemical activity U.S. our Water customer in XX.X% free headwinds and third highlighted of by to X for and land, Because of considerable Gulf quarter, industrial

down quarter million Third was adjusted revenue EBITDA XXXX, QX both from and XXXX. of $X.X from of $XXX,XXX quarter million $XXX from for was first year-on-year X% but down up QX 'XX, while

helping achieved build was very us revenue good XXXX. wins quarter some for lower, significant momentum that Although we in is the

This is in Fluids a deepwater is clear major second deepwater is deepwater market First award the years fluid Brazil. high-value, the in establishes X award last in us multiyear Brazil award deepwater as and our fluids. fluids bromine-based leader higher-density completion This Completion Brazil. in our major heavy a for multi-well,

well in QX first is this XXXX. The for late award scheduled to start

another for milestone will reuse. in by record third record a important over establishing that the water additional third this With an again Another recent wins, quarter quarter the fourth for change frac for all-time record eclipsed step customer recycling be is produced QX. quarter was

wells. time, avoid drifted has recycling come. activity of disposal for water more down adoption continue more for many overpressuring increase will rapid completion the reuse past U.S. of the increasing years is Although XX and months, At produced to same frac driving events to for to are seismicity

the in third success of recognition was highlight quarter investments produced support XX after discuss side the arguably its differentiation the the business the oil trailing Our study technology world, pricing the into the $XXX temperatures, million. a Services key is stands as a water extreme produced deepwater months beneficial with months and developing for in which market on of focus bit part a our research Kimberlite lower Completion responsiveness, adjusted Mexico paying of million "TETRA as pressures technical and the positioned service, our to the XX off that well validated even Kimberlite to and EBITDA generated with has the segment very cash market." from At availability, report. Coming conducted technically production and the free adjusted leader. Technologies reuse, the and for Fluids by of and performance Gulf gas by We $XX out total the over million study Kimberlite, back TETRA future investing solutions our TETRA aligning flow, in the in Gulf that of and come benefit, very Mexico. been to excels in to Arkansas. The I'll the will trailing well third is financials. a strategy end create tertiary, water wells was challenging quarter, leading later. A high concluded $X company, of As in most strategy and challenging

million, is Our current to project. liquidity inclusive Arkansas fund $XXX the $XX bromine delayed million future of our draw approximately

Completion TETRA gains the of completion is for investments, continues quarter, fluids to XX.X%, its up introduction XXX was that a the losses announced adjusted Products our EBITDA is points performance. the basis or was margin higher-value driven by In segment what very very The results. favorable environments new in available we downhole a third to in margin, strong on today. a high-temperature third industrial step-change improvement Fluids quarter chemicals Now increase that compared and well from corrosion sales & turning X, mix excluding QX. market of the business financial inhibitor unrealized

premium blend further will Neptune. and as our expand X fluids and to current completion our product for service market for a TETRA a including segment, share as wells CS high-temperature with We this market

fluids to as We a are TETRA also evaluating X corrosion other noncompletion potentially standalone market inhibitor. market

XXXX. fourth an The in our X-well hurricanes deepwater Neptune early Completion comparable the to on third is quarter a we in early completion third be announced to has down the for project Services, schedules. and slightly had ahead CS the Looking & as customers' fourth scheduled Fluids will that from previously October quarter quarter now impact start

EBITDA & set. third Water activity, Energy to margins XX.X%, segment. of U.S. is decline cost, we today quarter to goals allows technology but to some -- the for a but pricing new close get more the adjusted of on with business us the segment, better completion-related this the and highest cost our aggressive with or we our has which with margins, is consistent countering that crew down The which frac lower pressure Flowback automation over according XX% For onshore past revenues in are automation labor deployment Rystad have that similar lowered U.S. that much with months, were development in XX

aspects for for such Water safety, agriculture of a service and enhancing water strategy beneficial multipronged efficiency and as industrial automating the bridging approach, remains Services with Our all aimed reuse, applications. but to a recycling goal at & Flowback us of

only BlueLinx of environment, While automation, been rolling exceptional, Auto automated significant utilization in automated and in our results Even customer are progress today activity feedback which we're fleet. has out sandstorms, Drillout. transfer we've SandStorm made The the systems for been and of early and we early the deploying XX% is very this water for maximum have near stages positive. still in lower

