Liberty Energy Inc.

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. Please note this event is being recorded. I would now like to turn the conference over to Angie Avoyer, Director of Investor Relations. Please go ahead.

Thank you. Good morning and welcome to Liberty Energy's first quarter 2024 earnings conference call. Joining us on the call are Chris Wright, Chief Executive Officer, Ron Gusek, 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, and adjusted 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 adjusted pre-tax return on capital employed, as discussed on this call, are available on our investor relations website. I will now turn the call over to Chris.

Thanks, Anjali. Good morning, everyone, and thank you for joining us to discuss our first quarter 2024 operational and financial results. As we enter the fourth year of what appears to be a durable cycle for North American oil and gas production and development activity, consolidation across the energy industry is pushing larger companies to seek technical solutions and expertise to drive value creation. Liberty's strong first quarter results demonstrate the continued benefits of leading the industry in technology innovation, service quality, and investment in talent. Over the last year, the operations team delivered our highest combined safety performance and average daily pumping efficiency in Liberty's history. Our 32% adjusted pre-tax return on capital employed for the 12 months ended March 31, 2024 represents a continuance of our history of strong returns. I'm proud of the continued outstanding results our team achieved during a period marked by softening industry activity trends. Exceptional operational execution and deep customer engagement drove strong first quarter revenue of $1.1 billion and adjusted EBITDA of $245 million. We generated strong cash flow and distributed $42 million to our shareholders in the first quarter. Since July 2022, We've now distributed 417 million of cash to shareholders through the retirement of 12.5% of shares outstanding plus cash dividends. We remain focused on generating strong returns and free cash flow. We are pairing investment in profitable growth initiatives that increase our competitive advantage with a robust return of capital program. We are leading a generational shift towards low emissions, capital efficient, natural gas fueled technologies. Our comprehensive solution from critical power generation to the CNG fuel supply supports our DigiFleet deployments and uniquely serves our customers in their development of oil and gas resources. Furthermore, a growing demand for power from AI driven data centers and reshoring of industrial and manufacturing activity require reliable sources of power, which we believe will be best served by domestic natural gas. Liberty Power Innovations is well positioned to benefit from these wider opportunities beyond the oil field. Our customers see tremendous benefit from our direct investment in next generation pump technology, our ownership of power generation and fuel infrastructure, to control critical areas and expansion in our manufacturing. Together, this complete end-to-end service solution enables a rapid innovation cycle and superior operating efficiency that our customers have come to expect from the best service partners. Seamless integration of our Digi technologies with advanced cloud-based software for our pumping control systems, power generation, and on-site fuel management maximizes operational efficiency and lowers fuel consumption. The successful deployment of our first few DigiFleets has further strengthened our customer partnerships, which we continue to grow through ongoing engagement to provide customized solutions. For instance, we are enhancing our automated pump control technology with customization that allows optimizing key variables deemed important to our customers, such as rate, pressure, sand, and chemicals, and fuel efficiency. This solution responds to reservoir conditions and provides a customized fracture treatment across basins and horizons with innovation. Software optimization drives enhanced execution while minimizing downtime and maintenance costs. The performance of our latest pump technology, DIGI Prime, has been excellent. DIGI Prime is the most thermally efficient pump solution in the market, and we have seen natural gas fuel consumption that rivals the best dual fuel systems without any diesel consumption. That means the pump uses less natural gas and no diesel when compared to Tier 4 DIGI DGB pumps doing the same work. Technology innovation has been central to our history, including the multi-year design and development efforts of DigiPrac and DigiPrime. Last year, we decided to expand our internal manufacturing capabilities with the launch of our Liberty Advanced Equipment Technologies Division, or LAT. LAT now encompasses our manufacturing division, formerly known as ST9, and expands our ability to design, engineer, and package complete systems. We believe the success of new technology comes through ownership of the engineering design and the ability to rapidly incorporate feedback from field operations in the design and manufacturing process. This can further accelerate the innovation cycle and reduce total cost of ownership. Liberty Power Innovations continues to grow in scope expanding alongside our dual fuel upgrades and DIGI fleet deployments. In the first quarter, we launched operations in the DG basin with onsite fuel management services and will commence CNG sales this quarter following the commissioning of our compressor facility. Fract industry dynamics remain constructive as relatively steady demand in recent months has focused service companies on discipline pricing and quality of service. Superior performance and reliability drive higher returns for both E&P operators and service companies alike. Liberty's continual focus on technical innovation in equipment technology and software automation augments our industry-leading service offerings while lowering the total delivered cost to the customer reinforcing our position as the supplier of choice. Global oil and gas commodity prices have diverged and moved materially in recent months. Yet these changes have not materially impacted, although there's been a very modest softening demand for North American frac services. Oil prices have rallied since early in the year, owing to an improved global economic outlook, ongoing OPEC Plus voluntary production cuts, and rising geopolitical tensions. Iranian oil exports are at multi-year highs with a non-trivial risk that future Iranian export volumes decline. Natural gas prices have, conversely, declined considerably since last fall, primarily owing to strong production and mild winter weather, both driving natural gas inventories to well above seasonal norms. Natural gas prices are likely to strengthen in the future with increasing LNG exports and surging domestic demand for power in the years ahead. After 20 years of nearly static U.S. power demand, analyst projections for growth in the coming decade from AI and reshored manufacturing range from several BCF per day to over 10 BCF per day of incremental natural gas demand from the power sector alone. Globally, energy demand continues to march higher, supporting a strong North American oil and gas industry in future years. The lucky one billion, borrowing Arjun Murthy's term, consume 13 barrels of oil per person per year, while the other seven billion consume only three. it is safe to say that global energy demand will grow for the foreseeable future. Liberty's focus is profitable growth through disciplined investment in talent, technology, and equipment that leads the industry in efficiency and emissions. We are confident that our strategic investments in DigiFleets plus power and fuel supply through LPI better positions us to deliver superior returns over cycles. We are also excited by our partnerships in the Australian Beteloo shale gas basin, which exemplify our continued efforts toward growing reliable energy sources worldwide. In the second quarter, we expect low double-digit sequential growth in revenue on stable pricing and increased efficiency, with corresponding improvement in profitability. We continue to expect strong cash flow generation in 2024, supporting our technology transition investments and industry leading return of capital program. With that, I'd like to turn the call over to Michael Stock, our CFO, to discuss our financial results and outlook.