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NexTier Oilfield Solutions (NEX)

Participants
Michael Sabella Vice President of Investor Relations
Robert Drummond President & Chief Executive Officer
Kenneth Pucheu Senior Vice President & Chief Financial Officer
Chase Mulvehill Bank of America
Stephen Gengaro Stifel
Connor Lynagh Morgan Stanley
Arun Jayaram JPMorgan Chase
Call transcript
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Operator

Hello and welcome to the Nextier Oilfield Solutions Third Quarter Earnings Webcast. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, today's event is being recorded. I now would like to turn the conference over to Michael Sabella, Vice President of Investor Relations. Mr. ahead. go please Sabella,

Michael Sabella

President Good Administration Earnings and our Conference With and Robert XXXX operator. Pucheu, Officer; Nextier Financial and Chief third to General Oilfield results. Officer; Drummond, are today Solutions Call McDonald, me Chief morning, you, Executive welcome Kenny Chief everyone Kevin the quarter and Officer Thank to discuss Counsel.

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

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

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

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

Robert Drummond

call. everyone you, for to joining thanks Thank and the Mike

Basin. but investor and you his want to fixed welcome Pumping of develop oil aboard. know key are one important be how and background completed Nextier, input service very addition team's was not already expands investors of, team. Before in Mike supply of the a We Nextier industry-leading was to Not Many we of to an Pressure completion acquisition gas-powered will Permian Alamo to Alamo management will the our Tier premier frac strategy. if Mike, This last natural in have we working we X strategy. the our we making from strategic for with base Sabella provider Combining Mike accelerating gas well our be only execute valuable and extensive join both the his fleets as quarter equities already Nextier. begin, excited equipment, low I Mike executive what carbon also income. and our process decision-making say low-cost, the believe

team the Alamo we We transaction. the are lofty of excited future is for company about the the already beating expectations set the and

above-market very into performed a growth, are a deliver business Nextier to XXXX legacy helping quarter be another market our to prime addition, believe land of we improved U.S. significantly to beyond. In capitalize revenue in with what for well looks on profitability. activity and strengthening heading position We

two our review our market growth quarters activity to legacy to overall as quarter And to the strong -- Industry-wide, relative getting earlier gains second the legacy outperformed of continued completion Before well work. year. third the to achieved Nextier activity quarter adding to we customers the this in a like of upwards Nextier, return ongoing future into and were for the revenue third I'd quarter, in rate more row, results. trend more

with combined exited net frac fleets, at plan XX two company of the domestically, three importantly, low the we third it's in U.S. making legacy pumper largest carbon the at end pressure during third grew with reported the believe Simulfrac of And planned XX million. third $XXX we Alamo revenue fleet low After natural the the XX% Nextier, the of to XX by month equivalent ninth and additional a deployed including provider with quarter. the up time XX% a of The of fleets formation we accounting the benefiting revenue Nextier top was Nextier also cost, for quarter we market. As acquisition, consistent the Sequentially, of of revenue in services comparably fleet, one the inclusion gas-powered, fleets deployed total quarter. with active from the Alamo. Legacy exited are deployed the the quarter

wireline, and product financial coil tubing overall improved performance. continue and addition In our to frac, activity cementing lines to see

why integrated value I'd our completion like-minded to the driver overview, availability. like rate believe in momentum count, about in of to hit run team of that exited helps we on as EBITDA. $XX from we an million that focus as fleet. position the potential cost with perf customers and in the service to have commitment proposition around market. the integrated plug just our the more started to for show Based adjusted which drive largest especially million business $XX proud site share $XX our the way well We of impact COVID efficiency deployed is only lowering the frac the quarter With Our quarter, the managed of retain total and so this carbon well We package lowering position exit EBITDA enterprise. our the excited challenges adjusted as where million wireline about at through I'm on and emissions. third quarter our in we're as third earnings despite a unique and was September, logistics the truck

We makes wireline offering Alamo pairing fleets pressure-pumping integrated deeper far that our sense. integrated goes are trucks where with to than our expand critically, units. pump-down our simply wireline now But and looking to

innovative grow business. our of mile downturn, our NexHub our fueling most downhole help to We Solutions are proppant showing have for AI-driven delivery increasingly the technologies customers the business. the of and capability our last benefits NexHub recently, leveraged Digital Power Through platform we our logistics

on is not customers cost a focus putting we that offer boxes and own flexible landed it fits without Last-mile strategy silos. we in fit-for-purpose the as at invest solutions requires one is capital size believe don't or our model. all service business a lowest risk Our last-mile to

the of For demand logistics operations. created Simulfrac and challenges rise has last-mile fleet in new for example,

more cost. reliably deploying are product load offer the pleased and our that options further to routinely the through to improvement. results customers helped even that competitive in a third we gather at as several landed commodities ways are momentum strive Overall, continue we us and for with We find factors shown deliver are per quarter, we've to the achieved can quarter. There at site more well that storage we we the deliver

for downturn, targeted the made deployment our was to to investments First, convert the recovery. during the strong legacy the growth during Nextier, enhance fleet rapid fleet leading top-line result and of we

