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NR Newpark Resources

Participants
Ken Dennard Co-Founder, Chief Executive Officer and Managing Partner, Dennard Lascar Associates, LLC
Paul Howes President and Chief Executive Officer
Gregg Piontek Senior Vice President and Chief Financial Officer
Matthew Lanigan Corporate Vice President and President of Mats and Integrated Services Business
David Paterson Corporate Vice President and President of Fluids Systems Business
Praveen Narra Raymond James & Associates, Inc.
George O'Leary Tudor, Pickering, Holt & Co.
William Dezellem Tieton Capital Management, LLC
Call transcript
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Operator

Greetings, and welcome to the Newpark Resources' Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It's now my pleasure to introduce your host, Ken Dennard. Mr. you, Thank Dennard.

begin. You may

Ken Dennard

operator, joining and and We you, XXXX morning, to good for the you results. full-year us and call fourth appreciate Newpark review Thank quarter everyone. Resources' webcast conference

Howes, Paul Chief Business; Business. Piontek, Matthew and are today Paterson, Officer; me Newpark's and of Officer; Financial The Chief of President President President Lanigan, David Gregg Executive Mats Fluids With The

outlook full-year details will opening near-term Following high-level financial fourth a for management call before the provide of my results quarter Q&A. and remarks, on commentary the and the

I I February be the Before on There have normal recorded a XXXX, housekeeping will of turn the XX, a today's it in available information that and also webcast be by Company's to through. telephonic replay run website on the be the call available how and yesterday's call, at over, details release. newpark.com. access is until will replay will to that There

that of the reported note no call X, or a information this accurate you're that longer on therefore, time February be may replay as and time-sensitive today, Please transcript listening any advised in only as information of speaks reading. XXXX

by the may forward-looking the conference Newpark's of within this In comments contain forward-looking of Securities management United the the call meaning Laws. Federal views current addition, statements States These made reflect during statements management.

risks, by XX-Q contingencies. Form achievements However, certain reports Annual various made quarterly risks, listener to to differ reports The and materially to actual or on those and those uncertainties current on cause from in on Report performance could XX-K, read and statements of management. understand contingencies is results, Form uncertainties expressed the Form X-K Newpark's the encouraged

may certain today measures. non-GAAP comments financial include also The

on reconciliation comparable the website. measures and Newpark's the included found which release, GAAP details in financial can directly be to Additional quarterly press are most

behind and to Mr. over now President And me Newpark's Paul? CEO, turn Howes. I'd like call to the Paul that

Paul Howes

everyone. Thanks, morning, Ken and good

reflecting results, begin on the for quarter like full-year specifics our Before I'd XXXX. fourth by performance covering of the to financial the safety

important For safety and employee most value. core our our and both Newpark customers, is paramount

a which workplace. came in favorably in pursuit I result saw unwavering total industries the believe our we the employees recordable thank this harm slight of our zero compares like all Although, would commitment increase operate. working we to at that for we year, within safely for of X.XX incident to their a the rate, and

turning results. operating fourth Now to quarter the

than our remain the the Although slowdown American taken we within I'm focused be we markets. land in with swift infrastructure in pleased Mats accelerating proved challenging business, even on the energy In market quarter. fourth North other to actions growth the more anticipated, the non-E&P and the

Consistent in The the was led historical weaknesses benefited to strength the the revenues, in with from demand margin softer which rental by for quarter quarter to during a an to improvement somewhat strong particularly operating product X% experience, market, fourth the which service in revenues sales, gas focused in segment and our sequential seasonal offset in XX%. sales in increase Northeast. led basin product U.S. E&P and

our rental shift away infrastructure stable, remained energy activities continued In contributing market, with contrast have to revenue E&P E&P the the in the relatively market. from mix

and from of and For derived of rental segment are total including nearly sales. quarter, XX% non-E&P the markets, product of our fourth revenues our service XX% all

