PROPETRO® Client to confirm use of this image again Q3 2022 Investor Presentation November 1, 2022 Forward-Looking Statements Except for historical information contained herein, the statements and information in this presentation, including the oral statements made in connection herewith, are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future eve ...

Cautionary Note Regarding Forward-Looking Statements [Forward-Looking Statements Disclosure](index=3&type=section&id=Forward-Looking%20Statements%20Disclosure) This section outlines the company's forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially - All statements in this Form 10-Q that are not historical facts are considered **forward-looking statements**, indicating expectations or forecasts of future events[9](index=9&type=chunk) - Key factors that could cause actual results to differ materially include the severity and duration of current world health events and armed conflicts, actions by **OPEC+**, and actions by the **Biden Administration** impacting oil and natural gas production[10](index=10&type=chunk) - Other significant risks include changes in general economic and geopolitical conditions, laws/regulations, cost increases and **supply chain constraints**, and technological changes[10](index=10&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, and the company disclaims any duty to update or revise them, except as required by applicable securities laws[12](index=12&type=chunk) PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and detailed notes for the periods ended June 30, 2022, and December 31, 2021 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities slightly increased from December 31, 2021, to June 30, 2022, while shareholders' equity experienced a minor decrease | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--- | :--- | :--- | | Total Assets | $1,067,623 | $1,061,236 | | Total Liabilities | $250,587 | $234,934 | | Total Shareholders' Equity | $817,036 | $826,302 | - **Cash and cash equivalents decreased** from $111.9 million at December 31, 2021, to **$69.8 million** at June 30, 2022[16](index=16&type=chunk) - **Accounts receivable (net) increased** from $128.1 million to **$182.0 million**, indicating higher sales or slower collections[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company's net loss widened significantly for the three and six months ended June 30, 2022, compared to the prior year, due to a large impairment expense | Metric (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $315,083 | $216,887 | $597,763 | $378,345 | | Net Income (Loss) | $(32,860) | $(8,511) | $(21,043) | $(28,886) | | Basic EPS | $(0.32) | $(0.08) | $(0.20) | $(0.28) | - Revenue increased significantly, with a **45.3% increase** for the three months and a **58.0% increase** for the six months ended June 30, 2022, compared to 2021[18](index=18&type=chunk) - An **impairment expense of $57.5 million** was recorded for the three and six months ended June 30, 2022, contributing to the increased net loss[18](index=18&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity decreased from $826.3 million to $817.0 million during the first six months of 2022, driven by the net loss incurred | Metric (in thousands) | January 1, 2022 | June 30, 2022 | | :--- | :--- | :--- | | Total Shareholders' Equity | $826,302 | $817,036 | | Accumulated Deficit | $(18,630) | $(39,673) | - **Stock-based compensation cost** contributed **$14.8 million** to additional paid-in capital during the six months ended June 30, 2022[20](index=20&type=chunk) - The **accumulated deficit increased** significantly from $(18.6) million at January 1, 2022, to **$(39.7) million** at June 30, 2022, reflecting the net losses[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating activities generated substantially more cash in the first half of 2022, while investing activities saw a significant increase in cash used for capital expenditures | Metric (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $103,308 | $61,480 | | Net cash used in investing activities | $(141,568) | $(50,920) | | Net cash used in financing activities | $(3,869) | $(6,631) | | Cash and cash equivalents - End of period | $69,789 | $72,701 | - The increase in cash from operating activities was driven by **higher activity levels** and a net tax refund, partially offset by timing of receivables and vendor payments[22](index=22&type=chunk) - **Capital expenditures significantly increased** to **$144.5 million** in 2022 from $52.2 million in 2021, leading to higher cash used in investing activities[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide essential details on accounting policies, financial instruments, debt, and other items, offering context to the financial statements [Note 1 - Basis of Presentation](index=9&type=section&id=Note%201%20-%20Basis%20of%20Presentation) The financial statements are prepared per SEC and GAAP requirements, with revenue recognized from pressure pumping and coiled tubing operations - The company's primary revenue-generating activities are aggregated into one reportable segment, **'Pressure Pumping'**, which includes hydraulic fracturing and cementing services[25](index=25&type=chunk)[26](index=26&type=chunk) - Hydraulic fracturing revenue is recognized over time, while acidizing and cementing revenues are recognized at a point-in-time upon service completion[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - **Accrued revenue** within accounts receivable increased from **$19.4 million** at December 31, 2021, to **$43.2 million** at June 30, 2022[32](index=32&type=chunk) Allowance for Credit Losses (in thousands) | Metric | January 1, 2022 | June 30, 2022 | | :--- | :--- | :--- | | Balance - Allowance for Credit Losses | $217 | $217 | [Note 2 - Recently Issued Accounting Standards](index=10&type=section&id=Note%202%20-%20Recently%20Issued%20Accounting%20Standards) The company adopted ASU No 2020-04 for Reference Rate Reform, which did not materially affect the condensed consolidated financial statements - The company adopted **ASU No 2020-04, Reference Rate Reform**, effective January 1, 2022, providing guidance for the transition away from LIBOR[36](index=36&type=chunk) - The adoption of this guidance **did not materially affect** the Company's condensed consolidated financial statements[36](index=36&type=chunk) [Note 3 - Fair Value Measurement](index=10&type=section&id=Note%203%20-%20Fair%20Value%20Measurement) A significant nonrecurring impairment expense of $57.5 million was recorded for DuraStim® hydraulic fracturing pumps due to commercialization uncertainty - Fair value is defined as the exit price in an orderly transaction, with a hierarchy (Level 1, 2, 3) based on the observability of inputs[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - The estimated fair value of the company's financial instruments **approximated their carrying values** at June 30, 2022, and December 31, 2021[42](index=42&type=chunk) Assets Measured at Fair Value on a Nonrecurring Basis (in thousands) | Asset | Balance (June 30, 2022) | Total Gains (Losses) | | :--- | :--- | :--- | | Property and equipment, net | $11,341 | $(57,454) | - An **impairment expense of approximately $57.5 million** was recorded for DuraStim® hydraulic fracturing pumps in Q2 2022 due to performance issues and market conditions[43](index=43&type=chunk) [Note 4 - Long-Term Debt](index=13&type=section&id=Note%204%20-%20Long-Term%20Debt) The company amended its ABL Credit Facility, reducing borrowing capacity to $150.0 million and extending maturity to April 2027, with no outstanding borrowings - Effective April 13, 2022, the ABL Credit Facility's borrowing capacity was **decreased to $150.0 million** and the maturity date extended to April 13, 2027[46](index=46&type=chunk) - The **Borrowing Base** as