National Energy Services Reunited Corp

Greetings and welcome to NESR's third quarter 2024 financial results conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Blake Gendron, Vice President of Investor Relations. Thank you. You may begin.

Thank you, Donna. Good day and welcome to NESRR's third quarter 2024 earnings call. With me today are Sharif Foda, Chairman and Chief Executive Officer of NESRR, and Stephan Angeli, Chief Financial Officer. On today's call, we will comment on our third quarter results and overall performance. After our prepared remarks, we will open up the call to questions. Before we begin, I'd like to remind our participants that some of the statements we'll be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. I therefore refer you to our latest earnings release filed earlier today and other SEC filings. Our comments today may also include non-GAAP financial measures. Additional details on reconciliation to the most directly comparable GAAP financial measures can be found in our press release, which is on our website. Finally, feel free to contact us after the call with any additional questions you may have. Our investor relations contact information is available on our website. Now I'll hand the call over to Sharif.

Thanks, Blake. Ladies and gentlemen, good morning, and thank you for participating in this conference call. Our third quarter was once again strong, following solid first half of 2024, even on top of our robust growth last year. We continue to reach new all-time highs for revenue, EBITDA, EPS, and cash flow, and our balance sheet is increasingly fortified and poised for both accretive growth and prudent shareholder returns. Despite the prevailing market uncertainty, I am pleased to report that overall activity in the MENA market remains stable, and I'm extremely encouraged by the prospect in NET's core business outperformance, new technology rollout, particularly in direction drilling, solid hydraulic fracturing execution, and frontier market opportunities in water and decarbonization segment. Combined with our recent relisting on NASDAQ, our outlook remains extremely bright, both in the fourth quarter and in the coming years. Before passing to Stephan to discuss our solid third quarter results and balance sheet positioning, I want to first offer some thoughts on the macro outlook. Our recent technological milestone that we expect will fuel continued NEST outperformance and our overall positioning in an otherwise cautious sector landscape. I'm extremely proud of the entire NEST organization as we continue to push the envelope on growth, margin delivery, and cash generation, which afford us the opportunity to reinvest in really exciting growth areas of our business. If there are two key messages from my prepared remarks, they are, one, that the MENA macro outlook remains healthy, underpinned by growth in key countries, alongside Saudi leadership in pragmatically managing energy market balances with strong focus on gas and unconventional development. We expect Nesri to continue to outperform the broader sector with exciting development in the core, our drilling technologies, and in frontier areas such as produce water and minerals. These areas are driving Nesri's solid performance now and are expected to sustain performance over both the near term and also in the years to come. Turning first to the macro, the overall commodity outlook has certainly impacted sentiment in the upstream energy sector, and especially for energy services. While the global upstream growth outlook today is more cautious than it was even six months ago, we believe that MENA activity will remain stable, particularly with recent activity growth in countries like Kuwait, which is expected to lead overall MENA growth for the next couple of years on a percentage basis. Encouragingly, North Africa is again growing steadily, and there is plenty of appetite to accelerate further in places like Libya and Algeria. For Nasr, we have scalable presence, we can easily add significant resources from equipment and human capital to cater for rapid growth should the geopolitical landscape improve and opportunities materialize financially. Overall, stable activity across the MENA region hardly match the softened capital market narrative. We have very good visibility for the coming activities and where it will take place, specifically because of the long-term nature of the contract and the strategic importance of the energy sector in the region. Case in point is the Saudi unconventional gas project. which will remain a secular growth story given the ambition to grow domestic gas capacity substantially by 2030. Turning now to the portfolio, first and foremost, our core business continues to outperform even in a subdued growth environment. Given our relative size compared to our more global peers, our opportunities in the core center around our ability to leverage leading share in our anchor countries to pull through smaller segments in which there is room to grow share in other countries. Examples of this dynamic include the regional spread of drilling and manufacturing expertise from our team in Oman, the industrial service from Egypt, and the duplication of our Saudi FRAC success in other potential unconventional resources. With solid growth in the core driving success, it is our ROIA direction drilling platform that we expect could carry the up-performance forward over the next several years. The Tier 1 direction drilling market is more than $2 billion per year across rotary steerable, LWD, and MWD. It's a high-quality revenue given the consolidation and sophistication of the technologies. Recently, we announced the first successful run of our rotary steerable and MWD in Kuwait, in which the technology was able to complete the targeted interval in a single run. This milestone marks the culmination of nearly six years of joint investment, research, development, and field testing with more than 70,000 feet drilled, but more importantly, signals commercial viability of our technology. We already have in hand the multi-year contracts with provision to deploy our new Tier 1 direction drilling platform in Kuwait, Saudi Arabia, and Oman. And the upside within these contracts is significant. The next goals for Ruqya include repeatable success, reliability enhancement, personnel training, and growing our fleet of tools to expand our share as we continue to gain confidence in performance across the different reservoirs and formations. Another unique work we are doing at NESS involves a completely new market opportunity that is being defined and reassigned through our collaboration with our largest customer, our NESS Environmental and Decarbonization Application, or NEDAP. is a basket of technology aimed at establishing multiple circular economy within the MENA energy value chain. Often, as we spoke multiple times before, we found our NEDA technology outside of the oil and gas industry and adapt them to fit specific client challenges. One such circular economy is the circular water economy. In the third quarter, we announced our investment in Saltek BV, a supplier of technology called DIVAR, or Dynamic Vapor Recovery, which is a low-heat desalination solution originally from the Dutch dairy and chemical industry. Over the past couple of years, we've worked with our largest customer to adapt the DIVAR specifically for high-salinity produced water and have successfully executed two pilot projects in the country. Furthermore, we evaluated the technical efficacy of recovering available minerals from the produced water during the desalination process, including rare earth metals such as strontium and lithium that are native to this reservoir water. The SALTEC acquisition is a signal of our confidence in the multi-circularity model of water and mineral recovery. And while this area remains a very long development and scale-up cycle, we are extremely excited for the medium to longer-term prospect in our water-starved MENA region. Our open technology platform serves as the foundation for successful innovation, but it's the combination of our local know-how, operational agility, and the trust and open-mindedness of our customers that is driving technological success in the field. I'm extremely excited to share further updates on our strategic initiative in due time, including our NASDAQ bell ringing and tech expo tomorrow in New York City. But for now, I will conclude and hand the call over to Staffan to discuss our financials in detail.