Liberty Energy Inc.

Good morning and welcome to the Liberty Oil Field Services third quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Some of our comments today may include forward-looking statements reflecting the company's view about future prospects, revenues, expenses, or profits. These matters involve risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. These statements reflect the company's beliefs based on current conditions that are subject to certain risks and uncertainties that are detailed on the company's earnings release and other public violence. Our comments today also include non-GAAP financial and operational measures. These non-GAAP measures, including EBITDA, adjusted EBITDA, and pre-tax return on capital employed are not a substitute for GAAP measures and may not be comparable to similar measures of other companies. A reconciliation of net income to EBITDA and adjusted EBITDA, and the calculation of pre-tax return on capital employed, as discussed on this call, are presented in the company's earnings release, which is available on its website. I would now like to turn the conference over to Liberty CEO, Chris Wright. Please go ahead.

Good morning, everyone, and thank you for joining us to discuss our third quarter 2021 operational and financial results. Our third quarter results show solid growth momentum with a 12% sequential increase in revenue on both higher activity and service pricing. Our team delivered this growth while navigating acquisition integration activities, cost inflation, and the disruptive impact of the pandemic on global supply chains and labor availability. Third quarter revenue was $654 million compared to $581 million in the second quarter. Adjusted EBITDA in the third quarter was $32 million compared to $37 million in the second quarter. The third quarter benefited from service price increases, but Liberty was not immune to the serious supply chain issues the world faces today as faster cost increases more than offset higher prices during the period. Increased transportation costs and driver shortages, maintenance personnel, supply chain constraints, and integration costs hurt margins in the period. We estimate that rapidly increasing legitimate costs that were not passed through to customers in the quarter were approximately $12 million, and maintenance costs were 8 million higher than normal due to integration and COVID-related disruptions. We are actively addressing the supply chain, logistics, and integration challenges that are continuing into the fourth quarter to moderate their impact on margins. We all know the COVID pandemic has caused meaningful disruptions in the labor market. Liberty has taken significant steps to address the effects and we are starting to come out of the other side of these challenges. Michael and Ron will expand on these issues and opportunities. There is now widespread recognition amongst operators that not only is the availability of next-generation equipment limited, but even more scarce is high-quality service partners with best-in-class efficiency and technical expertise to drive higher performance. We believe this tightness in the market for quality service providers is important for operators, and they recognize it is critical to have the right partnerships in place today to be successful over the coming years. There is significant interest in Liberty's Digifract electric fleet. We have completed four very successful field trials and over 30 technical and factory deep dives with customers, and the response is overwhelmingly positive. We are excited to announce the execution of the first two multi-year arrangements to deploy Digifract fleets in 2022 with two of the field trial partners. We are also in active negotiations with the others. The technical innovation and engineering control that these fleets exhibit combined with the leading emissions profile and Liberty's operational excellence is a combination that is hard to beat. We are continuing our multi-year deployment strategy centered around choosing the best partners for DD Frac deployments and strong returns on incremental capital deploy. Operational efficiency came to the forefront during the quarter. In late September, we announced that Liberty Frac and Wireline teams worked in concert to achieve 24 hours, midnight to midnight, of continuous plug and perk pumping time. We are excited that just one week later, this team did it again. Keeping the ambitious goal of Liberty's Operation 1440 is an incredible feat. Delivering a full 1,440 minutes of pumping time with zero non-productive and non-pumping time requires a remarkable effort of coordination and efficiency. Our team achieved this due to our 10-year focus on real-time data tracking and predictive analytics, and due to our partnership with Kaiser Francis and Dowling. Surveying the macro, worldwide economic activity continues to grow, driving higher demand for energy, despite the impact of supply chain disruptions, material shortages, labor scarcity, rising costs, and COVID-related uncertainty. Energy demand continues to outpace the gradual return of supply, as evidenced by the energy crises in Europe China, and India. Global oil and gas supply remains constrained by underinvestment in both oil and gas production and the associated infrastructure. The urgent desire of many to see oil and gas transitioned away is running headlong into reality. In the year 2000, hydrocarbons supplied 86.1% of global energy. falling by less than 2% to 84.3% in 2020. Underinvestment in oil and gas infrastructure, whether it be shrinking the natural gas storage capacity in the United Kingdom or hindering the permitting of U.S. LNG export facilities, will surely lead to thousands of preventable deaths this winter among those unable to afford skyrocketing heating bills or surging food prices due to a global shortage of natural gas driving up fertilizer prices. Strong oil, gas, and natural gas liquid prices are bolstering demand for frac services, particularly among private EMPs. The positive momentum we've seen is expected to continue in the fourth quarter and into 2022. Our customers demand modern, environmentally friendly solutions with high performance operations and strong partnerships. We are in a highly advantaged position with top tier technology innovation, engineering prowess, service quality, and ESG friendly solutions. As we continue to look for ways to improve our efficiency and build value, we are very excited to announce our acquisition of PropEx, a leading provider of environmentally friendly last mile profit delivery solutions. PropEx has also been a long time equipment and service provider to Liberty. The dynamic team at PropEx is a great cultural bet with Liberty. The addition of PropEx integrates the latest profit delivery technologies and software into our supply chain, including their new ESG friendly wet sand handling technology and expertise. we will continue to bring PropX technology, equipment, and services to the whole industry. Together, we believe these solutions will reduce the environmental impact of last-mile delivery and lower our total delivery cost to our customers. I'll hand it off to Ron to discuss the significant value PropX will bring to delivery organizations.