Mexico. deepwater key American challenging results environment was in internationally markets the quarter fourth American North our Gulf Board. recently strategy components with and North to fluids, by of in we land a the clear approved market continues that the our strong land results E&P the overshadowing volatile the distinction experienced In long-term reflect of validate the between The

gain losses. the sequentially, traction Meanwhile, as elevated on activities IOC continued higher with improved up EMEA Our nicely, region fluids contracts, to along from XX% international in revenues downhole revenues in Mexico deepwater we benefit sequentially. however, other American growth the companies revenues a we the reflects faced market. XX% Gulf and North in challenges service where that contrast, of to the This stark land improved also

our the Mexico overall in North first declining of by stimulation U.S. and fourth rig extended improvement Gulf the downtime quarter, and declined impact our our land sequentially, chemical the in Despite on count, of the budget American revenues XX% the the of revenues customers several reflecting exhaustion through holidays.

American touched call, on quarter's in market North normal. our volatility last the the land As we that recognized new is we

reduces business, the an that to scalable also cost more only model variable land transition cash fluids and to impact operating have earnings a with building rightsize our We American structure the of taken North more a to but not flow. on the of actions U.S. goal volatility

demonstrate After careful at deepwater one market. time in further our actions a exiting to in we Brazil Brazilian our several to market, consideration has headwind took quarters. been and presence quarter the fourth in us capabilities for important a was allowing to U.S. facilities, which for the technical the several Newpark, in market reduce addition strategically

Unfortunately, the do entire Brazilian the years to we for will in thank for hard team Brazilian meaningful based all believe IOCs on any developments, over declined recent the years. has over and return way future. foreseeable the market the of the like significantly the work not I'd

ability XXXX challenging the continued finally, phases demonstrates flows full-year cash results that fourth generate flow conditions, $XX cash And our our the of quarter million. million, flow free free to the Free market like cash the cycle. I'd to bringing to totaled note $XX for all consistent fourth industry through despite quarter

the Gregg the call Gregg? And financials I quarter. hand detailed discuss with to of the will over that, to

Gregg Piontek

of quarter, the by near-term outlook. consolidated on covering our update Thanks, and for an followed Paul and good the I'll the by morning, operating results segment everyone. specifics begin

land $XXX XX% reflecting XX% most across in count Systems of the softness rig sequentially a basins. revenues XX% fourth generated XX% a decrease Revenues The declined million, million to Fluids segment sequential reduction U.S. compares and the in the quarter to decrease. XXXX, which for $XX an of total with felt U.S. year-over-year

results fourth at down activity impacted combined downtime to environment pricing quarter our a in rate competitive which the impacted certain those market, an remained in lower Further share. through holidays. a extended general, our rig decline increasingly reflected broader our of than that market the by addition In part per market with active, also in notable higher for customers negatively rigs revenue customers laid

primarily a as in count in to year-over-year million compares The in U.S. slightly where which XXXX, land the lower over same XXXX, land count $XX was declined million XX%, market QX Mexico, Gulf period. share. On revenues revenues reduction average rig by quarter. million or a the basis, the offset XX% declined $XX reflecting improved decline rig a $X million $XX fourth deepwater well from improvement to of lower as sequential U.S. U.S. XX% revenues for from

stimulation the although Paul to partially offset by year-over-year. a of in which our chemical on, this As share a revenue touched minor the contribution Mexico, U.S. market, in our revenues results. market first land provided land QX expanding The softness deepwater only we've increase provided in was seen million U.S. Gulf $XX

due on a In the year-over-year pronounced exhaustion market sequential budget declined driven to count $X XX% improved through our by to declined leading to XX% a Canada revenues key extended season. modestly Canada, the basis, revenues downtime compared count, a although primarily to customers exhaustion holiday budget with On in rig million rig basis, reduction from active several XX% by customers.

