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spk05: Good morning, and welcome to Tetra Technologies' fourth quarter and full year 2021 results conference call. The speakers for today's call are Brady Murphy, Chief Executive Officer, and Elio Serrano, Chief Financial Officer. All participants will be in listen-only mode. So if 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 touch-tone phone. To withdraw your question, please press star then two. Please note, today's event is being recorded. I will now turn the conference over to Mr. Serrano. Please go ahead.
spk02: Thank you, Rocco. Good morning, and thank you for joining Tetra's fourth quarter and the year 2020 call. I would like to remind you that this conference call may contain statements that are or may be deemed to be forward-looking. These statements are based on certain assumptions and analysis made by Tetra and are based on a number of factors. These statements are subject to a number of risks and uncertainties, many of which are beyond the control of the company. You are cautioned that such statements are not guarantees of future performance and that actual results may differ materially from those projected in the forward-looking statements. In addition, in the course of the call, we may refer to EBITDA, adjusted EBITDA, adjusted EBITDA gross margins, adjusted free cash flow, net debt, liquidity, or other non-GAAP financial measures. Please refer to yesterday's press release on our public website for reconciliation of non-GAAP financial measures to the nearest GAAP measure. These reconciliations are not a substitute for financial information prepared in GAAP and should be considered within the context of our complete financial results for the period. In addition to our press release announcement that went out yesterday, we encourage you to refer to our 10-K that was filed yesterday. With that, I'll turn it over to Brady.
spk01: Thank you, Aligio. Good morning, everyone, and welcome to Tetra's fourth quarter and full-year 2020 earnings call. I will summarize some highlights for the fourth quarter and current outlook and then provide an update on our low-carbon energy initiatives before turning it back over to Aligio to discuss cash flow, the balance sheet, and liquidity. Let me start by thanking all of our Tetra employs for delivering strong fourth quarter operating results and a solid year given the number of extraordinary headwinds we faced, including a second year of COVID-19 pandemic, unprecedented inflation, a record-breaking first quarter freeze, and a devastating third quarter hurricane. Despite all of this, we finished another year of positive cash flow, 13% adjusted EBITDA margins, and strong momentum in the fourth quarter, with the best quarterly operating results, not including the mark-to-market gains from Standard Lithium and CSI Compresco, in the last seven quarters and since the start of the pandemic. For the year 2021, we delivered $50 million of adjusted EBITDA on $388 million in revenue. With the pandemic largely behind us, in the past two years, we were able to achieve positive free cash flow, significantly reduced total debt outstanding, and improved adjusted EBITDA margins to nearly 13% despite an average 32% revenue drop from 2019 and before the impact of COVID-19. This again shows the resiliency and strength of our business model in the severest of downturns, but as importantly, coming out of the downturn from the prior two years, we are a stronger company with a much improved balance sheet, well positioned for a recovering oil and gas industry, and the opportunity to execute on a high-growth energy transition market. Revenue for the fourth quarter of $113 million grew 19 percent sequentially and 50 percent year-on-year. We generated over $13 million of adjusted EBITDA in the fourth quarter in the face of continued inflation and global logistics challenges. Excluding the realized and unrealized mark-to-market adjustments for Standard Lithium and CSI Compressco, this was the highest adjusted EBITDA since the pre-pandemic first quarter of 2020. We generated $7.4 million of free cash flow in the fourth quarter and again reduced our term loan, this time by $13 million, for a total of $68.5 million over the past two years. Water and flow back has seen a significant recovery from the negative impacts of COVID-19 as fourth quarter revenue of $53 million increased 14% sequentially and 70% from the fourth quarter of 2020. pandemic first quarter of 2020. This compares to the U.S. rig count and active frac fleet count down 29% and 36% sequentially or respectively from the same period. Overcoming inflation, we were able to improve our adjusted EBITDA margins by 200 basis points from the third quarter and the 12.9% adjusted EBITDA for the quarter was the best since the third quarter of 2019, again on much lower activity levels. These results, comparing to pre-pandemic numbers, reflect the strength of our business through market share gains, ongoing pricing improvements, efficiency through our automation technology, a strategy focused on treatment and recycling of produced water, leading proprietary technology such as Sandstorm and Tetrasteel, and another record quarter with 62 integrated water management projects. Regarding Sandstorms, we gained 24 new customers in 2021, 11 of