of June 30, 2022, was approximately **$120.5 million**, based on eligible accounts receivable[46](index=46&type=chunk) - Interest accrues based on **SOFR or the base rate**, plus an applicable margin ranging from 1.50% to 2.00% for SOFR loans and 0.50% to 1.00% for base rate loans[46](index=46&type=chunk) - There were **no borrowings outstanding** under the revolving credit facility as of June 30, 2022, and December 31, 2021[47](index=47&type=chunk) [Note 5 - Reportable Segment Information](index=13&type=section&id=Note%205%20-%20Reportable%20Segment%20Information) The company operates through one primary reportable segment, 'Pressure Pumping,' which saw a significant increase in Adjusted EBITDA - The company has one reportable segment, **'Pressure Pumping,'** comprising hydraulic fracturing and cementing operations[50](index=50&type=chunk) - Hydraulic fracturing revenue approximated **92.9% and 93.2%** of pressure pumping revenue for the three and six months ended June 30, 2022, respectively[51](index=51&type=chunk) Adjusted EBITDA by Segment (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Pressure Pumping Adjusted EBITDA | $86,291 | $46,826 | $163,285 | $78,697 | | All Other Adjusted EBITDA | $(10,344) | $(11,133) | $(20,805) | $(22,988) | | Total Adjusted EBITDA | $75,947 | $35,693 | $142,480 | $55,709 | - Total corporate administrative expense for the three and six months ended June 30, 2022, was **$7.7 million and $25.0 million**, respectively, up from the prior year[50](index=50&type=chunk) [Note 6 - Net Income (Loss) Per Share](index=18&type=section&id=Note%206%20-%20Net%20Income%20(Loss)%20Per%20Share) Basic and diluted net loss per share increased for the three-month period but decreased for the six-month period, with certain equity awards being anti-dilutive Net Income (Loss) Per Common Share | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Basic EPS | $(0.32) | $(0.08) | $(0.20) | $(0.28) | | Diluted EPS | $(0.32) | $(0.08) | $(0.20) | $(0.28) | - **Weighted average common shares outstanding** for basic and diluted calculations were approximately **104.2 million** for the three months and **104.0 million** for the six months ended June 30, 2022[66](index=66&type=chunk) Anti-Dilutive Equity Awards (in thousands) | Award Type | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Stock options | 587 | 995 | 587 | 995 | | Restricted stock units | 1,207 | 1,380 | 1,207 | 1,380 | | Performance stock units | 1,788 | 1,489 | 1,788 | 1,489 | | Total | 3,582 | 3,864 | 3,582 | 3,864 | [Note 7 - Stock-Based Compensation](index=19&type=section&id=Note%207%20-%20Stock-Based%20Compensation) Total stock-based compensation expense increased significantly to $14.8 million for the first half of 2022, partly due to accelerated vesting for a former officer - **No new stock option grants** were made during the six months ended June 30, 2022[69](index=69&type=chunk) - **631,233 RSUs were granted**, with unrecognized compensation expense of **$10.6 million** to be recognized over approximately 2.0 years[71](index=71&type=chunk)[72](index=72&type=chunk) - **327,939 PSUs were granted**, and an incremental stock expense of **$3.7 million** was recorded due to PSU modifications for a former officer[74](index=74&type=chunk)[75](index=75&type=chunk) Total Stock-Based Compensation Expense (in thousands) | Period | Total Stock-Based Compensation Expense | | :--- | :--- | | Six Months Ended June 30, 2022 | $14,800 | [Note 8 - Related-Party Transactions](index=22&type=section&id=Note%208%20-%20Related-Party%20Transactions) Revenue from Pioneer, a significant customer, totaled $238.7 million for the first six months of 2022 under an amended services agreement - The company rents five operations and maintenance yards from an entity in which a director has an equity interest[81](index=81&type=chunk) - An amended agreement with Pioneer effective January 1, 2022, **reduced contracted fleets from eight to six** and replaced idle fees with equipment reservation fees[82](index=82&type=chunk) Revenue from Pioneer (in millions) | Period | Revenue from Pioneer | | :--- | :--- | | Three Months Ended June 30, 2022 | $115.2 | | Three Months Ended June 30, 2021 | $130.7 | | Six Months Ended June 30, 2022 | $238.7 | | Six Months Ended June 30, 2021 | $217.0 | - **Accounts receivable due from Pioneer** increased from $62.1 million at December 31, 2021, to **$69.0 million** at June 30, 2022[84](index=84&type=chunk) [Note 9 - Leases](index=23&type=section&id=Note%209%20-%20Leases) The company has operating leases for real estate, with total undiscounted future lease payments of $0.8 million - The company has a ten-year Real Estate Lease and a two-year Maintenance Facility Lease, both classified as **operating leases**[87](index=87&type=chunk)[89](index=89&type=chunk) - Total operating lease right-of-use asset cost was approximately **$1.9 million** at June 30, 2022, with accumulated amortization of $1.1 million[91](index=91&type=chunk) Maturity Analysis of Lease Liabilities (in thousands) | Year | Totals | | :--- | :--- | | 2022 | $360 | | 2023 | $398 | | 2024 | $50 | | Total undiscounted future lease payments | $808 | | Present value of future lease payments | $785 | - **Short-term lease expense** for the six months ended June 30, 2022, was approximately **$0.4 million**[94](index=94&type=chunk) [Note 10 - Commitments and Contingencies](index=24&type=section&id=Note%2010%20-%20Commitments%20and%20Contingencies) The company has a $43.0 million commitment for new equipment and is involved in ongoing litigation, with outcomes currently not estimable - Total remaining lease commitments for short-term leases and lodging were approximately **$2.5 million** at June 30, 2022[95](index=95&type=chunk) - In August 2022, the company entered into a contractual arrangement to purchase and convert additional Tier IV DGB equipment for approximately **$43.0 million**[95](index=95&type=chunk) - The company is a defendant in the **Logan Lawsuit**, a class action alleging violations of the Exchange Act and Securities Act, with the outcome not yet estimable[98](index=98&type=chunk)[99](index=99&type=chunk)[103](index=103&type=chunk) - A **$10.7 million net tax refund** was received in March 2022 from the Texas Comptroller for sales, excise, and use tax[107](index=107&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial performance, highlighting significant revenue growth offset by increased costs and a substantial impairment charge [Overview](index=27&type=section&id=Overview) ProPetro is a Permian Basin-focused oilfield services company transitioning to lower emissions equipment but recorded a $57.5 million impairment on its DuraStim® assets - ProPetro is a Midland, Texas-based oilfield services company providing **hydraulic fracturing** and other complementary services, primarily in the **Permian Basin**[112](index=112&type=chunk) - Total available HHP as of June 30, 2022, was **1,315,000 HHP**, including 197,500 HHP of Tier IV Dynamic Gas Blending (DGB) equipment[113](index=113&type=chunk) - The company recorded approximately **$57.5 million of impairment expense** on DuraStim® electric powered hydraulic fracturing equipment in Q2 2022[114](index=114&type=chunk) - An amended agreement with Pioneer **reduced contracted fleets from eight to six** and introduced equipment reservation fees, contributing to revenue[115](index=115&type=chunk) [Commodity Price and Other Economic Conditions](index=28&type=section&id=Commodity%20Price%20and%20Other%20Economic%20Conditions) Industry volatility, driven by global events, has increased crude oil prices and service demand but also brought cost inflation and supply chain tightness - The Russia-Ukraine war and COVID-19 pandemic have contributed to significant increases and volatility in oil and natural gas prices, with global average