ProPetro Holding Corp.

Good day and welcome to the ProPetro Holding Corp second quarter 2024 conference call. Please note this event is being recorded. I would now like to turn the call over to Matt Augustine, Director of Corporate Development and Investor Relations for ProPetro Holding Corp. 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. This morning we released our earnings results for the second quarter of 2024. 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 release 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 release. 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, Matt, and good morning, everyone. As we've communicated previously, 2024 is a prove-it year for ProPetro, and I'm pleased to report that we are delivering. In the second quarter of 2024, we demonstrated the effectiveness and resilience of our strategy. We have proven that despite a softer market environment, ProPetro can deliver and is delivering meaningful value for our customers, partners, and shareholders. David will walk you through our financial results in a moment, but first I'd like to share some important business highlights from the second quarter. Despite unexpected activity disruptions during the quarter, our focus on industrializing our business and prudent dynamic capital allocation has helped ProPetro deliver resilient free cash flow generation. We expect our strong free cash flow to continue thanks to the investments we've made and the strategic decisions we've taken to position our business for sustainable long-term value creation. Underpinning our strategy and our confidence are three core principles. which you have heard us discuss previously. Let me walk you through each and share some details on our progress. First, our company is set up to drive free cash flow generation. We've made meaningful investments through our fleet recapitalization and are now reaping the rewards. Demand for our next generation gas burning assets is strong and our transition towards a more efficient service offering that will remain relevant in our competitive market is progressing uninterrupted by market headwinds. We ended the second quarter with seven tier four DGB dual fuel fleets with each bringing industry leading diesel displacement. The rollout of our forced electric fleet offering is well underway and the results we've seen so far make us highly confident that we're on the right path to deliver enhanced customer value and ultimately superior shareholder returns. This quarter, we deployed our third forced electric frac fleet. This is the first force electric fleet we deployed with ExxonMobil as a part of our three-year contract with a second fleet expected to be deployed in the next few months. The agreement includes the deployment of two force electric fleets, wireline and pump down services in 2024 with an option for a third force fleet with integrated wireline and pump down services to commence operations early in 2025. Our three-year contract with ExxonMobil was a major milestone, and in addition to other contracted electric equipment, is a glimpse of ProPetro's future. Moreover, we will continue to allocate capital to our forced electric offering and away from conventional diesel equipment, following the demand trends and the customer preferences we're seeing in the market. On that note, We have placed an order for our fifth force electric fleet, and we expect it to be in the field under contract in 2024. In addition to electrification, we're evolving our business and capitalizing on our strengths in other ways as well. We have been executing committed contracts that help ProPetro to deliver through cycle returns. We continue to work closely with our customers, creating efficiencies tied to integrated services and higher equipment utilization. We are cultivating an incredibly talented and committed workforce and our progress and success today are made possible by our first in class operating team in the field. All resulting in a business that has more durable and resilient future earnings profile. Putting all these factors together, we are proud to deliver valuable, more efficient and flexible services while reducing risks and costs for our customers. We are very confident that our business is poised for our continued growth and success all made possible by our team here at ProPetro. Now moving to M&A, which has been and will continue to be an important strategic driver for our company. Our disciplined and opportunistic approach to deploying capital towards value-creative acquisitions remains a fundamental strength at ProPetro. Our silver tip acquisition continues to be a strong tailwind for our earnings and free cash flow, as does our acquisition of Par5 Cementing, which is now fully integrated into our legacy cementing business. This quarter, we were pleased to complete the acquisition of AquaProp, an innovative provider of cost-effective wet sand solutions. This acquisition is yet another example of our commitment to enhancing innovation and integration through thoughtful capital allocation. The addition of AquaProp is aimed squarely at further industrializing our operations with the ultimate goal of bringing more value to our customers and ProPetro through removing unnecessary equipment off-location. Furthermore, it builds on a reputation of delivering best-in-class integrated completion services desired by operators in the Permian Basin. We will stay disciplined and opportunistic in our pursuit of accretive M&A evaluations that make sense. Indeed, ProPetra's stable and robust cash generation results allow us to advance our fleet transition and participate in accretive M&A, all while maintaining a strong balance sheet. Importantly, it also provides optionality to return capital to shareholders. On that note, and as we announced last quarter, our board approved an increase and an extension of our share repurchase program through May 31st, 2025, with an additional $100 million authorized for a total of $200 million. Since the inception of our plan in May of 2023, ProPetro has repurchased approximately 10% of outstanding common shares. David will add more on this in a minute, but let me just say that our actions on this front confirm our board and management's confidence in ProPetro's continued earning growth and free cash flow generation. Returning capital shareholders will continue to be among our top priorities. The success I just laid out and the initiatives we are pursuing showcase ProPetro's strength. Despite some turbulence in the market, our strong performance is why we believe ProPetro shares are a unique investment opportunity and that the investment thesis is apparent in the discrepancy between our equity value and the strong financial performance evident in our results. Yes, the second quarter was challenging. Rig counts continued to move lower and pricing across our conventional diesel assets became more competitive. We experienced a weaker quarter sequentially in our wireline business, due to shifting customer schedules and also saw significant weather impact as we had several uncharacteristically strong storms push through the Permian during May and June. Yet our premium service offering coupled with our operational excellence, robust and blue chip customer base and superior service proved to be resilient as our dual fuel and electric equipment remained highly utilized. We're also pleased to report another quarter of lower capex relative to our original budget, which will further support free cash flow in our capital allocation plans moving through the remainder of 2024 and beyond. We are confident in our ability to deliver strong financial results through the balance of this year and into 2025. Turning now to our market outlook. While ProPetro is of course not immune to the macro pressures facing our industry, We continue to take decisive action, building out our high quality service offering and maintenance of our strong balance sheet designed to deliver meaning free cash flow generation. We remain optimistic about the strength of North American land oil field services potential over the next several years and are confident that our industrialized model geographic focus in the Permian Basin and the discipline execution of our strategy will pay off despite the slow to no growth environment that exists today. Lastly, and maybe most importantly, our pursuit of operational excellence allows us to effectively service our strong blue chip, Permian focused customer base, and is supported by our proven electric technology, which garners committed contracts. Our balance sheet is healthy and we have ample liquidity to be opportunistic in our capital allocation decisions. In sum, our evolving industrial model has proven to be effective. and we look forward to achieving even greater success. We expect to continue elevating ProPetro as well as our entire industry for years to come. I'll now turn the call over to David to discuss our second quarter financial results. David.