ProPetro Holding Corp.

Good morning and welcome to the ProPetro Holding Corp fourth quarter 2021 conference call. All participants will be in a 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 Josh Jones, Director of Finance. Please go ahead.

Thank you and good morning. We appreciate your participation in today's call. With me today is Chief Executive Officer Sam Sledge, Chief Financial Officer David Shorlimer, and President and Chief Operating Officer Adam Munoz. Yesterday afternoon, we released our earnings announcement for the fourth quarter of 2021. Please note that any comments we make on today's call regarding projections or our expectations for future events are forward looking statements covered by the Private Securities Litigation Reform Act. Forward looking statements are subject to several risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. we advise listeners to review our earnings relief and risk factors discussed in our filings with the SEC. Also, during today's call, we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings relief. Finally, after our prepared remarks, we will hold a question and answer session. With that, I would like to turn the call over to Sam.

Thanks Josh and good morning everyone. Firstly, I'd like to congratulate the entire ProPetro team on successfully navigating the challenges of 2021. Beginning in late 2020 and throughout the entirety of 2021, our team dedicated themselves to helping our business recover while at the same time maintaining or even improving our level of operational and safety execution. I'm proud of our team's resilience, and I'm excited to see more great things come from the ProPetro team in 2022 and beyond. Moving to the fourth quarter, we were pleased with our operating performance and fleet repositioning, which reflects our intent to set the conditions for and pivot to the optimal path for profitability and value creation in 2022. As we prepared our fleets for this new year, our activity levels decreased slightly in the fourth quarter, resulting in a 2% decrease in revenue and a 12% decrease in adjusted EBITDA. Despite the operational inefficiency created in repositioning assets along with normal seasonality, our team executed well and continued to differentiate our well site performance from our peers. Again, I want to thank our team for all the hard work that went into preparing the company for the year to come. As demand for oil and gas continues to increase across the world and certain countries fall behind their respective oil production quotas, the call on short cycle crude from the U.S. is growing louder with WTI pricing above $90 per barrel. While we foresee many U.S. producers taking a capital discipline approach to activity additions, others are seeing new areas of leasehold become economically viable for the first time in years. Incremental services demand from these non-core areas of the North American oil and gas basins is expected to cause further tightening in the U.S. pressure pumping market during 2022. We also anticipate rig productivity from these non-core areas to be lower, requiring incremental drilling and completions activity for the U.S. to meet the call on short cycle barrels. Higher aggregate drilling activity will cause all tides to rise in oil field services. but particularly in pressure pumping, where utilization began the year at extremely elevated levels. As a result, we believe higher demand for pressure pumping, continued equipment attrition, and the risk of supply chain issues on equipment deliveries sets up an environment where the North American pressure pumping market could be effectively 100% utilized during the third quarter of this year. Our recent focus has been to prepare for the supply-demand imbalance in pressure pumping that we anticipate later this year. As I already mentioned, we repositioned a portion of our assets to more profitable work during the fourth quarter. While this caused lower utilization in the interim, we believe the opportunity cost experienced in the fourth quarter will improve our financial and operational performance in the first quarter of 2022 and beyond. During the quarter, our team also took the opportunity to conduct certain preparatory maintenance repairs on our equipment. We felt that the fourth quarter was a more appropriate time to conduct this time intensive work given our forward view of pressure pumping and pressure pumping pricing. That said, the reliability of our equipment in 2022 will be to the benefit of our customers and our shareholders. Lastly, we continue to make strategic investments and stock certain supplies and equipment that we believe will be at risk of deliverability in future months. This includes the continued deliveries of additional Tier 4 DGB dual fuel units, which I'll speak to more later during this call. With that, I'd like to turn the call over to David to discuss our fourth quarter financial performance and capital resources. David.

