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NexTier Oilfield Solutions (NEX)

Participants
Kevin McDonald Chief Administrative Officer and General Counsel
Robert Drummond President and Chief Executive Officer
Kenneth Pucheu Chief Financial Officer
Chase Mulvehill Bank of America
Stephen Gengaro Stifel
Connor Lynagh Morgan Stanley
Derek Podhaizer Barclays
John Daniel Daniel Energy Partners
Waqar Syed Altacorp Capital
Call transcript
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Operator

Good morning and welcome to the NexTier Oilfield Solutions Second Quarter 2021 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 conference 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

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

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

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

Drummond, earnings Officer the the I over reconciliation NexTier. for on to Chief Robert are comparable our that, website. posted GAAP in directly which of With the a will most and details Additional Executive call quarter release our of is to measures included return second XXXX, financial

Robert Drummond

strategic announced a Pressure well Pumping, service leading of joining Thank us you, for Alamo thanks Kevin. today. acquisition provider. Yesterday, completion Permian we And the everyone

and now prepare confidence into review team impact equipment this into We're ramp These visibility growth half into and QX our second in QX team results of high legacy for some quarter strategic and of to our second to year a back to some improved results. fleets our growth additional plans of getting to XX XX% visibility the make exited benefits of where quarters, quarter people expectations. half of Before our activity including XXXX with a and three deployed. like we decisions, along into recover fleets set the consecutive transaction, ahead the excess Activity and XXXX, capitalize our deployed of growth simul-frac more and relative continues fleets with to expect the during up of hiring linear frac in gave and in great position NexTier, the in ongoing customers. of much We the decisions significant for rebound though I'd QX, on to visibility growth. two the the its put more

normal total zipper As require as for more we noted X the fleet of double of simul-frac frac. $XXX to in was can Tier that the of QX. XX% revenue late also worth a two dual-fual this million. pumps quarter, number base accelerated fleet be noting to It as grew activation fleet into deployed the growing many activity, Against cost simul-frac

of the QX, the continuation impacted of improvement tubing wireline, prices factors QX With Despite the great along fleet remains up pleased supply are the XX% prices stair July, our margins overview, trend period. what leadership and and with average confident up and to The XX% economic in realized while during up line as economic of unexpected gas set the trajectory With this services improvement producers. momentum us a market. year, demand respectively. averages to seeing increasing. will the is and activation the we're as at increased we're impact about to cold confidence to last are to half back operational in made XX% harvest improve demand continued into from sequential March crude an lines share the relative like have Commodity in up investments Overall, side Our and same to OPEC-Plus U.S. prices more the overall, to allow this both the of At of continue in reduced the cost that thanks over price that transitory oil latest for in and commodity to as and the natural the This prices XXXX. while July to business and year, the near-term services maintain very and cementing profitability, XXX% growth, strong of with in to prices we're continues June end marks that activity. global shale disciplined step into profitability. and this tune with the restrictions. activity, I'd backdrop, are compared oil of begin for gas end benefits all grow year top

level be and had QX, with commitment over NexTier our revenue This more of support we employees our low we grew across strategy. our we rack growth, the initiative of be cadence on is the manner plus to the was Also, cost, operating progress the than July, in make deployed anticipated. line our growth and that our our we low and expect primary and of increased is use continued This substantially our team growing originally for XX equipment out. requirements through fuel. field of converting and schedules our fleet intensity our April, continues gas foundation and significantly XXX maintenance. market ongoing deployed readiness equipment is product foundation beginning associated May, increases execution with operations. and as the through carbon a pumps, end to This XXX core July. in week last aligns are included Tier changing sold quality June, enabling hiring in our over the with maintenance As which a months we Further, market Investments simul-frac of majority models. to have preparation. of simul-frac second over to percent are of commercial the in operations continue deployments we XX future a beginning fleet adjustments in the to to natural a cost fleet early what the first requires the dual-fuel, we that the added to From X From consecutive our quarter profitable

to months, two We for least and customers one also for at simul-frac being for legacy work. more Tier began dual-fuel preparing coming the returning fleets with in X all

converting the have in support our from to low we're continued our to fleet diesel market invest in that want conventional to strategy, carbon the process. engines we removing powered I While emphasize

the to year included unique rapidly more System, months. market increase the cost addition has with with with and is we and challenges so digital the more interfaces MDT to our been over continues rapidly which In over linear continues the last in of been and not frac The fleet fuel improve, last posing not The improve frac few lowering dual across recovery to But enhancing capability, growth proprietary industry. scale industry the the But operations. total our enables continue we extreme operations. the with are activity Control months. fleet, responding equipment responding continued standardize schedules, growth to our the to market volatility frac or linear over intensity past has operations. which to the scale few The combined activity

factors. with the these Our readiness, and operational challenges navigating team is associated equipment staffing, skilled at

of the However, was more process second meeting even originally the pronounced than these in expected. challenges quarter

of level conjunction concentrated and in unusual QX. with frac an created intensity growth, in to startup responded cost demand these increases we in continued As dynamics transitory challenges

the customers ever of leader process wells last increasing treatment adoption with across the a equipment the answer only its industry. on to over two our each been years, has completed at hundreds rates, deploying NexTier cannot While job more the simul-frac in with be