Second legacy as our expected, saw results customers on first the strong customer having and as latest to is from we impact our work. finally, And month during the acquisition a earnings. returning return quarter base of an already

We we are and strong beyond. enter we be continued for what a will think market as improvement poised in XXXX

by it's organization. XX% However, year challenges. getting there monumental Nextier not for this a legacy was at any We've almost increased our undertaking alone, without headcount

forth we truly people when them most put this the appreciate year. team up has stepped Our needed and the effort we

improving together the we going here as unlock continues a members mind, will mention the The a to has in in multi-year been think global is the growing the also believe satisfy significantly from the we're underlying stakeholders accelerated transition to first while that is coming We that years us that the this of of gas momentum than renewed supply in at making industry fourth team the our value cycle there run E&P plan confident many capital first the price term. is it This easier all put through a we're strategy doubt many smooth And us and solution is winning Commodity remains demand. the Nextier for predicting energy led activity will for both Nextier market Mike, teams for discipline U.S. cycle. recovery be Most is acknowledge outlooks the business part we've and It sentiment underway, should of longer underway. shale. no today global obvious run to need In And OPEC+ appreciation President optimistic means There's most industry it's Officer; Gillard come. and to and be the key Operating to bullish lengthen part for needs Alamo's our that needs the not we with energy added volatility, do remain quarter addition is to to market Nevertheless, and more that gas it Alamo. past XX operational behooves months. but our time side levels. will it the planning are while forward. we recover take fully Joe increase the disciplined, Matt believe that that previously and to the business to Both by to sentiment oil Chief increase and energy will -- well from and oil for experts cautious. McKie, these broader our spending customers years. current

ready do stands to our Nextier part.

that completely we likely is put fleet consistent If work premium available X a at of could the Tier there DGB message a was today, a X be fleet Tier hear out, the sold across to fleet Our tomorrow equipment DGP rate. industry.

are of this increasingly clean fuel combination. natural the transition savings, opportunity provides on both powerful that a power. been edge Nextier cost to recognizing and has lower gas Customers the dual-fuel to realize significant emissions leading

the cost plan role while diesel and fuel, our fleet As we package. industry customers leaders roll conventional dual that in recognize are to our a service of play emissions. into approach tiered important XXXX, allocate an fleet fresh integrated to fully our And lowering to in we we like-minded advantages

gas-powered to provider levels value better of frac needs from that fleets customers service offer multiple a Nextier is match a fully point service completion price we integrated at if fleets. their conventional can

equipment have right We of add the capacity continue we meaningful idle to opportunity use can diesel itself. that if presents scale to

half is will subdued Our as fourth notoriously into Nonetheless, the that could be as hard no there's potential to industry holiday and prices and third year. the headwinds doubt of years. impact commodity the fair gives year-end. strong The the previous frac was quarter it uncertainty quarter but and October budget fourth still a every the But second confidence from quarter slowdown seasonal better typical to of always, does exhaustion for predict. was relative seasonal the amount just more in exit us factors

our we're legacy the for dual-fuel in U.S. previously, preparing whatever the customers prudently another deploy fourth what late in decide. have we with at quarter. X are Consistent making Tier fleet preparations to final said We Nextier

fleets via committed to in remain conversations the this, also We pricing have of of pricing first additional we showing X upgraded customer and deploying and and not been We quarter. Tier Alamo are further will half capital increasingly dual-fuel be operations Demand beyond first fleet an anticipate in constructive. and signs XXXX. the do early deploying discipline improvement

enviable scale Many of fleet focus we need have suboptimal past and we for puts an completion over customer to not will base in do customers looking where that XXXX. current Our feel been profitability in position fleet traditional our integrated instead to work in the dedicated returning year work. us chase our additions on response to

on these efforts like-minded also our as our operations more aligning to relationships focus deepening customers will ways with finding new safer we while and make existing efficient. continue We

very real on progress albeit are front, base. the from to a see We pricing starting low