much goal recycling flows to linked the This with to the good a returns. With in terms of XX% and will good progress first Basin. reuse our regards which another market us reuse, advancing in XXXX. field beneficial commercial be larger pilot growing upgrading we're Permian be bridge to beneficial will our with desalination recycling longer-term cash reuse, strategy, frac for higher business, water the We making for for provide project will

addition X include Appalachia Mid-Continent major West for customer's have second currently pilot Permian agreements in a in addition, Texas other unit South Texas discussions projects are center processing very and to major and X Basin regions. with additional with In with level. are to We're a water that We our customers a R&D at and we with nondisclosure high-quality discussions operators. in customers

to initiatives. on our Moving strategic

materially for In electrolyte. is long-duration We quarter, energy electrolyte. the continue order with qualified, very confident manufactured, of electrolyte. full third a production first dialog requiring volumes, relationship the materially We're higher delivered collaborative and Energy their of our Eos the storage verge and Eos higher on close Eos we and

Memphis our demand. blending West increased the also meet planned manufacturing and EOS have capacity in We to

ramps is adding This volumes increase and the PureFlow of they confidence over require the this electrolyte our ship brings and materially will a the year. Eos in will to automated very XXXX. lineup, minimal As year for volumes we strong

a costs and and EBITDA volumes million. $XXX to result from side, a CapEx bromine long-duration of sales we compelling in million $XXX higher the Arkansas $XX million, needs, The of the EBITDA annual mix Report increase of production yielding is investment lower On from vertical of adjusted the both the deepwater integration. projects with Feasibility an XXXX highlighting a battery Definitive adjusted quarter, earlier increase economics, completed very S-K

keeping can we X.X net free fund to confident cash fund project liquidity flow are stages. decision ratio, the and while in from below we a we evaluating project While are the leverage current

considerable stage realized. still will X, investment funded We're plant the to with is a CapEx would needs published evaluating Stage first our also be reduction DFS while million bridge discussions capacity bromine initial until multiple bromine revised in in the XX% production of from target suppliers $XXX the The and and for supply volumes. CapEx of bromine the full this

projects Mexico, PureFlow focus meantime, define we lithium investment results, on to the shipments that our results, immediately can the then desalination electrolyte from additional to on questions. financial studies to we'll that we're continuing over with work and all the Evergreen levels impact especially Eos Long our our commercial partner for we TETRA project in further CS I'll lithium that, it near-term and U.S., For prices project, to unit water on the to support remain define lithium and Energy, our economics. With and But opportunity pilots. fluids in commentary we're Gulf our Elijio required turn increased the rebound initiatives engineering the term, engineering provide focused up it economics. prioritizing TETRA our a supply, that the will believe completing on advancing in open strategic to project Neptune of and some

Elijio V. Serrano

and Brady, you, good everybody. Thank morning,

in We XXXX award these under segment making the calcium many XXXX. projects is first Ahead second Neptune Mexico allow peak very in half had to add with year, and deepwater wells blending first we the automation be We that we've the we've a Eos operators. the in to half purchases, previously and expand the This subsequent for strong Mexico, bromine capacity Gulf the fourth is visibility predictable quarter, believe what U.K., of opportunities to in working Brazil market first discussion building opportunities. us the actions begin expected first year. open our a is has These years, chloride Neptune most projects, in capitalize to and related storage the sourcing monetized of Products us will additional steady will we quarters. are deliver expect and that of to Brazil, announced be of progress and the in quarter, will Fluids that and X plus in capital Completion volumes that backlog taken on the additional their projects believe industrial likely the the for the very we of preparing these Gulf is business plus on inventory quarter next in be next to but with X & Neptune in seasonal and the its on in based of are other the wells to

our industrial expanded sector. In for Finland, capacity previously addition, recall additional that for calcium in we the chloride of production volumes Kokkola,

quarter West And fourth -- the to with EBITDA, required Our PureFlow first a revenue, and total the industrial source Gulf certain represents volumes very of the The $XXX the Mexico through recently EBITDA, is and when for capacity business steady fourth uncertainty for first solid in to this months. our expected adjusted the EBITDA mirror oil also the is below third margins of or that Memphis CS electrolyte was and produce per calcium markets. flow to demands. is Neptune million expanded of XX% came And quarter into project chlorides in of cash the business the to full just in hurricanes that XX%. the past as approximately us expected pushed gas approximately revenue but quarter we and our revenue, due quarter few chloride meet there in year, of we've Eos'

on & industrial quarter electrolyte the first Water should in a plus expect then in Gulf benefit Mexico Neptune ramp-up We the to Eos, the of second Services. another material European this the quarter for us. Shifting calcium very segment the the from of shipments award Flowback in Brazil second quarter to back of strong chloride step-up and projects the be the the seasonality,

