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NEX NexTier Oilfield Solutions

Participants
Kevin McDonald EVP, Chief Administrative Officer and General Counsel
Robert Drummond President and CEO
Kenny Pucheu CFO
Sean Meakim JP Morgan
Tommy Moll Stephens
Mark Bianchi Cohen
Scott Gruber Citigroup
Stephen Gengaro Stifel
Chris Bell Wells Fargo
Chase Mulvehill Bank of America.
Waqar Syed AltaCorp Capital Inc.
Call transcript
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Operator

Good morning, and welcome to the NexTier Oilfield Solutions First Quarter 2020 Conference Call.

As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

For opening remarks and introductions, I'd like to turn the call over to Kevin McDonald, Executive Vice President, Chief Administrative Officer & General Counsel for NexTier. sir. ahead, go Please

Kevin McDonald

and Good earnings And our conference me Drummond, XXXX. operator. Pucheu, and NexTier Financial Chief first to Oilfield With Officer. President Robert are Solutions call today Executive morning, you, Officer; welcome Kenny everyone. the quarter Chief Thank to discuss

of to is Investor news get we release started, attention issued to Company's currently disclaimer the statements the yesterday direct like we forward-looking section contained which posted that Relations in Before your afternoon, I'd the website. in the

Our morning Company's statements which differ in to these speak expectations, cause are These to that outlook forward-looking those which from or the future, implied materially by of subject forward-looking beyond considered could call our the risks Company's includes actual this many that statements. expressed to and statements are results or the predictions are uncertainties, statements. of control

obligation no and statements Form We current undertake and forward-looking reason. publicly update any on XX-K, risk We and for filings. Commission regarding Exchange to Securities revise statements X-K, report Form on to disclosures reports our annual factors you any refer other recent or NexTier’s in forward-looking

measures press the our financial Additionally, and included to details include GAAP most are website. release our financial our directly non-GAAP measures, in that reconciliation is comparable on comments also today additional posted

turn over that, Executive to call NexTier. the With Officer I'll Robert Drummond, of Chief

Robert Drummond

everyone many around the the the this call joining morning. across thanks world. and to impact for pandemic ongoing Covid-XX addressing Kevin. start that like the And by Thank continues you. I'd to country so

operate. employees, in health appropriate protect partners and our actions of remains and focus we precautions the all communities Our and which the help taking well-being on to

the risk the a we on focused office site. the implemented quickly mitigation quarter, response During to plan well first from

relationships can have and industry support to vigilant our response ahead to those around prioritized stay continue our and we encourage I commend across the continue protecting quickly We remain the customers that everyone that colleagues them. decisively, my themselves to partners. and curve acting strengthen and with to and our of hope and by continue people a in

competitive quarter, recent we near our Turning despite following adjusted just flow quarter quarter, the inflows. per in Support first months contribution of from synergies totaled to X% flat million, completion proud nearing million. report Services strong of top And to Revenue utilized On the completion integration $XXX $XXX despite quarter profit the We business Keane We gross sequential results. related the $XX are EBITDA positions adjusted merger base, rate divestiture. fully throughout our fleet million stack. lower free of C&J $XX.X sequentially generated one-time Well cost us million of only the annualized was XX once cash excluding had this Adjusted first which again last challenges million compared of EBITDA to and to we targeted the average our two run $XX million I'm we adjusted have our delivered of captured delivering generated recently an margins. $XX and fleets.

prices increased the activity including pro customers pleased sudden steady was utilized with faced frac though fully start and fourth increase early in a and were price We commodity nation of to the quarter path deployed March. work network, while and pressure achieved strong reaching and forecasted to is improvement, resulted and global year. unprecedented forma start complete of an part for worldwide year the abated. imbalances early with in in and slowdown From the driven shocks industry expected This to as OPEC persist. commodity are in supply economic our global The by throughout also March. headwinds volatility under significant the demand a first out Covid-XX onset circumstances supply destruction very XX an quarter plus both in towards production exhaustion has demand fleet deployment unprecedented averaged recent back activity. XX started oil storage the company by and seasonal remain unforeseen perspective, resulted agreement in shut-in, We got including operating major products, and to all has in beginning as were increasingly extreme demand to significant utilized budget then

As completion in way reductions and a of including have range outright in budget responded stoppages. expected urgently drastic producers and

deterioration, Given several their over short the a producers have of budgets period. multiple updated unprecedented pace times

deployed first significant result, a as a As average. the our in compared quarter our fleet experienced we decline quarter final during to the weeks of

is here's volatile, While fluid believe. we remain the situation what as commodity prices

activity near-term activity activity remain in will full light this storage producers low declines visibility the manifest to completion slash continue environment. fundamentally a First, We've as will rig with of seen deteriorate count all and production. outpacing

making challenging variety more even take Second, of arrangement a the including dynamic stoppages activity remains efficiency situation reduction, on in near declines term. day-to-day scheduled of will and completion achievement almost activity the temporary

not financial hedge all storage will similarly varying strength. footprint. and operators Third, be impacted Access geographic EMP given position,

activity more build. impact the the need basin inventory and to duration magnitude exact resolution, we crude And footprint a have of the stable. related to work the through and expect virus where its driven global widespread sizable in uncertainty is significant fourth, we example, For by downturn a gas economic to unclear be

outbreak While on due we with change the the history and are customed and situation management well-positioned and with came activity deal NexTier industry the Covid-XX to our processes. downturn associated to without is in strong to quickly warning,

partnerships partner. and to will teamwork, we collaboration people's continue continuously swift result and our areas is dedication, combined and and new deploy efficiency of culture to so. action and in completion been relationships with led Our improvement these and We forging and a tangible improvement appreciate these on lasting in in constantly differentiated do management, vendors, us risk We've that believe with customers quick have drive challenging nimbleness for technique mobility, and to record innovation. the quo technology status continuous focused our our customers track our

the Our objective same. remains

improving the in operation. to in rapidly be completion efficient and company and safe determined ever drives process cost technology efficiency are US cost most utilizing the that by data We a deploying