crude oil prices **exceeding $100 per barrel** in 2022[122](index=122&type=chunk)[124](index=124&type=chunk) - Increased crude oil prices led to a rise in Permian Basin rig count from approximately 179 to **349** at the end of June 2022, driving demand for oilfield services[124](index=124&type=chunk) - The company negotiated **pricing increases** with customers due to growing demand and significant cost inflation[124](index=124&type=chunk) - The industry is transitioning to **lower emissions operating environments**, requiring significant capital investment in new technologies[125](index=125&type=chunk) [How We Evaluate Our Operations](index=29&type=section&id=How%20We%20Evaluate%20Our%20Operations) Management evaluates performance using non-GAAP measures Adjusted EBITDA and Adjusted EBITDA margin to provide a consistent basis for comparison - Management uses **Adjusted EBITDA** and **Adjusted EBITDA margin** as key performance indicators[128](index=128&type=chunk) - Adjusted EBITDA is defined as EBITDA adjusted for items like loss/(gain) on asset disposals, stock-based compensation, and other **unusual or nonrecurring expenses**[129](index=129&type=chunk) - Adjusted EBITDA and Adjusted EBITDA margin are **non-GAAP measures** used to assess financial performance by removing the effects of capital structure and nonrecurring items[130](index=130&type=chunk)[131](index=131&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Revenue grew significantly, but this was offset by rising costs and a $57.5 million impairment expense, leading to a widened net loss for the quarter [Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30, 2021](index=33&type=section&id=Three%20Months%20Ended%20June%2030%2C%202022%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030%2C%202021) Revenue increased 45.3% to $315.1 million, but a $57.5 million impairment expense contributed to a widened net loss of $(32.9) million Key Financials (Three Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $315,083 | $216,887 | $98,196 | 45.3% | | Cost of services | $218,813 | $162,837 | $55,976 | 34.4% | | General and administrative | $25,135 | $17,529 | $7,606 | 43.4% | | Impairment expense | $57,454 | $0 | $57,454 | 100.0% | | Loss on disposal of assets | $22,485 | $15,025 | $7,460 | 49.7% | | Net loss | $(32,860) | $(8,511) | $24,349 | 286.1% | | Adjusted EBITDA | $75,947 | $35,693 | $40,254 | 112.8% | | Adjusted EBITDA Margin | 24.1% | 16.5% | 7.6% | 46.1% | - Effectively utilized fleet count increased to approximately **14.8 active fleets** in Q2 2022 from 13.1 in Q2 2021[142](index=142&type=chunk) - Pressure pumping cost of services as a percentage of revenue **decreased to 69.0%** in Q2 2022 from 74.7% in Q2 2021, reflecting improved operational efficiencies[144](index=144&type=chunk) - General and administrative expenses increased primarily due to **$5.1 million in non-recurring legal fees** and $0.5 million in stock-based compensation[145](index=145&type=chunk) [Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021](index=34&type=section&id=Six%20Months%20Ended%20June%2030%2C%202022%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030%2C%202021) Revenue surged 58.0% to $597.8 million, and a $10.7 million tax refund helped reduce the net loss to $(21.0) million despite a large impairment charge Key Financials (Six Months Ended June 30, in thousands) | Metric | 2022 | 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $597,763 | $378,345 | $219,418 | 58.0% | | Cost of services | $416,083 | $286,215 | $129,868 | 45.4% | | General and administrative | $56,842 | $37,731 | $19,111 | 50.7% | | Impairment expense | $57,454 | $0 | $57,454 | 100.0% | | Loss on disposal of assets | $38,603 | $28,076 | $10,527 | 37.5% | | Other income | $(10,364) | $(1,487) | $8,877 | 597.0% | | Net loss | $(21,043) | $(28,886) | $(7,843) | (27.2)% | | Adjusted EBITDA | $142,480 | $55,709 | $86,771 | 155.8% | | Adjusted EBITDA Margin | 23.8% | 14.7% | 9.1% | 61.9% | - Effectively utilized fleet count increased to approximately **14.3 active fleets** in H1 2022 from 11.7 in H1 2021[154](index=154&type=chunk) - General and administrative expenses increased due to a **$9.4 million rise in stock-based compensation** and **$7.5 million in non-recurring legal fees**[158](index=158&type=chunk) - Other income increased significantly due to a **$10.7 million net tax refund** from the Texas Comptroller[163](index=163&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Total liquidity was $185.3 million as of June 30, 2022, comprising cash and availability under its amended ABL Credit Facility - Liquidity is provided by existing cash balances, operating cash flows, and borrowings under the **ABL Credit Facility**[167](index=167&type=chunk) Liquidity Position (as of June 30, 2022, in millions) | Metric | Amount | | :--- | :--- | | Cash and cash equivalents | $69.8 | | ABL Credit Facility availability | $115.5 | | Total Liquidity | $185.3 | - The ABL Credit Facility was amended on April 13, 2022, **decreasing borrowing capacity to $150.0 million** and extending maturity to April 13, 2027[173](index=173&type=chunk) - The **Borrowing Base** as of June 30, 2022, was approximately **$120.5 million**, and there were no borrowings under the facility[173](index=173&type=chunk)[174](index=174&type=chunk) [Future Sources and Use of Cash and Contractual Obligations](index=38&type=section&id=Future%20Sources%20and%20Use%20of%20Cash%20and%20Contractual%20Obligations) Future cash will primarily fund capital expenditures for maintenance and DGB conversions, with a $43.0 million commitment for new equipment in August 2022 - **Capital expenditures incurred were $89.1 million** during the three months ended June 30, 2022, compared to $30.8 million in the prior year[175](index=175&type=chunk) - Future capital expenditures are projected for maintenance, costs to convert existing equipment to **lower emissions (Tier IV DGB)**, and strategic purchases[176](index=176&type=chunk) - The company expects to fund capital expenditures through existing cash, cash flows from operations, and, if needed, borrowings under its **ABL Credit Facility**[177](index=177&type=chunk) - In August 2022, the company committed to purchase and convert additional Tier IV DGB equipment with a total cost of approximately **$43.0 million**[178](index=178&type=chunk) [Cash and Cash Flows](index=38&type=section&id=Cash%20and%20Cash%20Flows) Operating cash flow increased to $103.3 million, while cash used in investing rose significantly due to investments in lower emissions equipment Historical Cash Flows (Six Months Ended June 30, in thousands) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $103,308 | $61,480 | | Net cash used in investing activities | $(141,568) | $(50,920) | | Net cash used in financing activities | $(3,869) | $(6,631) | - The **$41.8 million increase in net cash from operating activities** was primarily due to increased activity levels, higher crude oil prices, and a net tax refund[180](index=180&type=chunk) - The increase in net cash used in investing activities was primarily attributable to investment in **lower emissions Tier IV DGB equipment**[181](index=181&type=chunk) - The decrease in net cash used in financing activities was mainly due to a reduction in net settlement of equity awards and no repayments of insurance financing in 2022[182](index=182&type=chunk) [Off-Balance Sheet Arrangements](index=39&type=section&id=Off-Balance%20Sheet%20Arrangements) As of June 30, 2022, the company had no off-balance sheet arrangements - The company had **no off-balance sheet arrangements** as of June 30, 2022[183](index=183&type=chunk) [Critical Accounting Policies and Estimates](index=39&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) There have been no material changes to the company's critical accounting