EPF quarter of down a the sale. and revenues the to slowdown without fourth in fourth be quarter We in expect expansion quarter third anticipation

margins mentioned, frac Brady remain efforts reuse by Flowback we & water for that volumes as increasing However, in expect the to are Services mid-teens, for and we produced fourth of implementing. automation the quarter driven Water recycled

As operators adjusted of the water operations of to that EBITDA in of treatment third transfer Overall, water profile the gain to us and margins produced from earnings and produced XXXX allows through expected below value segment. we continue plus be modestly our in more very cost award, risk solid the technology, will projecting. spills, be automation won't us in unlike quarter a fourth the EPF what XXXX, included frac Argentina. benefit in their the And the might utilize of recycling, increases this strong for Eos, deepwater ramp-up stronger while focus controls, sale expecting position be to shipments coming guidance, expected next that believe in the Brazil providing step-up others the and or year Neptune, industry on we quarter

including flow free lithium from $XX.X reimbursements by Arkansas the million was capital expenditures of of adjusted cash $X.X partner. our quarter impact for operations and of the Third bromine continuing net projects, million,

as capital Northern working third the we materially the quarter quarter. came the in expected, receivables As Europe in down monetized during

on and business immediate cash requirements the work the funding in to year. from continue We flow both base for Arkansas, this next capital

share upon we're costs incurring. partner to Evergreen continue unit agreed by our their of We for reimbursed be

remains to to investments. ratio and securities keep any leverage net objective not fund equity-linked our low Arkansas Our our bromine issue

space diluting out TETRA We will or shareholders. overlevering instead the before project before

holding the are third be end of the gains was quickly our The Gas net marketable given In Lithium trading cash slightly Kodiak these holdings converted leverage X addition can to of the $XX includes [Technical over of Difficulty] we This million our the in Services. At also securities. ratio liquidity, are and we activity recognizing Standard into mark-to-market entities. X.Xx. quarter,

September Our the to XX% ended XX cost and XX.X% for and XX%. return capital on is months capital XX of compares weighted average between trailing of our

on. close focus summarizing believe that everyone Let key should out I terms the me by what

well, remain improve and First, low for XX% projects the with Completion margins going our & Products when the Fluids We're quarter kick expect in. high XX.X% margins quite range this EBITDA segment segment Neptune into we adjusted gains. mark-to-market fourth performed XX% to in without the of the range when to

flow We between fund year. the any into equity-linked issue plans and in many securities. best have no capacity to backlog going projects years free our borrowing our next We we can remain cash that bromine and that have confident

at last selling can As Lithium. we raised have monetize everyone I Standard discretion in I'll marketable securities that. this, as our did million we we $XX prior the completely that holdings of to when time around by million remind mentioned, $XX we our

in for quarter. quarter, the a produced to a continue mentioned. the our down all-time market, closing the throughout onshore slower anticipated U.S. Additionally, maintain we in series including return headcount, margins reduction in result, reduction SG&A Flowback automation third & to we remain we even U.S. back a all quarter as as is for initiated volume slightly Brady cost mid-teens set the fourth the Brady right-size Water to we'll over and continue water that this and third a that our technology in operations. I'll deploy X% will Services It across to actions, of activity And comments. in

Brady Murphy

our in thank expectations. that In despite quarter with line financial Elijio. we you, headwinds was third performance closing, discussed, Well, the our

our and with for and from the to been & strategic CS and share deepwater record focusing market on bridging initiatives Services we've and some confidence getting beneficial steady and questions. around for increased giving produced a meaningful in XXXX Water more margins; enhanced open XXXX Neptune; we'll Brazil; market that to water all electrolyte our recovering in ramp-up call a time, recycling the efficiency outlook wins, beyond, working and automating treatment that, us clarity we're more us including volumes, beyond. With contribution Looking reuse; sales, for Flowback

Operator

question with Stephen from first Your Instructions] [Operator Gengaro comes Stifel.