The US currently grow permanently the production will is land is shrinking. US increasing. when pressure it gets under and call And and on not the but restarted, again gas again we economy business believe oil

As organized ourselves will a such response rapid to in we've manner that opportunity. future allow for

for enhanced We are to opportunities ability created a while quickly sales preparing by worst-case preserving through our scenario short-term our react organization.

us our aligning balance demand. preserving sheet deliberate priority centered conditions. to market balance And next are primary fortify cover pillars. cash. top a a actions our with where This to cost Protecting navigate will We've few. on several our a steps challenging and taken Starting decisions for remains our year these Our sheet further position. balance help structure sheet two protection, highlight that I'll

acted playbook and our we spending. decisively First, reduce future shift CapEx

of from As than and decrease previously lowered total announced, compared spending reflect previous XX% we to our XX% a our expenditures forma pro by guidance as XXXX. XXXX more over capital in

This of portion completion with innovation reduction line narrowing included previously in significant market to near-term our while our a idling return. and demand, fleet initiative investment active with technology

to downturn, a approach We the maintenance. reduce diligent particularly maintaining continue market while all in CapEx to to our prolonged event of evaluate ways

our sheet. cost and of Second, Well cash we further the approximately reduction divestiture accelerating years our operation, our executed five on free flow unlocking business, Support balance recently streamlining of Services onto

in in by at cash million guaranteed approximately generated by closing total $XX million to million including make-whole XXXX. proceeds $XX sale bonds $XX a March and Our par provision

and liquidity With million in including the of million quarter actions million $XXX total $XXX first million $XXX exited the cash comprised draw revolver we taken with availability. of of revolver $XXX in

navigate to We we expect our road actions benefit our further to continue the sheet balance ahead. as

expressed who form several current financial it. they that critical choose to customers in of have Our strength confidence in financial health sustainability environment our and have factors are as in communicated the

proactive quickly second sizing and Our and our cost demand, ability structure expand and rebound. to activity of preserving action market set when operations aggressive react of while our to involves

nearing We the our of integration synergy. Keane completion and recently targeted of of rate achieved C&J million and cost run $XXX are

focused mentioned March a a to transformation. of we've now transitioned the environment, component, our have in involved from which coordination assess fixed the base larger removed team. execution run and This the planning, and the size situation and scope are organization from entire significant our we across of rate $XXX synergies result our are effort early We business March, transformation variable significantly earlier. costs accurately manage reduce of taking immediately started early of Since system As of million intensely cost on highly the proactive incremental our to and cost actions accordingly.

cost headcount, operational our reducing and multiple overhead lower across from footprint derived geography. activity are levels or savings cost These

unrelenting focused will and streamline the organization. distance up. to measures benefit streamline, pick as optimizing Our respond advantages cost Steps organizational our activity market several that structural to which the near-term swift from to longer-term we strategy flatten well challenges with continue our and as and of the simplify within the functions declines, taken structure, on proactive as

on Let's walk reduction. costs maximizes organization way expanded with at through the of reduced leadership taking reductions our temporary that key we by executive in including our bonus the restructured a cash approximately and by We role. team cash XX% drivers. and reduce of salary leadership size the streamlined top senior XX% in of of compensation the our a some Starting talent significant company, managerial

line XX% in Directors with compensation by has reduction executive of of Board reduction a number including a and similar cash the measures responsive directors Our in team. taken the three in

overall workforce our a aligned market to with adjusted demand. size level We of the expected

today, we've of two-thirds. workforce nearly reduced As our by

our in We've aggressively cash than million. employees. we've our XX% current reduction every maintaining addition footprint all in by expense reductions four strategic and competitive annual swiftly for implemented our footprint drive operating a reduction compensation total In while basin actions by These workforce operate. the consolidation these of $XXX and to cost, more in labor facilities through lowering run rationalizing and compensation adapted we environment which a rate will actions, combined to

of only customer key Not suppliers. we've in actions reduction travel non-essential one and business including factoring our commercial also actions have and but Support of Well site reduce needs these now to the and of cost informed lead of our the resulted costs We've XXX-k.The non-discretionary in third should XX% in divestiture, environment. our the changes elimination the more and alignment when of times faster site. business, other of suspension will Services recent than of These long-term response addressed running exited help ever-evolving to about decision, with our our better arrangement

While involved. difficult of of necessary, very because been especially the the quality these actions have people

and future. in second cannot and everyone's of they for are We are do understanding humbled of all our actions. our customers during NexTier both The historically and challenging I company, enough professionalism the these to them what And thank none. people by possibly

we enabled surface our noted, around our opportunity centered digital I innovation select, and high-impact sharpened As focus on project.

already we've During the XXXX, to. completing our of are we spin initiatives on half a key committed strategic first few

primary XXXX, two For this includes initiatives.