encouraged conversations are we with having our customers. We the are by

we to prior cost our achieve net throughout able small we well lowered season. efforts the structurally at around to reported gains be have concessions we our to building the well the impact recover site our cycle the the positive scope from made earnings echo only and pricing company our heard had are the since previous base, margins broadly, peers been far, So results. pricing sentiments that With having we've without and But to XXXX. have expanding have as as integration modest all

all Like as own We on expect chemicals, pressures into prices labor sand, to higher. we the we our inflationary significant and steel, are of as with this from trucking everything make rest industry, moved on move progress cost dealing XXXX. the

has pass those as on a customers of So come immediately they done with to far, great our team working job through. increases

we We to will to next into position our make our as are business assume over Prudently, continue simply well the absorb XXXX. inflationary not pricing in we inflation plans must at cost year, our impact cost for a factors structure current levels.

next Our year. see to real as cost pricing into we beyond traction customers understand that need head we inflation

We are support demand pricing dynamics confident the that market cycle tightening unfolds. supply as in net gains should strong and the frac

unconventional partner, divest Regarding frac fleet our region. terms our came operations Arabia, to in in the we Saudi recently with to our NESR,

the to has has rivals involved. for an we're efficiency years, exit option think contemplated We level customer two that success And quarter. successfully the land. We the partnership been Over leave of of that terms level the executing of multistage in worked and our unconventional a increase customer the resounding equipment efficiency operations in partner U.S. now option with past for parties together to to the good that at a culminates NESR completion always all state-of-the-art our with continue training a sale that program new position the to our excellent and the fourth workflows. the an operating and outcome

services are in agreement our presence region capital that is the capital-efficient operations fueling Permian a dual-fuel gas people portion benefits we and Power East our U.S. in equipment maximizing the we the of frac pricing fuel strategy help Middle Safe fleet on current fleet. Lowering more Tier been For and back never through still July, heart here the and gas Basin. possible. but significant growing launched to next important prices. fuel year, is manage executing most fleet our the end, land that in to our will our return these even NESR back we in redeploy and X with We reliable on significant that of of savings consulting successfully to our in tiered critical manner at our customers important equipment remain a of And low-cost, has Solutions meets at to a as is stand threshold. resources low-carbon emissions to our business fleets capital the grow Natural natural ready our work to commodity for capable growing the for equally offer conventional this cost savings emissions strategy. and a

Equipment convert that for and dual equipment the to lengthy process. the if thought foundation a much can Tier intensive fuel. decide is relative Lengthening and power results upgraded of and chain are efficiently skated gas, core was Our solution we initial years to and fourth Tier and diesel could more deliver substitution runway rising field X by The initial are We our natural similarly strategy, X gas CNG delays the frac profitable and quarter. to great growth. to integrated integrated blend supply proprietary we've our sufficient sold in peers perf compressed enough gas fleet our were we X investment for giving out evolving and future capacity increasing a is to are to rates made upgrade to over prior this be equipment We fleet our compared market. is countercyclically natural right. to to us cost inflation two the Tier more the for to the frac new our acquisition Alamo a overall results. both past and business XX% and accelerated to adding fleet value Further, issues model. create for undertake be capital This or invested proposition quality to clear the was that execution gas-powered and decisions without the we where going acquisition they

part we the approach, that we frac completed partnership quarter, system. to ways with technology our our using optimization customers. can use looking project constantly And As to major end, add to of successfully proprietary that are integrated during for first our we third IntelliStim the value

monitor Silixa's deploys and completion innovative Carina performance alter this a and allowing cable real-time, system of fiber-equipped process, our Nextier part fracture maximize uses sensing wireline productivity. customers As us well to design to which in

the makes our us NexHub wireline Digital leaders this Nextier's technology. for deployment of fleet natural new and Center dedicated

in focused and XXXX. remains we extremely strong free are cash coming generating growth the cycle to on disciplined Nextier committed flow during

next equipment expand enter natural largely with gas-powered a growth free fleet and year. some next upgrade attractive We end a business nonetheless, Power be completed will our Solutions by high-quality generation cash to the should see starting do of of program We year our but is priority opportunities flow XXXX.