Stephen Gengaro

with choose it's gives as the 'XX? think guess XXXX. conversations we I they I as they're for to just of incremental that having do which who maybe of Are completion from I me. on X the Elijio the are deepwater it we as confidence? a And something about about else Neptune So alluded guess is, start phase, stand back think matter you're that the Where and and I CS these projects these projects some would what perspective? conversations half know drilling Or you things as far is projects in underway, in a

Brady Murphy

Yes.

we've So that of a been Neptune of some of And tracking are we've talked We've pipeline before we've lot projects the that pipeline And for CS time. forward. first were as about first of in pause, seen award projects Neptune a put the our hold. major out simultaneous Stephen, the starting award projects the X-well X-well with those on previously, that in to COVID, super first ever came we we've additional start on -- will pipeline. project move CS quarter. There announced obviously, mentioned

more drilling cautiously projects I say optimistic are we I would again, XXXX. that Neptune not think has projects the can started. already But these in we're secure that

really will timing there's we competing offering the feel we So of regard orders. positioned. Neptune price want not Neptune. case the is have really be the that for those because we unique today, a solution in another range Neptune in really in a selected not that of to be of opportunities committing it's we'll about to good secure pipeline careful about when But And that,

timelines their well. technologies with So in other lot they're more that putting really the of it's compatibility and a of project

Stephen Gengaro

helpful. No, Okay. that's

Water at see we're XXXX agree & business about is And around you question current as high you U.S. business. Would think flat I with do we other a consistently from the scenario? under had to that Flowback levels. in hearing pretty that The was that growth just scenario? expect level, activity And

Brady Murphy

Yes.

I XXXX. full for think for days year predicting the early

get anticipating we a But flattish typical gained as more where than point, We've recycling But growth. not QX year. think a capital we next of at I growth SandStorm. our in as the margins fairly we lot investing think margin quarter focused seasonality start up share technology if the our automation we're really on investing bring from QX. continue And well in to up those at efforts but will up. additional we the year. Stephen, are growth top year, are for of end to to our the flattish is with margins to slowdown point anticipation back this that's this our again, we 'XX produced the our continuing end great. we on fourth are market But go enhancement tremendous but of that, water through through at We increase as we're

Operator

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

Kurt Hallead

some Brady, in apt you know they the NDAs is in themselves. need context through, desalinization, go the X of try water guys like about negotiation. So then to what, and But what Can more us encouraging And timing? how for and just you through dynamics very the looks more at you let walk those what for, got, now and now are in level you factor how the to E&P X the another prospects I say, numbers speak emerging the of growth to on opportunities. let's you think process

Brady Murphy

Yes.

interesting It's a a market. market. is this very brand-new So

with of that Texas permitting, we're years. been it's somewhat emerge, very NDA the that that got operators and still go meantime, Permian, very that But X emerging, close we've collaboratively to opened one our with. look to up had we've shifted and due first already said, on to the major announced way we're hold forward. that South technology we a pilot done and We So with years customers now dialog under to as more put having X one field moving of at X customer were project [indiscernible] we see We've couple negotiating the in trial different willing NDAs Kurt. we've But working for the a it ago. all, with,

we're then as customers. produced capable our been pilot most So The asked are very operations us and it. once take and opportunity and these or commercial center, research they those the analyze discussions. different. they're Permian several water, we will less every with pilot the the by field to right will Again, then is, And of of are -- stages, water far, give pilot samples more we And it, we is that's complex at what operations the they doing sample constituents at specifications all move amount an in just see their where water we've center. successful And our because organics that those of the into to we've through show we waters that research operations run process. been now with of them treatment of

And as commercial so, multiple announced. see into hopefully, scale as more up. we then operations go through type pilots XXXX, I we'll And pilots field start come see think to -- opportunities XXXX, plant we announced you'll get

Kurt Hallead

about what that how the might Texas have take? do refresher Just context? long get you How sense Commission. process have -- is then E&Ps that from And any on long here. permits to Railroad the the

