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NEX NexTier Oilfield Solutions

Participants
Kevin McDonald Chief Administrative Officer and General Counsel
Robert Drummond President and CEO
Kenny Pucheu CFO
Sean Meakim JP Morgan
Tommy Moll Stephens, Inc.
Stephen Gengaro Stifel Nicolaus
Chase Mulvehill Bank of America Merrill Lynch
Ian Macpherson Simmons
Chris Bell Wells Fargo
Marc Bianchi Cowen & Company
Connor Lynagh Morgan Stanley
John Daniel Daniel Energy Partners
Call transcript
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Operator

Good morning, and welcome to the NexTier Oilfield Solutions Second 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, Chief Administrative Officer and General Counsel for NexTier. sir. ahead, go Please

Kevin McDonald

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

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

no call morning differ that these company's many statements uncertainties, forward-looking subject Form Form to revise statements filed on of cause any XX-Q, could from which reason. undertake or filings. We Our any this speak are materially quarterly Securities Exchange includes XX-K, risk to and implied and results expressed Commission update We in control those and considered expectations, regarding forward-looking you the obligation of report our and by statements reports actual the which on publicly our disclosures are statements. that statements risks annual factors predictions These for are forward-looking to refer outlook beyond subsequently to or statements. other or to company's in future, the NexTier's forward-looking

non-GAAP Additionally, measures. our today also financial comments include

I'll site. that, in NexTier. are details of release Additional With comparable Drummond, directly the that our and Chief a to reconciliation our Robert press included Web Officer posted most financial measures call to GAAP Executive the is over on turn

Robert Drummond

to U.S. rational consolidation been we our like of integration more April. by enhancement of our integrate that integration need would exceeded services. than joining transaction realized. significantly of to being and acted in results I'm was rate our on call strategic with targeted its and a fully Kevin, to March demonstrated ahead well balance as ability transactions, our The position ERP schedule morning. run in simplifying upon quarter to the merger completed taking our strength and completion to business announced in has achieved establishing in support the system have a We accelerated the of transformational the during I for synergies last our proud We financial sheet, all the complete and you. well leader transaction of balance the aspects and everyone synergies NexTier year start and well. process. improved for divestiture efficient and in six clearly further realized call address successfully our a our sheet, and We foundation. operations. industry, a on Thank thanks it these NexTier, flow back this free equals this extremely services months improved We second cash five the years while that with completed approximately of very our

Our our respond ability Saudi and market the and to in in completion service is evident ultimately, U.S., share. our quality, all over safety opportunities even performance, to

foster to a the practices, equal-sized best from Lastly, integrating companies. and platform both two companies provided people assets,

stronger and customers, Our remain employees. delivering we for than operating capabilities now long-term our stakeholder are committed ever, value shareholders, intensely to and

of my lean and the the long and in the is in balance sum, haul. also and Against second to these we organization business the managing get and the long value experienced pivoted market extremely sight long-term restructuring opportunities market in to This unprecedented our the our to our continue sheet, through I'll we for strategic committed In As as ourselves backdrop, while moment, rebounds. into oilfield building lose the a responsibly focused market sheet. environment we quarter objective company preserving be preserving that the balance nimble, to career. harvest more while this challenging are late on headwinds, throughout remain most medium we I've positioning first on more will services creation never quarter even for

several to highlights back achieved activity believe commitments significant placed our market during hydraulic expectations the the second track And environment. fracturing of record discussion working results, the line extended to with declined completion with upper-end very quarter. mind, their We us second to and like we the that a economic of COVID-XX shutdowns. of in U.S. in from share drilling forecasted which the meeting temporarily with production response despite quarter, shut at operators our in in I'd Activity most fleets halted we quarter the our U.S. Turning E&P as range, share and the tough our customer a in majority

We under full operations this structure pace a significantly further Our reductions our reduced assess as second the collaboration and structure achieve of a decisively and remain We run capture, in our adjusted grow to completion and reduce rate We with XX% speed continue The and activity and to declines SG&A, are in sequential resulting commitment in cost evident respond NESR, successfully differentiated on risk exceeded including outlet. to accelerated deployed decremental to integration and quality. through synergy outlook. continued decrease quickly support, strong and we fleet early to service in both our cost in our was international by adjusted ahead performance Saudi meaningfully year-end. our April. synergy management acted EBITDA

the June not with NexHub, by further our particularly We remote program, incident-free month move initiatives. team with criteria. is an liquidation value repaid exiting continue crisis. in any fleet, in zero. no We $XXX achieved position management working to our We release am of not but capital our with million, across environment, digital our $XX the in our assets, and a XX/X increased satisfying $XXX our providing return innovation achievement incredible an monitoring revolver cash, We quarter long-term of debt deployment including by capabilities our net This recordable incidences. and driven of I the added U.S. all forward of of proud million enhancing of deployed position and for and fully borrowings, time focus cash of a in losing by the excess million

business we market took did Finally, and organization our responsive resize effectively. good trough be the actions of very best the ourselves executed that the correct, drive managing We company around the as demand resources, activity, rebounds. while in forward to suit ready we've to a read not thoughtful ensures early, plan remain we positioning way been the of market stewards our instead, market to our on

many of operational former home. colleagues, wound continue especially challenging proud proud industry our delivering sacrifices, how our work safety as our to to by for and in all performed very employees focused make many some We so not has I'm while [ph] team the across our this significant of to thankful best to and activity the down, to and uphold headed. I'm of who at operations easy. everyone we and team of where at environment of how had our continuing our a commitments performance, our while stayed While our reduce so customers. market I'm portion downturn navigating impacted a unfortunately response saw has delivered, market [being] of been

