ProPetro (US:PUMP)2022-05-04 18:11Financial Data and Key Metrics Changes - The company generated $283 million in revenue for Q1 2022, a 15% increase from $246 million in Q4 2021, driven by improved pricing and higher activity levels [11] - Adjusted EBITDA for Q1 2022 was $67 million, representing an 81% sequential increase from $37 million in Q4 2021, with adjusted EBITDA margins expanding significantly by almost 900 basis points [13][14] - The company reported a net income of $12 million or $0.11 per diluted share, compared to a net loss of $20 million or $0.20 loss per diluted share in the previous quarter [13] Business Line Data and Key Metrics Changes - Effective fleet utilization was 13.7 fleets in Q1 2022, up 9.6% from 12.5 fleets in Q4 2021, achieved without deploying additional fleets [11] - The company experienced a record of 600 pumping hours for a simul-frac fleet in March 2022, indicating increased operational efficiency [11] Market Data and Key Metrics Changes - The North American drilling rig count continued to rise, suggesting that initial estimates of 15 to 20 industry-wide fleet additions in 2022 may be conservative [8] - The company noted that demand may outpace effective horsepower supply well into the next year due to equipment attrition rates and ongoing supply chain issues [8] Company Strategy and Development Direction - The company is focused on margin expansion and capital efficiency rather than market share, emphasizing a disciplined approach to fleet deployment [5][20] - A transition to lower emissions natural gas burning equipment is underway, with the company taking delivery of Tier IV Dual-Fuel units [10] - The management believes that focusing on returns and capital discipline is critical for success in the current market environment [18][20] Management's Comments on Operating Environment and Future Outlook - The management acknowledged operational challenges due to weather and supply chain issues but expressed confidence in the company's ability to navigate these challenges [6][16] - The geopolitical landscape, particularly the war in Ukraine, has tightened the energy market, creating a favorable backdrop for the company's operations [7] - The management expects continued volatility in supply chain constraints and inflation, which may impact margin expansion efforts [16] Other Important Information - The company incurred $72 million in capital expenditures during the quarter, with $28 million allocated to Tier IV dual-fuel conversions [17] - Total cash as of March 31, 2022, was $71 million, and the company remains debt-free, with total liquidity of $127 million [18] Q&A Session Summary Question: Pricing perspective and fleet profitability - Management indicated that approximately 30% of their pricing is at leading-edge numbers, with efforts ongoing to improve profitability across fleets [26][27] Question: Incremental demand in the Permian - Management noted that demand is expected to outstrip overall frac supply soon, emphasizing a focus on operational execution and maximizing returns [33][34] Question: Fleet profile evolution and CapEx - The goal is to increase the number of Tier IV Dual-Fuel fleets by year-end, with a focus on capital efficiency and profitability [28] Question: Operational challenges and supply chain issues - Management acknowledged ongoing challenges but expressed confidence in their team's ability to navigate these issues effectively [55][56] Question: Future of simul-frac operations - Management believes that simul-frac operations will see slow growth, requiring significant infrastructure and logistics capabilities [82][83]