Despite region. Australia, contract on, EMEA a countries robust improvements in market several reflecting international the touched America, are North to quarter, in improved completion Paul $XX much fourth fairly million fluids offshore seeing in the more we the across sequential a increase, environment. the of Outside of Woodside revenues total XX% broad-based as

our With fourth regional it's the noting shift EMEA activity fluids XX% quarter revenues. the in that contributed levels, of worth region

basis, and offset declined which region. increase an On and offshore contracts associated Australia, in in largely from by by the year-over-year $XX a $XX international million Brazil our decline revenues other EMEA regions million includes Algeria, transitions contract from with IOC X%, NOC a

dramatic the discussed more the markets November actions on certain volatility, to a of operational activity drive our in U.S. our cost footprint expectation and As and taken variable slowdown in structure. call we've continued rightsize with

goodwill yesterday's the fourth these impairments in charges actions with quarter. $XX in of in highlighted other release, charges As resulted million along to and

Fluids quarter softer charges, cost well the in structure our to a impacted align natural conditions. quarter, was as by reductions, operating sales these in lag a modest weaker market the generated for as the match Adjusting in we mix as part fourth the segment the loss which within

to by in offset million $XX exceptionally quarter, representing Turning fourth a $XX business. sales, sales partially the quarterly service decline rental X% which came a fourth a the Mats Total revenues, improved million activity at to $XX million. which improvement an was record segment of in quarter. million $XX for came at sequential by in $X increase in strong the driven product in in revenues million product The and

relatively in remained and softness The in segment with XX% from sales. activity, our declined XXXX, of customer stable. fourth to $X Mats in while rental partially markets sequential quarter record a primarily revenues $XX a E&P Comparing reflects by million million improvement product decrease offset the XX% non-E&P services, decline

service the and weakness Substantially, activity, stable. all year-over-year of relatively E&P revenues from decline have non-E&P was markets the while in attributable rental market to remained

XX% As total fourth quarter of segment derived were Paul revenues outside E&P. our touched on, Mats of

segment or full-year total from XX% XXXX, product $XX $XXX service and for $XX Mats million the non-E&P sales. markets our revenues, For and rental accounted of of million end million including

year. the in the quarter fourth strong in in quarter third of of Mats the margin for were to quarter improved million compares sequentially compared Benefiting office XX% segment quarter, the for Total $X.X to corporate to million the and the fourth operating fourth sales quarter fourth the last $X.X $X year. from last expenses million the activity, quarter XX% XX% and third product in which

activity of is related by result XXXX while strategic M&A includes sequential quarter spending Fourth is attributable primarily and lower the for planning decline matters, on the charges. to in decline legal severance to a driven spending this, incentives. $X.X Adjusting basis, performance-based lower largely year-over-year million

the for million, XXXX Turning the $XXX costs were XX% decline to to million $XX million results, SG&A primarily quarter year-over-year prior The in fourth compared quarter quarter, while in from lower increase in of XXXX. performance-based X% year. fourth quarter revenues reflects $XX primarily were incentives $XX quarter, year-over-year. consolidated the and sequential and decrease fourth quarter a our reflects severance decline fourth charges, last representing the third the million the

non-deductible during goodwill $X.X pre-tax U.S. of loss pre-tax the period. higher $XX.X foreign $XX impact provision The reporting impairment recorded quarter is was of received income a along on impact million with our than despite expense on the the in losses million of the taxes reflects This composition benefit the geographic tax where tax result fourth million, the for the the quarter losses. fourth earnings our of

income impact was This release. of press $X.XX $X.XX and compares impairments net loss net share in the Our of the of fourth $X.XX third last for share the a reflecting in diluted other year. to fourth per $X.XX quarter loss yesterday's in per highlighted share, quarter the of quarter per the charges and net

flow, Turning of was which to investing all decrease $X net operating cash million Cleansorb fourth cash provided quarter, activities $XX call. used a operations $XX the million million, of the with by discussed from million on quarter million activities in acquisition in $XX working along $XX last Cash capital. substantially reflected totaled in included cash which quarter's

