Liberty Energy (LBRT) Conference Summary Company Overview - Liberty Energy is a leading fracking company in the United States, celebrating its 15th anniversary in 2026, having been founded in 2011 [4][2] - The company has been ranked as the number one frack company in the U.S. for eight consecutive years according to the Kimberlite survey [4] Financial Performance - Liberty Energy reported over $4 billion in revenue last year [6] - The company has a cash return on capital invested averaging 24%, which is 50% higher than the S&P 500 and significantly higher than the OSX average [18] Business Strategy - The company aims to control critical inputs for successful fracking operations, including fuel, sand, and logistics [25] - Liberty has expanded its operations to include a power generation business, launching a CNG (Compressed Natural Gas) business to ensure fuel supply for its operations [27][28] - The company has made strategic acquisitions during downturns, such as acquiring the U.S. assets of Sangio and Schlumberger's onshore North American frac business [22][23] Technological Innovations - Liberty has introduced several technological advancements, including e-frac systems and various iterations of its DigiPrime technology [16] - The company has a complete engineering department that includes geology, reservoir evaluation, frac engineering, and big data analysis teams [17] - Liberty is focused on increasing efficiency through methods like simul frac, which has led to higher utilization of assets [35] Market Dynamics - The fracking market is currently experiencing downward pricing trends, prompting Liberty to explore additional service offerings to maintain margins [24] - The company is adapting to market conditions by lowering its headline fleet count while ensuring that all pumps are utilized effectively [34] Future Outlook - Liberty is investing in power generation, with plans to order 400 megawatts of power generation capacity [39] - The company is exploring partnerships for advanced energy solutions, including small modular nuclear reactors and enhanced geothermal energy [45][46] - Liberty aims to address global energy disparities through initiatives like the Bettering Human Lives Foundation, which focuses on transitioning homes in Sub-Saharan Africa to clean-burning LPG [50][51] Key Takeaways - Liberty Energy has established itself as a leader in the fracking industry with a strong focus on technology, efficiency, and strategic growth [4][18] - The company is well-positioned to navigate current market challenges and capitalize on future opportunities in energy generation and sustainability [39][50]

Company Overview - BKV is the largest natural gas producer in the Barnett Shale, with a corporate 1-year decline rate of 10.8%[10] - BKV has 1,500 MW of low heat rate power assets in Texas[10] - BKV's 2Q25 production was above high end of guidance at 811 MMcfe/d[34] Bedrock Acquisition - BKV announced the Bedrock acquisition for $370 million, targeting close in 4Q25[22, 29] - The Bedrock acquisition includes ~97,000 net acres and 1,121 gross operated wells[29] - Bedrock's 2Q25 production is ~108 MMcfe/d (~63% natural gas) with a low PDP decline of ~7% YOY[29] - Bedrock has nearly 1 Tcfe of 1P reserves (>70% PDP reserves)[29] Capital Expenditure and Production - Forecasted 2025 capital expenditures are between $290 million and $350 million[17] - BKV is targeting projects to reach a 1 Mtpy CO2 sequestration rate by 2027[17] CCUS Business - BKV's Barnett Zero project has been injecting since November 2023, with forecasted annual sequestration of 183 ktpy[105, 106] - BKV has injected ~242,000 tons through 6/30/25 at Barnett Zero[106]