which were gained in the fourth quarter. Argentina continues to be a bright spot as the most active unconventional share market outside of the U.S. In addition to our current fully deployed sandstorms in Argentina, we were awarded two significant early production facilities that will positively impact us beginning in the second quarter of 2022, and which will also include additional sandstorms as part of those facilities. In addition to the significant increased interest in produced water recycling for frac reuse, in part due to the increased seismic activity in key disposal areas, we are also seeing a new area of interest from both the operators and the midstream companies for extracting key minerals from produced water. Tetrastor core competency in aqueous chemistry and experience with extracting and manufacturing products from such minerals is a good fit with this growing opportunity. Overall, I'm pleased with the continued improvement in our water and flow back services business, and our performance demonstrates we are a much stronger business heading into a recovering market in 2022. I'm optimistic we will surpass our next level adjusted EBITDA margins target of 15% earlier in 2022 than we previously anticipated. Completion fluids and products fourth quarter revenue increased 23% sequentially and 36% year over year as we saw a strong demand from our previously mentioned Gulf of Mexico and international deep water awards on top of the recovery from the hurricanes in the Gulf of Mexico. Our Eastern Hemisphere energy services revenue more than doubled from Q3 and we believe is indicative of improved international market activity going forward. Although Q4 had mild weather for our seasonal calcium chloride sales, January and February weather has changed dramatically in our favor and will contribute to even stronger revenue for the first quarter of 2022. Excluding the benefit of the realized mark-to-market gains, completion fluids and products adjusted EBITDA increased 14 percent sequentially, with 20.4 percent EBITDA margins. This represents the 11th straight quarter of adjusted EBITDA margins of over 20 percent, despite double-digit inflation across most of our raw materials, energy prices, energy prices for the plants, and global logistics. As you look towards the first quarter of 2022, We expect further double-digit growth over the fourth quarter from a recovering oil and gas market and strong chemical sales, supported by a five-year distribution agreement with a new industrial chemicals customer for the western U.S., and a ramp-up of our pure flow zinc bromide sales for energy storage. We secured our first Generation 1 CS Neptune job for the North Sea, which is scheduled for completion in the second quarter. As a reminder, the typical CS Deptum job in the North Sea will be considerably smaller than what we have historically seen in the Gulf of Mexico, but it is an indication of continued acceptance of our technologies outside of the Gulf of Mexico. The previously mentioned plant investment in Northern Europe for a 25% increase in calcium chloride production capacity continues to be on track for completion in the third quarter of 2022. For the full year and beyond, deep water is showing signs of recovery as well. and given the new outlook on much lower U.S. shale growth production compared to the years from 2014 to 2019, we believe deep water activity will be key to support oil and gas demand for years to come. Considering that the 2021 global active drill ship rig count was 58% below the 2014 to 2015 peak, there is considerable deep water growth potential at current oil and gas prices. In a review of our CS Neptune pipeline in the pre-pandemic period of Q1 2020, We found that nearly every CS Neptune project we had been tracking at that time is still in our pipeline. But in nearly every case, the pandemic had dramatically slowed or even paused the projects from moving forward. That now seems to be changing as the customer dialogue on these key projects is active again. This is supported by the fact that the first 20,000 PSI rated ultra deep water drill ship is scheduled for a Gulf of Mexico project later this year, followed by the second drill ship for an additional project in early 2023. Other than the North Sea job scheduled for the second quarter that I mentioned previously, we do not yet have additional wells confirmed for this year, but the project pipeline and the customer discussions are encouraging compared to the past two years. We do expect that the continuous supply chain challenges to have some impact on the timing of customer deepwater projects as well. In the meantime, we continue to strengthen our IP position for CS Neptune with over 13 patents granted and 10 patents allowed. Our low-carbon energy business initiatives continue to progress at a rapid pace. On December 16th, 2021, we announced our long-term partnership with EOS Energy, a leading U.S. provider of safe, scalable, efficient, and sustainable zinc-based long-duration energy storage systems. This partnership aligns well with our strategy to utilize our aqueous chemistry core competency and U.S. manufacturing capabilities to enable the supply chain for low-carbon energy solutions. Tetra is supplying EOS with our high-purity zinc bromide pure flow to support the manufacturing of EOS's