Liberty Energy Inc.

Good morning and welcome to the Liberty Energy 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. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note This event is being recorded. I would now like to turn the conference over to Anjali Voria, Strategic Finance and Investor Relations Lead. Please go ahead.

Thank you, Gary. Good morning, and welcome to the Liberty Energy Third Quarter 2023 Earnings Conference Call. Joining us on the call are Chris Wright, Chief Executive Officer, Ron Gusick, President, and Michael Stock, Chief Financial Officer. Before we begin, I would like to remind all participants that 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 in our earnings release and other public filings. Our comments today also include non-GAAP financial and operational measures. These non-GAAP measures, including EBITDA, adjusted EBITDA, adjusted pre-tax return on capital employed, and cash return on invested capital, 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 adjusted pre-tax return on capital employed and cash return on capital invested, as discussed on this call, are available on the investor section of our website. I will now turn the call over to Chris.

Thanks, Ange. Good morning, everyone, and thank you for joining us to discuss our third quarter 2023 operational and financial results. Liberty delivered excellent quarterly financial results reflecting outstanding operational execution, focused customer engagement, and agility across a softer North American frack market. Record pumping efficiencies drove sequential growth in revenue and adjusted EBITDA while electing to idle a fleet during the quarter in response to softer market conditions. Adjusted EBITDA was 319 million, while fully diluted earnings per share was 85 cents. The industry remained disciplined, championing steady pricing for quality services while withdrawing underutilized frack fleets from the market. Our superior execution, combined with expanded vertical integration and technology investments, culminated in a trailing 12-month adjusted pre-tax return on capital employed of 44%. I'm proud that our team delivered a milestone achievement in operational efficiency. We achieved the third consecutive quarter of record average daily pumping efficiencies delivered across our full fleet, safely pumping more hours and tons of sand than ever before. This success was driven by the unique culture of innovation and excellence at Liberty. Over the years, our investment decisions have grown our competitive advantage by driving value creation through technology, scale, and vertical integration. Today, the latest piece in our DIGI Technology Suite is demonstrating impressive operating results. The commercial deployment of our proprietary DIGI Prime units commenced in late September, quickly becoming the crew and customer's favorite technology on that location. We embarked years ago with a blank slate to envision, design, and build natural gas powered frac fleets that would represent a step change improvement in frac technology. We didn't choose the easy route to simply extrapolate from existing pump technology or the partial route where we outsource the power generation part of a frac fleet. We took on the whole enchilada with a commitment to build the best damn next-gen frac fleet. Well, the effort was worth it. Today we have a truly differential frac fleet technology that is setting operating performance records while delivering the highest efficiency, lowest emission fleets in the industry. To say that customer interest in DIGI is high would be an understatement. We are supplying DIGI fleets with robust, reliable, compressed natural gas delivered and managed onsite by our new Liberty Power Innovations Division. We are on track to be operating four DigiFleets by year end and six DigiFleets by the end of January 2024. We are excited by the strong customer benefits and pull for our DigiFleets. As we continue to transition our fleet toward more natural gas-fueled technologies, we are also maximizing diesel displacement with natural gas across our dual fuel fleets. We have worked in conjunction with our technology providers to develop and deploy control software to significantly increase diesel displacement. Our years-long effort in predictive and preventative maintenance programs have positioned us to optimize equipment performance and availability, enabling us to run our pumps in optimal operating ranges to achieve maximum gas substitution. We are also starting to reap the advantage of vertical integration provided by LPI, improving the reliability of gas supply to our frac fleets. There is much room to run here. Liberty's focus on asset optimization maximizes the uptime of each pump, driving higher equipment reliability and operational efficiency. Our predictive maintenance programs are better than ever before. continually assessing asset health in real time. By applying advanced analytical tools and processes such as machine learning and AI, we are addressing issues before they become critical and using this data to prevent issues in the future. A year ago, we realigned teams to seamlessly work together on the shared goals of maximizing operational efficiency and optimizing equipment