Kenny, the I it turn Alamo of end I update to before the an we of closed give at which to Now, over acquisition wanted on August.

better the Alamo's been service sizable we company us Alamo measured According has our legacy hoped. as model so Midland Permian where compatible active which lift Alamo's financial deep combined, customers. is had months, we in Digital it's the is high Basin, we Critically, our just Basin already to strong to footprint level playing performance. offer exceptional with and were by promised, complementary a relationships over as for to further far, it see fleet. customer help current are growth. the combination out These highly continues delivering third-party than the sources, now equipment completion While in only Alamo's opportunity is Nextier. pre-acquisition relationships at team to The should two give solutions NexHub largest

are can annualized to transaction of to In addition, $XX confidence the with quarter we synergies originally CapEx get second of million and of expected million $XX to cost already XXXX. we achieve synergies on from growing track the by rate run surpass the we that up

on of Nextier. months confidence We the The customers. for be are and used the ready growing excited We've gas past transform are future the we're to our to And recovery to oil Kenny call and inevitable improving knew about to was we pass markets amongst what an deliver company we XX the the is to third I'll what discuss promised. financial upon quarter over recovery. us, now the with ready results.

Kenneth Pucheu

Thank you, Robert.

First, by $XX million a first the $XXX white up significant was legacy month legacy customer efficiencies improved million revenue our both The million segments. included calendar totaled on completions to activity improvement quarter. the second quarter. entire The third work driven the quarter Nextier construction This Total Services compared in Intervention compared second second space was in well and we was less during of revenue the and XX% Activity led Nextier in side factors: across revenue increase sequential Alamo, number fleet $X of traditional returned of Third adjusted the quarter saw one while the $X improved in our $XXX as quarter-on-quarter. quarter. in a and to million quarter relative base EBITDA to increase to the million XX% to quarter. and third

overall start-up a improved the to with in quarter The associated better costs Second, the million the And exit finally, Services the these allow to quarter run increase in at third million through one-time the profit increase inclusion late experienced second drop adjusted were to $XX our through saw gathered combination of we momentum Services to monthly $XXX rate million the our Completion in Alamo build compared segment, factors performance revenue of our activity achieve $XX we of that a totaled earlier second XX%. in quarter. cost EBITDA. fixed a this a to we sequential year. goal relative million absorption. third adjusted $XX us quarter $XX approximately sharp quarter segment of in Completion to million the of quarter, $XXX compared totaled million In to gross

Services an million net for $XX profit of We result include the quarter. There the Alamo tubing due to $X million a quarter cash million the as was filing. the XX Basic quarter third XX% third comp. adjusted from Management million stock total Basic results were EBITDA note, Well adjustments $XX a Services the deployed gross when activity. adjustments $XX segment. obligations the Please totaled EBITDA fleets. and Alamo quarter million, of liability and increase It business transaction In $X contingent mention exited for net customer to received improvement integration third million. XX One-time transaction. management in integration million. cement in When Services deployed This proceeds cash-related. any Further, by revenue slight are for Energy in management the third Approximately don't or was the During bankruptcy $XX excluding we assumed there's was items is a to $X company further of $X from meaningful satisfy second to the with fleets. our Intervention third lines Adjusted costs forward. $X of $X Support and anticipate million. costs adjustments with transaction that both important the quarter the in returning going resulting is totaled bankruptcy. associated a completions coil we transaction inability in of an impacted compared quarter, Well million average million, not the of acquired include our segment, Construction

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

adjusted of legal to $X the $XX Alamo net reflects inclusion management as SG&A at $XX million fees. increase This in quarter. than compared Excluding adjustments the prior less million $XX expenses as totaled million of per month well million,

the the quarter and quarter sheet. deferred Turning at We obligations. financing in quarter of at the $XXX the second acquisition from exited cash used the $XXX million million to third end for with third Total Alamo. costs $XXX down end balance in the was excluding of net discounts finance lease with million cash, debt of million, debt and the of $XXX

our used financing During second growth made credit of acquisition from to with in of for facility. investments attractive X cash third debt million million, OEM the funding the advance quarter, an for Net $XX million Cash asset-based operating total available approximately available quarter. exited used $XX activity this low-carbon the our $XXX of comprised million third quarter of from was $XX We portion overall of to on a strong mainly in the our under cash as the our largely low-cost, quarter the liquidity of fuel working $XXX in Tier approximately we flow strategy. quarter, and at capital quarter, the XXX Alamo million well end million, the upgrades. $XXX end on increase the was the for at we pay dual secured as

investing cash activities quarter. payment acquisition our fund the Excluding was during used the cash the million $XX to Alamo, third of in

fire This insurance quarter. use excess business. the upgrades, by activities cash Power resulted related This partially the incident in and overall QX of Tier dual fuel maintenance for was investment of flow by free the Our X driven third CapEx $XX million equipment. Solutions our from and sale proceeds from offset to were in investments