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

XX quarter the in averaged we Turning remained activity shock quarter fleets play in into prices emerged resilient, supply had and activity. fully commodity and that deployed fleets. hydraulic dual on sentiment, immediate average relatively out, activity the second we first March reductions in negative and which demand the saw XX completion into market fracturing translated how impacts significant April of versus utilized

producers estimate to did in measures. precipitous were response, utilized or through late or the many early market trough we completion first execute plans As June. XX our less pause decline fully hit We immediate a on drilling crews In and in and activity. work completion their quick in defensive programs, May resulting

protected capital our to actions us liquidity preserving ability rebounds. market and the that same helped adopted when Our working navigate time activity while the the a fund the cost unprecedented thrive structure to at necessary declines these position,

focus customer balance managing warm key areas staffing, optimization, strategic four assets. around alignment, and centered stacking actions our sheet decisive the of preservation Our and

to current customer and financials well-managed our position employees into macroeconomic demand. overall in actions NexTier much sustainability demonstrate already on financial positioning benefiting positioned customers, shutdowns benefits current navigating differentiate our service strength our essential All and our recovery. overall value the recovery, and partner now of and decrementals, best providers future impacted and managing supply global The the win us and during shareholders. control. economy, these importantly across proposition and in have are and Nevertheless, government and choosing more service our in in environment evident headwinds, our to We responsive the factors these making financial quality, oil critical decisions are can what actions when we results our commitment to with gas the the to success very by actions to impact remain

balancing So, base. online, smaller completion second-half is below remains producers beyond. conditions see continues remain pursue but rig critical and to factors. Shut-in on the brought two associated production new today, these environment, the of a of prices much Against there's and shown backdrop, Based no competitive, Commodity while drilling year capacity pricing this what that we're levels activity turning have influences, doubt the on going driving as growth. to improved, albeit threshold have now intentionally excess improvement, we plans for on necessary being back pricing limited signs they contemplate opportunities. significant highly market and for frac

and U.S. sustainable land balance price activity commitment meet our success. be customers, long-term commitment to industry needed and stability First, maintaining requirements. improvements are of second, ensure service market to needed future to foundational Current long-term servicing meaning conditions our will sheet not

rebound. third will exhaustion of fulsome timing critical impact the to be we oil capitalize geopolitical overall in factors. as key the seasonal market following pressures We demand have factors optimizing Regardless more elements uncertainty, virus several quarter, consider activity dynamics, of recovery our the ability the grapples of quarter on the budget fourth activity, uncertain, with our the other ongoing and rebound and of on exact visibility extremely the related in a strategy. We readiness remain believe disruptions,

First, NexTier to gave access a integration of process us pool the people; great talent.

have We today. team extraordinary place an in

to capabilities begins operational to the have best to taken many re-expand our position ourselves steps again. when We pick up market

financial maintain measures and us offense. sheet flexibility protective preserve balance to the power; lasting helps defense Second, play both our to

have assessing is customer identifying an supporting programs. best We position capital very our by long-term companies. completion increased their reflects given their it balance differentiated seen for and refreshing completion and for sheet on producers strength priority partner This focus emphasis the

conversation a how and when work. assessing quickly to asset preservation; customer Third, we've to slight while thus could activity they market we only recovery far, back inquire as in shifted has seen the readiness get

base. it asset that drive does the can has equipment the market overall scale, is and an base we based this we is several asset translated leg midst next the large sustains conditions to of improvement our activity in safety, new to on of reflect ensures a once in be readiness meaningful readiness future, minimal efficiency, at And challenges, activity deployed implemented that This into that continue for sustainability. assessment and believe an quarters of these While that not a yet fourth, protects, that a cost plan strong centralizes, broad and a ready on improved. recovery and conditions innovation; will our NexTier market investment quickly innovation

the deployed, wellsite already from continue will drive we to bearing to these capabilities to integrated boardroom. use fully program digital fruit, is the change and Our

our innovation technology our In us advancements the it that innovation response and continue returns. on some evolve of take With we like expand downturn, as to to the to to narrowed a continue we mind, to We innovation key on with are near-term serve I'd we differentiator. in focus a moment platform, with and initiatives. projects will making to investments believe our

efficiency. failures major prevents operating optimizes Equipment driving this is in -- operational in unison as NexHub our we enough our performance. field platform U.S. is and all about to predicts component and Monitoring, of this support example differentiation, one and which cannot real-time phase quarter, all intervention, the is on engineering improvement is more working and of enabled, next and of dispatching operating the impact expect continuous maintenance and on early includes our CapEx Health successfully we support, During having as better Health Equipment XX/X operational engineering, NexHub digitally fleet. more I this the environment, service digital enabled our say in cost. create efficiency second NexHub deploy the well leveraging even efficiency, newly function, completed continuously remote, That's which operation OpEx support centralized to consistently and deployment and positive fleet. I logistics An illusion NexTier cost-effective as Monitoring,

dual-fuel reduce gas source. is a fleets emissions gas our Another natural impact cost, the and dramatically primary consumption continued through ongoing as to differentiation frac of fuel example of the of our fuel greenhouse