policies and estimates during the first half of 2022 - **No material changes** occurred in the methodology for critical accounting policies and estimates during the six months ended June 30, 2022[184](index=184&type=chunk) [Recently Issued Accounting Standards](index=39&type=section&id=Recently%20Issued%20Accounting%20Standards) Disclosure concerning recently issued accounting standards is incorporated by reference to Note 2 of the financial statements - Information on recently issued accounting standards is incorporated by reference to **Note 2** of the Condensed Consolidated Financial Statements[185](index=185&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes in market risk from the information previously provided in the company's Form 10-K - **No material changes in market risk** have occurred as of June 30, 2022, compared to the disclosures in the Form 10-K[186](index=186&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - The company's disclosure controls and procedures were evaluated and deemed **effective** at the reasonable assurance level as of June 30, 2022[189](index=189&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter ended June 30, 2022[190](index=190&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 10 in the financial statements for detailed information on legal proceedings - Details regarding legal proceedings are provided in **Note 10 – Commitments and Contingencies** of the Condensed Consolidated Financial Statements[193](index=193&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Form 10-K - **No material changes** to the risk factors disclosed in the company's Form 10-K have occurred[194](index=194&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report - **No unregistered sales** of equity securities or use of proceeds to report[195](index=195&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report - **No defaults** upon senior securities to report[196](index=196&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are **not applicable** to the company[197](index=197&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - **No other information** to report[198](index=198&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, credit agreements, and certifications - The exhibits include the Amended and Restated Certificate of Incorporation and Bylaws, Certificate of Designations of Series B Preferred Stock, and the Restatement Agreement for the **ABL Credit Facility**[201](index=201&type=chunk) - **Certifications** from the Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350 are filed/furnished[201](index=201&type=chunk) - **XBRL Instance Document** and Taxonomy Extension Schema, Calculation, Label, Presentation, and Definition Linkbase Documents are included[201](index=201&type=chunk) Signatures [Report Signatures](index=43&type=section&id=Report%20Signatures) The report was duly signed on behalf of the registrant by its principal officers on August 4, 2022 - The report was signed on **August 4, 2022**[205](index=205&type=chunk) - Signatories include **Samuel D. Sledge** (Chief Executive Officer and Director), **David S. Schorlemer** (Chief Financial Officer), and **Elo Omavuezi** (Chief Accounting Officer)[205](index=205&type=chunk)

ProPetro Holding Corp. (NYSE:PUMP) Q2 2022 Earnings Conference Call August 3, 2022 9:00 AM ET Company Participants Matt Augustine - Investor Relations Sam Sledge - Chief Executive Officer David Schorlemer - Chief Financial Officer Adam Munoz - President & Chief Operating Officer Conference Call Participants Scott Gruber - Citigroup Arun Jayaram - JPMorgan Waqar Syed - ATB Capital Markets Stephen Gengaro - Stifel Derek Podhaizer - Barclays Operator Good morning, and welcome to the ProPetro Holding Corporatio ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38035 ______________________________ ProPetro Holding Corp. (432) 688-0012 (Registrant's telephone number, including area code) Securities ...

Part I [Business](index=7&type=section&id=Item%201.%20Business) ProPetro is a Permian Basin-focused oilfield services company specializing in hydraulic fracturing and complementary services Hydraulic Horsepower (HHP) Fleet Composition as of Dec 31, 2021 | Equipment Type | HHP | | :--- | :--- | | Tier IV Dynamic Gas Blending (DGB) | 90,000 | | Conventional Tier II | 1,225,000 | | DuraStim® Electric | 108,000 | | **Total Available HHP** | **1,423,000** | - The company's operations are geographically concentrated in the Permian Basin, which accounted for approximately **98.7% of revenues in 2021**[93](index=93&type=chunk) Customer Concentration by Revenue | Customer Group | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Top 5 Customers | 85.7% | 86.5% | 77.1% | - In 2021, **Pioneer Natural Resources USA Inc. and Endeavor Energy Resources accounted for 54.2% and 14.6% of total revenue**, respectively[48](index=48&type=chunk) - As of December 31, 2021, the company employed approximately **1,500 people**, with none of the employees being unionized[79](index=79&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from industry cyclicality, customer concentration, competition, and regulatory changes - The business is highly dependent on the cyclical oil and natural gas industry, with demand for services tied to E&P capital expenditures in the Permian Basin[85](index=85&type=chunk)[86](index=86&type=chunk) - A significant risk is the ongoing **Logan Lawsuit**, a class action complaint alleging violations of securities laws, for which the outcome cannot be predicted[115](index=115&type=chunk)[116](index=116&type=chunk)[120](index=120&type=chunk) - The company has a high customer concentration; for the year ended December 31, 2021, one customer, **Pioneer, accounted for 54.2% of revenue**[125](index=125&type=chunk) - The company's ability to use its net operating loss (NOL) carryforwards may be limited; as of December 31, 2021, the company had approximately **$408.0 million of federal NOLs**[159](index=159&type=chunk) - The transition to lower-emissions equipment is capital intensive and presents a risk, as failure to adopt new technologies could adversely impact service demand[95](index=95&type=chunk) [Unresolved Staff Comments](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[173](index=173&type=chunk) [Properties](index=35&type=section&id=Item%202.%20Properties) The company's corporate headquarters is in Midland, Texas, with other owned and leased properties in the Permian Basin - Corporate headquarters is located at 1706 S. Midkiff, Midland, Texas 79701[174](index=174&type=chunk) [Legal Proceedings](index=35&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference to Note 15 of the Consolidated Financial Statements - Details on legal proceedings are provided in Note 15 of the financial statements, which discusses the Logan Lawsuit and other contingencies[175](index=175&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20and%20Safety%20Disclosures) The company reports no mine and safety disclosures - None[176](index=176&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE under "PUMP" and it does not currently pay dividends - The company's common stock trades on the New York Stock Exchange under the symbol **"PUMP"**[179](index=179&type=chunk) - As of December 31, 2021, there were **103,437,177 shares of common stock outstanding**[180](index=180&type=chunk) - The company does not anticipate declaring or paying any cash dividends in the foreseeable future, intending to retain earnings to finance business growth[181](index=181&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue increased 10.8% in 2021, but Adjusted EBITDA declined due to inflationary pressures and supply chain issues Financial Highlights: 2021 vs. 2020 | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Revenue | $874.5M | $789.2M | +10.8% | | Cost of Services | $662.3M | $584.3M | +13.3% | | Net Loss | ($54.2M) | ($107.0M) | +49.4% | | Adjusted EBITDA | $135.0M | $141.5M | -4.6% | | Adjusted EBITDA Margin | 15.4% | 17.9% | -2.5% | - The average effectively utilized fleet count **increased by 20%** from approximately 10 active fleets in 2020 to 12 in 2021[204](index=204&type=chunk)[229](index=229&type=chunk) - Capital expenditures for 2022 are projected to be between **$250.0 million and $300.0 million**, primarily for maintenance and conversion to lower-emissions equipment[256](index=256&type=chunk) - As of December 31, 2021, total liquidity was **$169.3 million**, consisting of $111.9 million in cash and $57.4 million available under the ABL Credit Facility, with no outstanding debt[242](index=242&type=chunk) Cash Flow Summary (in millions) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash from operating activities | $154.7 | $139.1 | | Net cash used in investing activities | ($104.3) | ($94.2) | | Net cash used in financing activities | ($7.3) | ($125.2) | [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to commodity price, interest rate, and customer credit risks but does not currently use derivatives - The company is exposed to commodity price risk for materials and fuel, and has historically passed a significant portion of this risk to customers[280](index=280&type=chunk) - The company is subject to interest rate risk on its ABL Credit Facility; a hypothetical **1% increase in interest rates would have had no impact** on interest expense in 2021[281](index=281&type=chunk) [Financial Statements and Supplementary Data](index=57&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements, which received an unqualified opinion from the auditor - The independent auditor, Deloitte & Touche LLP, issued an **unqualified opinion** on the financial statements and internal controls as of December 31, 2021[284](index=284&type=chunk)[295](index=295&type=chunk) - The auditor identified **related-party transactions as a critical audit matter** due to the judgment required to ensure proper identification and disclosure[289](index=289&type=chunk)[290](index=290&type=chunk) Consolidated Balance Sheet Highlights (As of Dec 31, in thousands) | Account | 2021 | 2020 | | :--- | :--- | :--- | | Total Current Assets | $251,064 | $167,720 | | Property and Equipment, Net | $808,494 | $880,479 | | **Total Assets** | **$1,061,236** | **$1,050,739** | | Total Current Liabilities | $173,785 | $104,168 | | **Total Liabilities** | **$234,934** | **$179,963** | | **Total Shareholders' Equity** | **$826,302** | **$870,771** | Consolidated Statement of Operations Highlights (Year Ended Dec 31, in thousands) | Account | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Revenue | $874,514 | $789,232 | $2,052,314 | | Operating (Loss) Income | ($68,696) | ($131,243) | $221,360 | | Net (Loss) Income | ($54,185) | ($107,020) | $163,010 | | Diluted (Loss) Income Per Share | ($0.53) | ($1.06) | $1.57 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=85&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants - None[446](index=446&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective - Management concluded that **disclosure controls and procedures were effective** as of December 31, 2021[448](index=448&type=chunk) - Management concluded that **internal control over financial reporting was effective** as of December 31, 2021[451](index=451&type=chunk) [Other Information](index=87&type=section&id=Item%209B.%20Other%20Information) The company reports no other information - None[454](index=454&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=87&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[455](index=455&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=88&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Required information is incorporated by reference from the 2022 Annual Meeting Proxy Statement - Information is incorporated by reference to the Company's Proxy Statement for its 2022 Annual Meeting of Stockholders[458](index=458&type=chunk) [Executive Compensation](index=89&type=section&id=Item%2011.%20Executive%20Compensation) Required information regarding executive compensation is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the Company's Proxy Statement for its 2022 Annual Meeting of Stockholders[460](index=460&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=90&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Required information on security ownership is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the Company's Proxy Statement for its 2022 Annual Meeting of Stockholders[461](index=461&type=chunk) [Certain Relationships and Related Party Transactions, and Director Independence](index=91&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Party%20Transactions%2C%20and%20Director%20Independence) Required information on related party transactions is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the Company's Proxy Statement for its 2022 Annual Meeting of Stockholders[462](index=462&type=chunk) [Principal Accounting Fees and Services](index=92&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Required information on accounting fees is incorporated by reference from the 2022 Proxy Statement - Information is incorporated by reference to the Company's Proxy Statement for its 2022 Annual Meeting of Stockholders[463](index=463&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=93&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed with the report, with no financial statement schedules included - The financial statements from Item 8 are filed as part of this report[464](index=464&type=chunk) - No financial statement schedules were filed[465](index=465&type=chunk) [Form 10-K Summary](index=96&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no Form 10-K summary - None[473](index=473&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38035 ______________________________ ProPetro Holding Corp. (Exact name of registrant as specified in its charter) ___________________ ...

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited financial statements for June 30, 2021, report **total assets** of **\$1.067 billion**, a **\$28.9 million** **net loss**, and **\$61.5 million** in **operating cash flow** [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) - **Total assets** **increased** slightly to **\$1,066.8 million** as of **June 30, 2021**, from **\$1,050.7 million** at December 31, 2020[16](index=16&type=chunk) - **Cash and cash equivalents** **increased** to **\$72.7 million** from **\$68.8 million**, while **accounts receivable** **grew significantly** to **\$138.3 million** from **\$84.2 million**[16](index=16&type=chunk) - **Total liabilities** **increased** to **\$222.0 million** from **\$180.0 million**, primarily driven by a **rise** in **accounts payable** from **\$79.2 million** to **\$136.4 million**[16](index=16&type=chunk) - **Total shareholders' equity** **decreased** to **\$844.7 million** from **\$870.8 million**, mainly due to a **reduction** in **retained earnings**[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Service Revenue** | \$216,887 | \$106,109 | \$378,345 | \$501,178 | | **Operating Loss** | \$(11,747) | \$(31,322) | \$(40,398) | \$(38,751) | | **Net Loss** | \$(8,511) | \$(25,920) | \$(28,886) | \$(33,724) | | **Net Loss Per Share (Basic & Diluted)** | \$(0.08) | \$(0.26) | \$(0.28) | \$(0.33) | - **Revenue** for **Q2 2021** more than doubled year-over-year, **increasing** to **\$216.9 million** from **\$106.1 million** in **Q2 2020**[19](index=19&type=chunk) - For the six-month period, **revenue** **decreased** to **\$378.3 million** in 2021 from **\$501.2 million** in 2020[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | \$61,480 | \$96,910 | | **Net cash used in investing activities** | \$(50,920) | \$(78,025) | | **Net