Thanks, Sam, and good morning, everyone. During the fourth quarter, we generated $246 million of revenue, a 2% decrease from the $250 million of revenue generated in the third quarter. Effective utilization was 12.5 fleets, which decreased 9.4% from 13.8 fleets during the prior quarter. The lower revenue was a function of lower fleet activity and seasonality. Notably, the drop in activity was partially offset by some limited higher pricing. Our guidance for the first quarter average effective fleet utilization is 12 to 13 fleets, with visibility to some downtime due to winter storms in February, sand supply and logistical constraints, and continuing repositioning of fleets included in that range. In January, our effective fleet utilization was 13.4 fleets. Cost of services excluding depreciation and amortization for the fourth quarter was $187 million versus $189 million in the third quarter. with a decrease driven by lower activity levels. Fourth quarter G&A expense was $24 million compared to $21 million in the third quarter. G&A exclusive of $2.3 million relating to non-recurring and non-cash items was $22 million, consistent with the third quarter of 21. We expect first quarter G&A exclusive of non-recurring and non-cash charges to decrease to approximately 18 to 19 million. Depreciation was 33 million in the fourth quarter, consistent with the third quarter. Our net loss for the fourth quarter was 20 million compared to a third quarter net loss of 5 million. The fourth quarter was a transitional quarter for our team, and we believe Profetro's ability to execute on its financial goals this year will partially be a function of how the stage was set at the end of 2021. To add to the preparatory work Sam mentioned, our team continued to dedicate efforts on managing costs and supply chain inflationary pressures, which we anticipate continuing this year. We believe our emphasis on proactively managing these items will play a significant role in margin expansion in 2022. Finally, adjusted EBITDA of $37 million for the fourth quarter decreased 12% sequentially compared to $42 million for the third quarter. The sequential decrease was primarily attributable to seasonality and a conscious effort to reposition assets to more profitable work. Although these factors are expected to diminish in 2022, the first quarter will be negatively impacted by sand availability and logistics issues in the Permian Basin. However, we expect significant margin expansion sequentially with our net price increases effective in January and others achieved during this quarter. Our challenge going forward is to achieve economics supportive of reasonable full-cycle cash-on-cash returns for all our working fleets, so margin expansion is a priority over marketing additional horsepower. We call it the pursuit of margin over market share, which is our most capital efficient way to improve profitability. We've made substantial progress in this area over the last two months and look forward to making additional improvements throughout the year. For the fourth quarter, we incurred 49 million of capital expenditures, which included approximately 15 million of accelerated 2022 CapEx largely in connection with the previously announced Tier 4 DGB conversions. Actual cash used in investing activities was $19 million, as shown on the statement of cash flows, which is derived from capital expenditures of $56 million, less proceeds of $37 million, largely related to the sale of our underutilized turbine generators in the fourth quarter. This opportunistic disposition resulted in cash proceeds received in December of $36 million. The capital expenditure figure differs from our incurred capex due to differences in timing of receipts and disbursements. Free cash flow for the fourth quarter was $26 million. While we remained debt-free, we increased our cash position and liquidity by $27 million and $16 million respectively during the quarter with cash of $112 million and total liquidity of $169 million. Total availability on our asset-based revolving credit facility decreased to $57 million due to the seasonality of our revenues, but has since increased to $75 million at the end of January. Our outlook for full-year 2022 CapEx spending is a range between $250 million and $300 million, with the spend weighted in the first half of the year as we take delivery of our previously announced Tier 4 DGB conversions. The wider range is largely a function of the variance in expected and potential activity levels and potential capex spend related to 2023 customer demand and activity for our ESG-friendly offerings. While we expect liquidity will decrease in the near term, we believe the strength of our debt-free balance sheet, strong cash position, availability on our ABL credit facility, and the strong generation of cash from operations will be adequate to support our investment cadence through the remainder of the year. Within this guidance range, routine annualized maintenance capex per fleet is expected to be approximately $9 million which reflects expanded increases in our Simulfrac service offering, where we provide significantly more equipment on location and where we currently anticipate supply chain and inflationary pressures on materials and services. In addition, the full year guidance range includes approximately 100 million of fleet refurbishments and upgrades, including 50 million related to our previously announced Tier IV DGB conversions, to be delivered in the first half of this year and the remainder to other opportunities. As we make decisions in this opportunity-rich environment, we reiterate a commitment to maintaining a solid financial position that provides maximum financial and operating flexibility. With that said, our ability to maintain a healthy balance sheet and capitalize on potential opportunities will largely be a function of the success of our priority of margin over market share. In January, with our more comprehensive net pricing increases across our fleets, preliminary adjusted EBITDA margin was approximately 25% with total monthly adjusted EBITDA landing at just over 24 million. This is a significant improvement and a direct example of our recent progress. However, We caution that January's results are not likely to be indicative of the full quarter as sand supply constraints and winter weather in February have created downtime that has disrupted our operations. With that, I'll call back to Sam for some closing comments.