We assess additional in as equipment path continue in to see to overall will value expanding area. gas-powered cost a continue capacity natural and this emissions, and for investments long-term lowering we in

summary, efficiencies. time company of market, we're for forecasting balance enabled position nor for stage a operating and strong right. improve differentiated rebound. waiting market compete provides fracking but future Global customers, much techniques by are we further can that the we in too that Invest not costs, in generation remain It's equipment, global proven when we capabilities built we environment, and any tough all-demand spending So, are will time around next sheet and a recover. lower ultimate a us right digital Further, commodity activity prices. in base further And on people, performance. equipment, the Achieving of to preparing actions our our these the for balance a position. like setting our an are recovery, is

President Kenny, to leadership report and an over several role himself to turn wanted I'm In leadership share of where I'll been that, last assuming that Vice him Before and I efforts a great call in to the me start last been member lead to executive team. efforts. off Executive IT quarters from will he continued Vice team. partner, over to And proud since continue has and of year. promoted President, the NexTier's has of Senior and recognition call NexTier's regarding Please CFO established end essential Kenny a finance Kenny, further over has his success. Kenny. join I our Kenny to With contributions, turn wishing the congratulating the as an at the to update

Kenny Pucheu

better. segment, million compared primarily revenue Thanks, million second activity quick to $XX Services million Despite divestiture and Services totaled first Support first decrementals reduction our quarter. Total Sequential In Robert. declines, of compared EBITDA Well our quarter first million sharp quarter is second was in XX%, Completion million cost pace Total segment profit late million actions adjusted QX. the revenue the totaled compared the EBITDA and the decline, compared in the in revenue significant $X magnitude gross our quarter. ahead in to and decrease Completion adjusted in approximately resulted a $XXX Services totaled $XXX of XX% adjusted million dramatic by forecast driven second business of first the $XXX of quarter $XX in $XXX quarter. quarter. million or $XX to to of

fully the an quarter, And XX second fleets. in completions when factoring equivalent of we the gaps, deployed During of average we operated activity utilized XX fleets.

a activity noted, we achieved the in estimate trough, early quarter, market fleets average late Robert start and dramatically to beginning the in driven As May in remained frac fully-utilized June. of month resilient April. with fell Activity of May XX was

divestiture totaled Services our end into our we to which gross we where annualized covering leader utilized $XX to Adjusted million fleets. compared per eight and Well $X and a quarter. which the the million frac support product gains frac totaled non-cash. In and to of and EBITDA million, costs, $XX $XX the $X first offset and the accounting in driven million, focused quarter. to near March; notes our and associate million million in first are of totaled regions of an $X million $XX.X In the quarter, and the with Construction footprint fleet, $XX cementing Adjusted position basis, revenue with long-term fully fully peer activity. and completed million, consisting that $XX million Intervention as quarter, coal of million we segment, relative second game, quarter, approximately make-whole fourth reduced line levels in performance. of received compared management million wireline by approximately constructive for first profit June, on NexTier non-cash the $X Support of restructuring second On which somewhat costs, exited expense, of and on bottled million, as compensation in includes merger utilized the Services compared a adjustments the of stock gross severance includes during partially of quarter the management in adjusted for fleet a million Well the provision integration significantly close per of part market adjustments $X $XX continues $XX.X primarily basic So profit

totaled million quarter. general, selling, $XX first quarter million Second the administrative to in compared $XX expense and

$XX of we totaled first merger Prior SG&A management operated quarter. Keane adjusted to in of $XXX and million expense between SG&A approximately Excluding adjusted million. the compared adjusted annualized combined a million adjustments, SG&A to $XX the C&J,

significant our at we these the pivoted of integration We completed As business downturn of accelerated of synergies identified part transformation. quickly synergies. base process, a the the and the and capture start of

second million, adjusted With we half less $XXX achieved of these run to than merger. rate the quarter SG&A efforts, prior

to continue and our improvement significant rate efficient and of structure We office become support million, structure growth capacity. while to processes in target and cost run retaining our a back muscle continue adjusted in approximately more reflecting $XX SG&A

We enhance also as lean, our support term support expenditures continue improve. structure financial to keep long will and market performance SG&A conditions

our of and $XXX the excluding the the lease to was first in finance cost of million quarter. deferred quarter $XXX second obligations the sheet, the balance second $XXX to at exited cash ABL first with Total borrowings. $XXX million the of we end of of excluding the Turning to million compared the debt at net million debt compared the finance end discounts quarter cash quarter and

repaid previously defensive on during million As in drawn we move quarter. ABL earlier, our facility mentioned the had the Robert first $XXX the that we fully

quarter. end trailing Net Cash the approximately credit million balance $XX in driven the of $XX in second million at leverage basis. its of in total lasting second quarter availability our cash on with second over and based free quarter approximately cash $XXX million and a during used forma power. select in exited resulting CapEx second million the $XXX facility. We the $XX flow technology. zero, confidence while activities and pro of maintenance totaled investing have flow XX investments quarter resulted of asset was in million in a month debt cash was of approximately This million $XX the of sheet comprised ratio liquidity available by operations from flow during We

in in million million the integration $XX cash cost, cash and Excluding and merger restructuring cash $XX free and totaled second quarter. cost related market $XX million adjusted severance flow in

earlier strong Turning averaged to significantly fleets April a May noted utilized we XX June. weaker quarter fracturing the comprised hydraulic is second and our of outlook, fully as which in and

the allowing of the are progress off and expect increase average base historical third steadily quarter, activity us the in range XX%. the maintain we We entering slower throughout quarter to third X of share market our as to to

decline As to continue a but we we impacts revenue quarter our expect not expense strong certain perspective at utilization competitive second our quarter. combined to fleet quarter Robert noted, with second due increasingly of and of the From the sheet. contributions activity, environment, to pricing will April level the balance third of an in versus revenue maintain from

decrementals quarter. to XX% comments. earlier, noted base, support we hand With for reduce second to than continue the closing that, XX%. as expect I to SG&A to EBITDA As drive third hold by On this back adjusted cost another less quarter to expect and Robert we it will down compared to