Now quarter, normal a as continue factors to seasonal we our XXXX. continue to should during see for we absent on outlook; into demand higher healthy outlook head services. This into the translate the fourth profitability

operating our First, efficiently demand and a significant fleet year XXXX. portion have start-up place pick we as are strategy all as and just We're believe have of up we in could inefficiencies costs us. the behind in as right again we

Second, of company, strong Alamo operational pricing. performance the inclusion companies significant shows into both in for own cost fixed finally, our resulting to a practices. absorption and And opportunity the best improve

minimal impact starting the pricing fleet. gross traction with cost While been our mostly net has see gas the XXXX, respect of earnings, improvements far the real to pricing in portion natural to so in going we especially reported in of inflation, pricing cover

fourth current of to commodity remains prices half the second quarter years. we hard the seasonality believe the relative will typically While smooth prior predict, to

and quarter improved the we CapEx merger, further the $X.X fourth our on additional seasonal quarter the the on $XX accounts for Taken fourth services fuel reduced lines still Power expect and conventional technical single quarter. together, But approximately and fourth fourth products This East. C&J Alamo, equipment. currently across given fleet proceeds business. XX CapEx absorption agreement offset significantly We increases. deploy some sale Since million the cost less for third cash a new significantly known, the for of capital the of fleet deployment CapEx a year factors. significant the for our in an fully by fleets see in in additional our of and in active relative operating footprint count per is we million, dual in Middle benefit Based quarter-over-quarter average additional visibility with on our comprised have conversions increase quarter quarter, excess than deployed fleets fixed per of currently expect basis, typical frac, service plus the and our strategic of a full the investments fleet been price frac not continued to of commensurate of to of Keane modest on has quarter from consulting results maintenance Solutions

from track the fleet in Saudi, our can harvested inflow cash unconventional on we to XXXX, harvest from to quarter. sales we than asset that sales You in see asset more of we of the $XX and expect for $XX in Inclusive are frac fourth million. million see sale significant XXXX,

too invested to cycle our both pressure the low-cost, opportunistic as sustained remain our in We CapEx large a upgrade early to for as fleet already strategy Tier our Solutions capital anticipate Nextier XXXX for firmly majority DGB the reduce putting pumper year. bottom low-carbon business. Nonetheless, needed convert in We in next of well discipline plan was of cash the growth capital We Power give and guidance capture of as the CapEx opportunities and near in on course Regarding our required of It's XXXX. funded flow positive a priority. year acquisition strategically free to on X committed significantly will the plans Alamo. our beginning be portion investment for XXXX next CapEx an like-minded some in is do to top XXXX. will a

our year, generation. towards Next free cash will shift flow strategy

to This see XXXX. includes what continue we supportive encouraged a we environment fleets. the in be We by head gas-powered in market and into commodity for as the natural continued market price tightness

space. in all of offering. of We pricing a and tiers meaningful would better a be earnings significant with less activity built Net We across better to installed this white base to an earnings with our addition path have improved service utilization. utilization upside power platform see with

Tier benefit utilization the supply. Our of XXXX, cost-advantaged to double-digit enter recognize accept the stay fleet, enterprise dedicated X should is short dual fleet pricing. they expect We're both approaching willing adjusted will we equipment EBITDA agreements as fully increasingly of customers fuel per finding in utilized next fleet this and year equipment active and

With we I'll with closing pleased that, it Robert for turn are where today. a are We company to back as remarks.

Robert Drummond

Thanks, I few closing, takeaways. Kenny. a you In with wanted to key leave

actions has the historic Nextier XX taken we've the for from First, recovers planned, past a prepared transition as strategic industry to proven be downturn. year we have as months the a XXXX over Nevertheless, in will should beyond. future us where in as and the tight. for what the market remain leaders the be we industry, positioned think market of We've a strengthening low-cost, low-carbon ourselves success XXXX in

have the heading for done. to only We reward XXXX that see work great momentum we've starting hard are just the all and into

showcase ourselves our Solutions, equipment. wireline industry-leading pressure gas-powered differentiating frac pumper. than planning more to Thank completion on win of will face to part the part finally our of we will all increasingly gas and oil great natural the we'd makes that, a even have as far seems at We're It's just embarks up transition we And integrated this and solution. require and in the to to of Day through scheduled Analyst offering need a our Power now Second, are our you. be a energy virtual the with like to open technology above the solution challenges this the we Nextier logistics are be fleet energy stand Q&A. The do back. that finally, March clear we ready macro lines And world the at from beyond for transition. that and NexHub, X.