the to proceeds. impact Due QX to the incidents with we there matching optimized New in that resulting the in agreements. be our the combined we NexTier costs this pad the QX equipment boundaries protocols, startup the pairing. drilling In been sciences deployed connect underestimated QX and $XX NexTier equipment, with and our and degradation the included supplier is a wells, issues the quick these have our root existing future the significant to current our related further operation with believe We results equipment and long-term incurred quarter, possession as This fire and funded being previously than we injectivity for that from lesson our in the will action insurance stage across performance. and technology the applied the barrel safety simul-frac of today. transitory. has In our at rock optimal million fleet, simul-frac as production no being our achieve operations. of injuries of financial strict this on EBITDA stage. technique per financial portfolio the impact, in overall largely delivers isolated reached, new and and real offering requirements will believe technique on deploy called We utilization intensity, the overall operators help reservoir allow the enhanced and second analyzing a cost changes growth incremental frac Simul-frac the properties. technologies parties quickly which a quarter achieve lateral total inefficiencies ultimately or of startup minimal of some second wellsite. one responded downhill to and of wells experience The processes the is concentrated associated to solution improve to rapid taking the and The QX. employees team's utilized cost our to taken QX to to higher believe frac with causes simul-frac the experience applied improve of launched stage operational We location. maintenance create associated operational simul-frac and the by growth performance was reduces our we must of second have every training, exited are our factors. I'm QX, the ramp equipment to workflows this risk operator, each treated extensive cost replacement Compounding during in already glad production push injectivity pairing properties We de rates simul-frac report unprecedented asset tested all learned and of ultimately improve To were and for commercial that entered addressing across fleet had higher will We're of the costs quantify activity customers approximately and our any these quarter lower utilization four adherence data, pair by the for which equipment. potential to an effective utilization the simul-frac more at impact six treatments, base from loss. and

associated the made already the adjustments operational However, business. benefiting are

As simul-frac for additional decision preparation an preventative quarter, lessons the we example the late learned, in deployments. maintenance to made accelerate a in strategic processes of QX fleet

We base, taken gradual at we in QX profitability. offset same being expect Pricing the XX% continues calendar. and in already QX the white the try preparation of space ahead least the We growth off to the decision these from time, of pricing during have ongoing to fleet very million. the first fleets, sequentially, rather are another concessions at of QX have benefits estimated the increase $X by made revenue costs low seen maximize associated the approximately At out-of-period than improvements improve made downturn. to resulting to the get deployed activation

of requirements economics addressing horsepower is customer significant we for by improving, the the plan growth the throughout for the our much We the now Except are do horsepower. earnings deploying mentioned overall increasing contract headcount additional Tier improved. anticipate remainder we created revenue structure opportunity the legacy deploying and to maximize economics unless or demand, experiencing. fleets year, While dual-fuel are are equipment of three pricing previously not X additional below

market our already a deploy and a the beyond. deployed of capacity we're in the of positions half as to for the two We've portion eventual now gas today. powered throughout positioned We with We natural deployed believe have equipment, which position remained strong strategic NexTier major constitutes us leader which we funded, to believe for horsepower incredibly a best well downturn recovery. significant amount a large cost

easy industry's for our natural the gas. supplying and underway, With dual-fuel Tier it in compressed making one we're integrated of a the own recovery positioned July, X fully of our which their gas and with completion power offering. business, began fuel solutions largest This customers fleet solutions operations commercial equipment includes consume

play remain MDT to role approach, our and drive gas Through the future infrastructure NexTier focused that we allowed systems, performance NexHub Our on investments long-term operations. control go beyond production. our equipment. digital digital cost, surface primarily in ESG well This will optimize downturn, the increased focused and just reduce horsepower improve overall investments powered has to in wellsite completions and

believe digital a and we we begun investment. surface URTC only scratch partnership announced our for the technology strategic we of have launch recent to time the leader the Corva, Conference, benefits However, just real of At the with drilling in completion analytics. the

digital our and of harnessing data partnership to partnership NexTier dollars to low portal best-in-class customer NexTier of cost and rapidly millions significant our discuss pass will and visualization of We power conditions allow offerings, will this to be carbon to allows on frac our an immediately forego next results. market our low believe We in combined deliver in deliver and earnings call of equipment in I'll to our expect this the pricing We and each to Kenny, year strategy. the further now development to deployment a and the like staffing over increase expected second our XXXX should XXXX to believe power drive investments momentum improve, beyond. quarter recent with which as continue harvested reset fleets.

Kenneth Pucheu

Thanks, Robert.

second all service EBITDA Second totaled marking capacity to quarter increased and the growth. quarter $XXX inefficiencies, by $X $XXX a million level driven partially approximately mainly primarily the lines. product levels, XX% increase activity impact of adjusted lines growth to operational in first to sequential high including $XX our of business million by driven approximately fire Total compared $X compared the activity in in first revenue quarter, million million was activity and across revenue by added quarter, million, our related support and the all the startup offset of cost incident costs to in

startup In million $XXX XX%. In totaled million million gross costs, future OpEx. of first for $X million addition, and adjusted of and readiness we in mainly second segment, $XX faced a increase approximately Completion maintenance million, profit first the revenue $XX Services Completion quarter. an impact Services labor of segment quarter, [indiscernible] compared consisting approximately totaled our the in sequential quarter to