The fourth and to our course investments. our demonstrated adjust ability results managing quarter net capital

primarily to $X in generation softening of response in capital $XX were million CapEx, used able in reducing cash market, reduction free investment only million, the rental fleet, our in the million. cash example, of from debt. the Financing to net net quarter of we net pace $X a activities flow sale E&P increase of and while of reflecting Mats the For resulting

operating Turning utilized $XX million capital XXXX $XX million, for million working provided net cash, $XX activities cash in of flow, to including investments the acquisition. Investing $XX capital. Cleansorb included $XX million reduction a and our activities which full-year net million

million, million activities Financing of $XX an in utilized and including share debt. repurchases net reduction million $XX $X

and Our total a XX% $XX of of debt a a of resulting with and year-end, a XX%. in balance balance of leverage total debt debt-to-capital million to as net million remained $XXX of modest ratio ratio cash capital

XXXX on million and include December facility. outstanding on bank Our million $XX our $XXX primary notes convertible due components asset-based debt

the without from primarily XXXX to maturity note to to to free Although, generation we in maturity, public position to utilize us facility balance, we helping capital away plan XXXX our cash flow access convertible bank still nearly are need a two reduce markets. fund years our the

lower overarching expecting Now in theme not revenues our E&P U.S. improvement has although Consequently, an capital rig levels land customers. U.S. discipline to Fluids, expecting weeks, the market modestly of expected are in likely near-term be offset as recent outlook. activity. consistent remain deepwater relatively to fourth we activity as the improvement also with land will in turning In U.S. we significant near-term most stabilized a our for are by quarter remains

have as early of In currently a to that Canada, scheduled QX worth begin IOC, pace see expect improvement we in consistent project a the to it's with we we with the noting should which second are typical deepwater last Also, year. we QX. seasonal tracking

of Internationally, will a activity showing more a revenues pull while third timing general with our drilling multi-quarter quarter fourth strong pause we Albania, activities is the in in the including the a to in within following level customer quarter, based key on contracts, back anticipate line operations with strengthening results. Shell

the In anticipate to of month-over-month take meaningful drive base, bottom quarter. near optimization Fluids the to improvements cost cost Consequently, U.S. our are margin, steady operating quarters terms it although will segment breakeven our in in a improvement will line. remain delivering first we efforts the few

which pullback and a improvement from be record in levels revenues. QX, service segment, Mats in to the we offset partially the sales by achieved rental expect should product In modest

persistently activity, the geographic our infrastructure greater over to the continue market gas time, presence. to E&P expect low stability provide continue natural we Although impact to prices expand our as energy we customer

is million by project back rental well conditions, be pull product level. currently dates, of as start to it $XX can revenues timing both QX to weather we the impacted always of the as roughly the a challenging sales, While total to expect timing bit predict, which

necessary Further, the expect markets, stable, mid-to-high commercial QX accelerate the a investments likely profitability operations our are with non-E&P near-term pulling our geographic our with revenues in decrease growth end the in our established and to remain see margins in although relatively into to back we expansion infrastructure increasing and of headwind expected to teens.

office corporate million will expect to we be $X range. $X spending, Regarding expenses QX in the million

a the will Regarding while cash land, in strategy flow, we navigate approach taking more U.S. in which detail, challenging actions carefully to to appropriate cover environment of Paul capital bifurcated requires are execution our balancing as deployment. the

size In assets from and our Mats, rental which level to and will will we based levels continue on both our rental of opportunities, impact adjust fleet near-term investment capital sale utilization our of the our the fleet.

Fluids, NOC investments. expenditures investments In Overall, IOC will and XXXX limited. remain we remain until expect into land we see required catalysts below the North necessitate investments to market revenue capital continuing fund levels, growth, support American are very will although, to additional driven we that our

generation provide free seen to like of I'd market in to historically, driven working highlight we've reductions by that Further, capital. periods tailwind as softness a cash flow

near-term. the weakness currently U.S. with we tax in remain continued significantly expect our taxes, will Regarding operations, rate elevated in the

And to concluding with call over like to I would the that, his for remarks. back Paul turn