Financial Data and Key Metrics Changes - In Q2, the company generated revenues of $520 million, a decrease from $600 million in Q1, reflecting market headwinds [18][32] - Adjusted EBITDA for Q2 was $79 million, down from $130 million in Q1, resulting in an adjusted EBITDA margin of 16% compared to 22% in the previous quarter [32][34] - Free cash flow improved to $54 million in Q2 from negative $14 million in Q1, demonstrating operational resilience despite challenging conditions [18][34] Business Line Data and Key Metrics Changes - Stimulation services revenues declined to $432 million in Q2 from $525 million in Q1, with adjusted EBITDA falling to $51 million from $105 million [34] - Proppant production segment revenues increased to $78 million in Q2 from $67 million in Q1, driven by higher delivered sand sales [35] - Manufacturing segment revenues decreased to $56 million in Q2 from $66 million in Q1, with a notable increase in external sales contributing to adjusted EBITDA improvement [36] Market Data and Key Metrics Changes - The company noted a stabilization in active fleet count towards the end of Q2 and into early Q3, with modest improvements in activity levels observed [22] - Increased customer engagement around 2026 planning indicates a potential uptick in activity levels compared to current conditions [43][44] - The company anticipates increased demand in the Haynesville region, positioning itself well with significant proppant production capacity [24][19] Company Strategy and Development Direction - The company emphasizes its vertically integrated manufacturing capabilities and sophisticated asset management platform as key competitive advantages [10][19] - A strategic partnership with Flotek has unlocked value and positioned the company in a multibillion-dollar market for gas quality management [16][40] - The company is focusing on a power generation strategy that targets the data center market, aiming to generate revenues decoupled from the volatility of the completions industry [17][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about market conditions improving, with signs of increased activity and customer dialogue for 2026 planning [7][19] - The company remains disciplined in capital allocation while preparing for potential tightening in the market in early 2026 [20][50] - Management highlighted the importance of technology leadership and operational flexibility in navigating current market challenges [11][19] Other Important Information - The company reported total liquidity of approximately $108 million at the end of Q2, including $87 million available under the ABL [38] - The company executed transactions expected to provide approximately $90 million in incremental liquidity through 2025, enhancing financial flexibility [39] - The Flotek transaction involved the transfer of mobile gas conditioning units, strengthening the strategic partnership and providing financial benefits [40] Q&A Session Summary Question: Inquiry about increasing customer engagement around 2026 - Management noted a significant increase in engagement regarding 2026 programs, with operators reassessing their activity levels and some already returning to work [43][44] Question: Context on increased activity since late June - Management indicated that the uptick in activity is observed across both gas and oil markets, with a more pronounced increase in gas-directed activities [45][46]

Partnership & Opportunity - The company's partnership with Liberty has a long history and presents significant opportunities [1] - There is a substantial need for power, creating immediate demand [1] Energy Solutions - Gas is viewed as a bridging solution to nuclear energy, playing a complementary role in the future [2] - The company aims to provide near-term power solutions for data center providers, transitioning to new nuclear builds [2] - Offering a comprehensive portfolio mix makes it easier for customers to obtain power [2]

Real Estate & Space Industry Trends - Data centers are a rapidly growing sector in real estate, driven by AI, cloud computing, and online activities, but their high energy consumption poses a challenge [1] - Private capital is flowing into the space industry, with new companies emerging to serve various aspects of the sector from both public and private perspectives [3] - The space industry is experiencing a revolution, with companies seeking to monetize space through manufacturing and serving as a base for further space exploration, including potential data center production on the moon [6] - Space offers unlimited power from the sun, unlimited cooling from the vacuum, and unlimited real estate, potentially unlocking constraints faced on Earth and providing clean energy [9] - The current economic environment presents challenges for global development, with stagflation, higher rates, and slower growth making it difficult for developers to make projects financially viable [19][20] Technological Advancements & Infrastructure - Reusable rocket technology is advancing, with potential for 1,000 tons of launch capability, moving towards a million tons per year [32] - Robotics are becoming increasingly advanced and advantageous in the lunar environment due to the challenges of sustaining human life in space [31] - Ethos is developing technology to utilize lunar geological resources, such as anorthosite, to create building materials like synthetic igneous rock, which is twice as strong as concrete, for constructing landing pads, roads, and foundations on the moon [26][27][28][29] Energy & Power Consumption - Data centers are projected to consume a significant portion of US power generation, potentially reaching 40% by 2030, highlighting a serious infrastructure problem [42] - China has a significantly larger installed power base than the US and is investing heavily in solar energy, necessitating the exploration of new, non-Earth-bound power generation methods [44] - The cost of solar energy is declining rapidly, and nuclear energy is gaining traction, suggesting that energy problems will be solved, but the demand for power is infinite [47] Investment & Future Outlook - Capital is seeking great opportunities and returns, with space emerging as a promising area for investment [21] - Infrastructure investments require a long-term perspective, considering future disruptors and their potential interplay with the current world [14] - The space industry is in its early stages, similar to the railroad era, representing a major investment opportunity and creating new "rails" for the future [17]