Brady Murphy

don't possession a We're charging that take E&P's to It own them. the water. fee We water. process water the technology water. Yes. for of They the is servicing and

getting put environment, for cetera, et defining the with Commission moving on That responsible are able applications, the permits into to into into Railroad the the is farming, is Commission, produced those although process they et water So specifications forward. Railroad to industrial ground, obviously, the cetera. be

to how motivated But fast with I think Kurt. this our to to customers' able we'll pretty highly is the fast be we that, get will on moving. dependent Railroad are grow obviously approve they permits how Commission

don't process, lot of you can a tell but momentum. I control that we seeing So we're

Kurt Hallead

Elijio. for maybe And

guess the $XXX pretty you then, math about the tell from basically part business, Looks that's chemicals coming I into the of with year, your point a that part year. I in growth be to then gave just of and going us reference Neptune terms going oil think, next would Brazil million. the simple consistent Elijio us hold all about project. would $XXX industrial a and gas completion fluids like million

know as you've terms you in range somewhat to these specifics but this Neptune mean Brazil in hesitant there what projects to can could of growth? I provide revenue past, potentially any So is on been provide the us and

Elijio V. Serrano

between The Neptune to hard smaller the projects projects that indicated XXXX. margins. fluid are on will it margins projects did projects the mention Neptune because Exxon fluid really But long Mexico XXXX Exxon is entire are into smaller when We've the segment EBITDA. meaningful Kurt, projects, these the Gulf predict, depends even when in and in impact saw EBITDA we well slightly And and the a low-XX% lost is pushes with did do it And are very well. that I the the how much how strong. than of what we we have on

Kurt Hallead

Okay. And project Neptune not right? then a is though, the Brazil project

Brady Murphy

one bromine heavy -- solutions. but a project, not brine our of that's is it Kurt, brine Neptune No,

project similar it's Gulf deepwater that non-Neptune. is of So to Mexico a

So for us. material it's

Kurt Hallead

And you dynamic. million Okay. bromine. for referenced million. of then should staging think If total maybe investment, $XX I was Brady, out the referenced bromine of type you total, to the follow-up, draw of staging about we I you being do How the potentially $XX was the earmarked it? $XXX like delayed know had but think the million And mentioned how think, about you expansion that? the just

Brady Murphy

Yes.

Kurt. prepared our look that. So yet still X the to what on evaluation say like, financials doing we're We're will not Stage

targeting be lower a bromine will We initial production.

is CapEx call, CapEx We're just what's of probably As phase. in what publicize reduction be first mentioned the be bromine I ready the target. pretty DFS not in of the savings will to significant. XX%, But will that order yet we the the for published in on think the XX%

Operator

comes Next question from with Martin Rice. Johnson Malloy

Martin Malloy

on question ask bromine well. First as is I to project the wanted

to FID case? offtake the think, You of about the quarter, then And Is project. the possibility that the project there this with wanted this for find derisk in project, fourth also out, I I still to some? agreements is had previously talked

Brady Murphy

possibility have a Martin, deepwater situation agreements. of and anticipate on now years our We've until we needs capacity agreements, consumed. our what too the is but many the offtake later additional we're There of won't plant offtake reality well to is when got us, the Eos, we for right between take pretty from demand demand fully utilizing additional

bridge I at from the stage the fact, mentioned, thinking, think, way initially suppliers as we In additional we likely this lower highly get may the to to opposed with would execute that full bromine out FID as if million. and supply we supplement bromine $XXX we're do say, supply to approach we're this will point, capital we staged the lower the it's the on with somewhat I plant. negotiating

potentially happen, So see in full million it's you'll the think fourth QX, not and $XXX quarter FID'ing the I QX. will likely approvals some in staged in announcement probably very but of a approach, not if

Elijio V. Serrano

and investing lot got secure expended the to studies. a we've add to taking in also land, make to to that of date engineering and we've to that to advance the access been amounts power, land, steps I'll Marty, we've clear the And sure

to make the been our So required in that for to bring it's not as some sure the take time online FID we to project meet of waiting initiatives if we've demands.