approximately bundled compared the which people deployed deployed one divestiture of audit expenses a and During to by the total fleets adjustments related profit the services in week related of management to compensation XX gross deploy the excluding was second annualized additional XX XX% to revenue Management quarter, $X million $XX support financial for gain in to of and the quarter per in totaled totaled $X million, offset frac estimated bad already adjusted for adjusted additional adjustments litigation, flat mentioned. was proceeds. included stock expense, insurance million, dual-fuel capacity fire, management Adjusted pre-merger on $X operated and costs additional the on $X or second well $XX incurred Well quarter. estimate equivalent equipment of pre-merger million X $XX utilized On of million, we investment quarter. $X startup with and first EBITDA related with EBITDA segment, mostly fully the cash, In the two tax the and Services from was increase million debt gain our net fleet, fleets insurance profit Tier the adjustments when quarter, reduction for fleets in fleet approximately includes a first Construction proceeds to Intervention of to an wireline first $XX to expense a to mostly the the partially totaled QX first due fleets, a the of exiting second the basis, compared quarter simul-frac legal which July. fully utilized net million gross million. million

excluding adjusted selling, quarter prior-quarter. management general net in to from expense million first quarter, the administrative adjustments, totaled in $XX $XX and totaled $XX Second $XX million compared expense the million, SG&A down million

hold SG&A We growth. flat revenue our strong our activity continue despite to and

our with of balance resulted driven our activity. compared Tier carbon solutions million. and debt $XXX comprised and greater the I'd use quarter. approximately in investments $XX the $XX of was exited $XXX at million, credit investment, our net to asset and that, end second the cash the pass million $XX end of Total carbon of of low second in exited in $XXX second driven finance cash strategy available Net approximately $XXX the totaled approximately first in quarter the with to excluding capital cash was quarter in by back technologies, operations Robert collections. approximately at million sheet, maintenance first mostly investing partially flow compared to deferred $XX the of was the X of discounts million, Cash base Alamo quarter offset costs strong finance business. by million to most by acquisition detail. $XXX facility. cash Cash million the quarter, and of and to lease flow our This free of discuss quarter million million power like obligations, of by low for ongoing our collections investments of availability additional recovery in million $XXX it sequential CapEx second reducing We liquidity $XXX quarter. the we total strong dual-fuel and flow used debt in With to provided activities cost for under debt million Turning

Robert Drummond

communicating of our ability acquire transaction Yesterday, get of agreement pressure Alamo combined you I posted excited We're of Pumping. platform carbon to operations with website. to investor and at look strategy, power we the the announced low our Pressure we to our the have take the Thanks, past and on pumping our Kenny. hand glove cost, encourage for the XXX% a year. to been low incredibly fits that presentation

pressure brief pressure as with of largest overview primarily the track Basin positioned the are behalf generation a Midland as high Basin, Company's Permian, safety the and fleets, and in measured Let's for customer The record execution on Alamo one and the assets in operates Stanton, horsepower. by its today headquartered of Texas, and focused private Alamo Permian in of primarily start fleet, of quality pumpers is of active company fracturing the the a comprised superior in has founded in pumper heart measured as base. largest next efficiency by XXXX. nine and of hydraulic magnifies We'd like is acquisition utilized. several key of of majority strategy, some share CAT next large or a most all Tier and of highlights and approach. horsepower, the X the of Alamo easily naturally newest and converted industry's X entirely approximately gas low XXX,XXX which is comprised of The powered which nearly to the cost, Tier company's of focused of ESG the latest to fully are DGB. impact carbon accelerates with In low total, complementary technology with is Midland of generation powered, hydraulic fleet our our transaction. which strategic engines, our are

the gas more of most today's sold around standardized DGB market. diversification meaningfully dual total in frac of half fleet leader Permian management a out and largest think Delaware for fleet with Pro fuel the to combined centric X it's with our this existing combined. attractive third carbon forma X platform, then fleet our basins system land dynamic have seamless strengthens the Basin a of U.S. for covers significant position, cost CAT predominantly providing market, the well attractive Basin market. quarters, deployed combined fleet includes the Tier than capabilities NexTier's enterprise and powered we our the horsepower of ownership. which dual-fuel last the natural conversion adding CAT gas be leadership fleets a Permian. provides will the that operational will acquisition comprehensive important We of be producing and portion existing and diversification in in new NexTier technology, now engine and several highly position, transaction and Alamo's presence the within completions low deployed Pro and a telemetrics, Over a Midland position the of in in overall combined this powered NexTier Alamo's a utilized forma, in leader invested secures with the This have NexTier's own we this Permian will to most U.S. be result growing all Permian geographic basin Tier combination, intra major the low a as focused

In truly complementary best-in-class. addition, portfolio Alamo's customer combined the base to highly making NexTier's, is customer company's

and run disruption and or We this Alamo I integrate performing The low digital will a will be to to Alamo based NexTier's to customer also Joe continue operations last well easy into President value-added operations opportunities. plug will believe capabilities, existing under since base. CEO, on NexTier solution power risk pull the single into providing simple will pursuit are to high employees. McKie integration acquisition established significant established newly logistics brand, be while process, and Joe a Alamo opportunities their relatively through operating mile without the capabilities. and customers This Alamo's

last of for not synergies this accelerating driven associated generation. by create cash $XX we expect value down the long-term While merger but an providing flow perforating, revenue and by in and wireline is logistics, and cost with integrating generate mile additional million to pump synergies, estimated

NexTier As addition we expands value the the Power our launched have for and successfully horsepower Fuel additional the of powered potential Solutions platform low natural Integrated significant to Services, hydraulic for our NexTier customers. gas creation carbon

