ProPetro (US:PUMP)2023-02-22 17:04Financial Data and Key Metrics Changes - Revenue for the full-year 2022 was $1.3 billion, a 46% increase year-over-year [7] - Adjusted EBITDA increased 134% year-over-year to $317 million, driven by improved pricing and cost management [7] - Fourth quarter net income was $13 million or $0.12 per diluted share, compared to $10 million or $0.10 per diluted share in the prior quarter [8] - Total cash as of December 31, 2022, was $89 million, with total liquidity of $155 million [10] Business Line Data and Key Metrics Changes - The fourth quarter generated $349 million of revenue, a 5% increase from the third quarter, attributed to the acquisition of Silvertip [28] - Silvertip posted $20 million of revenue for January, marking the highest monthly total in its history [9] - Cost of services for the fourth quarter was $243 million, up from $224 million in the third quarter, driven by the Silvertip acquisition and cost inflation [121] Market Data and Key Metrics Changes - The company noted that the Permian Basin remains structurally undersupplied, particularly for next-generation hydraulic fracturing services [106][118] - The transition to natural gas and electric capabilities is expected to provide a competitive advantage in the market [32][95] Company Strategy and Development Direction - The company is focused on transitioning two-thirds of its fleet to natural gas-burning and electric capabilities by the end of 2023 [32] - A disciplined approach to capital deployment is being pursued to enable shareholder returns and strategic acquisitions [125] - The company plans to issue its first sustainability report in 2023, highlighting its commitment to reduced emissions and community efforts [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about valuation improvement across the oilfield services space and the company's long-term role in energy production [12] - The company anticipates meaningful positive free cash flow in the second half of 2023, supported by a front-loaded CapEx program [10] - Management acknowledged the challenges posed by inflation and supply chain constraints but emphasized the company's operational efficiency [96][100] Other Important Information - The company completed the acquisition of Silvertip Completion Services, enhancing its position as a leading completions-focused oilfield services company [24] - The company is transitioning to a more capital-light asset profile while reducing maintenance CapEx [123] Q&A Session Summary Question: What is the current pricing dynamic in the market? - Management indicated that pricing is in a healthy spot and remains conservative, with expectations for meaningful returns to free cash flow if execution continues [20] Question: Is the fleet movement largely completed? - Management confirmed that the repositioning of the fleet is mostly complete, with operational efficiency maintained [39][47] Question: What is the timeline for the deployment of electric fleets? - The sixth DGB unit is currently operational, with the seventh expected in April-May and the first two electric fleets in July-August [52] Question: What are the expectations for shareholder returns? - The company is shifting focus towards shareholder returns and strategic transactions as the transition story winds down [78] Question: How is the company addressing fleet attrition? - Management noted that the new fleets will primarily replace aging legacy equipment, with a focus on maintaining operational efficiency [131]