Martin Malloy

I wanted to you how technology to And just discuss that advantages second the you that are technology? a are your maybe your Great. the with Could Okay. ask then just about What desalinization out there? compares question. moment technology. others take to see

Brady Murphy

I it. don't since you ask, address to weeds But try Hope far this. get into I'll Sure. in the too

of it So the stages process. X think in of

run that very services it current water to working constituents us. today all dissolved treat reverse low of membrane the second experience ocean the technologies. the the is run through that through of to typically, second It's harmful produced total us of of to take on the stage stage different we stage that. we the total is a we water, But unit, solids, out stage types that Hyrec produced that osmotically it, a of technologies to that in will a world. that the over it's first of dissolved X offer to to receive run technology lot a water water, TDS, If are low is The us to allow time to the type pretreating allows if -- again, organics, desalinate long water an proprietary and a gained we've lot for that of And produced both first very osmosis. And something process. from we've been used assisted this our recycling through is of the that which it's all

that just to It's levels technology. allow not no weeks run of work or allow membranes technology couple to is every membranes it to proven fouling the a it's So the through one of that to so. through water economics the changing produced the pretreating

if is those. And again, will in proprietary higher minerals. posttreatment it's certain I of the meet Railroad constituents KMX what certain will will we the a and we've of and of type a technology. phase applications. that process will solids dissolved high a levels final clarify, oil salts able with proprietary proprietary gas, of it's salts that typically higher that total run much Commission permitting or that unit. the allows in both if vacuum customer process. for And related really technology And the So pleased by of membrane That's It's of different to levels ultimately gas then the to for treatment type been got to oil are TETRA. water, technologies and third really And be distillation relationships on technologies to the proprietary process specifications of through another water. those that then give with the us another should out thresholds produced TETRA. prove desalinate to the and specific Both We've water depend the for

So then our middle the TETRA proprietary X membrane X those without and are and on side. the too stages, in the technologies hope X the I pre- describes detail. posttreatment that much it

Operator

Next of Markets. Bobby question line Northland Brooks comes Capital the from with

Robert Brooks

spot both lithium unique the you're discuss your to expectations and you Evergreen. Monday. outsider you going from are few because So a AOGC also just your for perspective? a are for to maybe at slated royalties really in receiving important And guys ruling next be And from given So the you take an Standard then of producers is on of right? ruling deal, to royalties could acreage note guys minutes Lithium lithium anything

Brady Murphy

Yes.

this November a any and that and the industry, say, technology. been royalty investment the in working Arkansas again, predict type state the citizens for We, commitments others think we I can't motivated set. for and most until of collaborating going within of the the get the any believe, that the that will residents date will optimal structure forward. is in both for really I this say X, but benefit I and year, what move is royalty go, the of how support that I officials have royalty preparing outcome that place I to think seeing you're think set, royalty will until hearing. I justifiable this is would set projects investment very don't hearing to are But so be is in lithium So with very can

is So it's project royalty a very economics do of to until difficult your that set. obviously

I you we're the a and moving of fourth, the this motivated were outcome, was I and Bobby, for question? hopeful. asking the about know do can't to approved I quite is but... So expectations forward, state your very get there part our I'm know but second predict sorry,

Robert Brooks

Yes. hit but No, I as there, follow-up. you just think maybe it a

it you as to the to as point just then your producers any ruling right? were And asking. way perspective. a that should yourself well just as happen documents maybe landowners as the insights And right? discuss crystal the nobody what ball, maybe I maybe but was well, XX, them. get, guys why information or other hoping unique have September those are that to you more versus supposed -- what as But And do in -- -- make you're your that some submitted AOGC of the were landowners sent highlights has so guys that make the go like to because So what to point and

Brady Murphy

our about those say negotiated with thing Lithium. royalties, already set. option our Yes. will Lithium Standard in are were Those Standard The only I agreement

is this be will So information, getting royalty of Standard lithium TETRA any -- Lithium public X.X% that production TETRA achieves. and commercial off

we the would can't to investment, submitted, that terms where the see really, more documents outcome. have predict royalty X.X% how the we were it's the than But with the again, justify that Lithium. think play that should I be things of in say, to Standard is that in capital less So which OpEx, put need I around optimum be, goes. we'll

Elijio V. Serrano

And one, essentially Bobby, I'll Number Department of national a Norway, them. Equinor, Standard the of then, Lithium second, that oil add up grant received up. Energy. quarter, And favor that in that production very Lithium encouraging they bring couple the of Standard company, teamed the third a items happened from their of with are in

TETRA those So that And encouraging is wells a the points data perspective can to drills from lithium Lithium very incremental also, part in to key I the Standard produce future. that Standard us, remember Lithium X the feed the think to source gives the our the and which oil us bromine in lithium. the battery get storage then an they're incremental out to market. needs bringing gas out get default, and of brine to By is bromine,