Operator

Bank with the America. And [Operator Chase of Mulvehill first comes Instructions] question from

Chase Mulvehill

Mike good on a first, Hey, to everybody. where before. spot much just you're in you Mike, guess, the were morning, better than I congrats transition.

to fleet. really not In was -- and math, of get of on EBITDA is but you I of question kind math math better. here per you profit first Mike's said my million do over million So $XX gross noted hit me double-digit range my $XX anymore you to for and October September, the

urban blame two So Robert, And two October's I Number is it number the education. guess questions. that my of kind right? And wrong, then is knowing if math I it's one, on fleet in you all might double-digit. back per XQ per think that How considering fleet average should was kind the gross of about profit half quarter? of we seasonality the profitability see the

Michael Sabella

the the visibility we and we to for Thanks trying in made we we space. bit. the look in Thanksgiving little we from and History remarks right of our tell sure I'd the than all that holidays you the September got Chase. better But wanted rate Look, question, customers. we make October the say like and at you a say, prepared our prepare QX, called would yet -- bank now unexpected that have is on rate that run November, achieve we on and really activity got that to that indications for out is of don't were when solid excellent much the a run track. still I was some that that Christmas we October all breaks because are bit creates better in going pretty But in white

and to though, some to around a spend are there able time we holidays. the to line in I we behoove think fleets loaded in lot the with that slowdown react to to in ready, the getting a bottom where it be mostly front versus here contract But being would slight we us be QX, of with while COVID. is XXX expectations have associated occurred miss and quarter did now. August COVID when or QX, we And some people of end was tracing impacted had by

but we much. So, I line, QX But approaching where right to don't only we're XXXX. into negative going emphasize too not want as as the now are into we bottom we go like that

Chase Mulvehill

been Okay, It that's after really helpful. people. around more is we've of pricing. My what bit heard a weeks kind a other question from of Obviously, you others. couple reported we've positive than little hearing follow-up from sounds some

kind all? to net the that those at on side? you're on conversations speak you color of pricing around get more last add -- And some maybe X just around and pricing to the if take in uplift could especially XQ pricing, And color back to know a don't putting you for fleets XQ I pricing of moment some or maybe kind see the starting few weeks. over maybe Tier started increases? accommodated maybe So Have are

Robert Drummond

supportive have. for you're realizing I the can out more I macro the and when every we get, think Chase, information the think we the the is pass, day smarter we that later right more by is one XXs. go thing pointing have the But in longer that is time oil sure we everybody

on bit accurate like our typically occurs bit that like. pricing an So thing up XXXX that to with. we net integrated the have worried and the we think, target, have service the are want a we digit through in and predicting at customers end consistent looks to more will And a gains say get loading customers do that and to engaging who fast about as pretty having XXXX able really in that how double as a at be not that than say, expecting about means well on the we've company earlier focusing our I'm customers, up I focused fleets like-minded is inflation been But would to we moving in I work fleets XXXX. which that's be for inflation fleets. determined one gaining year. model they now built I the efficiency are do -- and they're they I be for little got the a net around of some mean, we're percentage think pricing we hooking aspect be gas-powered what will of with to But estimations how going access

the perhaps more some fleet many but into of And in is So, are efficient even choosing the that demand in some cases, We've modeling. it's ask of fleets around pricing the individual base, I I each you And conventional driven right past work pumps in market the these been Simulfrac. been highly company. customer works more XXX think lately. you bit is think of there's crews fleet, by U.S. perhaps than And macro and important, land using supply when diesel the how more or and and for think, working out doing frac in frac, that fracking. on for about today of of a it's per the the very

of to about XXXX about of similar So is we And fleets. that's our running deployed deployed horsepower. about I I most think arguably, that math where help And at today. And XX.X believe people's deployed that's puts so $XX for assumptions on, we make use from XXX, horsepower XXX are at million projections the us that's own million XX up all of that neighborhood all deployable. horsepower in of probably it;

of think we diesel remarks, significant can of you XX%. north to amount -- a get got bit put in And some we more in for for the market. I the of little that mentioned probably high, that to fleets utilization work available costs market reactivate the equipment is list. when those back prepared Tier So, of but X And the we toward most end it our I think that's what's true

supportive. So very that all of being

Chase Mulvehill

continue builds. on Yes, the guys some the of see I we'll on electric awesome. side mean, hopefully, but new building Yes, builds I know fleet the you discipline heard to we've aren't new side.

see and on on gets anyway, those contracting kind and a land it's move drillers. towards Robert side. But push contracts it hopefully, I So [indiscernible]. everybody difficult I'll like to like over. that good we'd take-or-pay know the Thanks, turn the of paybacks

Robert Drummond

Thanks, Chase.

