Ranger Energy Services Conference Call Summary Company Overview - Ranger Energy Services is the largest well service provider in the United States, focusing on maintenance and production rather than drilling new wells [2][4] - The company reported revenue of approximately $550 million and EBITDA of about $75 million in the previous year, with a free cash flow conversion rate of around 60% [3][4] Recent Acquisition - Ranger recently acquired American Well Services (AWS), a Permian-based company, which contributed approximately $180 million in revenue and $35-$40 million in EBITDA [3][19] - The acquisition was valued at $90 million, primarily funded by $60 million in cash from Ranger's balance sheet [5][23] - This acquisition positions Ranger as the largest well service provider in the lower 48 states, enhancing its market leadership [20] Financial Performance and Strategy - Ranger has historically returned about 40% of its free cash flow to shareholders through dividends and share repurchases, with a commitment to return at least 25% [5][34] - The company has repurchased over 15% of its shares in recent years, indicating a strong focus on shareholder returns [4][34] - Ranger aims to generate over $100 million in EBITDA by 2026, reflecting a significant growth opportunity [30] Market Position and Competitive Advantage - Ranger differentiates itself from competitors by focusing on production and maintenance services, which are generally more consistent through market cycles [6][12] - The company primarily serves major oil companies like ExxonMobil, Chevron, and ConocoPhillips, benefiting from their stable work programs [12][13] - Ranger's service lines include high-spec rigs, processing and ancillary services, and a focus on safety and executional excellence [8][12] Technology and Innovation - Ranger is investing in new technologies, including the Echo electric hybrid rig, which features electric drawworks and regenerative braking [36][37] - The company is also developing an AI camera system called Overwatch to enhance safety on job sites [43] - Ranger's e-ticketing platform integrates with HR systems to streamline operations and improve cash flow [41] Financial Flexibility and Future Outlook - Ranger maintains a strong financial position with a leverage ratio of less than half a turn, allowing for continued share repurchases and potential future acquisitions [32][33] - The company expects to achieve pro forma cash flows of $80 million, providing ample resources for growth initiatives [33] Key Takeaways - Ranger Energy Services is strategically positioned for growth through its recent acquisition of AWS, strong cash flow generation, and focus on shareholder returns [19][30] - The company is committed to leveraging technology and maintaining a competitive edge in the well service industry [36][43] - Future earnings potential is promising, with expectations of exceeding $100 million in EBITDA by 2026, driven by operational efficiencies and market demand [30][31]

Acquisition Highlights - Ranger is acquiring American Well Services (AWS) for approximately $905 million, funded through $605 million in cash and 2 million shares, plus a $5 million earnout[7] - The acquisition is expected to generate ~$4 million in cost synergies, fully realized by 2027[7] - The purchase price represents a multiple of less than 25x AWS's Last Twelve Months (LTM) Q3'25 Adjusted EBITDA[7] Financial Performance & Metrics - AWS's LTM Q3'25 revenue was $186 million with a gross margin of 29%[16] - AWS's LTM Q3'25 Adjusted EBITDA was $43 million, representing a 23% Adjusted EBITDA margin[16] - Ranger's LTM Q3'25 Free Cash Flow was $531 million, with a 71% conversion rate[38] Strategic Benefits - The acquisition strengthens Ranger's position in the Permian Basin, expanding its customer base and service offerings[7, 11] - New service lines from AWS, such as tubing rentals, inspection, chemicals, and mixing plants, provide opportunities for pull-through revenue[7, 11, 22] - The combined company expects to repay borrowings within one year of closing, leveraging cash flows from the pro forma organization[11] - Ranger remains committed to returning a minimum of 25% of cash flows to shareholders[8]