cash used in financing activities** | \$(6,631) | \$(130,615) | | **Net increase (decrease) in cash** | \$3,929 | \$(111,730) | | **Cash and cash equivalents - End of period** | \$72,701 | \$37,306 | - **Net cash provided by operating activities** **decreased** to **\$61.5 million** in the first half of 2021 from **\$96.9 million** in the same period of 2020, primarily due to changes in operating assets and liabilities, including a **significant increase** in **accounts receivable**[23](index=23&type=chunk) - **Cash used in investing activities** **decreased**, with **capital expenditures** **falling** to **\$52.2 million** from **\$80.7 million** year-over-year[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company's single reportable segment is "**Pressure Pumping**," which includes hydraulic fracturing and cementing **Hydraulic fracturing revenue** constituted approximately **93.5%** of the pressure pumping segment's **revenue** for the first six months of 2021[26](index=26&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - **Pioneer Natural Resources** is a **significant customer**, accounting for approximately **\$217.0 million** of total **revenue** in the first six months of 2021, up from **\$191.6 million** in the same period of 2020[81](index=81&type=chunk) - The company is involved in **pending legal matters**, including the **Logan Lawsuit** (a shareholder class action), the **Shareholder Derivative Lawsuit**, and an **SEC investigation** No provision has been made for these contingencies as the final outcome cannot be reasonably estimated[97](index=97&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) - As of **June 30, 2021**, the company had **no borrowings** under its **\$300 million** **ABL Credit Facility** The **borrowing base** was approximately **\$71.8 million**[50](index=50&type=chunk)[52](index=52&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes **Q2 2021** **revenue** growth to rebounding demand, while six-month **revenue** **decreased** due to pricing, maintaining **solid liquidity** and focusing on lower-emissions equipment [Overview](index=24&type=section&id=Overview) - **ProPetro** is an **oilfield services company** focused on **hydraulic fracturing** in the **Permian Basin**[108](index=108&type=chunk) - As of **June 30, 2021**, the company had **1,423,000 available HHP**, including conventional Tier II, Tier IV DGB, and new **DuraStim® electric hydraulic fracturing equipment**[109](index=109&type=chunk) - The company is field-testing its **DuraStim® electric powered hydraulic fracturing equipment**, with a goal to commercialize its **first fleet**, though **supply chain disruptions** may extend the timeline[110](index=110&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Q2 2021 vs Q2 2020 Performance (in thousands) | Metric | Q2 2021 | Q2 2020 | Change (\$) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | \$216,887 | \$106,109 | \$110,778 | 104.4% | | **Cost of Services** | \$162,837 | \$68,193 | \$94,644 | 138.8% | | **Net Loss** | \$(8,511) | \$(25,920) | \$(17,409) | (67.2)% | | **Adjusted EBITDA** | \$35,693 | \$25,410 | \$10,283 | 40.5% | - The **Q2 revenue increase** was driven by a **significant rise** in **average effectively utilized fleet count** to approximately **13.1 active fleets** from 4.0 in **Q2 2020**, following the **rebound from the COVID-19 pandemic's impact**[132](index=132&type=chunk) Six Months 2021 vs Six Months 2020 Performance (in thousands) | Metric | H1 2021 | H1 2020 | Change (\$) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | \$378,345 | \$501,178 | \$(122,833) | (24.5)% | | **Cost of Services** | \$286,215 | \$369,041 | \$(82,826) | (22.4)% | | **Net Loss** | \$(28,886) | \$(33,724) | \$(4,838) | (14.3)% | | **Adjusted EBITDA** | \$55,709 | \$100,334 | \$(44,625) | (44.5)% | - The **revenue decrease** in the first six months of 2021 was primarily due to **significant pricing discounts** provided to customers starting in April 2020 and customers directly sourcing consumables like sand and chemicals[144](index=144&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) - As of **June 30, 2021**, **total liquidity** was approximately **\$140.8 million**, comprising **\$72.7 million** in cash and **\$68.1 million** available under the **ABL Credit Facility**[155](index=155&type=chunk) - The company had **no borrowings** under its **\$300 million** **ABL Credit Facility** as of **June 30, 2021** The facility has a total capacity of **\$300 million**, subject to a **borrowing base** of **85%** of eligible **accounts receivable**[155](index=155&type=chunk)[158](index=158&type=chunk) - **Primary uses of cash** will be funding operations and **maintenance capital expenditures**, including costs to convert existing conventional equipment to **lower-emissions Tier IV DGB equipment**[161](index=161&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | \$61,480 | \$96,910 | | **Net cash used in investing activities** | \$(50,920) | \$(78,025) | | **Net cash used in financing activities** | \$(6,631) | \$(130,615) | [165](index=165&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been **no material changes** in **market risk** exposure since the prior **Form 10-K** filing - There have been **no material changes** in **market risk** since the last annual report (**Form 10-K**)[172](index=172&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded **disclosure controls and procedures** were **effective** as of **June 30, 2021**, with **no material changes** to **internal control over financial reporting** during the quarter - The **Principal Executive Officer** and **Principal Financial Officer** concluded that the company's **disclosure controls and procedures** were **effective** as of **June 30, 2021**[174](index=174&type=chunk) - **No material changes** were made to the **internal control over financial reporting** during the quarter ended **June 30, 2021**[175](index=175&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) Information on **legal proceedings** is detailed in **Note 10** of the **Condensed Consolidated Financial Statements** - Information on **legal proceedings** is detailed in "**Note 10 – Commitments and Contingencies**" in the financial statements[178](index=178&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) There have been **no material changes** to the **risk factors** previously disclosed in the company's **Form 10-K** - There have been **no material changes** to the **risk factors** disclosed in the company's **Form 10-K**[179](index=179&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported **no unregistered sales of equity securities** during the period - **None**[180](index=180&type=chunk) [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported **no defaults upon senior securities** - **None**[181](index=181&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is **not applicable** to the company - **Not applicable**[182](index=182&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) The company reported **no other information** for this item - **None**[183](index=183&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists **exhibits** filed with the **Form 10-Q**, including **CEO** and **CFO certifications** and **XBRL data files** - **Exhibits** filed include **certifications** from the **Principal Executive Officer** and **Principal Financial Officer** pursuant to **Sarbanes-Oxley Act Sections 302 and 906**[185](index=185&type=chunk) - **Interactive Data Files (XBRL)** are also included as **exhibits**[185](index=185&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 (Registrant's telephone number, including area code) or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38035 ______________________________ ProPetro Holding Corp. (Exact name of registrant ...

