RPC, Inc.

Good morning, and thank you for joining us for RPC Inc.' 's fourth quarter and year-end 2024 Earnings Conference call. Today's call will be hosted by Ben Palmer, President and CEO, and Mike Schmidt, Chief Financial Officer. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. I would like to advise everyone that this conference call is being recorded. I will now turn the call over to Mr. Schmidt.

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 those risks, all of which can be found on RPC's website at www.rpc.net. 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. Our 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 results that continue to reflect the challenges of the OFS market. though we did have some bright spots in the fourth quarter and some positive developments heading into 2025. The environment overall remains highly competitive, and seasonal slowdowns certainly impacted parts of our business, as customers faced typical fourth quarter seasonal issues related to budget exhaustion, holiday downtime, and unpredictable weather. While recent quarters showed more weakness in pressure pumping without performance in other service lines, fourth quarter results in pumping showed some signs of improvement after a difficult third quarter. Pressure pumping generated higher revenues, while our non-pumping services tracked more with the industry activity declines. Market dynamics remain largely unchanged, with the spot and semi-dedicated market amply supplied with horsepower capacity. and pricing remaining under pressure as OFS companies compete to maximize utilization. Bottom line, pressure pumping in the fourth quarter was up 3% sequentially, while all other service lines in aggregate declined 3%. For the full year, however, pumping was off by 24%, while other service lines declined only 2%. We believe bolstering our other less capital-intensive service lines over time with organic investments and potential acquisitions will help drive growth and reduce volatility in our financial results. We are encouraged by the general optimism around the energy industry with the new presidential administration and the opportunities that may present themselves in the coming years for our customers. However, many aspects of energy supply and demand remain unclear. While activity increases could provide tailwinds for OFS providers, significant increases in oil and gas supplies might pressure energy prices and have negative consequences on completion activity. At the end of the day, we have limited visibility on actual policy and regulatory changes and the impact those might have on our results. But one thing remains unchanged. We are eager to serve our customers and deliver outstanding service regardless of how the macro and legislative landscapes evolve. Shifting to fourth quarter service line commentaries, I'll start with pressure pumping. Despite some sequential gains in fracking coming off a soft third quarter, we reiterate that we continue to exercise economic discipline, opting to idle certain assets rather than operate them without adequate returns. Consistent with our third quarter results, we still see a difference in demand within our frack assets for our Tier 4 GGBs, where we have better visibility with more dedicated customers. At this point, we have relatively solid commitments for these fleets through parts or all of 2025, and we are delivering excellent well site performance with respect to gas substitution and overall efficiencies. Conversely, demand remains a headwind for our legacy diesel equipment, resulting in more aggressive pricing. We intend to upgrade our fleet over time and continue to rigorously assess the through cycle economics to justify our capital investments. Of course, if and when we invest in Tier 4 DQB assets, we will pull older equipment out of service so we don't add to industry fracking capacity. Looking at our non-pressure pumping service lines, we were pleased by some specific developments, though not satisfied with overall results. In total, these service line revenues were down 3% with mixed performance from business to business. Coil tubing was up low double digits with some new business wins contributing to growth. Submitting also increased in the quarter with strong revenues, operations, and cost execution. Downhole tools revenues declined modestly in the quarter due to seasonal factors. While 2025 may be challenging from an overall market perspective, we are pleased with our progress on two key new products, as we've mentioned on previous calls. Our recently launched three and a half inch downhole motor is gaining traction and we look forward to further momentum in 2025 for this lower-pressure, high-rate motor. We also recently launched our new unplug system, which uses our perf pods to block flow at each individual perforation rather than a single point above each stage. This provides numerous advantages over traditional single-point isolation. Field trials were completed in Q3 of 2024. and we are now in full commercial deployment, having completed hundreds of stages across many well sites. We see this technology as being well positioned to capture share of the North American land tract plug market and believe it has the potential to be a positive growth catalyst that is largely independent of broader OFS demand. Rental tools also declined slightly in the quarter due mostly to seasonal factors. Mike will now discuss the quarter's financial results.