First, the DGB of of upgrade engine technology lowering gas compressed of practically our portion or capable gas, burning filled dual natural fuel OpEx. a natural while

frac health capital including significant control spending drive long a equipment believe initiatives and we the over provide digital which monitoring, will down and Second, deliver opportunity term. maintenance optimization to efficiency

offering return service and of of a We've enhanced investment these work. was our on more customers already capable base seen as declining addressing maintaining

digital we've made. supports our made our While even of efficient the headcount and more adjustment initiatives level have workforce

great the of via a across by US we our the we our strong Arabia these we footprint back well-positioned region. customer NESR. sustained to year NexTier the base maintain Marcellus Separately, beginning oriented streamlined deployed innovation from position last that gas contract in addition natural and further In through with partner the is US-based where Utica completion making differentiated a are dating in company to a our Saudi strides our at fleet is

deliver efficiency. start. NESR's and is to and brings service development good to Our very all partnership proud ability involved a This quality I'm world-class leading end the it the customer. furthers our parties to efficiencies of arrangement off as benefits business team's

for a future. reflects opportunity NexTier in the this believe to continue We growth unique

industry through to Before the tough impacted to be this the to before. things on thousands to but empathetic their challenging be cycles We our make released a Kenny, that sustained industry. times it's I'd on over same I continue us. will is jobs. being The our colleagues industry of all pass see in to few those but are loss know of this difficult our No outbreak. sector time, employment from a been At we're comments has like two industry, Covid-XX cyclical by

needed prevalent. it strong is industry They focused our get and in change are the is stay innovate people times optimistic and Our when when tough, are resilient. when and uncertainty

advantage company. of again. stronger I benefit continue this record, energy ready take out the stand services for the persevere and the around that Americans of proudly fewer our will With collective is to a critical so I'm many track confident we'll other We'll and world. once perhaps come market or side more on with constructive deliver to

I'll that Kenny. now to over With turn things

Kenny Pucheu

increase Total Robert. forma Services The re-openers coupled million business pricing revenue fourth compared decrease by Well Support pro QX the quarter revenue divestiture the of you, million Thank to impact quarter. which $XX $XX EBITDA first totaled was from in $XXX million with Well The $XXX the was first our March, early strong sequential driven and adjusted contract with in was in were compared Support by quarter the of sequential utilization the partially performance. adjusted divesture business. to decrease offset the fourth pro EBITDA in the Services quarter. Total million due to forma operational

and all utilization to basins was aggressive compared of challenging reductions relatively market quick partially divestiture the in flat program March. conditions the as and from quarter. by in our Price both fourth cost offset decisive quarter the our first adjust our higher and actions reductions were synergy to Excluding this performance segment,

In million profit Completion pro million forma compared of segment, totaled gross million to $XXX segment the fourth our $XXX quarter. to totaled adjusted relatively of revenue profit in Services first remaining Completion quarter gross adjusted fourth compared revenue Services flat. quarter, in $XXX $XX the pro forma million

quarter, and which adjusted average During of profit million fully position adjusted of a deployed in $XX.X first utilized of we includes NexTier in gaps, performance. fleet completions frac fleet peer fourth leader million XX the utilized annualized gross fully On relative pro in an forma bundled basis, to quarter, activity fleet. and the profit the which operated fleet per a total when equivalent per factoring we continues compared annualized to gross as $XX.X wireline XX

unchanged compared segment was forma pro revenue revenue divestiture $XX segment Well the In The Support million fourth fourth Services revenue a million Services the in compared of fourth $XX to totaled quarter. as Support totaled Intervention million compared $X March. In totaled driven revenue profits Well Construction the $XX Well gross early quarter. to $XX the and Adjusted of our the decrease in million to of forma pro in million segment Services by quarter.

make-whole $XX transaction our to in $XX before costs, guaranteed in $XX subject working bonds to noted, Robert cash sale capital amounts including at adjustment. of by proceeds provision. million million million customary As generated escrow And closing total and a par

integration market of fourth assets of of EBITDA of adjusted consisting includes of million including pro Adjusted quarter million cost; compared merger compensation for $XX of $X $XX forma the and for by million impairment and $X Services adjusted profit gross stock $XX Segment total gain offset management million to business. the all Well $X adjustments first segment partially primarily million gross approximately profit of the the adjustments goodwill, in quarter. million, of on sale spent $XX million million non-cash Support $XX

non-cash. adjustments million during quarter were the million $XX On $XX management in the approximately first

the compared adjustment $XX fourth fourth adjusted adjusted SG&A forma million SG&A quarter First totaled and million to general million totaled to excluding selling, of quarter; SG&A $XX pro forma the in expense expense million $XX in pro compared administrative of quarter. $XX management

the the first our finance the market. made was at lease in first of of cash million and Turning at unprecedented on credit strategic our the discounts in pro position March of deferred to defensive and cash sheet. fourth quarter. our $XXX finance challenges debt for obligations based on $XXX of the and $XXX the of decision million fourth a to and in quarter quarter. cost facility asset $XXX million; with balance $XXX net during a million, to total to end We excluding compared draw maximize drawn cash end to Total the compared quarter exited $XXX million forma the of revolver million We