Financial Performance (Q1 2021) - ProPetro's Q1 2021 revenue was $161 million[29] - The company reported a net loss of $20 million in Q1 2021[29] - Adjusted EBITDA for Q1 2021 was $20 million[29] - Free cash flow for Q1 2021 was negative $5 million[29] Operational Highlights - 99% of ProPetro's Q1 2021 revenue came from the Permian Basin[29] - Pressure pumping accounted for 98% of the company's Q1 2021 revenue[29] - Multi-well jobs made up 96% of the Q1 job mix[25] Strategic Positioning - ProPetro is focused on the Permian Basin, where over $60 billion in E&P transactions have occurred since 2018[12] - The company is investing in Tier IV DGB and DuraStim technologies to reduce emissions[19, 22] - ProPetro plans to deploy 90,000 HHP of Tier IV DGB by the end of 2021[26] Market Dynamics - The Permian Basin accounts for 66% of the total U S onshore oil-directed rigs[17] - The Permian Basin accounts for 64% of the total U S onshore oil rigs added since August 2020[18]

Part I [Business](index=7&type=section&id=Item%201.%20Business) ProPetro Holding Corp. provides hydraulic fracturing services in the Permian Basin, transitioning to lower-emission equipment amidst market volatility [Our Company and Services](index=7&type=section&id=Our%20Company%20and%20Services) ProPetro focuses on hydraulic fracturing in the Permian Basin, investing in lower-emission equipment while streamlining core services Hydraulic Horsepower Capacity (as of December 31, 2020) | Metric | Value | | :--- | :--- | | Total Available HHP (as of Dec 31, 2020) | 1,373,000 HHP | | Conventional Tier II HHP | 1,265,000 HHP | | DuraStim® Electric HHP | 108,000 HHP | | HHP in process of permanent retirement | ~150,000 HHP | - The company has committed to purchasing **50,000 HHP** of **Tier IV Dynamic Gas Blending (DGB) dual-fuel equipment**, expected to be delivered in the first half of 2021[28](index=28&type=chunk) - The company aims to commercialize its first **DuraStim® electric-powered fleet** in the second half of 2021 and holds an option to purchase an additional **108,000 HHP** of this equipment through July 2022[29](index=29&type=chunk) - In 2020, the company shut down its flowback and drilling operations, disposing of the related assets to focus on core services[46](index=46&type=chunk)[47](index=47&type=chunk) [Market Conditions and Customers](index=7&type=section&id=Market%20Conditions%20and%20Customers) Performance is tied to volatile commodity prices, with a concentrated customer base where top five clients accounted for **86.5%** of 2020 revenue - WTI crude oil prices declined by approximately **67%** from January 2020 to the end of March 2020, falling from ~$62/barrel to just over $20/barrel, before recovering to ~$62/barrel by March 2021[35](index=35&type=chunk) Revenue Concentration by Customer (2020) | Customer Group | % of Total Revenue (2020) | | :--- | :--- | | Top 5 Customers | 86.5% | | Pioneer Natural Resources USA Inc. | 42.5% | | XTO Energy Inc. | 20.3% | [Competition, Risks, and Regulations](index=10&type=section&id=Competition%2C%20Risks%2C%20and%20Regulations) Operates in a competitive market, subject to operational hazards and stringent environmental regulations, with increasing scrutiny on climate change - Major competitors in hydraulic fracturing services include **Halliburton Company**, **Liberty Oilfield Services Inc.**, and **Nextier Oilfield Solutions Inc.**[50](index=50&type=chunk) - The company maintains **pollution legal liability coverage** for surface or subsurface environmental clean-up and third-party liability arising from contamination[56](index=56&type=chunk)[57](index=57&type=chunk) - The company anticipates that the **Biden administration** may introduce more stringent environmental regulations, particularly concerning hydraulic fracturing, permitting, and GHG emissions, which could increase compliance costs[60](index=60&type=chunk)[70](index=70&type=chunk)[74](index=74&type=chunk) [Human Capital](index=14&type=section&id=Human%20Capital) Employed approximately **1,100 people** as of December 31, 2020, prioritizing safety and implementing COVID-19 response measures - The company employed approximately **1,100 people** as of December 31, 2020, with none being unionized[79](index=79&type=chunk) - **20%** of executive officers' annual target bonuses for 2020 were based on achieving safety goals, including a target total recordable incident rate of less than one[81](index=81&type=chunk) - COVID-19 response measures included instituting remote work, limiting visitors, and providing company-paid coverage for testing and vaccination[81](index=81&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) Faces substantial risks from industry cyclicality, commodity price volatility, Permian Basin concentration, and legal/regulatory challenges - The business is highly dependent on capital spending by E&P companies in the Permian Basin, which is directly affected by volatile oil and gas prices[83](index=83&type=chunk) - Operations are geographically concentrated in the Permian Basin, making the company vulnerable to regional supply/demand factors and regulatory changes; in 2020, approximately **99.5%** of revenues were from this region[90](index=90&type=chunk) - The company is subject to a pending **SEC investigation** and multiple shareholder lawsuits (the **Logan Lawsuit** and the **Shareholder Derivative Lawsuit**), which could result in significant legal expenses, penalties, and reputational damage[111](index=111&type=chunk)[115](index=115&type=chunk)[117](index=117&type=chunk) - Reliance on a few large customers is a significant risk; **Pioneer Natural Resources** accounted for **42.5%** of revenue in 2020, and its 10-year service agreement can be terminated by Pioneer as early as **December 31, 2022**[132](index=132&type=chunk)[133](index=133&type=chunk) - Federal and state legislative initiatives related to hydraulic fracturing and climate change could result in increased costs, operating restrictions, and reduced demand for services[137](index=137&type=chunk)[145](index=145&type=chunk) [Unresolved Staff Comments](index=34&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[170](index=170&type=chunk) [Properties](index=34&type=section&id=Item%202.%20Properties) Corporate headquarters in Midland, Texas, with adequate owned and leased properties for current Permian Basin operations - The corporate headquarters is located at 1706 S. Midkiff, Midland, Texas 79701[171](index=171&type=chunk) [Legal Proceedings](index=34&type=section&id=Item%203.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 15 of the Consolidated Financial Statements - Details on legal proceedings are found in "Note 15. Commitments and Contingencies—Contingent Liabilities" of the financial statements[172](index=172&type=chunk) [Mine and Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20and%20Safety%20Disclosures) The company reports no mine and safety disclosures - There are no mine and safety disclosures[173](index=173&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=35&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Common stock trades on NYSE under 'PUMP'; no cash dividends anticipated, with earnings retained for business growth - The company's common stock trades on the NYSE under the symbol "**PUMP**"[175](index=175&type=chunk) - The company does not anticipate paying cash dividends in the foreseeable future and intends to retain earnings to finance growth[177](index=177&type=chunk) [Selected Financial Data](index=37&type=section&id=Item%206.%20Selected%20Financial%20Data) Provides five years of historical financial data, affected by the 2020 industry downturn and the 2018 Pioneer acquisition Selected Financial Data (in thousands, except per share data) | Metric (in thousands, except per share data) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Total revenue** | $789,232 | $2,052,314 | $1,704,562 | | **Operating (Loss) Income** | $(131,243) | $221,362 | $232,669 | | **Net (loss) income** | $(107,020) | $163,010 | $173,862 | | **Diluted (loss) income per share** | $(1.06) | $1.57 | $2.00 | | **Net cash provided by operating activities** | $139,124 | $455,290 | $393,079 | | **Total assets (at year end)** | $1,050,739 | $1,436,111 | $1,274,522 | | **Long-term debt — net (at year end)** | $0 | $130,000 | $70,000 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue decreased **61.5%** in 2020, to **$789.2 million**, due to the pandemic and oil price collapse, leading to cost-saving measures and a net loss [Results of Operations (2020 vs. 2019)](index=47&type=section&id=Results%20of%20Operations%20(2020%20vs.