Operator

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

Stephen Gengaro

Good Thanks. morning, gentlemen.

Robert Drummond

morning, Good Stephen.

Stephen Gengaro

Two from on utilization gets follow-up fleets questions. you or seeing general narrow Chase's are traditional And the that me. higher? between you widening the things far the as diesel? as What are differential One, as seeing to in gas-powered and price

Robert Drummond

to not absolutes I'm didn't be But definitely say because ask wouldn't glad I it's would I for narrowing. say able it. that you me probably

you more either do they that more of asking electric when or gas-powered, dual and to form are once think responding the for tenders in perform. in fuel I and inquiries

the I it's concert it mentioned think question allows with already with diesel, Chase's broadening. differentiated. don't the pretty that been But us I moving giantly of to move as that. I So It's which it's gas-powered base, in up do believe part around

Kenneth Pucheu

because I'll fuel would with that diesel Permian, Stephen, I has prices. considerably fuel landed up gas. fleets gone And with the strong is this proposition is part cost DGB, value diesel add even the that today, natural with the the proposition especially -- is gas actually add the of of the displacing very savings in by Kenny. natural the of value that cost to just

So is dual value today with fuel. the still very proposition strong

Stephen Gengaro

the and just just And even be cetera? value be that, think do customers inflating think around wanting as there's because of because truly because are proposition could that it cost? the Kenny, of i.e., you to pull some Or a DGB increased our you reasons desire, follow-up of may et diesel that economics diesel, the environmental better that with even do any

Robert Drummond

And question. put say, good a on per you That's me submission. would I XX-XX Thanks. a economics if

Stephen Gengaro

Would rates talked the for point. some was Okay. And was the on your $XXX based respond of EBITDA run and my question given kind to of about, -- number you're going a the that? million reasonable seems comment we remarks XXXX, think I you real before mean kind then when starting be Chase's on pricing to seeing, prepared questions, year be when to of follow-up you you've that how you about given

Robert Drummond

on kind plus the when I certainly Look, that sprinkle I to accurate. run is to out guided and begins say, there. XXXX rate of you -- to a we've you pricing think guided that's look it as net couple fleets that think you that do and of consensus close math pretty about a And would October that we've in

Stephen Gengaro

Great. guys. Thank you,

Robert Drummond

Stephen. you, Thank

Operator

question from comes next Lynagh you. And the Thank Connor Stanley. with Morgan

Connor Lynagh

Yes, thanks.

question. and chain Just the supply wanted inflation to stay on

much give understand pricing us cost seeing So of in components, structure, you terms to maybe around could to help asking business? How want it industry what specifically. I -- specifics don't in level cost guess, understand how pricing just cost sand, but is out your offset you labor, we to of this be I I think a do what structure called -- probably you big you're is an see need think you think the way much I in happening

Robert Drummond

Connor, it's Well, question. great a

proactive components predicting things. We've be be as I macro-economy. of inflation expected people, think the cadence it's more true. you to you've And than that probably probably that's in your prepared we being put for major somewhat purchasing versus other I and to the how in guided pretty how what's tried think chain, competitor-specific supply

last lot or the XXXX. inflation certainly, we've of And that a say that months growth roll people, I so. going in to employee we're we headcount more over the arena some labor six into adding have as is been side, On XX% would

So we're of those kind in. factoring things

big whether be the number, a but like if we it be by a I really going good to -- think ahead of we it's because Kenny, I color to we to corrected still don't I wrong inflation mitigating you portions of line our have going be it. to And on bottom job with or on think. of way, to inflation, the I our the some to quantify But major major mean, would we'll going the that? customers add a little be I'm to done underestimate sure want got try is the I'm commodity get more we whenever components, components.

Kenneth Pucheu

is QX in again. continue to some move to Yes. look Look, year. has chemicals, you on going The of the you if which labor asked, Prop inflation going And a gas we that. next mean, been getting cost likely labor is price chemicals seen line be has with moved the see market and I you at then component as already. structure if competitive. in We've at to look that into is substantial major

And cost. is it's inflation pretty you're own being to net lines, do all we one have much some of to the inflation, steel we a and So become going our going get cost pricing. be just our to see where can't major pass-through components a level of significant on entity what

Connor Lynagh

Understood. Yes.

this rationality about are thinking in change would here. thus of far of are that has a bidding? feel been pricing fair there's qualitative Just XXXX? how There's obviously So feel some end-of-year would season been bit been bidding industry be Obviously, the I'm that in more for that more a sort But you how comments sort of Do there's underway. consolidation. similar you any work vein say around you but there's way appreciated. companies people curious,