of Net was the investments was trailing debt including end This first months CapEx borrowings asset operations in ratio a totaled in XX of resulted at the from flow used million million flow a in for $XX asset available basis. $XXX under in forma $XX activities cash quarter quarter by Cash technology. in cash $XXX driven cash while first approximately facility. excluding $XX free maintenance $X investing $XX credit $XXX during of selected first approximately flow flow exited We quarter leverage million million and the the near our in approximately the facility and free million million the $XXX million availability on resulting first $XX quarter cost, pro first million based zero total during with the liquidity integration million of cash comprised of of merger cash of adjusted based million quarter. and credit of

activity we to market forward-looking our ongoing are on regarding levels and some recent to Due provide uncertainty, color Nevertheless, we or evolution. going not provide guidance financials. activity can volatility

reported, as by the we overall XX in end as working had declined early than April and we and expect more market of As declines we March. That fleets deployed would with by half activity. recently number further line

We potential could are, prepared also range profiles. market address provide activity however, of a opportunities to that

from that as we issues. with can being taken inventory we activity cost customers the already see regarding measures are control near-term have deal the current You cautious our

back With Robert closing that it I'll to for hand comment.

Robert Drummond

executing Kenny. I've will and with milestone continue completions nearly very company partnered critical NexTier leading ever roles several on consider yesterday basis. and evolution. a that an been impact long I Greg later speak with. in one single Thanks world-class to last mark since throughout but success to be our closely to these element privileged talented know fleet our in on a From a ongoing We this benefit his to Northeast leaving and key thank in Keane him will of country. announced a I've left company continued that the has our achievement behalf in every NexTier, an missed of single of work We leaders decade provider enduring we month. stakeholders. company's service the most him with and process benefit wish on over to the us success and for will organization now term. our Greg nothing the He him all Greg integration the future. dedicated been has beginning, executives Greg Powell and be playing a after a to years the I be will of the

Before we leave like to open with the Q&A, for several points. I'd up lines everyone

and are the of will only and impacts First, in the the The an to unprecedented industry of strongest unexpected extended for be is period time downturn. energy an midst survive. experienced likely

pivoted remains protection focusing our financial strength Second, driving cost additional market capital paramount. We've quickly and activity sheet balance to aligning by expenditures the with reduction.

Our fortified balance positions sheet and persevere. the us last

includes and our platform international pressure This a gas innovation and NexTier. differentiate equipment. strategy to attractive outlet, Platform basin Northeast. exposure Third, for our continued to unique the rich base

have we long discipline lasting efficiently integrating strong management and maintaining record Finally, of a a commitment, meeting track validation. our system capital forging partnerships, and

well-positioned I market are we haul the real, is like in in long the now ahead for our position challenge the and relative While future. and the

closing, in our not our their I surrounded and They're for could they dedication, for that term for them efficiency. and NexTier I effort. loyalty assure better be their low and long focused the them period as want thank employees their of customers, on navigate So we're the loyalty want and to this thank commitment and our for to including simply the prices. customers field team, by hard-working here people. I commodity management extra safety

the out and sorted to our diligently balance will the our shareholders allow the the together to act the will offensively ability gets working team. and quarters. for work stakeholders, that comrades we to as To the to create coming us We in both other to haul are continue are sheet protect departed defensively continued encourage and managing give to to strong rejoin us company long opportunities our market

line like With that open for Q&A. the we'd now up to

Operator

[Operator Instructions]

first question Meakim from go Morgan. JP with Our Please comes Sean ahead.

SeanMeakim

Robert, Kenny, good morning.

the environment. long the both structure, well all you -- as to through likely for standalone resize than running When for considering cost thanks XXXX all in get specific cost there? be what back later it the looks take key on fleet the fixed you'll integration, you there like is to have does any XXXX new reason materially take in as may you different how going So current looked reacting actions it to how and just

RobertDrummond

progress. C&J, Sean. expect current that little not When prior is question, anticipate at the to we've Thanks to do we lens to looked made able smaller for from in SG&A the being if status. it the considering that Keane a tune merger create somewhat we make Definitely, activity of structure it, with and with bit

can QX. see we week of a making it there huge to since and progress You QX. intend call get second of the We're in March amount in

that, more would little like you give Kenny, You'll color perhaps. see a to

KennyPucheu

Yes.

we QX. On a SG&A planned benefit Well seeing the SG&A, in that had reduction. of we add I Services seeing are just in reduction XX% mean, versus I'll QX divestiture a we're nearly the terms the of as

we're getting So see head $XX million going QX reduction towards in combined, all a the below we potentially significant those QX to as and annualized/

SeanMeakim

to the if activity Got net sheet stays the we it. That's you cash So to difficulty Thank you are cash extended near full in then period positive and fairly assume you. manage what just capital low balance of to avoid maintenance without fortified to How words in company business very overhead, forecasting in can that the of you'll other for I term? confident talk sustain ability And guess in time. XXXX. margins that an through your maintain recognizing burning any need helpful. about we visibility,

RobertDrummond

activity our we out downward to look there's It's still scenario forward. but but a of is for lot a worst-case guidance question. say is saw like to activity, extremely the you going short-term our done as taking total guidance cost we of XX% at uncertain. we and side Look, on able much would I a the we've past we've side compensation good simply a looks being there scenario already, for And when position the cost lot of no are, we're as experiencing term that what provide a intermediate because us made, kind like on the not we of revenue give question dramatic try activity significant taken of as line, reason the in planning because

estimate got I be predict what be think to like. look capacity total frac to and the market to you able is able going first to