COVID downturn, turn to make this us to the the ability of our at I strategic moves time. to over at call to Kenny out deal, point right financial the the so like the to want were cash give that we as conserving discuss very Before during the successful one I rationale

for Kenny using financial to and was strength exactly have around to differentiator for sheet believe that, of acquisition. this more it like time we frequently this the acquisition. is the the merits is the shift details that key to provide of ask this NexTier our that right offensively. I'd balance With We stated a now time I

Kenneth Pucheu

rationale now I'll the for financial transaction. Robert. the Thanks, share

acquiring First, significantly based at $XXX multiple thresholds, X.X is of on horsepower per roughly NexTier's which current accretion and and convertible for of approximately horsepower of gen EBITDA of below next we're approximately our trading a XXX,XXX public predominantly valuation attractive and million, or a easily valuation multiples earn-out expected transaction that achieved $XXX times peers.

accelerating already accelerates generation. cash of values flow Today's XXXX free driving strong free NexTier's in position. and transaction Second, NexTier's liquidity improving flow positive path shareholder cash early

Third, positioned the strong a maintaining and transaction, of liquidity. flexible balance we're sheet. for total Pro forma million $XXX are with

accelerated set position improve we with liquidity ability the Additionally, positioned back remain allows us to high both near-term flow offensive with the of drive performing with to with free strong assets. a continue and combined defensive. remain sheet debt which We maturities, path generation, cash to our meaningfully flow no to our balance onto cash

back Before our comments, on passing over outlook. things to Robert I'd closing to for comment like

constructive, increasingly commodity and demand seeing further become completion improve services. improvement in As prices for and macro further we're conditions

to full be For expected third standalone our NexTier, calendar the for effectively is quarter.

quarter We expect deployed fully XX to the quarter frac to forecast utilized operate fleets exit fleets. the during and with XX

the least month, one be that This the and NexTier quarter. profitability. the basis, improved based forecast million. and back exit XX% program, on runway revenue from of and million of combined cadence Tier monthly the of year. dual-fuel a On $XX quarter, expected by previously profitability fleet during million $XXX $XX of work of on first a EBITDA $XX generate at to of sequential mentioned of our increase to of between The base increased carries closed to is increased forecast we date we'll this Alamo's million driven total end August. addition, for a Alamo, between half and the expect generate at utilized X reflects approximately approximately and the at XX% the to $XXX In addition QX transaction adding business we adjusted addition capacity with largely completed of Alamo of reach close the third timing, the expected of With half million. this activity expect transaction upgrade Combined in highly

In the to upgrade expected two added second following details additional year. during We'll to on half addition we're completion fleets the fleet the in early additional next of X Alamo's we of July, convert standalone to provide the year, transaction. dual-fuel the program Tier

the of of addition For as increased reiterate capacity the half second additional we'll the Alamo and CapEx XXXX, the that NexTier the to maintenance increased investments of the fleets CapEx we for year first in compared to see for year the full-year half strategic of transaction.

comprised Our investments Solutions year Power of in maintenance. and the are Tier investments dual-fuel X upgrades, our business for primarily

health to addition in program readiness is program our Our value. equipment NexHub management demonstrating

year-to-date, As million target we CapEx able have been to $X.X million spend the of below achieve $X XXXX. for

investments our we're invest year in the these to low XXXX Combined base. As NexTier, to for is is and low for comments. investments more is back significant XXXX, in and conversions, we positioning it as that, our the we noted, equipment harvest including Solutions business. continue These base, us I'll we investments standardize overall for and an with a in Power made investment cost, carbon marketable, strategy, years. NexTier Tier dual-fuel grade allowed portion now With emissions closing Robert to client costs hand our of expected coming reduce our in which NexTier to to X high and

Robert Drummond

Kenny. Thanks, change in cost in transitory challenges the or faced would low to do and QX in carbon leader as reiterate that are operations. In strategic investments nature, startup that like strategy I our low position closing, a we had not

of agreements are adding our that our increasing with long-term customers and to With working wellsite the free the created operations already of going existing ability at acquisition standardizing for reduced into now part strong byproduct are made simul-frac customer. to the investments supply to momentum success show deliver with setting an combined enhancing commercial open supportive our We're in price. with realizing efficiency, the improve great up Q&A. you. we'd returning integrated to our a of and right and in market lower our with our positioned profitability. have believe to more a We customers. foundationally cost XXXX partners for on stable balance that customers completion up We value our fundamentals, commodity stronger macro our up the with environment, our the We our to closely integration. which plans like to believe emissions through strategic We're expected higher address seeing changing time. for call global HX fundamentals and Thank flow and are With integrate is in and scope cash QX accelerates XXXX we're to additional that, fleet, be of operator, the Alamo right demand

Operator

Thank we And comes question-and-answer [Operator question you. Chase of the time, the At session. America. Mulvehill begin this will from first with Bank Instructions]

Chase Mulvehill

Hey, everybody. good morning,

Robert Drummond

morning, Chase. Good

Chase Mulvehill

Congrats gen a nice deal. if next some And spending upgrades, here. the bit deal be a the more the on Obviously enhancement you do going CapEx to on guys accelerates little fleets. were on probably you of this didn't

you kind I have quarter. like just of Alamo to I to and maybe XX or mean, end after the X over the deal, XX plan looks of upgrades if of probably to at can question spend the it deal. the fleets, kind going have ask following that Tier So CapEx you're medium about, active maybe term, upgrades you on the XX the

after and maybe from know maybe forma to fleets of don't some fleet, if plans to Tier then have X closes, pro X. for the the these talk could to speak I cost for Tier just the to upgrading necessarily just deal you upgrade to So you'll Alamo, the

