ProPetro Holding Corp.

Good day and welcome to the ProPetro Holding Corp third quarter 2024 conference call. Please note this event is being recorded. If you require an operator assistance, please press star then zero. I would now like to turn the call over to Matt Augustine, Director of Corporate Development and Investor Relations. Please go ahead.

Thank you, and good morning. We appreciate your participation in today's call. With me today are Chief Executive Officer Sam Sledge, Chief Financial Officer David Shorlimer, and President and Chief Operating Officer Adam Nunez. This morning, we released our earnings results for the third 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. I'm pleased to report that, thanks to the hard work and disciplined execution of our team, Propectra delivered strong results in the third quarter. Despite the challenging market environment for our industry, our free cash flow generation has been resilient thanks to our clear strategy anchored by next-generation investments and our focus on an industrialized operating model. Without question, we are seeing some of the same market softness as many of our peers. However, due to the strategic actions we've taken, we are generating strong, sustainable free cash flow while also taking market share. Over the last year, you have heard us state that 2024 is a prove-it year for ProPetro, and we are doing exactly that. Let me walk you through how we are doing exactly that before turning it over to David to review our financial results. Fundamentally, we prioritize cash flow generation and remain well-positioned to deliver positive cash flow going forward. Demand for our next-generation services is strong as we manage our portfolio to meet the needs of the industry of today and into the future. Currently, ProPetro has seven Tier 4 DGB dual-fuel fleets, each bringing industry-leading diesel displacement. Simultaneously, we continue to execute on the rollout of our forced electric track fleets, an effort that began with the deployment of our first forced fleet in August of 2023. Our forced fleets have received positive reviews from our customers who appreciate the meaningful efficiency upgrades and the fuel savings of electrification. Earlier this year, we commenced our three-year contract with ExxonMobil, under which we are providing hydraulic fracturing, wireline, and pump down services with two committed force electric fleets and an option for a third force fleet also with bundled and wireline pump down services. Looking ahead to the deployment of ProPetro's fourth and fifth force fleets, we expect the fourth fleet to be deployed under contract by year end with the fifth fleet active in early 2025. We intend to continue the transition of our fleet by winding down investment in Tier 2 diesel-only equipment and instead prioritizing investment to more force electric equipment. Not only do we fundamentally believe this is the way of the future and a clear path to sustainable success, but we are also de-risking future earnings by leveraging the contracts this equipment demands. At ProPetro, we believe that a dynamic market requires a dynamic strategy. When it comes to capital allocation, that is exactly our approach. Our capital allocation strategy has three main tenets. Fleet transition to electrification, value enhancing M&A, and shareholder returns. I'm pleased with our execution on all three fronts. Our dynamic capital allocation strategy is what has allowed us to opportunistically pursue acquisitions. such as Silvertip in the wireline market, PAR5 in cementing, and AquaProp in last mile sand solutions, which have all meaningfully contributed to our top and bottom line results. Our recent investments have also allowed us to stay ahead of the curve in transitioning to our forced electric equipment, all while delivering attractive returns. We've also mentioned before that deploying capital towards value-accretive acquisition remains a strength at ProPetro and a key component of our strategy for growth and value creation. Moving forward, we will remain opportunistic as we pursue strategic transactions to profitably grow our business and better meet the needs of our customers. As I mentioned a moment ago, our electric fleet transition is well underway and we look forward to continuing that transition in 2025 and beyond. David will go into more detail about our share repurchase program in a moment, but I want to reaffirm to you our commitment to returning capital to shareholders. Earlier this year, we announced that our board approved an increase and extension of our share repurchase program through May 31st of 2025 with an additional $100 million authorized for a total $200 million in the plan. Since the program's inception, the company has acquired and retired 12.6 million shares representing approximately 11% of our outstanding shares. We are incredibly proud of our ability to allocate capital to the highest return opportunities while consistently returning capital to our shareholders. Our recent successes demonstrate the strength of ProPetro's business. Our strong performance reinforces our belief that 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. While we are proud of the quarter we put together and our ability to continue generating strong profitability, the quarter was not without its challenges. Our wireline business continued to see some softness, and pricing across the conventional diesel-only frac market remains competitive, putting pressures on that part of our portfolio. While the second quarter saw some bad storms roll through the Permian, the third quarter actually uncharacteristically had more weather events, particularly in July and August. This resulted in a greater impact than anticipated. Although we did see softness across our sector, I'm pleased to report that, much like in the second quarter, our bifurcated offering proved to be resilient. Our Tier 4 dual fuel and electric equipment buoyed our business, remaining highly utilized and high performing in the face of a softer market. Moreover, our cementing business continues to excel and capture market share as rig activity has declined. Another achievement in the quarter I want to highlight is another reduction relative to guidance of our capital expenditures. A few years ago, we were very clear about our capex strategy, and I'm proud of our success in achieving and surpassing those objectives. We expect to reduce capital spending to support strong free cash flow generation well into the future. Looking ahead, we remain confident in our ability to deliver strong financial results through the balance of this year and well into the future. And now I can briefly touch on our broader industry outlook and how we at ProPetro fit into that outlook. We are, of course, not immune to the macro headwinds facing our industry. Therefore, we are focused on controlling what we can, which includes taking decisive action to protect service quality while ensuring that we maintain capital discipline and a strong balance sheet. Everything else flows just from that. Our goal is to become the go-to completions provider that works for the consolidators of the EMP sector. So, looking at future M&A, as I mentioned earlier, we will always keep an open mind. Our focus in this area will be on value-created M&A that provides opportunities to scale our business through additional offerings that increase our commercial competitiveness without sacrificing free cash flow generation. Moving forward, we also remain optimistic about the strength and potential of the North American onshore oilfield services over the next several years, particularly as the market moves in the direction of providers like ProPetro, which offer lower costs to customers through things like fuel savings while also providing enhanced efficiencies. We are confident that ProPetro is positioned as a leader in this arena. Before I turn over to David, if I can distill where we are today and why we are confident about the future into three key points is this. First, with our best-in-class team, we are pursuing and achieving operational excellence and have a strong, deep, blue-chip customer base to match. Second, with an eye towards the future, our electric transformation is well underway and garnering resilient contracts in a high-demand environment. And finally, With healthy liquidity, a clean balance sheet, and a strategy to de-risk future earnings, we are positioned to deliver value for our shareholders while opportunistically pursuing accreted organic and inorganic growth. With that, I'll turn the call over to David to discuss our third quarter financial results. David?