And We're bit range Look that that through kind the we've obviously little then active full is in this share our in little increase fleets through, market process. at through been storage having market. of working the where more of bottom X% you line look That's or environment at scenario a is a sizing QX of a to to production. XX% for true organization me but and a we're in the to dealing it of it this kind color? with guidance. kind historical been given QX, the perspective add of the are shut want of the and deployed operators to Kenny,

KennyPucheu

Yes.

as cash part of flow that generation I you XXXX, offense play This see. through On these even at want to we I stays they doesn't we XXXX for but that the tell longer will what our XXXX your cash look to whether whatever I'll the be can include balance increase the working brings levels we've significant where we to helped of flow We at just mean just us scenarios year-end for million able we it that have free second at looked term Sean, talking our in mention see to defense. play have have question, be XXXX, if sets we we and do and $XXX here obviously look out, it $XX million or for play see do how will capture about positive up addition cash into borrowings. we'll bond and this this capital any by we're liquidate

RobertDrummond

got now to not - we're runway but to have in the try ultimate room liquidity of to with so company also I necessarily activity. working runway bottom rather on structure the defensive absolute deal optimize rebound deal to the with going maximizing would defensive dealing that cost add also we we market. that We'd the the focus really the for aspects enough want capital to with of

two. kind we So balancing of those

Operator

Moll with ahead. Stephens. question go next Tommy Our comes from Please

TommyMoll

many question. visibility weeks, currently And the Good morning rest it the coming of then this if breakeven thanks any no-go quarter we in that go Is fleet on have for decision those taking month? just the to how about and you're you based even what free just in think it? the my of quarter are after insuring as flow way active? for for calendars kind is another your days, or of the Robert third deciding proceed maintenance to keep when cash the the through what's active, there

RobertDrummond

that clear working lot the Tommy. to question, with their if linked we And as I good have. that more want So would their changing just are about say customers the operators market production. visibility you a CapEx becomes our guidance the have visibility is to EMP notice of frequently pretty clarity the

to go they're and are finger your do put on some and variation as customers this, could base that scenario there. to very customer part sticking loyal with very it we to have have a QX through us is but loyal, that have difficult plans planning QX. We We out making

and ourself for fleets plus many advantage a got we deployed, as market to in same the far side keep little how going coming, very size the in opportunities. much, I bit take flexibility it's as size we we how the upper guess is it of know sense As ourself the to to of we what that as we're us of

We change from guidance And bit little market that say little the of we I market the by it we know and looking our outlook. there. fleets. bit is and ranging band the placed that exited from I Tommy? has XX. see a deployed XX down can with as you activity of reached two-thirds, of as headcount fleet we question, the move do I can gave talked and it in guidance. in well a average QX at the dramatic XXX know occurred many everyone's count how about market have of catch would And wide were that what we of view deployed by we going we pretty rapidly you XX fleets is projections about that of for tell So us And peak just of you an from reducing will the kind I that number a on The about that have we it gives be fleets has as all of in is. Did all would April to

TommyMoll

That's and see of but suspect part in Robert. now largest pure-play. going picture Consolidation Pivoting third we're history other big American opportunities North the on so, you're question very the during to sir. bigger do the market more you. to for been the to helpful. player company's Yes, or I Thank largest has completions the this a you, hand a downturn

go make So scale I be to your downturn wonder now need it asset to and at add? into at as and consolidating to full continue it's we or continue think base sense you not look does do there this may

RobertDrummond

that's I maybe kind to accretive would appreciate that aimed consolidation we've may think time and the very it it a I'm and mind. from to in We're America logic, transactions done this our assets. appreciate that would scenario of be going to don't the do shareholders doing all got that. be our look get it are rationale with potential say, beginning. the benefits on but stop success to around macro C&J. North see taking to constantly landscape the of opportunities would good having and a competitive that other going frac. a as finish most too do current through go further it get want that wouldn't and to the We've say are investigate our from to the screen to And strategic And the process us extremely we be it along be into rationalize We've purely say the conditions at we much a record sure ability that I but would be open with But hold given and case fully have to our leverage we for but integration got so taking I of reaction that, But an high first, very view the obviously I we important. bar reaction at we where us said question. track not good. recently or I counterparties the perspective consolidation ideas of that demonstrated

that to open a mind our well. keep We

C&J just not that deal mode. are and digesting now in we aggressively we're the So

TommyMoll

what point ask and I Well, assuming example of it to turn but you be willing at question for this it give if frac an appreciate happy outside I'll not be also back, be would the you you're might an may to area answer. of

RobertDrummond

would can do that that is logic I that of had management look, Yes, and some here we where very in the and do for say just could early question. somewhere looking we're what the appreciate I add our days industrial last part team value today.