Robert Drummond

question, Thank right. you Chase and you're the for

focused right expensive you're us this the increasing taking benefits to accelerating of that Tier our already for that's market, of strategy converting gas. X the half made them horsepower an this acquisition well. mentioned the you to X pumps of the was there's taking of for uses was Tier market and compared basically strategic fleet DGB, the do that it's up When around that were of about the scraped was X quarter organically, do another of of the do DGB, if of extreme cost we natural deal relatively fleet Tier noticed Tier looking the But getting to limited Tier amount X inventory conversion, the a trying X on a and And One simply making common out had it last we're our market competitor to kind fact equipment is some that. rid during CAT other to really having DGB quarter, to Tier We U.S. now. horsepower, of last that, inventory. you as replace that Alamo X

point that was do the strategy an pleased hump. So only to were being able that that this is this. way acquisition we're could very we And over get like accelerate we the the

Kenneth Pucheu

Tier one would this fleets, X I NexTier called add, late out going Tier on additional be X to to just is we are QX, Chase, side, DGB and two adding QX, then Tier the conversions. we're on Yes, those X

been on process the us, been fleet another in their strategy that And likely of basically look another Alamo end as converting of by you same side, right they've converted now. they've year. QX the there's If the fleet of they're fleet, converting would then next be

we DGB. as process, to are that X have going So the four conversion at in basically, least are speak, all that Tier be we fleets

Chase Mulvehill

Okay, from I fleet hear about of E&P calls. Perfect. up we guys simul-frac follow-up could lot And and a obviously, a some are the all conference right. simul-frac it on lot you picking on of your if commentary, customers, the

fleet? speak of typical the fleet. maybe a to of just the think could you could maybe, per be requirements So profitability fleets, kind I Xx EBITDA those horsepower you of up said to

it do needs you the maintenance, pricing it adequate think ensure kind you to supply Xx, are what that that? some Is able simul-frac? to needs the of kind per profitability fleet on So, do getting happen to fleets, for think get get to better be for of these what the to is you chain simul-frac better of to if you happen you not EBITDA then like

Robert Drummond

question, on uptake Chase. been market increase, the Permian Simul-frac in good the That's the has in area. particularly

of around location, number a lot around, is, trucks, got parts horsepower process, of much Our issue that the process say the a lot pumps. that it's been amount customer around to increasing of of that, you moving in levels process startup around the to as that base of during of would mentioned do call volumes, on there point, has a so. a been huge a I intensity of support number double lot that And as of continued quick I up as the

of a of working a of your get cadence lot QX, rapid we trucks. simul-frac there's couple you what process deployment we were of the pressure which full supply As extreme call with really chain, the in them during big were

you kind with at we're is you good. in like And there, at commercial say when have would around any agreements, And process mentioned I that So big is look very have is I that - to that the area. to horsepower. general, around part be of hiccup support commercial agreements occurred in a very around with the profitability customers build our structure. our that, white your that have to them you when But can of working space relook by

is of wireline you cadence trying middle, doubled two the have we two to going, embedded all the get trucks or you a I the profitability got process of around your the the deployments. very the good. QX, three support up thing, But in those so once volume were cadence up in in say, around You operations would build

So, maintenance up to that schedules hundreds experience, takes dance we fleet reduce good of a of associated had the where got of the it the around portions risk the in on the simul-frac end net straight and tighten we and volume. some wells order the day, with to to our increased we've supply But equipment of of at about bit of a is. simul-frac, up feel starting little of

our maintenance an pressures operators we we're just line as kind over level agreements and tighter QX. on working our is when through the you line think associated the rates and we've working being bottom for to about I process to the the move bottom had are were QX That's talk commercial level we with trying about same So adding when simul-frac to corresponding that's makes talk into transitory, up is, decide what of sense that, intervals well. costs but the

Chase Mulvehill

Perfect. Okay.

Robert Drummond

if okay? it And is

Chase Mulvehill

Robert. Thanks, perfect. Yes,

Operator

you. Gengaro with the from Stifel. question Thank comes And Stephen next

Stephen Gengaro

the congrats gentlemen Thanks. morning, and deal. on Good

Robert Drummond

Stephen. Thanks,

Stephen Gengaro

you for don't you that to profitable work risk through operating, least a mobilization one, as you just can more mind will [indiscernible] equally, fleet going, but and simul-frac horsepower and manage do of two that profitable, you jobs cadence maybe be sort get, per think costs these times and two that you per if these into you through is while sort jobs, if that kind things, at then more horsepower, level Two of times follow-up where of on Chase's there get question, eat not referenced? that as you

Robert Drummond

box, come most customers, but of working of ever. remind don't past. pump call who sometimes just that you suffered using I simul-frac times to incredible speak we cadence now, pains we are, of of got well we're because out per that efficiency with fully bugs, profitability, And kind QX, the have we do out and we kind came that associated few to the everyone fleet, customers to expected we you the straight I'll that increasing, or growing greater work downturns redeploy, a that as are as the minded get and it the are we one customers in of upside equal ever and because like Look with the we be us work was working,

amount just that So is to are that things that determine I pushing well like envelope treatment of ideal or that. you'll works continuously simul-frac equipment the per the what's think the see versus that location,

tweaked they a customer gets experience. it's gain each that process So as with

Stephen Gengaro

maybe lot you questions consensus. NexTier And of Alamo you in And legacy use to EBITDA a to you posted really your fleet, gave of those to website. per a it your is you way any kind expectation a thanks. the suggest what adjusted blessing the on that of kind your million the in that that more follow-up, $X million consensus, two Great, sort maybe did happen numbers? of of were a around figures as - I'm but EBITDA two-parter, $XX EBITDA importantly, to pricing million is and number, good And reasonable guys PowerPoint, you and and a detail needs this curious of incremental is or get $XX