Robert Drummond

Thanks, Kenny.

leave that U.S. the up few I is business and of open a gas We Q&A, comments. Before component believe with key a lines to and we want concluding global everyone gas smaller economy the post oil supply for stronger into the oil will a decades future platform the than as of is be source while an profile. the ever. COVID inventory important created leading completions We into and that for

with focused Our focused long quality this while performance customer be to technically relationship deliver completion our land that balancing and remain long-term company continuing and backdrop market readiness safety on builds strategic innovative continuing the ongoing on commitment planning and partners. of term is a leading to service creation. focused with We market value likeminded U.S.

to to of want thank innovation, the by would and team for perseverance to for challenge continues I mission open leading and the Q&A. employees like Lastly, Operator? our that, their up completions now our making NexTier continued lead uphold way our am line we quo, company. dedication. inspired a the endless status With I

Operator

Instructions] Please Our first you. Sean Meakim JP go Morgan. of is question [Operator Thank today from ahead.

Sean Meakim

morning. Thank you. good Hey,

Robert Drummond

Sean. morning, Good

Sean Meakim

for all Thanks commentary. the

revenue fleets to impact I pricing the there. expectations So, you the at range many maybe there of averaged of It the from outcomes about get am in of talk quarter-over-quarter. you July, terms of factor volume expect you you how Can in noted is like quarter? sounds tiring sense a pricing. end, versus the balance of the down

Robert Drummond

it's QX Look, up little Sure, mix little we migrated the begin the where 'XX of fleets factor is in Activity has the gas pricing of pick a but guiding the Sean. operators reason really XXXX, see oil humming day, we was revenue to or maybe the more. we will basin more as when at Good to pick that [ph] QX, or and that the we up ramped the in starting calendars early bit of bit question. as not really in market are evolving maybe just we a count, is [attack also at as this the deck] were is whitespace a in as end well. as from it QX down is routine in been oil to year. and There to click is a basin where today, up all certainly

in of can XXXX, and the of XXXX from that of you we then the up reset U.S. the XX, frac cases QX being U.S. as most back that coming work April probably beginning now its in into fleet when as the down worst that that's saw rolled way and count see the come the in kind trajectory were low highest in QX, market off end trajectory June as in QX, of price of June, was know, and we that see occurred probably and the the the ramping we operators probably. So, of point, middle now and pricing of to everybody land bottom of had beginning in the the scenario, history the the was downturn at month, were of low with where got renegotiated in

So, that's the present. dynamic is that

the as say it that to look at would market be many our counts As we going frac could guiding how too X% into we a matter just is It I stick flow count guidance working, negative thing into would it really in to going price it from market doesn't said to perspective or that how say but are rig with the we about XX% be is market count U.S. to everything, to are where much price is as share and going us for talk we're environment, small very the a now, got range, right fleet the in to about environment. fleets fleet no that and behoove would make to about when cases. getting our at, many exactly that impatient a that cash are be we sense or is spot rig doesn't and that be to count competitive we

Sean Meakim

Robert. appreciate Got it, I that,

fair. all that's think I

leads that follow-up the So, then. to

but So, pathway little pretty positive we challenged. cash thinking and better flow, ultimately positive activity, have to EBITDA, directionally that about sustaining got so

optimized You that towards are G&A level. working

of year in primarily the the back Can cash to maintenance the back-half your capital Now, in of just your positive your spend. step flow year? positive not is terms third just for of but half quarter, sustain EBITDA you big the ability free the talk and about of confidence change

Robert Drummond

free on ended that, we cash but still the working as be on going of parts this pricing front-end as market and the path going there's knew than we this as catch failures more focus operating are loaded, that year balancing got I've million year track. right moving Look, you're well We're implementation the they on $X.X and that we market we're This margins, cash positive have we in is far now, and major know, inside with. This before down share and with a in equipment minus about confident to, that and a guiding ending our been having for component company, going year a as costs operating CapEx, we've Sure. down, lot one capital us to see, huge flow is to of is you wind to NexHub far allowing last referred performance. a towards example, impact that occur. driving on

it's we're modeling market. the continuously into into we that as our price moving So, a dynamic rolling

there's last as out we year, that this our kind March. year at to had So, period EBITDA factoring all I still of but is playing are in making pretty and of scenario, the probably a would our thought cash say is versus they back would, we're to going having as and pricing end had that cash things than a flow more plans cash were be where projections, these or of end of we the real negative at discipline, we all into we're and committed much

to what do is the a to crew themselves just would as as the go very those. were sustained far we will say we're [decks] address online to for going same the would was what all a that go asking. was something be then and not for That's short into how it's the bring at of lower-end and back if that [ph] market I and into we with upper-end goes present a have or be example. it guide, It's that you next set year, price opportunities down. way that share something as then of dynamic the So, hope lot that I strategic to

Sean Meakim

That is helpful. Thanks, Robert.

Robert Drummond

Sean. Thanks,

Operator

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

Tommy Moll

questions. morning and thanks for taking Good my

Robert Drummond

Tommy. Hi,

Kenny Pucheu

Good morning, Tommy.