Robert Brooks

and for Yes. already clarity have you set. guys Appreciate royalties Thank that on you that reminder that.

going I'm question. the So jump next to to

have remarks, prepared that extensively going factors pretty how about and release term up suppliers yesterday's to why in are to community. think production guys bromine talking you understood guys' mentioned then near now Evergreen expand volumes. to supply that's you're by those to producing the getting supply, underpinning more in prior investor well and You right? And the bromine guys you the And I need talked your

why give you the but now I'm the to haven't changed, outlook to on just like happening it factors that's out versus guys what ago? to seems is, So maybe could Because some X underpinning hear secure now are supply. color more you us as months going curious

Brady Murphy

Yes.

have secure for market we to as how with next some think I bromine, on we have want since our stage the changed at flexibility in is to more additional Arkansas. say, side, for demand to to on just supply. supply that have over bromine. we on we couple of the has right make think sure That there are us be started. investment the the options probably I the we're I evolves how as been in we we But able years. given bromine market would that gives capital it where some bullish we as flexibility relates look some us way of terms now, current the Nothing

to And somewhat take attractive us so, look at. that's a for

We haven't concluded anything yet.

yet. We look haven't we published what the project all evaluate Stage like X decisions. bromine of any But those final to before want investment-type obviously, we make of would the

Robert Brooks

as let's it changing outlook. the still good some makes as a doing was nothing so It's That X manner, we're the ago, really but this remains Outlook with Okay. ourselves staged give hey, months sense. getting up, strong it's, just and now maybe flexibility. Evergreen in

Brady Murphy

exactly Yes. That's right.

Robert Brooks

then maybe one me. just And for last

then is near deepwater if to result expansion guys this you job this that guys jobs by project. And winning on of capacity give just if readthrough guys already think there your deepwater Brazil. you in some And mentioned Brazil job of lot you I -- happening us, other a help expanded win can could that guess Obviously, you you So, a region. stuff Do you in countries going this right? then because it? now maybe serve other capacity is maybe off XXXX XX%, you winning the opens remind

Brady Murphy

Yes.

of the trends we Gulf type been see when first to We ago see the of high-temperature, lot in Brazil, activity, one started some secured, have the completion wells higher of of the years, deepwater in a the market markets of these higher in we heavier of in investment the terms had of world. similar some the largest, in anticipated But Again, not several brines pressure high-pressure deepwater that years the necessarily Mexico. is density requiring deepwater largest some moving towards not a if Brazil of Our couple traditional fluids. the we contract. rig actual

made in we moving investment anticipation capacity way. so, the market in that of that additional And

So obviously, that that pleased very out way. we're worked it's

the yes, to markets. completion we because more technology to shift really opportunity fluids where Brazil, value see So that's especially and continuing its if in there's TETRA brines heavy the brings

Operator

Your next Daniel with Jayne question Josh Energy comes Partners. from

Joshua Jayne

First automation & Services. question is Water across just Flowback technology around

driving the wanting you to urgency speak could automation, guys margins customers to, that you going is this urgency I of on sense be year. of into You of to behind going front-end to how increase sense further the move for next factors behalf forward. one of if your outlook wondered alluded just their on can towards and here your

Brady Murphy

Yes.

of very automation. So customer good we're seeing acceptance

of you're has oftentimes, zone, the red are been segment. the particular under And defining of factors labor-intensive of this putting traditionally Flowback businesses People a people in fairly our et One Water cost pressure, operation. & highest also costs wellheads cetera. the

in a this. there's critical factor involved So safety

we're the to were that where be get And address margins the the we us appealing that so, putting while the customer in back place, we on get efficiency a equipment for as to order to customers, returns into realized very as we would safety and well that. seeing wanted that,

these field. But move in So with well faster pretty But on indication maximum others. the plan today. that as that. we see right sold consider that or types now we'll year for technology. have out, if wanting again, XX% some customers staged we that's customers will to we're equipment But we accelerating until the the of taking demand have utilization even is automation an than But a things money our probably per obviously, do entire some we approach. automate of upfront we We'll that, some flowback some from put are