Paul Howes

Gregg. Thanks,

very Although, the the that we've to have adjust necessary through note environment ability demonstrated North deliver our course and to American and this free pull before, consistent we to been land important flow. remains challenging. cash It's levers

part North it's long-term our the completed update an worth was we planning in as volatility mitigating noting XXXX, integral associated And risks with strategy that of market American process. the

several and by November of our underpinned customer offering, is further base, product elements Our geographic Board strategy, in scope. by our was key to approved diversify which Directors intended

little we total and responsible being in that Analyst full and on share. Day out energy year-ago, the into where of market our a dollar presentation have a still laid over we opportunity this details specializing environmentally socially costs focused our and remain reduce solutions Mats, operating risks. our limited access an today multi-billion site partner, service customer to In infrastructure we In market, expand

the upstream into flow market segment multi-billion And decade, this The to our and Mats accelerate consistent report pleased now addressable validated with E&P, market. majority demonstrated the of dollar infrastructure that our capital. steps Mats our of generating extensive been competitive outside are growth to over has review strategic both and on we resilience advantages. business cash I'm size solid the our taking energy returns of invested revenues derived our past

geographical To on and expansion set. investments near-term rental of to technology we in our opportunities, disciplined opportunity in commercial the align are fronts, the that our goal, making a based key several outlook achieve expanding continuing and footprint market with by fleet and with investing new

taken We the our E&P insulate although our remain be to always are customers' and will actions improved actions to our in tied from Fluids, we recognize are business This can to these has that environmentally market, a to be strategy. In embedded key business solutions volatility market there focused ability bringing total of part for well performance. that lower committed over cost and of decade. our the our operations have been DNA the

with and drilling industry, evolution We've systems. that goals. ESG known gas industry, family are continue as long providing been in the spotlight their with our the confident align to currently to on leader oil our of that operators provide water-based with fluids And the we the we ESG technology will including solutions industry

addition market which is help several customer supportive sensitive IOC cycle. to innovations, from to of financial initiatives, insulate environmentally key plan which stronger returns provide our world, leverage In relationships us to will growing our through industry continued We stability to greater volatility. further commitment a and NOC Fluids the around the intended are strategy our and

We've that XXXX that Gulf and made by this new product with on one-third our expansion of from line. meaningful customer positions performance progress into capabilities demonstrated the our been growth this delivering successful, now continued Mexico, us proven for In logistical very of base. derived with front technical fluids our completion revenues has

award with growth. to relationship poised we the both has that and Shell through will year-over-year over Our of work past our deliver are expanded where expand XXXX, with again recent extend year the meaningful scope

priority. high IOCs several to contracts remains near-term we XXXX. expanding our recent in in IOC our XXXX. long-term tailwinds, expansion and in Those the also expect business NOC Hemisphere, a grow the presence Eastern market winning NOC We're and in successes

out solution in we to low In portfolio market North a environment. total our expand addressable to opportunity fluids are rig efforts count America, continuing build our our

pillar with fluids notable this completion achieved in the strategy. we XXXX discussed already have the of success We

parallel, organic we But year in stimulation our formally an offering one limited required investment. capital the product U.S., line chemical approximately launched ago, that expansion in

relationships, capabilities declining was While infrastructure, XXXX launch spend, into time existing this leveraging qualification admittedly prolonged effort translated this headwinds to and timeline. our customer of a and with challenging the product

customers targets the of made that significant year, challenging a the the business U.S. hitting Middle first we with not Despite the in for out set East. progress key I'm with number pleased this in and its both

a to continuing prove large services award a platform and our capabilities technical contract the products This is of supply with independent. showcase the in fleet momentum early to our Our for XXXX market. superior US unique chemical our first contract provide will with a wider build to frac and

fluids total accomplished, develop, landscape. the share Although in $X North confident particularly challenging remain our of capture of the light billion Newpark a American team solution what will I we am has time to roughly initiative addressable market. Overall, take of the meaningful the proud in ability highly to

on I'm existing invested also are and our improve a unchanged, confident, by on and goals the light model, capital leveraging capital we remain long-term maintaining returns path maintain to right our to our infrastructure to a stable strong flow in in balance sheet, provide volatility to segments. our land growth on further more both and through which markets allows stability increased across free the cash weather market U.S. us

as With employees focus thanking their and like work hard I us shareholders dedication call Newpark thanking on that, do and for our by for the investing I'd safety. continued our their close as as to to well always in

that, With Operator? take your now we'll questions.