Tommy Moll

your want about footprint talk I East a Robert, second. to Middle for

currently; what that to year, might first those for secondly, of kind crews the you and whether partnership how do over how potentially add visibility be is crews of and you off, have more same going, the there So, balance during two the timeframe? active crews will

Robert Drummond

think region will we're team, interested a I growth seeing the as that that anticipate this and and I we've look, like their could company and with kind has honored of heard, on, around, of would good It's at as far the expertise say question, arena. during are going best, our NESR's I in and wireline both directly crew don't be that and linked during from handle It's got that quarter, better, and the We, do that the strengths our market to the tied getting we're and are costs arrangement as as significant is something very I the that, frac with you last we we're mix Thank and lucky I MENA. very say just we increase and is but now, improve customers into company for worlds; so, a good but partnered of NESR. through been a challenges future, best I would NESR, during better some is process, just -- period, continuously to on a the new bringing directly of people into that -- are can in associated in upside think where and and say that's understanding in you year. the and growth. that the business because they're COVID second efficiencies inflated, the strengths that moving the development the added the that to pumpdown operating

Tommy Moll

of That's thank you've see you evolving likely a I some you. if shift see going in as see helpful, to underinvestment continue already some well-capitalized. how the to by on to dynamic for the comment Robert, could some that you're you frac, competitive specifically you. North aren't players America Robert, started to question strategic to restructuring, wanted

environment, talk some the the been you and see So, a quality, evolving? might maybe or in There's terms how marketplace bifurcation for dynamic? that of consolidation, see you in potentially do horsepower, if that opportunity more how of impact availability,

Robert Drummond

and we that, which and to meaning have and the question, scramble going deteriorates, the are drain this cannibalizing flow we're got they That's the and the see that support are that, be fleet's related necessary most maybe to cases you're cash When of the or generated to being support it downside is inadequate and that taken not for because trough pay free equipment, the flow corporate Yes, or going by it's that through the one happens, you that to I levels a now, above. supported I just occurred that liquidity, past, of like for has or is the challenged that negative, then kind people's or they've this scenario, that those issue would going that that of like to safely one through current activity. sort accelerates the going capacity way pricing some been pricing, planning consumed has when CapEx stacked beyond in leads is catastrophic cash either of profit the period able say has to that both pricing in maybe operator is we to we is maintain equipment is level cash when that, to that negative, believe the believe and administer equipment market, an other sustainable. pricing off to don't many cash say maintenance during right that of of market, gross

believe, we on on the bifurcation be So, movements be Whether that. going said investment evolution consolidation, to to capitulation to we'll be not have believe kind power we I would it source, determined. capability using and do to have think not say and the that you able natural what in there's to exists, and of has is somewhat gas drives yet evolution to to some also are I an patient, is going see the maybe we we that that or market. pressure put as

there's assets, try this for people you wellsite, evolution natural some utilize for scope us operator a and to of more consolidation of that around were efficient where can believe piece of if we both everybody, the there. at support get so and that to the a going the next-generation with you the the conventional market got you that consolidate So, more across or our is opportunity wonder, can activity diesel you you gas, kind leverage footprint there use sort and a We cost of sense efficient, business activity differently makes address a from some scenario we have power can scope then, increasing maybe our structure and of that to bigger helped of to of to know, but conversion forth.

now, to for about to when the market that hope that assets change little things got we strategic way we'll let think bottom then, evolve we upside it, and having of of on kind a us, patient I So, our consolidation when in and bit focus then of addressed ready being and more ready, but materially. be hit more, we've general, a that's ourselves. market lot M&A bit believe that that the a be line logic we'll kind is, doing

Tommy Moll

Yes, all it Robert, you, and Thank I'll back. helpful. turn

Robert Drummond

Tom. Thanks,

Operator

Stifel. today next Gengaro question go is Our from Stephen Please of ahead.

Stephen Gengaro

Thanks, good morning, and gentlemen.

Robert Drummond

Steve. morning, Good

Stephen Gengaro

in you I if mentioned don't with XX any thought I around mind, where you you of start have the you you think we kind color things, -- the Two mean now? think you market bottomed fleets your can on are at right quarter, do

Robert Drummond

I'll asking, wouldn't do of to an you I time but lot in and always expert, how market, to meaning careful deployed, XX we deployed, when and many of we to that of profess sure price, we are say we and reports side linked QX. We're place, XXX, going and would plans right the fully-utilized, curve around walk more obviously to in I are on ahead number operators of I to be to of that getting up somewhere think and this kind in think neighborhood but continue that and that to and more be than go fleets the so around their talking understand fully-utilized say it got that the or a in Stephen, now, kind spend that what heading competitive recovery be is many of us slowly. landscape, making be define would just the less number I oil something somewhat believe in about is that, we're market and are will like the that are

Stephen Gengaro

into Do think environment are as And example, downturn on thinking, a you you. environment, we an back normalized of that out little earlier, impacts and thank if anything Great, XXXX it's fleet this but just we maybe get thought your to this touched many achieved using just per you of past? you to that some the in sort think lower bit longer I'm ability -- levels as term. structural as longer the then the there about level is but gross about term profit of coming but a

Robert Drummond

account in it's I market was there XXX some of maybe taken size, are is absolutely if total utilizing but operating to future, that discussion to the deployed, to And XXXX, or much it so in say, just to reductions because to You you program I that and had going and you U.S. market. of know, and case we frac back-half count the the things is would to I look U.S. past, it's reasons does sustainable I linked these, XXXX, think would improve that to much -- of that you of compare new believe for being a this that those of in say believe that the evolution but take define frac you -- to costs, make know, macro the very like well get is of taking simultaneously kind the been possible XXXX, same you true. that that's these has our also fact about after that fleet in the capable that like, and the think of price, what digital back say of partially while very the into the obviously kind I some would get it a QX oil of the market the can but very that, doing into the we're

Stephen Gengaro

That's Great, color. thank helpful you.