Joshua Jayne

some addressable contributing? think study you standalone would just then maybe around about inhibitor, And just you XXXX. interesting hoping color. what to total that ultimately was gas week total a And X be little expect framework last talk addressable then the bit for when could was the my was talk I the corrosion TETRA give what market done you a as Could pretty in just some in interesting or be about would thought for could about follow-up, TETRA cost we market I start and oil I for more. release corrosion talked when X back

Brady Murphy

Yes. fluids. completion blended with our we'll it marketing Right be now,

markets. for And think And us that a year. so, that's wells price, so allow in I to next high-temperature to high is again, XXX going XXX think, we premium get wells to Rystad temperature or would estimating, qualify

any put that will to in yet At market we'll to of We're to days announce dollar on in for to us. in prepared future. pretty opportunity able early the what this numbers but so, we're not us. mean hope And still color a be point it, that's time, on commercializing more that the sizable

as temperature, the in the TETRA X As X reduces is market. to is the value attractive high part TETRA is into really, XXX outside gas really corrosion degrees compared again, of market, what where above far It play. oil else significantly and of the comes

we'll benefit not one have what markets to but them. other we that type X. There be quantify think we're we at, that of TETRA temperature gas. value from environment of we're of prepared that that is oil would find markets to where be able gas So to are yet to and looking have oil wells Obviously, outside and

Operator

Next question EF comes from Jesse Sobelson Hutton. with

Jesse Sobelson

elaborate And quarter. was wondering, influence with all to curious Really about business sales just the sounds I'm meet like management how talk year. margins I if margin to anticipated solution anticipated year. the electrolyte capacity next could you this you demand you're It could your next the Eos PureFlow impressive Energy. these and processing set are more with on

Elijio V. Serrano

Eos. Then Eos selling them took we electrolyte the for of ultra-high of started last just a bromide volumes. a purity capacity that have demands much year And blend automation higher we on historically that Eos's if started full instead West gas purity an year. to process and and to set their our to we they higher would PureFlow, so to the in zinc complete sector, Memphis level So those billion, and we and that the initial small meet And with shipping engagement of the electrolyte. added blending instead that doing earlier arrangement them, and refined oil complete and selling buying to an from market that that we're as them in scale used in zinc couple it in you we it parts it Jesse, per now take recall, this with then means we our last that PureFlow months, We announced open which products the bromide was level. blending take we're

or prepared to the with electrolyte complete fully this of once automated PureFlow at point, running meet demands a and either So we're line. up their they're

Jesse Sobelson

And then on the front margin the business? for

Elijio V. Serrano

to any the for that and margins on comment what it's but with customer, assume gas sector. we're going be oil in seeing specific consistent won't We Yes.

Operator

Next from Weston with Management. Dan comes question WestCap

Dan Weston

your you a all mentioned think, you national that quarter, SandStorm progress. Middle I deploying into on oil the for customer. major Last were first East Congrats the

when If final think give be? progressing? a that guidance you you trial can would little reasonable a there do timeframe on decision And is how for a investment

Brady Murphy

a with the local to we to actually We've that. SandStorm SandStorm we announced think reached agreement meet Middle make We've agreement had we have requirements major had I place. completed in in quarter. Dan, and the that an East oil actually some the national modifications company, We're delivering to our market. this

And XXXX. so timing. the the little Hope that a on actual trials of clarifies the quarter until first in bit the won't place take field

Dan Weston

relating lastly, Could missed Yes, status have a Elijio's I for give appreciated. would Lithium Thanks remind DOE. to be update formal just DOE a you And us, then made the And has funding? TETRA any can for that. application clarifying Standard you and that. comments to relating may

Elijio V. Serrano

on, I to can on advantage application available are that if that take in process. comment the focus not. ] won't that on hope to all on production We to or there. want side applications in an bromine we've battery don't progress, for we of or [ try we'll communicate get that us qualifies calls to success there is side, rather future the than work out we Yes. that We communicate or either the try lithium system, that. assume whether that's submitted anything the But

Dan Weston

get No, Yes. it. I

Operator

concludes session. to question-and-answer back Mr. I the conference Instructions] closing over Murphy for to remarks. like our would turn [Operator This any

Brady Murphy

everyone. your all interest in thank great appreciate Well, Really TETRA the and questions. you,

For conclude call very you we'll Thank now, our today. much.

Operator

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

disconnect. now You may

TETRA (TTI) 30 Oct 242024 Q3 Earnings call transcript