Thanks, David. We're excited to see where margins are landing early in the year. And as a result, it's nice to be in a position where we can take advantage of an opportunity rich environment in 2022. On that note, I do want to take a moment to provide an update on our ESG-related service offerings and how we are viewing it going forward. To date, all of our previously announced Tier IV DGB dual fuel investments are sold out and are expected to be put into service with dedicated customers as they are delivered throughout the first half of 2022. We continue to see demand for lower emissions natural gas burning equipment, particularly when that offering is coupled with an efficient operation like ProPetro. We believe our operations like Simulfrac coupled with our ESG friendly services are delivering the solutions that the most efficient operators are needing. Our dual gas offering is most important to aid in supporting our customers emissions goals, but it's equally a financial benefit to ProPetro as these units and the pricing associated with them allow our company to effectively scale without placing additional net supply of horsepower on the pressure pumping market. Moreover, conversions provide scale in a way that is asset and margin accretive to pro petro. When considering all investment options, whether organic or inorganic, we believe asset and margin accretion is the most risk-mitigated strategy toward improving our bottom line. We do not believe that scale for the sake of scale is pragmatic in this business, but as long as demand warrants and a healthy balance sheet allows, we will continue to transition our fleet to more natural gas burning and lower emissions equipment with premium pricing and strong economic returns. As we turn the page to 2022, the focus for ProPetro is the generation of economics supportive of reasonable, full cycle, cash on cash returns for all working fleets, as David mentioned earlier. Even though we have additional assets to put to work, we see very little upside in marketing more capacity prior to achieving proper economics on all active fleets. As a result, our team is improving the respective return profiles of our currently operating fleets prior to adding working capacity to the market. This requires discipline in force ranking projects every day, along with a balance of continued willingness to collaborate with EMPs that value consistent and high quality services. As mentioned during our previous call, disruptions related to supply chain issues and labor shortages in the Permian Basin should be anticipated in 2022. Even with the year just beginning, ProPetro has experienced negative impacts related to sand and sand logistics. While these disruptions appear to be transitory in nature, we expect no shortage of challenges like this in 2022. Our team remains prepared and will continue to provide efficient services and industry-leading performance that our customers expect from ProPetro. Lastly, as you all know, safety is paramount at ProPetro. Adam, David, and I want to congratulate our customers and our teammates on an outstanding safety performance in 2021 and year to date in 2022. No words can describe how proud I am of our team for executing at the highest level of operational and safety performance during this transitional period. From all of us in the room today, congratulations and keep up the great work. With that, I'd like to turn the call back over to the operator for Q&A.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. And the first question will come from Steven Gangaro with Stifel. Please go ahead.

Thanks. Good morning, gentlemen.

Good morning, Steven.

Two things for me. What I wanted to start with, you mentioned the sand issues that are out there. Can you talk a little bit about what you guys are doing as far as delivering sand for customers, maybe on a percentage of fleet basis? And is there a profit opportunity there for customers? for you guys to manage, deliver sand given what has happened with spa prices in the primary as well?

Yes, Steven. This is David. Regarding sand, we provide that to just a small percentage of our fleets today. Many of our customers provide that directly. One of the things that we've been working on is the discipline of passing through the actual cost on jobs, and so I don't think that's going to be a significant driver of profitability. I think we're getting that through our primary pricing mechanisms, but it's certainly something for us to be disciplined around.

Yeah, and Stephen, this is Sam. Just to add on top of that, in times of volatility in the market, much less volatility in a more focused area like sand, This effort and discipline of actually passing through all your costs, much less trying to capture a margin on top of those costs, is a real task. We've struggled with it at times in the past. We know that a lot of our peers have struggled with it as well. We feel really good about how we're transacting in that part of our business now and our ability to protect ourselves and even capture some value from that volatile market that is the sand market today.