Operator

Thank you.

the of set of question-and-answer Raymond of Praveen questions Our James. your will from [Operator question. conducting Instructions] comes Narra We with Please line first now session. proceed be a

Praveen Narra

guys. morning, Good

Paul Howes

morning. Good

Praveen Narra

the variablizing as as start some so We've the on I more structure footprint. well we breakeven for guess QX. reducing the side, cost if guess Fluids I of could done

as we we enough? guess rest today's that to mid Mexico of we level aligned year, we're stimulation by the variablized about that margin enough cost structure have to the given the as that it of benefits? for the in tailwinds kind move think we through Or we get can have So of seeing still single-digit I business year-end that a such Gulf activity and

Gregg Piontek

that. Gregg. is take This Sure. I'll

see bit in little shift past, meaningful a in you seen time. does the we've take when a do the it of topline, As

QX. And a have actions actions did take number QX. of continued so in we in Those

expectations. work quarters it's I take its is of versus going So trying it through. weakness evaluating that few activity to the takes you're that's quarters what and a short-term a to work levels why to few long-term way part And think through And region-by-region for to doing evaluate

David Paterson

Paterson. David is This morning. good Praveen,

I to to think just point. add Gregg's

sort I a think transition. was QX of

meaningful rig in really As was were excited U.S. I land to Mexico. with dropped, longer proven Gulf fluids. the What now much we in of Mexico. the of than growth Gulf we've the about we staying We're start was, super the completion our see performance on

With scaling on of fluids drilling to the the three recent of two on full three completion award, have going towards Shell we're service and full we're Shell fluids, service rigs. rigs and out working with

forward, overall which So in will the as I year the segment. moves think of mass of that I think we'll financial critical Mexico, bolster performance reach Gulf level the the

recent also of to QX, out right. Hemisphere, QX, to manifest starting themselves wins looking sort seeing some we're And late Eastern the the of in

the So in the And in Middle QX. market say, in recent wins position East I the of indicated reach the levels late that some Cyprus, think the by financial other going I dynamics healthy, deepwater in we're Algeria. is to to you QX, us that project seeing would some

Gregg Piontek

breakeven QX North forward The on a so then just American question, point that exact little back like there. from well. bit as mean this market trajectory said, the of improving to kind a bringing points And I behaves from to how I of, that of is your dependent it

Praveen Narra

must have fair? from be if that doesn't drag are improve as the taking Or But Is that in here. place be a of Sure. more I been? as QX, little of significantly North it of should the a initiatives least continue flow-through QX, does it at guess like less on in even bit drag the a sounds America P&L to it much given activity

Gregg Piontek

cost that's the actions. we to we back these cost take I steady a improvements again, think because as initiatives, month-over-month affair. a seeing No, those It's fair are point gradual

Praveen Narra

Right, okay.

non-E&P of obviously side, revenue now. Mats portion the quickly, significant just On your

the Mats terms increased the customer year of in terms how over Can or talk non-E&P base. and that's and about your So last of adoption last in that's breadth over parties? been the just you by of we multiple of guess awareness year where kind I'm what stand I curious product

Matthew Lanigan

Yes, Praveen. two Matthew. and address it take It's parts. one, I'll I'll that in

result, had customers on over space, ongoing in direct us. if dozen our think see Mats number Firstly, customers sort value basis. you side, T&D the which were at the dominated I in purchasing two was the look of by to Pleasingly, on an which product from we sales of customers, them repeat this QX speaks they a

So we're getting more breadth in that space.

So on the rental and seeing service side, similar we're expansion. also

you to we skill our largely a our necessary them E&P infrastructure If we've basins. at to end look existing – these sensitive strategy, E&P in make done been and environmentally safe the way, and with prove our around which capability it's really users have in credible, sure set service

stage to we're are where start are these at be a Now, that looking to expand us that front. to where customers going we want on to good and things

Praveen Narra

much, Thank guys. very you Okay.