Financial Data and Key Metrics Changes - CECO Environmental reported record bookings of approximately $228 million, up 57% year-over-year, with a sales pipeline exceeding $5 billion for the first time [7][8][12] - Revenue for Q1 2025 was $177 million, representing a 40% increase year-over-year, with adjusted EBITDA at $14 million, slightly above expectations [12][39] - The company exited the quarter with a backlog of $602 million, up 55% year-over-year, marking the first time the backlog exceeded $600 million [11][37] Business Line Data and Key Metrics Changes - The recent acquisitions contributed approximately 28% of the revenue growth, while organic growth was driven by project execution against the record backlog [12][39] - The company divested its Global Pump Solutions business, which contributed about $10 million to revenue in the quarter [39][34] Market Data and Key Metrics Changes - CECO's sales pipeline has grown significantly, with nearly a dozen opportunities each valued over $50 million, indicating strong future potential [8][12] - The company noted continued strength in various sectors, including gas infrastructure and nuclear, despite not booking large orders in the power generation market [71][76] Company Strategy and Development Direction - CECO is maintaining its full-year 2025 guidance, focusing on price and productivity measures to offset tariff impacts [10][33] - The company is committed to expanding its portfolio with a focus on reshoring, power generation, and water infrastructure, aligning with macroeconomic trends [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience amid market uncertainties, emphasizing the importance of geographic and vertical market positioning [17][20] - The company remains optimistic about future order bookings in the power sector, anticipating significant contract awards in the coming quarters [56][57] Other Important Information - CECO's gross profit margin for Q1 2025 was approximately 35.2%, consistent with recent quarters, attributed to operational excellence and improved project execution [43][42] - The company is focused on IT infrastructure investments, particularly in a unified ERP system, while maintaining a capital-light approach [85][86] Q&A Session Summary Question: How does the power-related pipeline look at this point? - Management indicated a strong pipeline exceeding $1 billion, with various solutions including emissions and gas infrastructure, and expects large contract awards in the power sector soon [56][57] Question: How does the company handle cost changes and tariff impacts after booking a contract? - Most contracts allow for pass-through of tariff-related increases, and the company is actively working with suppliers to manage costs and maintain visibility [59][60] Question: Can you discuss the mix of the $228 million in orders? - The orders were balanced across various platforms, with notable strength in gas infrastructure and nuclear projects, despite no large orders from the power sector [70][71] Question: What areas of investment are planned for the rest of 2025? - The primary investment focus is on IT infrastructure, specifically a unified ERP system, with modest capital expenditures expected for traditional equipment [85][86] Question: What impact might defense spending have on the business? - While not a direct defense contractor, CECO expects indirect benefits from increased factory construction and power infrastructure investments in response to geopolitical situations [87][89]