Robert Drummond

you. Thank

Operator

next Our go from America. from Please Bank will question Mulvehill ahead. Chase come of

Chase Mulvehill

morning good everybody. Hi,

Robert Drummond

good Hi, morning.

Chase Mulvehill

to Robert, can the to? of market Middle guess impact about far as the duration the East East two frame maybe kind and on and try And the fleets, if related a maybe does XX% exclude that two Middle P&L share, about I quickly talk then comment you clarification or quick to of just kind I include contracts the maybe X% guess are those you things as fleets.

Robert Drummond

refusal for are to have so, as we're and mean, When public hadn't versus U.S. of at does share on [indiscernible], a able the that's we as to talking as it us or term fleet, I'd with, first question. good that's whether fully as grow think decisions I going frac utilized, or deployed U.S. not we're or but think point, expand kind talking man, say they U.S. on a but things paper, it contract, I market the whether - you're our make that good durations like to and of look thing the talking far total I of and both fleet went we Hi, do Saudi multi-year to as we kind as deployment how gives want to guide, not, evergreen, be only, chance the but far answer.

Kenny Pucheu

I arena, Robert the that COVID additional was costs mean, in to environment it that we we've and U.S. international profitability, to a said address we're Chase, that. the holds. into some and And hurdle through did still mentioned managing that always our creative today market it's a to get this have

Chase Mulvehill

then and your And or color. if staffed kind think how would flow actually of practically helpful then level need we consider kind kind cold you about cash staffed, about us of you when right, stack crude of to of cold equipment all bringing what Okay, kind that's stacks would think of many we consider not to more fleet. kind throughout reactivate be free

Robert Drummond

and if of be to ready to opportunities willingness at that customer balance have running pipeline lot on of but to QX and in people That grow definition both to assets what of to we there to of had as to in but go time ground the where ability one and far needed that way equipments go of ready typically free recently opportunity hit our and spend we respond one go to same are hot a we or pipeline the cash so. take scenario definition crude plays, two drives have ready ready as that of were out hot our warm [indiscernible] jump flow to depending to advantage strength levels efficiency kind we try it equipments we with and what those bigger. strategy, to or like to able hot try not we the we So, occurred able or keep of and equipment do

I components think a of it's lot to that. got

is drives we if efficiency have the whitespace if schedule forth and on all Is even bringing visibility and the pricing. that there committed up volume work of it has and being of And so be a First, to in by and fleet free the worth some would flow even positive, what environment. mean this no, component there in cash it strategic saying patient. that's a free I visibility flow cash neutral? we it's unless argue will

that. Chase as anything as much about on add So I that's probably can to could probably, say,

Kenny Pucheu

and would a internal we very likely approach Yes, QX. the Chase small hurdle. market of environment cash in think, our own about is competitive, this have this in flow through, of and the disciplined go say a level we market, work I that what like that is take breakeven GP the below to because our especially hurdles it's I talked We're and going past we've levels in very but pricing QX

Chase Mulvehill

add to? were together, that would you kind if how hot and those to warm Okay, add fleets stacks of crews many

Robert Drummond

if like mentioned starting I is we how but is that, earlier got smaller a we've many give it the markets to we competitive historically, now, are than Chase, had it right when deployed guidance become negative.

said publicly. So, about anything it hadn't we

Chase Mulvehill

Understood.

Robert Drummond

Thank you.

Chase Mulvehill

Yes.

Okay, it guys. back turn I'll Thanks, over.

Robert Drummond

Chase. Thanks,

Operator

question Simmons. ahead. go Our next is Macpherson Please Ian from of

Ian Macpherson

the the Good Thanks. in gentlemen. quarter. free morning, Congratulations cash flow on

Robert Drummond

Thank you.

Ian Macpherson

speak on are you to Robert, speak engaged only the hand proportion ready, fleets that about other total you is gas not the hours talk fleet mode? the usage dual-fuel. as your on in proportion you well natural and one what that for of can hand, a dual-fuel of uptake there on continuing to of Can your did the

Robert Drummond

just diesel our come to haven't our but for to and right say demand past that Systems in and way. general having Ian, in got of of we're dual-fuel amount natural been I the a for from that general, of to phase a in tell aspect present in control say we market natural that while, that lot of participating much far, anticipated for capacity and emissions the is advantage Again, I'd the have able money. been haven't to we is we've dual-fuel, with just fleet, baffle We acquisition so fleets we controls had us reasons. from first bit stay edges among diesel maximize into the little to can step would systems, and the out but market and in invest and C&J and that mix, and and grow best are many our gas fleet MDT that are than kind competitive we of our a benefits ahead the the for that how trying proprietary in of been gas or the one said, the in burn bit conversion the to barely of the is now fleet went in an the sustainability I to are just you Control lower conversion think gas. continually to from better obvious When a got we've

Ian Macpherson

I understand. been much. My other questions have answered. you very Thank

Robert Drummond

Thank you for the question.

Operator

Our ahead. is Wells next Fargo. Chris Please go today of question Bell from

Chris Bell

Good Thanks. morning.