Operator

question go with Please next Cohen. ahead. Mark Our comes Bianchi from

MarkBianchi

at at just you looking I'm XXX. the to I I just you Hey, I I maybe because Can there what the commentary just the your of was thanks. run about a misheard balance heard free something million now to Kenny, go of the and wanted right the back comment end your throughout through at cash say year. number again? thought kind about $XXX I cash year

KennyPucheu

Yes. Sure.

just increasing ending to QX XXXX of over was way through I $XXX that from free that stayed balance our the ending what is it a the So we would today see cash positive flow was That million. XXXX if XXXX comment. we see pointed out cash generation

MarkBianchi

you. Got

Okay. That's great.

release realistic the In in to that much talk working --? expectation a bit expect commentary? of about you you little there, terms What's how cap can would

KennyPucheu

Sure. a opportunities companies said of as efficiencies. When capital lot two identified we on we together put the working we

client lot base. of side; making inroads our efficiency a even collaboratively we've the really been good and still on incrementally with capital that working to On increase see supplier we supplier opportunity side, the

activity. from So we of downturn incremental our both of see and with see still the capital you're incremental market efforts to this we a of efficiency. called trend a in capital our working But of free that the revenue environment, general in terms going last the contributor quarter and cash flow being also significant working shape to this out efficiency

I our portion free be just going to XXXX. would generation significant it's So in cash say of flow

MarkBianchi

Okay. enough. Fair

you quarters if on couple there's you and from so customers In how gas the terms can over there maybe piece any next fleets what given have to exposure basins, maybe forth? many the say that visibility help indications does of and

RobertDrummond

Mark. question, the for thanks So

little for have We last able I the many that in but been the actually the haven't reasons competitive couple we've guide how and would Marcellus given a quarters. Keane fleets that gas base customer we in on in had region any operating originated bit out to really we've very basin, point grow Utica consistent a

a for situation contributing -- even have factor the was it overall oil bigger it So coming with we activity profile. our is

oil, far as the distinguishing is look gas relative the as quarters. few we in As out in himself next versus it prospects

You to see pricing commodity can in need a that bit.

we ago couple taken quarters So the competitive footprint And that northeast us really kind rationalize a made even to in some had position have. there. like that our up more of the of we we actions cost

maintaining to we've record So service efficiency safety our up our customers that show to there. and been while able consistent

us good lot. the in we So It's best to ones I region. operating we like a believe and customers. it very important got the some

Operator

question Scott ahead. Our Please next comes with go Citigroup. from Gruber

ScottGruber

Yes. previously time margin margin I'm gentlemen. here, US? does here industry think simply efficiency about help process. the there some you think addition a new Robert, gains you the drive but how the how view also to Are of diversification sure incremental customers models the in how evolves digital -- in about about do Good in here additional that a terms market? from you the but longer-term yourselves also capture you angle non-stock go Is is in business help to mentioned a make there's a think businesses, how in adding that And Just how overall process? there how but the this, E&Ps to efficiency for you morning, a completion gains potentially bundling do angle contemplating? in you're angle? contract possibly

RobertDrummond

question do bigger be the into macro perspective believe that a there's I do back. competitors the we Look, deliver that mean when is I service from ones companies that come that perspective can continue going much first production from lot service customers efficiency out the or a question. when and cost-efficient maybe the US does That's cost-effective will to the most. look we on future. win can that a the to is as most good that it The of kind call or the the the

far opportunity other increase leverage cost what the As provide bigger as scale improve say and service fixed in I into opportunity can of services a the would services to on a network, the as you efficiency scope would roll increasing. want to the to they completion the is company that?

they of We cycle vertical was the And went through operators as the of we because move that believe more us even put into as can take company we'll have things make but together integration. come a And out where phase it some had some further, to service if that like bigger gaining were the challenges future, at prevalent. access. efficiencies QX work with points the more a efficiencies we scope doing to prevalent even

ourselves improving revenue speaking talked just opportunities really avenue. distinguish I one service our about on companies we're primarily a but of focused stage at cost into into investments generated around just are today, We've some that's often to digital efficiency. bigger want So We our the the are that. the investments year by of digital, about about in that They're digital. talking programs been

out of quarter's well equipment monitoring a program engineering monitoring capability equipment health to example. operations hub programs bigger logistics out the required and the alloy equipment is take by even the pump leverage people of systems We XX% total We you these to This need over for think to example. call. time the the reducing rolled prevent so how hub our decisions number site is have next health the control when job where data our we of profile digital maintenance to can to themselves. to a the operating scope center Lowering early last and XX% a in talent, you in using for make intelligence having it across into for do aspect the of bringing need eliminating the leverages around you failures early cost failures artificial

think there. sensitive that's be be in it efficiencies to very our through looking applications through is partners, think lot comes digital blocking the So that to going to tackling a and scope what customers And share at good there's through we're working when time. more with and going future preferentially had very market at over and that increase I we think and closely to general increase and and customer we

ScottGruber

customers with that market a here this or moving in be from the of ala of kind world model push industry model in the the envelope more services away pull just shift that the to you today a give towards more around conversations the your I here your some reacting going now leaders sense. customers you can for and there to bring and are NexTier bundling I'm is a tier provider services makes that can either the of the Now stage. be lot thinking right everyone's talk senior from And the side because maybe top like are of carte is know the expanding that up to services of have customers from US.