Matthew Lanigan

Thanks.

Operator

Pickering, questions. line Tudor, your O'Leary the & of from Holt George of of comes proceed Our Company. next questions set Please with

George O'Leary

Good morning, guys.

Gregg Piontek

morning. Good

Paul Howes

morning. Good

George O'Leary

lot work on variabilizing done costs. a those Clearly, of and savings plan the cost

that's I kind to And there would buckets two impact just on to also if fixed impact a us CapEx are then those little going quantify cost you if a helpful? for the perspective So frame be bit super changes further. maintenance notable from could the that the any of wondered forward, business

Gregg Piontek

is It Gregg. Sure.

change volumes In become cost tough it structure, a variable. is as dramatically, fixed fixed terms cost because all of up to the bit frame

described, foremost. footprint as And we and evaluating so going first are have our we is what through,

your either we of out of cost process now or are have handful a taking change the some that's it. locations so we And of that step and have shutting the down of in shutdown of

roughly for are our maintenance a fairly this businesses all on $XX of Obviously is On two the in the both of prudent the balanced maintenance CapEx business things, like North spend. evenly is in between side that. we're America, times think – being about capital should million our you we it's extremely capital how

So that back little a that pull bit. may

David Paterson

David George, Paterson. Yes,

at very our said, structure U.S. cost what deep a in actually taking fixed and Just been We've add multiple mainly to basins look in to we're multiple land. locations. Gregg

really a business looks that XXXX. and streamlining roofline in how that to doing So we're lot work, of support the our

are action some already more out of taken late there – sort second half of earmarked we've and to in facilities, the we'll the QX benefit So of some some see to for XXXX. that one, of Q start get really

George O'Leary

Mats think just of Okay. That's kind you for Mats super more that of of about the the guidance, helpful. Praveen's opportunities, piling of side frame onto non-upstream you as just size I'm set? non-E&P revenue opportunity one And that not business, for could then looking the questions And set as focused and pieces which pie, utility those marketing opportunity you – And and are the it's you construction, perspective? out where go or guys marketing from the or whether sales year-over-year where work guys more acutely selling XXXX? of work in midstream on most

Matthew Lanigan

in we to the and capabilities and is natural where clearly around service the ongoing that regions Matthew. where That's have T&D footprint see southern it's Yes, Look, space. on focus I'll take activity. that market our primarily one we again. a

is in ramps there. I we're needing not up think think when we activity. activity significant it, about The

share We we've have just got moving to on focusing been forward. that capture the

Gregg Piontek

utility within the infrastructure largely is basins. about footprint you our of in beyond Coast there your at there, corridor – the limited obviously, is the U.S. large a And eastern has oil around concentration E&P But the in we've had so as a mean that Northeast. activities I the look the U.S., around East our presence Yes, more been

George O'Leary

Yes. it That turn makes over. color the I’ll sense. back appreciate perfect guys. I

Operator

Tieton comes your Please Management. Dezellem from of of line with Bill of [Operator proceed questions Instructions] set next the question. Capital Our

William Dezellem

Thank of you. questions group A here.

revenue you're structure? from you what you more to that to second to customer First in the relative to looking U.S. and on also Or variable, of Mexico, cost of would the increase expecting to all, to do to And of levels the the that? talk of the variability then how land were relative your Gulf make you're doing would you efforts there, cost expecting and wells in here structure your discuss the number are you what secondarily, be Shell XXXX?