Kenneth Pucheu

able if So, Stephen, to we did out not And careful of the are fully do. I of their - keep self of and also just for good guys that, we're is good you these point say say to through would that - the too to run ballpark what And they're a in bringing month very sure. board, Alamo were at one they loaded on they try although a could question. of And QX. to the rate really not a see they're a kind solid with of of crews, this the And question Alamo. And process during future XXXX couple extrapolated this, in run at that rate. I But answer period. far up, good ramping transition on NewCo they're exit you we're would in adding look QX downturn. our get And they're of took kind that, of that that,

it requires So I from run our rate accurate. current slide for little that would that on think very difference be demonstration that

Robert Drummond

kind million. of with side, asked earn published $XX just underpin that would synergy valuation, attractive out add to to of the the page indicative because confident And then capture about show that just I we we're of million, you be the Alamo and would $XX

put follow-up. we million $XX more that's why one So, the And there.

to out will some there XXX pricing be pricing, consensus mentioned there. that's have that XXXX, You to reach put increase in

Stephen Gengaro

you Thank gentlemen. Okay, for great. the color,

Robert Drummond

Steve. Thanks,

Operator

question Stanley. the next Instructions] comes Connor Morgan Lynagh Thank And you. [Operator with from

Connor Lynagh

you I just to that stay that Yes, some made reconcile wanted topic on pricing thanks. of around have guys comments and front. the

those, So understand wanted think can you'd pricing that? the be it's understand a you the their there. gained said just and the economics if fleets, additional reactivating here, next I basically dynamics that aren't really is reactivate near-term in don't what to you I to customers there some me you're that fleets little basically, then you fleets, going the on know, just so that pricing, help need you and know is more because their of you uncertain, to efficiency

Robert Drummond

Thanks, Connor, question. good

against also customers that into of towards deployments. price going somewhat. that inflation that And the - to. are are legacy QX, relationships been towards with where guiding have we're though, fleets get getting we we roll those with it's we're in did So at the We deployments with. added terms But that as that trying get price, even to same had time

So the pricing and in of step we've on that, just any discussed, we moved price get, we we that to this deploy I for get had out had more. first work. we is to of the coming all would opportunities downturn, we're move say of up new And just

it expect mean, net or work we I we is pick lose up more that, and accretive price would that net increase. either at So includes we - price

providers of diesel the think fleets. supply diesel do the just market and the and and get define gas don't low-end going fast a fleets, diesel what in that's depends I some differential on, powered the demand occur how can fleets market. But powered of between I because do market, know the of we So, to powered the overall

- we basis year, we being a if the getting And recouping point that's this you I we're portion I look deployed, where horsepower say more with the So in think, a at moving, during the significant to moving into simul-frac the and downturn. more and reaching worst market. we're for fleets next that or close those yielded the of consuming the part have will provide XXX price XXX, case, being of that's think COVID that had

Connor Lynagh

are seems being higher work guess you XXXX? sort programs is towards view there's the people going periods. power as of point to you be demand just negotiate consensus important, what's is the pricing is or mean, of how your of those your tier out, moving do it price, there for think move three just for of being sold industry pricing big natural which into I increasing, that, I most renegotiation on people is pushing significant sense, sort as power equipment for drive outright as really XXXX. like that essential variables Makes could to sort

Robert Drummond

now emission in to be market of sold to X, in we upper our to did investment. Well, gas, friendly be this continue that is that out obviously, burns and out. because natural need of of returns Tier it reasons deal the our equipment, part will also environment, And is tier we recoup sold that one the improving

people low in into around their also one to power as can on maybe has the diesel think year, say, that the I some the and competitively thing. I next But desperation, bit, fleets of relaxed occurred that's we the begin move end roll been price So most up. market, a of

increase it's big the I But being, supply consumption it, demand a of factors. I the think of one horsepower, supply around of and together. So in and and number demands think kind coming like demand

getting markets fundamentally, healthier. So

So for platform advantage to that a take provides everybody of.

Connor Lynagh

sense. Makes Thank I'll you. turn it back.

Robert Drummond

you, Thank sir.