RobertDrummond

prices thinking dig commodity for really start rationalize every and early And that Scott, innings. to been to but to dealing low I possible. like little the in way it's they're organizations there's create to the But bit, discussions with sure for going going for it's think bit productivity process and of days them be that but ways into a early definitely dealing we're scenarios just try about it's they a are, they're tough area. cost a too, it's are Look, with operators we their looking when to

Operator

Gengaro with Our next go question Please ahead. Stifel. Stephen comes from

StephenGengaro

don't you if things, Two morning. Good mind. Thanks.

on from Mark. just one Just follow to earlier question an I up think

that do you'll cash Where be the rise -- XXXX a the think around quarter? from ended at comment can to you end comment you first is quarter, in XXXX? Your your you where relative you $XXX first million, color give to XXXX balance the you made; jumped of year-end any it

KennyPucheu

on we a is year cash from end year we draw by not It is Yes. on going sheet the XXXX. the balance end ABL QX rise the the incremental to will saying have give color to a year end are that of our year. excluding but We're end versus any of what

StephenGengaro

capital Okay. that fair? liquidation though? Do Is working you. from Thank these Great. you see levels

KennyPucheu

Yes.

StephenGengaro

per versus where then with per number and we coming fleet or thank think follow And think you fleets it year that for we versus all think it's Is some CapEx maintenance about idle balance you as Okay. how being of one stagnant your pretty at sure negotiations, should XXXX? just history I'm the up, been? about and it's down

KennyPucheu

No.

to to million. going We $XXX achieve the in about seeing What CapEx XXXX. $X per of committed million today maintenance fleet. in off XXXX $X.X to that to we're reduction reducing million that So in $X.X we per our $X fleet a We're to million achieve about $X XX% averaged million to million of XX% to million $XXX fleet. about guidance per to

RobertDrummond

to going are achieve We that.

One as factors as will consumption that smaller, fact running well of the be that inventory we're fleet some the asset. a in achieving of smaller

StephenGengaro

then follow Thank one that. just and to you up

it dynamic. right customer Are there's to volatile with good a now discussions I -- newer our strong seeing sense? are too have rapidly you is know or preference more As customers big now or preference to as -- a have some or extremely assets ability you the things you of deploy is

RobertDrummond

there's the I called dual most or mix this people but CNG they supply filled assets can equipment are burn latter in in everywhere places some a can little natural and are ways of gas focused diesel everywhere preferential market the But investment. to where in around still year half It's been them made part bit needs I we business. have our that last out would of we the fuel being market customers home; they that and indicators year the gas the everywhere be, key in front a long investments a our that performance from preferred. do not how would that has process everything. a the on a and on run say say the of their It's and the it's

Operator

comes Our go Fargo. next with Wells question Please from Chris Bell ahead.

ChrisBell

morning. Good Thanks.

So a curiously color have is little very just XQ for the front, on you all clarity volatile. cash the obviously more if thanks

bogie bit a of give you for cost a the of Can kind could lot that that you be to EBITDA? pretty a a could had quarter? think the EBITDA. so as come benchmark well. Whether just You far if give breakeven on shake expect of little it about is whether and out Because decent on sense range have a out there's visibility can how given I, you wide curious around

RobertDrummond

on Look, be cost that's said side clear guide lot really because the difficult your while what fluctuation of able side. weren't pretty we've we inactivity to we to revenue on going meant makes when to we a guidance given The it. it of predict day-to-day very

broad most customers depending efficient many pretty it's lot, are time where is like this the operating their a fleet upon range the So changing a how active minds In you're environment operate not the working. to in.

on. periods. less the during focused we're be why much a so or short-term bit it's can schedule that QX, kind of not So But efficiency QX about those a basing

on We're large protecting the cost obviously we the to ball the balance ability say a and to that taking the but give amount got us capture I'd out eyes there, sheet our liquidity clear a of be what position the going more this get -- kind once in view like. of then that's do of to get value is them to sorted the things activity in we profile can going look demonstrating marketplace

platform the us after the to capital it growth be going obviously the to next that occur that -- to is we're position capture having as in to do We're I year on think gives the that there's have to but or is space working most going the year the creation even. where more to our value both gets the liquidity company's going best ability that. the focused do in

lot with gives if thanks mode we're a deal market like trying this is a than to make that to or But scenario in going of is very and market the beginning more point case positioned going well the worst if defensive to year, the do the bad offensively us year at capital QX of input. opportunity. cash next to And be year even we're we're the the the have working to we

ChrisBell

And for pricing. Thanks. but fair. is the That's lot Okay. mover a requests there's big of activity obviously then to been follow up

there, seen a Some your And it much whether have on different clawback is of but so, answers how given you pricing? you change peers in movement if there's from some quantify? hard can of to

RobertDrummond

Yes.

some and -- if manage mind further that track and we're we did when -- margin, beginning After the year balance like to and back That back manage We would you concessions through those call quantify QX much notice we're longest similar the So EBITDA this in that costs and to it, on are we're a QX. upside. better year that we as previous But just the price last that we pricing pricing the our scenario said decisions fluid and cash flat sheet get make the to had price well. were get we opportunity go in but to now before comment concessions on were shuffling at around virus to with concessions the further the the people as versus efficiency not margins yield most we've still we into my cost to runway trying it's to on keeping give to the going us point were going to before. to that there reductions rolled management. is the have very through right quarter was try typically in were the and year of improved pricing way that

Operator

Chase with go of Bank from America. comes question next Our Mulvehill Please ahead.

