National Energy Services Reunited (NasdaqCM:NESR) Conference Transcript

Summary of National Energy Services Reunited (NESR) Conference Call Company Overview - Company: National Energy Services Reunited (NASDAQ: NESR) - Founded: 2017 as a SPAC - Current Revenue Run Rate: Approximately $1.3 billion, with a clear path to exceed $2 billion [2][5][160] Industry Insights - Focus: Oilfield Services (OFS) in the Middle East and North Africa (MENA) - Market Position: NESR is the largest national OFS company in the MENA region, following the big three international companies [5][11] Key Market Dynamics - Middle East Oil Production: National oil companies (NOCs) in the region are focused on long-term planning, with a shift towards gas and renewable energy [10][11] - Growth Projections: The Middle East is expected to see a year-on-year growth of 7-10% [20][24] - Kuwait's Capacity: Kuwait aims for a steady increase to 4 million barrels by 2035-2040, having recently surpassed 200 rigs [13][15] - UAE's Aspirations: The UAE is targeting 5 million barrels by 2027 and aims to stop gas imports by 2030 [15][16] Strategic Initiatives - Local Value Addition: NESR is positioned as a national champion, benefiting from local perception and compliance with in-country value programs [27][31] - Investment in R&D: NESR has established a research and development facility and is investing in local innovation ecosystems, such as the Ahmadi Innovation Valley in Kuwait [34][41] Technology and Service Delivery - Technology Development: NESR is focusing on proprietary technology in advanced drilling and decarbonization, with plans to commercialize new tools in the near future [52][53] - Service Quality: NESR aims to maintain high service quality, scoring top metrics in various service segments [58][60] Financial Outlook - Revenue Growth: NESR anticipates a growth rate of 30-40% year-on-year, significantly outpacing the overall market growth of 5% [102][104] - Margin Maintenance: The company aims to maintain profit margins in the range of 20-25% despite competitive pricing pressures [130][136] - CapEx Plans: NESR plans to modestly increase capital expenditures to around $120-150 million, leveraging favorable market conditions to acquire equipment at lower costs [151][154] Future Growth Opportunities - Expansion Plans: NESR is exploring opportunities in North Africa and Asia, with a focus on maintaining a strong presence in Libya, Algeria, and Egypt [161][162] - Cash Flow Management: The company expects to generate significant free cash flow, allowing for flexibility in growth investments or potential dividends in the future [181][186] Conclusion - Investment Recommendation: The CEO suggests that NESR remains undervalued and encourages investors to consider purchasing shares [190]