Great. Thank you. And then the second question was, you mentioned on the call and also in the press release about, I think you used the words repositioning assets. And I was curious, and maybe you could tie this into price, but is that, when you say that, is that to customers with more visibility and less white space? Is it a pricing move? Is it just a strategic alignment with a customer. Can you kind of shed some light on what you exactly mean by that and how it pertains to pricing and profitability?

Sure. I think the simple answer is that it's a little bit of all of that. Really, it's mostly around our pursuit of increased margins and this more healthy cash-on-cash return that David and I both mentioned in our scripture remarks. And repositioning fleets and assets can be a significant part of that at certain points in the cycle. But with that repositioning also comes pricing. I don't think we would be moving assets if there weren't differentiated pricing with the opportunity that you're moving them to. You're also looking for more consistent work schedule. You're looking for an ability to transact and manage and cover your costs better. Really kind of all the above. that that repositioning results in just a better value proposition overall. It can also differ a little bit on a customer-by-customer basis, how many of those opportunities are available with that repositioning.

And, Stephen, just to add to that, this is David. You know, I think the way we're thinking about it is every fleet needs to generate full cycle cash-on-cash returns independently of itself. We're not looking for incremental contribution that is not meeting that objective. So that's where the discipline around our fleet deployment plays in. And moving some of these fleets around, getting them in a position to be priced correctly to generate those full cycle cash-on-cash returns is a priority for us.

Great. Thank you, gentlemen.

Steven.

And the next question will come from Taylor Zarcher with Tudor Pickering and Holt. Please go ahead.

Hey, good morning. Thanks, everyone, for taking my question. My first one for Q1, I think you said in January the monthly run rate from an adjusted EBITDA perspective was close to just north of 24 million, if I heard you correctly. And obviously there's some issues you're encountering. here in February and likely next month as well with respect to sand and other sort of transitory, hopefully transitory issues. But I was wondering if you could help us think about just EBITDA margins over the balance of 2022. You're talking about 25% margins for January. That's almost a thousand bips higher than what you were doing in Q4 of 2021. So Should we take that comment to mean that at some point, whether it's Q2, Q3, or Q4, you should start generating 25% EBITDA margins on a consolidated basis for the company in 2022?

You know, I think that we want to be careful given some of the weather-related impacts in February. But I think certainly given that we've reset pricing across our entire fleet, and we still have some yet to bake in that has already been achieved. I think certainly being able to get back to that 25% level is an objective for us and certainly possible.

Okay, good to hear. And just to follow up there, so on the CapEx budget, $250 to $300 million, if I assume you did get back to 25% margins or close to it, it seems like you could maybe stay a free cash flow positive for 2022. And I just wanted to clarify or ask you to help us think about cash flow for 2022. Do you think on the budget you've outlined, you can stay positive at the free cash flow line for 2022?

Yeah, Taylor, this is Sam. I do think that opportunity is there this year. There's kind of a few things that need to shake out for us to talk a little bit more confidently about that. But given what you saw, What we're seeing in January from a profitability standpoint as a direct result of the work we did at the end of the year last year and the work that we're going to continue to do from a pricing and repositioning standpoint, that opportunity is very real.

Awesome. Thanks, Sam and David. You bet.

And again, if you have a question, please press star then 1. The next question is from Evan Mapes with ATB Capital Markets. Please go ahead.

Yeah, good morning, guys. Thank you for taking my question. Just around the Durstin fleets, can you just comment on are they working and how are they running operationally? Kind of what's the outlook there?

Yeah, Evan, this is Adam. Currently there is no Durstin trials scheduled. As you might have heard throughout the script, you know, the team towards the end of last year or back half of last year was Um, you know, made the decision to be focused going into 2022 and repositioning our fleets to more profitable work to achieve, um, these full cycles, cash on cash, cash on cash returns, and also, you know, putting focus and mitigating any, uh, supplies chain issues that could help or prevent us from doing so.

So that's where our focus lies right now. Okay. Then just one quick follow-up then as you guys look to upgrade your fleets, are you guys looking at different kind of E fleet technology? Maybe like in 2023 or just focusing on Tier 4 DGB for the time being?