David Paterson

Okay, Bill, David Paterson.

we're kind land, building on of multiple of right. in fronts, terms U.S. in the – So we're attacking variable structure

facilities, proliferation of in as I roofline years said, I right. the did think over land, business with U.S. unconventional the our think I've expand,

and facilities mud where and the So looking they're in at plants, pulling we're basically the looking at work. that really, the to located service

So more we for we're rigs to have. a to week that all service of a the hub-and-spoke efficiently and move more trying model

at And Also, think won't geographies continue associated compromising especially drive that service it, look benefit technologies in without but XXXX, efforts and the proliferation and the quality there's pad U.S. will with our with activity but the We how I've can pad service drilling seen I deliverability. automation. the develop that delivery to ongoing concentrated drilling. we our probably increased see to in of streamline of we really

to switching through XXXX Shell, fluids to now our include both Mexico, of Gulf So scope gears with and and the reservoir expanding completion scope locked drilling. the extending in having

for So forward been it a has huge step us.

customer in originally IOC pigeonholed second there call the was that talked We The sort This actually had C&I. QX. that late Gregg grassroots well. is a on one-off to starting in of for

drill their with extra well QX. now will term on that They're to the to rig. We an see campaign going slip

Mexico. of hope that scalability So of the answers in high-level the and dynamics that's really the both dynamics. the I Gulf really some

William Dezellem

we back hearing and a as you're the from this what take the from customers XXXX level And your about you. you follow-up, Thank a through plans forward? please tell Great. just activity step us would go year activity

Paul Howes

their all flow in free Yes. E&P, investors. what hearing Certainly, factor Bill. Hi, from to discipline, it's capital our we're around Yes. cash customers

And a their as fourth activity cautiously to could in second optimistic they as quarter they see that free again, look But flow, the activity quarter. the third year-end and look to at so and they we're cash well. in ramp-up start manage we'll

see. year, think the but we'll it's be pretty again, for So flat to I going

Gregg Piontek

Yes, was that thing entered that at least And concerns. consistently the change we've north one fairly demand into importance dip that commodity a that watch theme we customers. the was of very some obviously, dynamics for the this think the That's down I price puts with could one as is we recently, heard year, – the $XX. seen maintaining thing of biggest to

William Dezellem

Okay. all. Thank you

Paul Howes

Bill. Thanks,

Operator

with of question. Holt O'Leary Our of next comes Co. line questions the from set Tudor, Please proceed of & George your Pickering,

George O'Leary

guys. Hey,

back me in. question. follow-up one had letting Just for Thanks

side on to see spend the Mats But the year-over-year, answering it, XX% of completion there XX% about of guys my just drilling T&D in questions. clearly down U.S. business as am business, to sure the previous side of framed to are opportunities one and correctly. the make We call ballpark. you the On XXXX thinking and want non-upstream I

giving exact I what topline business that grow those that again, you have puts guidance but but of realize and there? takes looking a are you're not business a in for and XXXX? for kind given growth can kind guidance in here, the not year-over-year revenue from of Mats And full-year, can conflicting the trends, perspective two

Gregg Piontek

the I'll a Paul look you it Yes. modest is the even contribution at of the to that news down. bad start Sure. I either that note up roughly headwind This of and coming $XX described add in made XXXX fairly result, think service Gregg. and was the was we've then that But news I and lot it million to QX here is Matthew pullback guess revenue. of now that when important on. and thing all rental we can the a only or oilfield activity as is – seen it's the the down good

much base. that's So a smaller

of non-E&P smaller about geographically, to as but that to piece expand grow we're piece. continue much this be do plan had now what The that's described now concerned business. majority, to a now our doing revenues really in here We it's to the and down it, being Matthew

Paul Howes

a the you about ago be market market Analyst T&D year $X Meeting, Yes. to estimated our we're up at billion. at And – framed if addressable we that roughly look that we

doing business is and geographically. we've what will But expectation, to that our grow we now need those so capabilities, competencies and business year-over-year. out Matthew's certainly, core in is – expand building build And been

George O'Leary

much. very Thanks Great.

Operator

We have for any reached end the would turn session. of closing the the comments. to I floor management to back over question-and-answer like

Paul Howes

Thank All joining interest once in Newpark and again we the to your right. to and forward call quarter. again you next for for talking look you

Operator

today's conclude teleconference. gentlemen, Ladies This for and you participation. does thank your

your have a lines, and wonderful may You day. disconnect