Robert Drummond

morning, Chris. Good

Chris Bell

it at that is fair in third know sensitive little some So curious, but will you least reactivations I fleet on quarter? you're trying be making assume be the to a numbers, to

Robert Drummond

the in will the like a from visibility off perspective, we saw the quarter. thing back in high-to-low way all front fleet bottom. up of saying beginning, kind same occurring, our the see We of the the count I QX trickle where fleets that was to October from going Yes,

you yes, test straight respond continuously, is through when I mechanics away that put thing quickly. into So, well, little need of might these equipment these readiness checked, easily, bit how we down it it's kind go they're equipment the program, up can ready fixed, this we that for and dynamic, and can that the and the go and on pressure to on in run assets put spent any the our so going tell a where pretty got cycle and to a readiness we time aspect, so fleet can't much be

So we base, you and be try might can that. you that arrangement got to you have and to can differentiate opportunities see running, what there an cash so customer to ourselves continue work, then makes sense going to that so ground popup quickly positive move hit do we that they these that with the make can a get we're and see flow clearly, able to you

Chris Bell

guide Okay. Thanks. is I unchanged That's on And your CapEx, year, for XXX. helpful. XXX, guess this then,

some times there maintenance I cheer called for any top think fleets coming those DGB are that CapEx should to $X remains technology of technologies per million should budget market, should -- plus kind you numbers about three CapEx we on about but think equipment engine we from If are always idle, or harvesting about about expectations as XXXX? in or number benefits you NexTier, budget you new of of how we that think about think and million think fleet, $XX

Robert Drummond

on the our believe to have tag disciplined of team of CapEx stop of now kind to things really and sheet this have in can and continue that because to by already right as time, have defensive do do of another at investments, right around return taking fleet little have visibility back So, say, investments focused that the will to most I the perhaps up and just when gas know maintenance opportunity offensive, exist sure the technological we that if and to getting we innovations we logic. burning defensive until the evolution the CapEx top some balance per continue, support capital Kenny to will kind we the to, I be That's plan investment. of we that efficiency a kind will our making we we is of are that the get level going those be Ken… low we what we're are clear, and to that think over cash we possible, future at good of strategic they where maintenance that and say the we going lower update count, that fleet a working lot when point our or we question, and on the to of of to we up profile fleet, to I invest current many will we're that a as our becomes and have we more ramp time end XXXX showed of we're related at largely already elaborate top come end require that; were project why the we you but strategic in that, flow on sort Kenny, and the look the don't start the fleet,

Kenny Pucheu

Yes.

about by In but CapEx you spin So, HX was and now driven right maintenance, see come within XXX maintenance down know, it's front-end those to activity. going XXX as significantly. range. XXX, money and our CapEx, down anticipated spend and strategic we still winding then, CapEx, but our loaded mainly line XXX be spend, on then, spending our HX on on in primarily We'll with range,

Equipment have In of $X.X than going those will program of our impact maintenance NexHub, per the which really health our levers plug to and been Monitoring us that to specifically XXXX. past, able maintenance or to that into we $X.X, to continue we've per to we're achieve is pull about to at program, in Because seen we of NexTier, NexHub. help the continue so CapEx we equipment monitoring fleet our into what look, that'll a fleet CapEx as the into million continue encouraged we we lower in keep less the talked terms fleets Health level grow and

Robert Drummond

portion that asked of a is that using if we So, and is would and for manner think to us but to you but very what consider, controlled is not which do card the I questions and you're we capital, the fleet horsepower deck think of card permanently it we in in manner, regarding sure, ultimately a and planned, in trend about in part additional cannibalization would that a and lease a controlled would sacrifice some the would our for off saying taking market need. mean, for be those consume it it components the was I

Chris Bell

Okay. Thanks.

clear, to per XX wrap it be altogether, investments probably obviously that fleet to occur. is it's up and a would $X.X likely starting So, yet it not technology but plus point about

Robert Drummond

That's good a very assessment.

Chris Bell

All right, Got it. thanks a lot.

Robert Drummond

Thank you.

Operator

of is Cowen. from question Marc next Our go ahead. Please Bianchi

Marc Bianchi

I wanted G&A. you. Thank to about ask

reasons and rate here helpful? year, run expect other of fourth think that, get around for to see rate, kind million the brackets we by put end run $XX room there. million be an in either $XX I some that, would if out at related that you the the XX quarter adjustments quarter, still puts to in more the XX%, And sort or target called of with run bucks to to third some to of getting we the should G&A along about some and guidance quarter and should go and more is third third you rate the the could the million that out which down so to get that just

Kenny Pucheu

Yes, sure.

a our conversion. system out we our adjusted XX% We actually additional you're and having did books, some our give in going one kind I million, ERP going that as a or to see efficiency, we're So going towards start I to wanted quarter, in of out is closed QX. cut that's us levels. pre-merger exit finalize from improvement SG&A last long-term quarter, and I would G&A results and with look, take we to XX% our half to June, marching half we've to from next and one argue as mentioned to $XX last in so ERP fully going what the back-office mention, another And

adjustments, $X million In merger year, on driven see I of to concluding programs those costs restructuring, as mention the that in wanted up and QX. we the are one things of we of wrap terms to market than less mainly so our the we about related both is

to start the as of come you're and So to programs. some cash going windup both down book see we management adjustments, those

Marc Bianchi

that for the say income number you a $X cash Would similar both million statement? Kenny. flow statement, Thanks, is

Kenny Pucheu

million to going $X It's be cash.