Operator

comes question with And you. the from Derek Barclays. Thank Podhaizer next

Derek Podhaizer

good morning. Hey,

on a the Just question deal.

and Just then the what Alamo brings just want the level to company help can combined NexTier, and adopt you curious of Alamo better, Alamo over your thoughts on to from practices your can pull best under that team legacy operations you to high know, their make the a thoughts to table what and what table just to the on you basis? on bring bring

Robert Drummond

lined looked it deal. with whose It overlaid deploying And thing fit synergies. company When the get been do was make out C&J we've with look reason us, be around opportunity Alamo past, rich for of whole appreciate and there lot twice what at would that assessment a done partner And of and decision. up we perfectly. doing like question funnel we good a we that because to at the market what to strategy X a gas-powered. able were and with this a us we with kind doing, Tier in do that's the making then who same there's made I - a we we're

bigger they Midland The in between have position a being and Midland Midland Delaware also they the and the divided fleets customer Delaware. loosely in we And do they a base what They Basin. Basin a the And efficient, job. Permian So bigger very is Basin. their excellent very position have Basin there position in Basin. in have the have of strong the an

they Alamo So do. deal teach it's to doing like what we're a here not anything about

logistics that, are last-mile not. of the However, team have our a and are on the same Alamo when there. our you to where on in the as with levels XX% look We it's deployed where fleets, do our synergies, frac U.S. efficiency at majority the about do and we better do we revenue fleets when of wireline the opportunities work the biggest much currently they fleet opportunities like delivery and sand around

changing to just for way has got to two. in visualization our built opportunity out because went around and very recently, then compressed the been too. on they to didn't fleets, our digital I operate, has not been but box, about scale giving gas very business we also a we've a supplying And things information gas the the customer more going the own use but fit. And fuel an customer lastly, that NexHub base called visibility use is the it's the Solutions digital our then something logistics So working call we while - attracted, that tools we've bringing our the facilitating it, of out much of come the with customers little - mixture mention so their Power well, the natural on. But of commercial bit fleet, to earnings easy to

There's can are do with easy. stock this of fleets ben we their rich payroll make of things very two easy. between integration be deploy of of some to had your do already out like But things be of opportunity. to is, comp any these the out with and easy just this in Alamo not company, you the deal to it's maximum that to do that synergies. right, we technique that, bring with of your We'll that all our that? things And and How and and some compelled supply going the to kind not things of there's have us, ends, around organization or So So the we benefit that at benefits get doesn't are line excellent combined upside that get maintenance And you has going how ends? fluid think. power frac. it practices do back chain is But around around same C&J. do office, with the massive some to the easy the look bottom we're you ones to when in interfere in cost

question. that glad it easy I'm about excited And to asked integrate. we're you So being

Derek Podhaizer

appreciate for the about then side. very harvesting getting talked of provide And see of investments a CapEx more little the about made. color us where some then that you just falling you maybe Kenny half on And color. helpful. that's Could the you a the Great, it second year? the I for thinking on you XXXX, question

Just see the thinking increased kind that about per out. now a the CapEx where environment laid maintenance thinking of Maybe conversions around post CapEx being normalized more have us non given fleet, versus help you already about you you simul-frac simul-frac.

details bit little a be and color more Just you if provide would more around helpful. could any that concrete

Kenneth Pucheu

we called we our to greater in then CapEx, as on Power make July. ads be the Alamo. I the strategic on called in that investments it rounding dual that Solutions out we're in one to look out so additional fleet. relates addition NexTier HX fuel. out made continuing is than just investment, going We're HX two to to and Yes, taking We're

that's same and we we expect the has year-to-date, been been of be simul-frac look with even in to you million A lot monitoring that HX, doing in CapEx we've on able if maintenance fleet work, So at fleet, and that fact our per and below $X.X basis. fleet we've do set. that the more per a hurdle to our health per

look a less the They equipment. you primarily Midland fleet, operate Basin, which If at the in has Alamo's fleet. it's intensity younger on

maintenance the that per is for substantially - them lower CapEx than the fleet CapEx $X.X So million.

that at NexTier, will wound XXXX so down. the Tier made will mentioned I Those most earlier. look Tier and converting some you CapEx. fleet to of whenever XXXX just X on in that There'll that DGB, less strategic investments we we fleet be do X be So be enhancements the Alamo

NexTier CapEx significantly see the to So relates as we strategic as side. being it less

plan the maintenance side, paying we're that fleet. reduced put on Alamo. sheet have the just flow we'll cash I harvest and to for think on CapEx the cash per And we blended the back balance

Derek Podhaizer

update helpful. the it. one then sneak in. investing that there? a your around announcing? Very direct you've field also eFrac know And some been in. just it And solution trials offering, you've doing more, Got of been I I Any if drive that Any you're could then updates

of Just any that color around eFrac that, kind is side? versus the where just

Robert Drummond

at burn a the is there All around now, doing selective the of of the or Right We're best, is we our versus source, question. as what are still line gas little power most power turbines three testing these speak solution opportunity out has and engines, be on sets high good some around our So that always going eFleet today field eFrac looking and pump. each effective a with commercially set. line test, high Caterpillar-type simultaneously, power. customers gen all the to

we're process that Everything We're all technically So way technically, in we of proving out. is sorting in good out. like - still - everything the of shape. the

it getting a investment. of Now a on around is to sight commercial solution line return

application. those it eFrac opportunities most do either around used - discussions in think are of is I But we in for different not pump we many a at story - the test think I of in XXXX-type in in but system direct a have sort our general, was contract drive also two recently, the for field moment. for

Derek Podhaizer

Got it.

Okay, great. much. Thank very you

Robert Drummond

Thank you.