maintenance. Today, Real-time data is enabling our teams to execute on these priorities and hold themselves accountable in delivering superior results. Wireline was a new business, added to Liberty in the one-STEM transaction. We knew our customers would greatly benefit from streamlining our Frac and Wireline crew interactions on-site to shave extra minutes off the day. Every minute equals efficiency. and translates into a lower cost of producing a barrel of oil for our customers and improved profitability for Liberty. Today, we have more Frac and Wireline paired red on red crews since we first brought Wireline into the fold. We are proud that Liberty Wireline now ranks as the top service provider according to the most recent Kimberlite survey and independent industry research that extensively pulls E&P customers across the industry. We increased our quarterly cash dividend by 40% in response to the significant growth in our per share earnings and cash generating abilities from our business transformation over the last three years. During the third quarter, we repurchased 1% of our shares outstanding, or a cumulative 11% since our buyback reinstatement in July 2022. We are focused on the opportunistic execution of our buyback strategy. We will move more aggressively during stock price pullbacks and moderate our pace when the stock runs up. However, we continue to see a large dislocation in our stock price relative to what we believe is the intrinsic value of our stock. The goal remains the same. Maximize the value of each Liberty share and drive higher total returns for years to come. Fleets across the industry were idled in response to completion's activity softness, supporting a better supply-demand balance of marketed fleets as compared to prior cycles. As the shale revolution matures, the industry has adapted to a new era in frac markets through consolidation, technological process, disciplined investment, and serving increasingly complex customer needs. Fract activity has largely stabilized at current levels, representing a base load of fracked fleet demand needed to sustain EMP operators' flattish production levels. Fourth quarter trends will likely see seasonal softness, winter weather, and holiday disruptions. We expect the recent strengthening of commodity prices will drive a modest increase in industry activity beginning in 2024. Liberty's internal analysis shows several natural gas levered E&P companies are expecting to increase activity into 2024. The sustained strength in crude oil prices is also stimulating demand for frac fleets among smaller private oil producers. The resumption of modest growth in frac is within view. Global oil and gas markets found firmer footing during the third quarter, driving higher oil and gas prices. Volatility in commodity markets has emerged from the possibility of an escalating conflict in the Middle East and renewed recessionary fears. Recognizing the elevated uncertainty, global industry supply and demand trends infer that the delicate balance of oil and gas markets is tilted to the upside given the relatively small spare production capacity today. The long-term demand outlook for secure North American energy anchors a more durable cycle. OPEC Plus decisions, including the extension of Saudi Arabia's production cuts, further demonstrate a willingness to support commodity prices, underpinning long-term investments in North American shale. We just saw an industry titan double down on North America's future. The positive outlook for North America is leading to consolidation and investment amongst E&P operators focused on long-term value creation. Liberty is uniquely positioned to support our customers' ambitions to unlock value with our superior services, next generation technologies, integrated footprint, and scale. Today's E&P customer is focused on driving improvement which can only be achieved with outstanding service partners and differential technologies. The transformative work our team accomplished over the last three years through technology investment, vertical integration of wire lines, sands, and logistics, and now LPI natural gas treating and delivery uniquely positions Liberty to address the diversity and complexity of customer needs. I would like to take a moment to celebrate the Liberty team Record performance was a result of the collective effort of all of our 5,500 teammates across North America I am proud to be your partner We outperformed in the third quarter in the face of a softening industry delivering significant operating efficiencies outstanding safety record and attractive returns in the fourth quarter Activity is expected to slow modestly on normal seasonality and the related impact on efficiency. For full year 2023, we expect adjusted EBITDA will be at the high end of our guidance range of 30% to 40% growth over 2022. We continue to deliver superior returns and a differential service for our customers. Our commitment to excellence and focus on company culture Our next generation Digi technology suite and LPI positions us well to compete in both near-term cycles and over the long term. The best has yet to come. With that, I'd like to turn the call over to Michael Stock, our CFO, to discuss our financial results and outlook.