Thank you, Chris. We are excited by the opportunity to both strengthen Liberty's logistics efficiency and technology, while also continuing to offer these leading solutions to the industry as a whole, whether we are performing the FRAC services or not. PropEx is a leading provider of last mile profit delivery solutions, including containerized sand equipment, well site profit handling equipment, and logistics software across North America. the E&P survey expressed a preference for containerized sand handling on their locations. Today, PropX systems can be found on approximately 25% of all frac locations. Founded in 2016 as a solution to optimize on-road trucking delivery of sand, their custom, designed for efficiency, containerized sand handling equipment for both wet and dry material maximizes delivered load capacity and flexibility. The system utilizes the widest cross-section of trucks in the market. This has led to logistics efficiency and environmental benefits from lower delivery rates, faster turnarounds, fewer trucks required, and reduced emissions due to lower idle time. Liberty has been a longtime customer of PropX. In fact, as part of the integration of OneStim, we are in the process of moving legacy OneStim fleets as this is the more efficient and cleaner facilitator of sand transportation in the industry. The rapid innovation and ingenuity of PropEx continue today in the nascent wet sand business. Through their ongoing work with early adopter Ovintiv, PropEx has built the equipment and expertise to become the premier provider of this technology. Wet sand handling technology is a It is an ESG-friendly solution that allows for the delivery of wet sands to operators. Customarily, sand processing requires sand to be washed and dried prior to transport, and the drying is the highest emitting process at a sandbine. PropEx's wet sand handling equipment allows for the transportation and usage of wet sand, eliminating the drying process, reducing costs, and emissions. We view wet sand handling and delivery as a disruptive force in the last-mile delivery business in terms of lowering total costs and reducing environmental impact. As we look ahead, we see many opportunities for localizing the supply chain with smaller-scale wet sand mines using the PropEx system, providing real, sustainable cost savings across the value chain. the latest real-time logistics software, which raises efficiency for operators and service providers across the space. The PropConnect WellSight and software automation platform is available to customers for sale or as a hosted software as a service. It drives better visibility and automation from source to dispatch to WellSight and billing. Internally at Liberty, we plan to integrate PropConnect with our Oracle Transportation Manager to streamline supply chain, delivery, and operations. We expect this integration will modernize last-mile delivery, enable our driver quick pay initiative, and bring significant improvement in cost efficiency and geo-optimization. An early trial of the next-generation software platform in the Permian enabled a 20% reduction in the number of truckers required to keep a pad supplied with province. through end-to-end optimization of truck flow. The new platform also enhances Liberty's ability to partner with a broader range of trucking providers, from the independent owner-operator to the largest firms. They will benefit from clear line of sight to utilization levels and automated invoice workflow, speeding payment times to inside of a week. Safety is paramount to Liberty, and driving is the most dangerous activity we undertake. We believe direct oversight in the last mile space provides us the strongest opportunity to drive continued improvement in this area. The transaction positions Liberty as an integrated provider of completion services offerings with profit, equipment, logistics, and integrated software that will improve Liberty's operational efficiency. It is representative of our relentless focus on building value over the long term. By integrating the latest profit delivery technologies and software into our supply chain, we believe we will reduce the environmental impact of last-mile delivery and lower our total delivered cost to our customers. With that, I'd like to turn the call over to Michael Stock, our CFO, to discuss our financial results.