Robert Drummond

as we think and I this before. competitive but I I've Connor, that So more landscape discipline ongoing in the seen our is see from view speak than

thing question that to Chase's make is I point where horsepower trying getting a math now that simply most think utilized. of during I it's was the of because

there's I legacy we're the a force the many carrying very to stands. are more us we're work going in the assessment. bit mean, rationalizing close not deploy during I whole better think for probably driving as to the would numbers say, industry to our of people do I think to some little But around that number an XXXX little of that And macro we trying I disciplined probably where I I whole think total a real, of the year. fleet in that pricing. fleet. being that's mean, still across got firming that up are that job

even So unusual kind for think that's mid-November. that I of

Connor Lynagh

All right, appreciated. that's I'll back. it turn

Operator

And from Arun the JPMorgan comes Chase. you. next Thank Jayaram question with

Arun Jayaram

how that $X.X some CapEx Good get you thoughts highlighted but morning, million your you give you to between which if CapEx. growth on could us mentioned? some gentlemen. budget I wanted you I could sustaining you wanted assume of XXXX about see on to finished I haven't thoughts be the per the capital fleet CapEx think some mix versus

Kenneth Pucheu

Yes, absolutely.

as So on look, year, on free be to be that Nextier. is we balance next focused generation, cash plan Part we'll a mentioned, capital going our sheet. flow it's focus of primary the strengthening for on

X fact X our dual investing our we're Tier fleet have we will pumps went Tier DGB. the and do Alamo will and to a a we of now the next X side be portion XXXX due The as will on and already lot year capital-efficient less know, through conversions. XXXX X converted. in more Tier That We you conversion fuel significantly significant converting be that to Tier conversions cycle,

a So see you reduction significant there.

frac for to we $X.X sorry, annualized will Solutions invest business will into and -- year. million roughly then We have fleet Power continue our capital around XXX per next

our see NexHub. to progress continue equipment We health monitoring, on our

CapEx $X.X So we're down per million. around to that to maintenance keep able fleet

PSLs, our probably at around look you spend we'll million. $XX If other

be focused So free on flow. generating that's today. to going have again, the cash we And we're visibility that

Arun Jayaram

us possible just Or you of Would provide mentioned? a just range? just a those all items ballpark given to that it be

Kenneth Pucheu

that No, we're time. this do not prepared at to

Arun Jayaram

of follow-up the to market? I you're been how get fair the in fair enough, Nextier reception to about and how some on more my thinking color enough. Solutions Yes, And launch has eFrac is wanted maybe the participating Power

Michael Sabella

Tier dual benefits Power put financial strategically, further good fleet a the doing was it fleets capacity benefit business, our With from get moved our deployed Solutions everything a drilling And we will would only by that there is mentioned first on. field it's people's also fact to it not other Power Power it are originally, that because say, of not thing just dual-fuel Solutions when important of that And to pull Solutions around question. appreciate it the into in lot fleets, with prepared our with own fuel things optimized you're maximum frac we've around most that the But the -- the CNG, own with the get say more these electric I other -- into been I That's on displacement get that. remarks, pull gas blending can you to X within lot the the engines. And would that we fleet as people's venture I P&L rigs even. with for we part I is XX% growth perhaps. oilfield our it. we a but there's

the to line will deploying excited we've I our we it. returns, that, So then would And upside, more I most stick in from the made point, to stay Power been business itself after this at get customers where the to will getting middle benefit we the say just how investments only we're to think it try we the but targeted be not be want about Solutions we it. and trying haven't just that QX. and But it now. And so a we're into applies get it's much I disciplined by is it after now being then feed capacity. we're -- more we're on And we groover with we But early of I've in sold the to decide strategic but probably to. we're capacity take fleet. certainly, and new double The our days in already tested patient position referred frac about market, opportunities. about out the to Bottom -- being will time the really other that, got from

Arun Jayaram

Great. Thanks a lot.

Robert Drummond

Thank you for the questions.

Operator

question-and-answer the closing floor session. would now Robert call this remarks. And for Thank I -- concludes you. like the Drummond to return any to

Robert Drummond

trying to the thank participating has for employees in through all I much continued ever gentlemen, In very Thank much bringing you seen. and for out very attention, to Alamo for you dedication the the Nextier each their as one of aboard conclusion, forward to most for welcome of want questions. in hard and the us together. work really of the just forward And move Thank we're periods ladies any team, organizations these looking best and today's call. we your

Operator

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

disconnect now may You your lines.