Marc Bianchi

of million Okay, the for we then, that at sensitivity if and would $XX rate. count, say size get run above terms just maybe help a in G&A? count great. And kind think us of you that about for fleet that fleet What

Kenny Pucheu

we number, think NexHub level and things at with I I Well, came the reason kind a that of a that XX that with team, when the mean, up few cause. so new ran was with get XX, we fleet the we beyond like that were ERP that target and same because we can we probably support a

market So period. of probably in and that for I the are expectations that piece project size sustainable it's XXXX, that XXXX what through total at and our least of kind

Robert Drummond

I as to in and add, going we grow. to as my mentioned tight just we're prepared remarks that And keep level

that'll us for So the incrementals rebounds. position better as market

Marc Bianchi

Yes. Thanks the answers, for guys.

Robert Drummond

Thank you, Marc.

Operator

go will our [Operator come Please Instructions] ahead. of And next question Stanley. from Connor Lynagh Morgan

Connor Lynagh

thanks. Yes,

cash speaking have lot of you return what's buyback of given the can support guys had outlook, and to up and past capital you be a upbeat you of relatively looks wondering puts magnitude months balance little and over you're to wanted Just if bottom, relatively on organizational balance and potential decisions discuss cash line, got bit here, that? thinking I is your make to but in around pass we the what to free sheet takes had some to and you've ask be here of your a the strong to want adjustments in sheet, capital, don't the flipping sit that your maybe structure about shares just allocation as how here, make

Robert Drummond

in us and dividends. to can but a capital significant market. time, better discussion our in on what of be the believe might no uncertainty We've would in okay One lot of buybacks our than matter still we the then for now, Thanks would liquidity, and extremes that right ourself invest just stock of to there happens course the runway, we is would have two, to we of that number or been a question, amount opportunity give say a Connor, for great be all to a boardroom lot manner the position flexibility. I with

mean balance wouldn't and it, to on clarity keep mid-runway, until the you I in the we much So, of think short see that I it that the need there would got about or gets us runway, foreseeable talking the we sheet. -- uncertainty

Connor Lynagh

that's where debt Okay, of do a how much mean get market visibility level from we're run cash of appropriate feel I fair. we do I or shape is what if at? this perspective, you to a net sort in mean, to business slightly better

Kenny Pucheu

you is you you going in mean, keep have always cycle, that play look Look, the in to growth I to that cycle. you how if out, is mind at this to participate growth have fund what to want

higher working have of and Robert compete cash to meantime, amount the be technologies the minimum able in gas dual-fuel invest, mentioned, the fund are So, the of burning you tier as that able be spectrum. have compete and capital, a to at to next-gen in to technologies to you allow

I'm number, of rebound. call you I would to is that a out to but the know, what amount substantial a not you say cash catch going need So,

Connor Lynagh

Right, appreciate it.

Kenny Pucheu

Connor. Thanks,

Operator

Our Partners. John from Daniel ahead. go is next Daniel question Please of Energy

John Daniel

Hi, in. Robert, thanks for me putting

one Just question…

Robert Drummond

John. morning, Good

Kenny Pucheu

Good morning.

John Daniel

any out several strength, pumps, OEMs thoughts. designing new thoughts financial to as Just are just curious guys pump certainly technology roll know given year, given new your plans next you or your

Robert Drummond

obviously. a that's John, question good So,

is on size be we to the And two question Next-generation ourselves frac obviously in maybe consider call certainly The is company to we frac as it land. like U.S. number when? horizon.

when deploy yet, We with many maybe we expect way being that, investment to solution and is and follower what these in not in our pricing deploying the a participate the capital. and time to it just technical proven view to best is fast can are the got strategically support best of

lot bridged will with that engines it dual-fuel know. diesel you been of as is a tier, logic burn into Our gas natural

John Daniel

Sure.

Robert Drummond

about power make of part fleets? that dance, worst about customers from that least investment, stranded discussions that, options all second, solution expect that obviously we with we we process essentially timing -- And at how then and be in bit investigating get the dealing but the capital a some who make second timing, do and the evolution. right, two got are the in you minimize that to close is project the sure sustainability deal of got of old runway we capital we with and that believe talking conventional with got could more and and participating as that really and timeline scenarios this we first, a just are we that optimizing had, So, to you is to we and

John Daniel

Okay. Do benefits investments the types them? those let's the -- you underwrite more any ESG of help ultimately it get any of going customers sensitive to just sense they're from since that them call

Robert Drummond

do. I Yes,

to ways ability around of think, can and those -- and that what off and power that it -- different business but will a because very take dual-fuel sector lot I the takes to be the exists to different speed and evolve the there a capital with bridge enables significant in it's a will financial at borderline, some bridge, think, is the emission bit the the there good, as all I think gas the of off, a for more our investment good next-gen make is much service that and burn probably solution, what natural whatever participate company, evolved it is is for direction ways, model in in many be a than bottom needed line the different, anything as reasons, else I arena. scenarios perhaps reasons, today, but in itself also there, good right step is a as a dual-fuel of in but the right, really that palatable to the

between an industry. for So, it's as operator. the are us service spot They and individually a bad company not

John Daniel

for Thanks us. it. putting Got

Robert Drummond

All the best.

Kenny Pucheu

John. Thanks,

Robert Drummond

participating really NexTier. interest We questions. end day. and today We you. great appreciate you'll think Well, Allison, everybody the of Thank have a in and I safe, that's the hope the in stay call your

Operator

attending has for ladies thank gentlemen, today's now you presentation. We concluded. you, and Thank the conference

lines. your disconnect now may You