ChaseMulvehill

question I just want I you squeezing to Hey, had heard guess I in right. I me gentlemen. thanks for sure that make first

And count XX I we're that's at some heard the than than so, of since definitely you better exited you Can confirm -- actually little April a your then fleet. think rig peers. down said what if and think I you better from I that? hearing is bit

kind if fleet something concentration peers there you of maybe that active outperform helping many customer or So about today. can your how of you their is when think out we is talk you about kind have

RobertDrummond

that of as clarify market mode the in we're at I would pad than whatever, a also who right you kind by a now working timing kind of of of average or say adding who's shutting relate So, number that it the down depends obviously lots only the in entry they're in for and it side of on different Chase, to lower and point back on I saying was And operations an was factors. overall April. the April where

think I bit how April. of I saw is did, market on say to in a I about I think the So would difficult share we the We that that share comment made predict. the upside to but the out blip market little that that one quarter shakes rest

ChaseMulvehill

the is it then forward when how know we you as fleet gross about Okay. want be you of I but our per year to the All XX% but profitability. through numbers, should overall all remain right. thinking go positive want should for just will make rest XQ about do specifically end average should I think assumptions give don't year? we through how profit own think the should you fleet remainder kind how the it speak if know X% just about us -- exact don't we probably And just on us the walk know the for you you to of but we market then count, year? know I so we share about if the we to think don't to of how

RobertDrummond

have P&L say these QX is single same the it's I every single at look going cost you in count base that in had business be makes especially previously revenue, manner smaller a do possible part that that difficult -- the line QX. Chase, it fixed way very cost fleet even during in to and across of labor of the every that as to challenging. report trying a flux, and every applied during lower We is would we look just to outside and even get perhaps a to we're

that profitability in not we're the you bottom too to share? of to had a now. is top-line like of there market guide way right cycle? negative with the tune what the Yes. Could range, would going But in on range that And the foresee? the it. that I territory -- range try because is Yes. the We categorize dip -- in it's So difficult we

combined out you You And that-- share you your look feel a guidance XX% like. got what range the taking ranges that line give market that and for at think gives doing compensation market it. view total modeling on, you're to of X% when I our good to on million on $XXX with and would our of a the

KennyPucheu

Yes.

always just we've believe that cost are add said on has demonstrated Maybe highly I promptly our cost taken And that we've our variable. -- that to if I comment the with are Now the they we've can actions decrementals. variable. costs

you to have able at deliver If our been decent decremental. history look we

So QX I less QX is XX%. result versus would mean QX. mean good decrementals a would versus I'll take than I say similar in I have QX that

RobertDrummond

think made. when the And I'd you also already about we've that add cuts

the I as and quick implementing. most think the to deciding in proactive we've far do as it market been in

prospects a and production bringing keeping very two to man of instead well than all are protect to out pipelines organization fund done. trying of a of shutdown opportunities out and And is to associated to If or thing go; part creation to available to perhaps around important sheet a point up value having lot that to in the with your the want liquidity the US, able to do a to to forward. take that muscle being those. having really it have we we size more balance really you'd this three them up think we've furloughs set the it's for you I layoffs cut having of the all worst the crew of and ready muscled main care for think able we be ready the assets or staff But up organization itself,

placed and in just the where program that new point be those falling I make and fluctuation is bottom one key our being one assets very put I'm protect stack. in as it's extremely is got a you when that pleased in you of program to using kind completion got of and virtual we able How how of to is And out every maintained activity component place, this the are want while warm activity this us digital quarter. give where well to understanding

looking all those we So three are aspects. of at

Operator

from AltaCorp Our next Capital. Syed Please question comes ahead. go Waqar with

WaqarSyed

taking my question. Thanks for

in Do see for two, You Arabia. sent involve? that horsepower prospects one Saudi you fleet to and additional much does Number future? how number one

RobertDrummond

working a partner that we successfully while in send a to that NESR, We linked much arrangement in see continue with development. for is field business very couple times the question. growth create and a stated Saudi, business managing in in ourselves you Thank very opportunities. who development on it's a unconventional all back ability gas to the the to been unconventional We is fleet the this for did conjunction front our opportunity partner NexTier's

horsepower, that would good. pretty believe prospects near the the we say to many how about fleet conventional adding a are So, of you the got And term for X.XX a I yes, now. in of fleet from country horsepower US in there

WaqarSyed

for to margins and the what's account Okay. towards and right the it? And costs revenues the, how you about do way that think for

KennyPucheu

would that and margins. incremental to say their our just dollars I US

WaqarSyed

Okay.

fully consolidated revenues all costs? just the and it's of So

KennyPucheu

correct our services segment. That's completion in

WaqarSyed

you Okay. that SG&A in to terms down, And I guided number. then of miss you,

You said SG&A would second down be how almost the by in much quarter?

KennyPucheu

versus QX. XX% Nearly

WaqarSyed

side Could D&A well? Okay. you any provide the as guidance on

KennyPucheu

Yes.

the less going the So full year. than $XXX look on D&A we're for side million to be

of last purchase the C&J So in significant accounting. with purchase year versus reduction the

WaqarSyed

for Okay guidance non-cash of onwards in terms QX and any there? and then compensation

KennyPucheu

it'd with a down. maybe QX say bit would little I be aligned

Operator

Mr. the Drummond would remarks. any session. the closing gentlemen, the question-and-answer end back I Ladies and Robert reached turn call to we have for to like of

Robert Drummond

Yes.

in the you. environment you. look seeing staying interest Just NexTier. in call quickly and participating forward much Thank in your and you today's to thank safe for Hope very guys you are

Operator

is conference now today's you presentation. attending for concluded. The Thank

disconnect. may You now