Operator

comes from question next Energy the Partners. And John you. with Thank Daniel Daniel

John Daniel

customers? sorry, deal. picture, is is fuel your sense you that solutions, the Hey dual guys, of the more one those but direct bridge simply on electric of that who the just big of real do say to a good view some Robert, It's X to question. a the drive - just and job Tier

Robert Drummond

looks market, I the But was count of the power I are wanted in - portion to know got billions highlighted were example, go market still around go we think you've that would Day. trying of is those a the discussion fleets destination would today, a if had very to dollars about of you it the Look, fleets. required to aspirations But say, immediately, deploy having the the if that solution. it's around to small if what what eFrac, everybody XXX be matter we I to to for Investor disclose think electric eFleets just no like largely I the in ultimate

I I on is around solutions. that, how dual X thing I commercially, lot. type has that long So long in sure, spot different believe think factors. And of to for sweet be? testing for would some that would next-gen measuring going the we is those And a actually the change rates argue it one I And think market of that's there's emission all the be fuel time. all will say, the will a Tier still

diesel a And fast on happens what a of prevalent. out get be we forward low end. around think to into the I point is number attrition electric more going you the the where years and the Tier would come X on diesel, attrition fleet investment on of maybe fleet then

John Daniel

Okay.

Robert Drummond

my That's view it, on John.

John Daniel

last group DGB. X the of then a jumping I'm And you enough. one, good that's have ahead guys proportion of in of terms fleet job done of peer Fair a wanted right tell the to today, decided you conversion, to what's that go just Tier could X engines curious you the to XXXX lead if time us to DGB if fleet Tier and get now?

Robert Drummond

buy to try inventory I Tier - and had mean if engines, an to only not I the can right can you go think, X now. only what's that go, in we think market. But you convert there's I Well,

think six to neighborhood then to have months engines, if out I for X.X-year, order, you process in I four, to the before the a get try think you it's building before assemblies. say, of, big begin make like you - can of the

Kenneth Pucheu

add, And to be forma we're receiving just of John, going Tier X would I pro significant pumps. amount

Tier to X X about really, for those to it's convert DGB. us, kits getting the just So Tier

So that acceleration out the market. of ability the get some have on in also ahead anything to we there comes

John Daniel

very you Thank it. Appreciate Okay. much.

Robert Drummond

Thanks.

Operator

with comes Capital. the from And you. Altacorp Thank Waqar next Syed question

Waqar Syed

is Thank Markets. you. Capital ATB This Syed Waqar from

security release, were the on public reported And strategy there back $X.X what's stocks company was loss maybe press that the the you investment question. elaborate equity what in a a you around equities? owning? owning your you of numbers Could quick Just million. mentioned of In

Robert Drummond

Yes. Look, Waqar, I appreciate the question.

during look, and the trade debt COVID receivables we for So had downturn, that investment And did moves we just potentially bad market. the to unique some opportunity And that. a aged with stock.

and we these balance - fully So recovered some receivables, have value the of still on the of sheet those we remaining.

Waqar Syed

answers That's much. great. very Okay, you Thank question. my

Robert Drummond

welcome. You're

Operator

so Stifel. And Stephen Gengaro from next far question the with

Stephen Gengaro

do the quarter Alamo follow-ups Kenny, year for quickly. taking the per a have of or for you just EBITDA couple Thanks from sense incremental per assets?

Kenneth Pucheu

you've you it. earnings is potential seen Well, presentation, if But in out take it we know just don't earn-out I Alamo, future million. the of believe we which indicative $XX at for if the Steve. called the the starts earn-out,

Stephen Gengaro

no. No,

depreciation, I D&A. Sorry, meant the to ask just for

Kenneth Pucheu

Depreciation, will they're yes look, a in. accounting. lot obviously, by today, But million there as purchase that of around we that is will their But some shake somewhere out with financials. company their But as provided accounting roll the D&A today. where purchase at that's be $XX

Sorry for Steve. that,

Stephen Gengaro

and high couple this a and or has quite slow related kind Because it And had keep just competitors feels the think some is be is to develop. it out one the sort E&Ps, your better I sort of But you And how hasn't pricing has - ramping have? it should demand public for maybe urgency of mentioned evolves. like sold assets seeing the side. the of hearing assets. pricing one how to We've your sounded momentum. next curious from dynamics you. of take on Thank the think Do the I'm high-end the materialized. just pricing they higher-end year you of there been that already, of and heard spending of timing you how other on it the quick any like

Robert Drummond

sector if went big occurred a to we the the at look and the of of through think Price it's process And the freeze being I has as think price. process move. out. deploying you begins for to balance whole can Well, are sheets total we're think customers' dealing I that they lot. on response bottom our lot frac assets from period people, around general in a well generating underperformance cash. the playing what that's situation our and of as inflation healed They're a understand of need And I with and the up the

well-known for back more think have return. that with the but companies the on half I think their year. I'm that move in first hope in to got So that the we've the to It's market plans I think versus publics. see more playing that in that was I that, sure - year - our customer our deployment to but And frac back base we're pretty of that's the quicker and the We it, more. into half-centric half this could And that, speak I of count pretty seeing been and I happens. privates favor on rig

of to the you So on many as begin I reopeners the have is change the that reestablished, your increase. get to on we think of opportunity price agreements

Stephen Gengaro

you. Thank Great.

Robert Drummond

Thank you.

Operator

And to comments. conclude I turn closing the Drummond like session. Mr. any to would that for floor does Robert the question-and-answer

Robert Drummond

you think, I thank the for customers to up, company and I in Thank to great excited have going Joe just to and say These collective the ramping to as up and want employees a dedication publicly end to make Look, you, together. to We're the team. very We're been to to are Keith. also all we've NexTier want team And very safety our to their our group. Alamo management team activity. our guys welcome and our people good. that joining I

today's very participating in thanks call. for So much

Operator

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

may lines. disconnect your now You