Great question, Evan. This is Sam. We're looking at everything right now. You've known us long enough to know that our operating model is usually very customer-focused and customer-driven. Our move into the dual-fuel DGB space is largely a product of what our customers are asking for. Uh, we're going to continue down that road as you've seen. Uh, but we're also in various conversations across almost our entire customer portfolio about what can be in addition to that in the form of more gas burning equipment. I think that's what most of our customers are after from both the cost and emissions standpoint is to pursue more gas burning equipment. Uh, and that can be in a lot of different, uh, that can come in a lot of different ways. So, yes, we are analyzing multiple opportunities across the equipment space as it relates to the end of this year and next year. Okay. Thank you, guys.

I'll turn it back.

Thank you. And once again, if you have a question, please press star, then 1. The next question is a follow-up from Steven Gangara with Stifel. Please go ahead.

Thanks. Actually, I have two more things, if you don't mind. The first, you talked in the press release, and you also highlighted on the call sort of the desire to really focus on capturing value as opposed to market share. Can you give us a sense for how the competitive landscape is acting? Are you seeing a price discipline approach for most of your bigger competitors and I'm just kind of curious what you're seeing on the competitive front, given how tight the market is.

Steven, I'll take a shot at that one. This is Sam again. At this point in the cycle, when utilization is trending up, pricing is trending up, it's a little bit harder to grab on to consistent data points, given there's just so much movement in the market. You hear us talking about repositioning of our fleets. You've heard Competitors of ours talk about repositioning of fleets. There's going to be marginal incremental activity ads that are coming throughout the year. So a lot of noise. That said, I do feel like there is more pricing discipline in the system than there has been in quite some time. I think everyone in the pressure pumping sector is coming to the realization of how much equipment we're using and how efficiently we're using it and what the return profile needs to look like to meet that operating model. And although it can be a bit bifurcated at times in terms of pressure pumpers that are working in kind of this uber-efficient, simul-fract type, multi-well pad environment, that's the game we're playing and competing in. And we do feel like there is decent discipline in that arena, that said. We're much more focused on the economics we can generate, ProPetro can generate, rather than what's going on around us and partnering our quality operation with EMPs that put a high value on consistent operations.

Okay. Thank you. That's good color. And then just the one final – you talked about – the simulfracs and the impact it's having kind of on maintenance capex per fleet. Are you thinking that's a reasonable range going forward on the maintenance capex line even as we get into next year? Is there something about, you know, fleet configurations being larger that's driving that number higher, or is it just inflationary pressures?

Yeah, Steven, this is David. You know, I think certainly we've got inflationary pressures that will persist. But I also think that, you know, we're continuing to transition our fleet as well. But I wouldn't be able to give you an estimate on how that moves. I think that we definitely moved it up from our prior range, given, you know, the state of our fleet today and how it's being used. And, you know, we'll give you further guidance going forward on that.

Yeah, Steven, this is Sam. Just to add on top of that, I think just fundamentally for the sector, I think that might be a data point or an example of just how much equipment is in the system on a per fleet basis sector-wide. A couple of our peers have done a good job talking about this. We've tried our best to do the same. There is just a significant amount of equipment on each one of these locations, and I think that's That's why we're seeing earlier tightening of the market this cycle as you look at utilization on like a fleet by fleet basis across North America. Operators don't want to give these efficiencies back. Therefore, we're trying to work with them to find a way to make the right return on these larger fleets as they exist today. So that obviously comes down through something like maintenance capex just because you naturally, whether it's simulfrac or a regular zipper operation, you have significantly more equipment on location across the board.

Great. Thank you for the call.

And the next question will come from Waykar Syed with ATB Capital Markets. Please go ahead.

Thank you. So Evan asked all the good questions. Sam, just one question for me. You know, on these bigger simulfracs, it looks like you may have about $100 million worth of equipment at the well site. to incorporating maintenance capex, you think you need somewhere in the range of $30 million of EBITDA per crew to make attractive returns on that investment?

Yeah, Ricard, 100 seems high. In fact, it is high, significantly high. But fundamentally, what we're trying to do is earn a cash-on-cash return on the value of the assets that we have deployed to any said location. The math is very similar for us. Whether it's a zipper or simulfrac, the dollar amount of assets that we're deploying needs a specific return in a specific time.