%202019)) Revenue decreased **61.5%** to **$789.2 million** in 2020, resulting in a net loss of **$107.0 million** due to demand decline and pricing pressures Key Financial Performance (2020 vs. 2019, in millions) | Metric (in millions) | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $789.2 | $2,052.3 | (61.5)% | | **Net (Loss) Income** | $(107.0) | $163.0 | (165.7)% | | **Adjusted EBITDA** | $141.5 | $519.1 | (72.7)% | - The decrease in revenue was primarily due to a significant drop in the average effectively utilized fleet count to **10.2** active fleets in 2020 from **23.9** in 2019[231](index=231&type=chunk) - Revenue from idle fees charged to a customer increased to **$47.2 million** in 2020 from **$13.3 million** in 2019, partially offsetting the decline in activity[231](index=231&type=chunk) - The company recorded an impairment expense of **$38.0 million** in 2020, compared to **$3.4 million** in 2019, primarily related to goodwill and property and equipment[236](index=236&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity from cash and **ABL Credit Facility** totaled **$120.7 million** as of December 31, 2020, with reduced operating cash flow and capital expenditures - As of December 31, 2020, the company had no borrowings under its **ABL Credit Facility** and total liquidity of **$120.7 million**[243](index=243&type=chunk) Cash Flow Summary (in millions) | Cash Flow (in millions) | 2020 | 2019 | | :--- | :--- | :--- | | Net cash from operating activities | $139.1 | $455.3 | | Net cash used in investing activities | $(94.2) | $(495.3) | | Net cash (used in) provided by financing activities | $(125.2) | $56.3 | - Capital expenditures for 2021 are projected to range between **$115.0 million** and **$130.0 million**, including approximately **$37.0 million** for new and converted lower-emissions equipment[258](index=258&type=chunk) [Critical Accounting Policies and Estimates](index=52&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical policies involve property valuation, impairment assessment of long-lived assets and goodwill, and income tax accounting, requiring significant judgment - The company reviews long-lived assets for impairment when events indicate the carrying value may not be recoverable; in 2020, triggering events (commodity price collapse, decreased share price) led to impairment tests and write-downs[273](index=273&type=chunk)[274](index=274&type=chunk) - Goodwill of **$9.4 million** was fully impaired and written off in the first quarter of 2020 due to a significant decline in crude oil prices and the resulting market outlook[343](index=343&type=chunk)[277](index=277&type=chunk) - The company recorded a total property and equipment impairment of **$28.6 million** in 2020, which included a **$21.3 million** charge for the planned retirement of **150,000 HHP** of conventional Tier II equipment[274](index=274&type=chunk)[275](index=275&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Exposed to commodity price, interest rate, and credit risks, but does not currently use derivative instruments for hedging - The company is exposed to commodity price risk for materials (proppants, chemicals) and fuel (diesel, natural gas) but does not engage in hedging activities[283](index=283&type=chunk) - A hypothetical **1%** increase in interest rates would have increased 2020 interest expense by approximately **$0.4 million**[284](index=284&type=chunk) [Financial Statements and Supplementary Data](index=57&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Presents audited consolidated financial statements and auditor's unqualified opinion, highlighting **related-party transactions** as a critical audit matter [Report of Independent Registered Public Accounting Firm](index=57&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Auditor issued an **unqualified opinion** on financial statements and internal controls, identifying **related-party transactions** as a critical audit matter - The auditor issued an **unqualified opinion** on the financial statements and the effectiveness of **internal control over financial reporting**[287](index=287&type=chunk)[297](index=297&type=chunk) - **Related-party transactions** were identified as a critical audit matter due to previously reported material weaknesses in internal controls related to their identification and approval[293](index=293&type=chunk) [Consolidated Financial Statements](index=60&type=section&id=Consolidated%20Financial%20Statements) Balance sheet shows total assets of **$1.05 billion**, total liabilities of **$180.0 million**, and a net loss of **$107.0 million** for 2020 Consolidated Balance Sheet (in thousands) | Balance Sheet (in thousands) | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $167,726 | $375,591 | | **Property and Equipment - Net** | $880,477 | $1,047,535 | | **Total Assets** | $1,050,739 | $1,436,111 | | **Total Current Liabilities** | $104,163 | $232,966 | | **Long-Term Debt** | $0 | $130,000 | | **Total Shareholders' Equity** | $870,771 | $969,305 | Consolidated Statement of Operations (in thousands) | Statement of Operations (in thousands) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | **Revenue** | $789,232 | $2,052,314 | $1,704,562 | | **Operating (Loss) Income** | $(131,243) | $221,362 | $232,669 | | **Net (Loss) Income** | $(107,020) | $163,010 | $173,862 | [Notes to Consolidated Financial Statements](index=65&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail segment performance, major customers, **related-party transactions**, and pending litigation, with no loss provision recorded - The company has one reportable segment, **Pressure Pumping**, which generated **$773.5 million** in revenue and **$174.0 million** in Adjusted EBITDA in 2020[386](index=386&type=chunk)[390](index=390&type=chunk) - **Related-party transactions** in 2020 included property rentals from entities affiliated with former executives and equipment maintenance services from an entity with a family relationship to an executive officer[431](index=431&type=chunk)[434](index=434&type=chunk) - The company is facing a class action lawsuit (**Logan Lawsuit**), a shareholder derivative lawsuit, and an **SEC investigation**; no provision for loss has been recorded as the outcomes are not yet reasonably estimable[457](index=457&type=chunk)[461](index=461&type=chunk)[462](index=462&type=chunk)[463](index=463&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=91&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - There were no changes in or disagreements with accountants[470](index=470&type=chunk) [Controls and Procedures](index=92&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded **disclosure controls** and **internal control over financial reporting** were **effective** as of December 31, 2020 - The principal executive officer and principal financial officer concluded that **disclosure controls and procedures** were **effective** as of December 31, 2020[472](index=472&type=chunk) - Management concluded that the company maintained **effective internal control over financial reporting** as of December 31, 2020[475](index=475&type=chunk) [Other Information](index=93&type=section&id=Item%209B.%20Other%20Information) The company reports no other information - There is no other information to report[478](index=478&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Related Party Transactions](index=94&type=section&id=Items%2010-14) Information for Items 10 through 14 is incorporated by reference from the Company's forthcoming **2021 Proxy Statement** - Information regarding Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, Certain Relationships and Related Transactions, and Principal Accounting Fees and Services is incorporated by reference from the forthcoming **2021 Proxy Statement**[481](index=481&type=chunk)[483](index=483&type=chunk)[484](index=484&type=chunk)[485](index=485&type=chunk)[486](index=486&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=99&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) Lists financial statements from Item 8 and provides an index of all exhibits, including corporate documents and certifications - The financial statements from Item 8 are filed as part of this report, and no financial statement schedules are included[488](index=488&type=chunk)[489](index=489&type=chunk) - An exhibit index lists all required filings, including agreements, corporate governance documents, and executive certifications[490](index=490&type=chunk) [Form 10-K Summary](index=103&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no Form 10-K summary - There is no Form 10-K summary provided[497](index=497&type=chunk)