Core Insights - CECO Environmental Corp. reported record orders of $228 million in Q1 2025, leading to a backlog exceeding $600 million for the first time in company history, indicating strong demand and growth potential [4][6][8] - The company achieved an operating income of $61.9 million, significantly up from $7.7 million in Q1 2024, while net income rose to $36.0 million from $1.5 million in the same period [4][6][20] - CECO maintains a full-year revenue guidance of $700 to $750 million, representing a 30% increase at the midpoint, alongside a backlog growth of 55% [6][8] Financial Performance - First quarter revenue was $176.7 million, up 40% from $126.3 million in Q1 2024, with gross profit margin at 35.2% [6][16] - Non-GAAP operating income for Q1 was $8.6 million, down 16% from $10.2 million in Q1 2024, while adjusted EBITDA increased by 6% to $14.0 million [4][20] - Free cash flow for the quarter was $(15.1) million, a decline of $13.2 million compared to $(1.9) million in Q1 2024 [4][6][20] Strategic Actions - The company implemented strategic price actions to mitigate tariff impacts and proactively managed its backlog by adjusting inventory purchases and hiring key personnel [5][8] - CECO plans to take cost actions in Q2 2025 to eliminate redundant roles and enhance productivity, expecting these measures to support operating margin expansion [5][8] - The company is monitoring economic conditions and supply chain dynamics to manage potential cost increases effectively [8][29] Market Position and Outlook - CECO's portfolio is aligned with long-term growth themes such as industrial manufacturing reshoring, electrification, and energy transition, positioning the company favorably for future growth [4][8] - The order pursuit pipeline exceeds $5 billion, reflecting strong confidence in continued growth [4][6] - The company recognizes the dynamic economic environment but believes its operational model mitigates direct exposure to tariff-related imports [8][29]

Financial Data and Key Metrics Changes - In 2024, the company achieved a 15% increase in oil production and a 22% increase in total production, while upstream cash capital expenditures declined by 27% [6][14][25] - The company reduced debt by $90 million year-over-year, achieving a leverage ratio of one times at year-end [25][30] - The average daily net production for Q4 2024 was 15.91 thousand barrels of oil per day and 25.03 thousand barrels of oil equivalent per day [14] Business Line Data and Key Metrics Changes - The company drilled 30 wells, completed 20, and turned in line 22 gross operated wells in 2024 [11] - The cost per foot for drilling decreased by 11% year-over-year, with an average of approximately $520 per foot in Q4 2024 [12][56] - The company maintained low operating costs, with lease operating expenses per BOE for 2024 at $8.66, roughly flat compared to 2023 [17] Market Data and Key Metrics Changes - The company captured and sold more produced gas in Texas, resulting in a lower percentage of oil in the overall production mix [15] - The company is focusing on developing its New Mexico assets, which are expected to provide significant long-term growth potential [7][46] Company Strategy and Development Direction - The company plans to shift more development activity to New Mexico in 2025, with a focus on midstream projects to enhance operational control [7][8] - The strategic development includes a 15-year gas purchase agreement and a high-pressure natural gas pipeline capable of transporting up to 150 million cubic feet per day [8] - The company aims to build complementary assets across upstream, midstream, and power sectors to create multiple revenue opportunities [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the capital efficiency of the asset base and the ability to generate positive free cash flow [26][30] - The 2025 plan includes a total production growth range of 9% to 14%, with oil production growth of 5% to 8% [26] - Management highlighted the importance of maintaining balance sheet flexibility and access to capital markets for future opportunities [10][30] Other Important Information - The company achieved a total recordable incident rate of zero for 2024, demonstrating excellence in operational safety [11] - The company is expanding its power joint venture to reduce reliance on the grid and capitalize on market fundamentals within the Texas power grid [9] Q&A Session Summary Question: Can you provide updates on the ERCOT project and potential upside? - Management confirmed that the ERCOT project is progressing well, with construction expected to start soon and potential for additional projects being explored [41][70] Question: What are the benefits of the New Mexico Gas Midstream project? - Management explained that building the midstream project allows for better control over gas transportation and processing, addressing the regional lack of takeaway capacity [51][52] Question: How did D&C costs progress throughout 2024? - Management noted a continued improvement in D&C costs, with a decrease of 11% year-over-year, and plans to maintain this trend in 2025 [56][57] Question: What is the status of the ERCOT deals? - Management indicated that they are deep into Phase 2 of the ERCOT project and are exploring various opportunities, with updates expected in the near future [70][72] Question: Are there concerns regarding service availability or cost pressures? - Management stated that service availability is good, with slight improvements in drilling costs, and they are modeling a slight increase in well costs for 2025 [76][77]