Is it in excess of 100,000 horsepower at the well site for simulfrac, or is that number too high?

That's a little high. My comment was off of, I think you said, $100 million worth of equipment.

Well, so I was just doing, like, rough math. If you do, like, $100,000, you know, and then, like, let's say $1,000 per horsepower. Now, the number may be a little bit lower, maybe, you know, $80 million, but broadly within that kind of range. You could also have 120,000 horsepower at the well site as well, right, with Samuel Frax.

Yeah, maybe the math you're doing is just doubling – doubling a traditional zipper operation, which is a little too healthy, I think. We're seeing a little less than that on our Simulfrac locations.

Fair enough. And then, so for Simulfrac, what would be the kind of right number for including the maintenance capex, the right EBITDA for crew to get your return hurdle?

Yes. So we don't provide that information. I think, as Sam mentioned, With respect to our deployment of assets, we look at full cycle cash-on-cash return. And so we know what those numbers are. And quite frankly, simulfrac locations vary between customers and job types. So, you know, we may have some simulfrac locations that look like a zipper. So it's really just I think that's proprietary, and we'll leave it at that.

Sounds good.

Thank you. And the next question is from Arun Jayaram with JP Morgan. Please go ahead.

Yeah, I wanted to get a sense of how you're thinking about the pace of upgrades towards Tier IV DGBs. I know, Sam, in September you placed an order for 125,000 hydraulic horsepower. You currently have about 1.25 million horsepower of conventional tier two equipment, a little over 100K of Durastem, but I wanted to get a sense of how do you see the pace of upgrade capital over the next few years? Is that a good run rate as we think about 23 and beyond?

Sure, Arun, good question. As it sits today, I think we're somewhere in the ballpark of halfway through. taken the delivery on on the previously announced tier 4 DGB plans we do have as we stated in our script we do plan to take delivery on that entire investment program by about mid year this year and what that will equate to in terms of fleets is probably just a little more than four fleets for operating fleets of dual fuel equipment as we look forward I think part of What we are trying to analyze right now from an opportunity standpoint is how much more of that needs to happen and at what pace. We haven't made any specific decisions around continuing that program in a sizable way right now. What we can tell you is that the pricing for those assets is different, the demand is different, and the math does make sense at this point. So we're working hard with certain customers to run to ground decisions, those opportunities here in the near term.

Yeah, and Arun, this is David. I would just add to that that, you know, we're not necessarily locked into a particular technology here. As Adam and Sam have both mentioned, we're evaluating a variety of technologies as there's innovation that comes to the marketplace. So, you know, we've communicated our conversions for this year. We'll see how the market goes if we continue to extend that beyond this year and or what other technologies we might incorporate into the mix.

Great. And my follow-up question, obviously, rising activity by the privates has been a theme over the last several quarters. And I was wondering to get a sense of... If you could give us a sense of your mix between public and private operators that you work with today, and are you seeing any deltas and margins or EBITDA per fleet between those two different customer groups?

Well, we're not going to talk about the profitability across customers, but I think what we can see is demand definitely strengthening from privates. as their balance sheets are repaired and as they consolidate. I think steady demand coming from the publics and the majors. And really at this point, it's almost coming from every segment. Majors, large independents, publics and privates, quite frankly.

Yeah. Arun and Sam, just to add on to that, I think as evidenced you saw in our presentation, early January numbers and really historically with the company, we're highly interested in these, you know, booked up calendars that give us opportunity at the most efficient work that is in the market, private or public. I don't know if we have a preference. Like David said, we're aiming for a cash on cash return on, you know, on a fleet by fleet basis. Thankfully, operating basically solely in the Permian Basin, there's a lot of large, sophisticated private companies that can meet that need of ours that has a very full calendar and very efficient planning and operating. We have obviously some sizable public customers as well. So I think it's a little bit less about private versus public. It's a little bit more about what the operating opportunity is for us on a customer by customer basis.

Great. Thanks a lot.

Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Sam Sledge for any closing remarks.

Thanks, everyone. We look forward to working with all of our stakeholders in 2022 as ProPetro and the Permian Basin help meet the global call on oil and gas, and more importantly, dependable and cost-effective energy. We hope to speak with all of you again soon. Thanks for joining us.

And thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.