RPC, Inc.

Thank you and good morning. Before we begin, I want to remind you that some of the statements that will be made on this call could be forward looking in nature and reflect a number of known and unknown risks. Please refer to our press release issued today along with our 2023 10K and other public filings that outline all those risks. All of which can be found on RPC's website at In today's earnings release and conference call, we'll be referring to several non-GAAP measures of operating performance and liquidity. We believe these non-GAAP measures allow us to compare performance consistently over various periods. Today's press release and our website contain reconciliations of these non-GAAP measures to the most directly comparable GAAP measures. I'll now turn the call over to our President and CEO, Ben Palmer.

Thanks, Mike, and thank you for joining our call. This morning we reported third quarter results that reflect the continuing challenges of the OFS market. It remains highly competitive with limited near-term visibility heading into the winter season as customers face budget exhaustion and limited incentive to increase activity amidst current oil prices. Consistent with recent performance, our pressure pumping business is facing relatively more headwinds than our other service lines. The spot and semi-dedicated market has ample supply of horsepower capacity seeking to be deployed, with pricing remaining under pressure as many of our peers seem motivated to maintain utilization. Our other service lines in aggregate were more resilient, posting a modest sequential revenue decline. indicative of the more diversified customer base, which includes larger Tier 1 customers spread across more bases. To illustrate this contrast, our pressure pumping revenues were down 12%, while all of our other businesses in total were down just 4%. The product market remains highly competitive, and there's definitely a downward pricing bias with calendar white space in the spot market. We've remained disciplined, opting to idle assets rather than burn them without adequate returns. We do see a difference in demand within our fracked assets for our Tier 4 DTBs, where we see solid demand and have better visibility with dedicated customers. We have commitments for these fleets several quarters out, and in some cases through the end of 2025. Our crews are delivering gas substitution rates that we believe are among the best in the industry, and our customers are pleased with our efficiency and performance on-site with these assets. On the other hand, demand is more challenged with our legacy diesel equipment as those fleets lack the ability to take advantage of low-priced natural gas fuel. Thus, these assets must be priced even more aggressively to compensate for higher fuel costs if we want them utilized to fill the calendar. We remain committed to upgrading our fleet over time and pulling older equipment out of service so as not to add capacity to an already well-supplied marketplace. We also mentioned in our release the impact of E&P consolidation. As you know, this can be a win-some, lose-some scenario. But beginning in the third quarter, we began to feel a more tangible negative impact. Specifically, we had one meaningful pressure from the customer that was acquired, and they informed us the acquiring company's incumbent FRAC supplier would be taking over the business. While we had an outstanding relationship with this customer and delivered excellent service, this was an unfortunate case of it being out of our and their hands. We've worked hard to replace these revenues and continue to make progress backfilling our business pipeline. In response to these challenging conditions and without a clear catalyst for near-term rebound, we took additional cost actions during the quarter. These were mostly headcount reductions to bring our cost structure down and align more with current and near-term expected demand. While we don't want to overreact to market slowdowns and hurt our ability to capitalize on quick positive turns in the market, we felt these actions were prudent, and we will evaluate further actions as appropriate. Looking at our non-pressure pumping service lines, we were encouraged, though not satisfied, with their relative resilience on the top line. Rental tools revenue was flat, while cementing and downhole tools were down slightly. While not large businesses, we saw nice gains in snubbing, nitrogen, and tubular services. Our newly launched 3.5-inch downhole motor is gaining traction, and we're optimistic about demand for this lower-pressure, high-rate motor. We're also coming to market with a new innovative solution to reduce reliance on bridge plugs. Our unique and proprietary technology can substitute the bridge plugs with a release of pods that plug each individual perforation. using well pressure to their advantage as they are forced into the openings and sealing each perforation. There are many efficiency and cost benefits of this newly developed technology. We have proven its effectiveness and we're beginning to market it to our customers. Response to recent trials has been impressive and we look forward to rolling out this technology more broadly in the coming quarters. In coal tubing, we're looking forward to an emerging opportunity in California to perform specialized plug and abandonment work. We discussed last quarter that we had completed a similar project in Texas to prove out the technology, though the revenues did not repeat in the third quarter. We expected this ramp-up would be lumpy, driving a sequential decline in coal tubing, but are looking forward to scaling this proprietary technology and service for a large customer in California next year. As mentioned, these non-pressure pumping service lines in aggregate have a diverse customer base, servicing large and small EMPs across many bases. and exhibit significantly less volatility than our fracked operations. We believe these non-popping service lines help balance our business, positioning us as a diversified OFS player with many capabilities and ways to service the extensive E&P customer pool. Mike will now discuss the quarter's financial results.

Thanks, Ben. Shifting to the third quarter financial results with sequential comparisons to the second quarter of 2024. Revenues decreased 7% to $338 million, driven primarily by lower pressure pumping activity. Breaking down our operating segments, technical services, which represents 93% of our total third quarter revenues, decreased 8%, driven primarily by pressure pumping. Support services were up 7% and represented 7% of our total third quarter revenues. The following is a breakdown of third quarter revenues by our top five service lines. Pressure pumping was 38.4%. Downhole tools, 29%. Coiled tubing, 8.8%. Cementing, 8%. Rental tools, 5.2%. Together, these five accounted for 89% of our total revenues. Cost of revenues, excluding depreciation and amortization, during the third quarter decreased by $14.8 million to $247.5 million, or a 6% decrease, a point less than the revenue decline. The lower cost of revenues stemmed primarily from lower employment costs. We closed a small pumping location and reduced the headcount of this of this and other operating locations. Cost of revenues also decreased due to lower maintenance and repair expenses in materials and supplies, reflecting lower activity levels. SG&A expenses were $37.7 million, up slightly from $37.4 million, largely reflecting the fixed costs of our support functions. Diluted EPS was 9 cents in the third quarter, down from 15 cents in the second quarter. There were no non-GAAP adjustments to either EPS figures. EBITDA was $55.2 million, down from $68.5 million, with EBITDA margins decreasing 240 basis points sequentially to 16.4%. For the quarter, operating cash flow was $70.7 million. And after CapEx of $51.7 million, free cash flow was $19 million. On a year-to-date basis, operating cash flow was $255.2 million. And after CapEx of $179.5 million, our free cash flow was $75.7 million. We know that while year-to-date free cash flow is down from 2023, and will be lower for the full year as industry conditions have been more challenging. There were some timing benefits, especially in CapEx and working capital, that boosted last year's free cash flow at the expense of this year. All told, despite a tough environment, we still expect strong cash flow this year and that our trailing two-year average would still be quite robust. We still expect CapEx to finish 2024 within our guided range of $200 to $250 million. During the quarter, we paid $8.6 million in dividends, and we maintained a strong balance sheet, including a cash position of $277 million at quarter end. I'll now turn it back over to Ben for some closing remarks.