innovative Aqueous Zinc Battery. From the recent EOS Q4 earnings call, they will be increasing their revenues from $5 million in 2021 to $50 million in 2022, with a backlog of 148 million booked orders. They also increased their opportunity pipeline from $3.7 billion at the end of the third quarter to 4.1 billion, or 25 gigawatt hours of energy storage. To put this in perspective, 25 gigawatt hours of energy storage translated into pure flow volumes would equal more than 20 percent of the current annual production of bromine globally for all industries. For this reason, along with our ability to recycle the end-of-life electrolyte, a collaborative long-term strategic relationship is important for both parties. Which brings us to our Arkansas brine leases and plans. We're currently drilling an expiratory well on our Arkansas leases in the area where Tetra retains 100% of the lithium and bromine rights. We expect this well to be completed this month and expect the information and data gained will satisfy requirements necessary for an inferred resources report in the second quarter for our current exploration target of 2.54 million to 8.58 million tons of bromine, an exploration target of 85,000 to 286,000 tons of lithium carbonate equivalent. From these results, we expect to initiate a preliminary economic assessment, or PEA, to produce lithium carbonate and elemental bromine from our acreage. In December of 2021, we invested $5 million and signed a joint intellectual property agreement with CarbonFree, a CO2 capture and mineralization technology company, for CO2-free calcium chloride production solution to enable CarbonFree's SkyCycle CO2 capture technology. This will allow us to participate in the equity upside as Carbon Free continues to make progress in commercializing its SkyCycle proprietary technology, and we continue to advance our long-term business relationship, jointly working on plans to source and provide substantial volumes of calcium chloride. Carbon Free has successfully mineralized CO2 in its San Antonio SkyCycle pilot plant. This process requires large volumes of calcium chloride as a key part of the conversion chemistry. And Tetra will bring its global leadership in the production of calcium chloride, supply chain network, and technical expertise to the partnership. With that, I'll turn it over to Elijo to provide some additional color, and we'll close with some comments, and then open for some questions.
spk02: Elijo Alonso- Thank you, Brady. Fourth quarter adjusted earnings per share were breakeven compared to a three-cent loss per share in the fourth quarter of 2020. Loss from continuing operations was $703,000, a significant improvement from the loss of $7.1 million in the fourth quarter of last year. During the fourth quarter, we sold the shares that we own in Standard Lithium, which resulted in a realized gain of $4.6 million in the fourth quarter that was included in our adjusted EBITDA. The fourth quarter also included a $3.2 million unrealized marked market loss on the common units that we own in CSI Compresco. The net of the two is a benefit to adjusted EBITDA of $1.4 million in the fourth quarter. As you recall, in the third quarter, the unrealized market-to-market gains reflected in adjusted EBITDA was $6.2 million from both Standard Lithium and CSI Compresco. As a reminder, we still own slightly over $5.2 million common use of CSI Compresco with a current value of $7.3 million. and we have no restrictions on our ability to monetize this asset. We excluded from fourth quarter results unusual items that total $891,000 in non-recurring expenses, net of non-recurring income. Fourth quarter adjusted pre-cast flow from continuing operations of $7.4 million, despite a $12 million sequential increase in accounts receivable on the back of the 19 percent sequential fourth quarter increase in revenue. Fourth quarter free cash flow benefited from the $17.6 million in proceeds from the sale of the 1.6 million shares of Standard Lithium that we announced in the AK filing earlier in the quarter. In that AK filing, we had mentioned that we had monetized 1.5 million shares, and shortly after the AK was issued, we sold the other 100,000 shares that we own. In total, we sold 1.6 million shares at an average price of $11.02 compared to the Standard Lithium share price today of 650. We expect to be receiving another 400,000 shares of Standard Lithium before the end of April as part of an option agreement that we have with Standard Lithium. These 400,000 shares will be in addition to $1 million of cash that we received at the end of December. At 650 per share, the value of the shares to be received from Standard Lithium are approximately $2.6 million on top of the cash that we received in December. Adjusted pre-cash flow for the year was $9.3 million, reflecting the proceeds of the sale of the shares of Standard Lithium. Working capital at the end of December was $81.7 million, a change of $6.9 million from year-end 2020. As you recall, from 2020, when business slows down, we can generate significant pre-cash flow We monetize working capital when the markets pull back. And as Brady mentioned, we invested $5 million in carbon-free in the form of a convertible note that will enable us to participate in the equity upside as they commercialize their SkyCycle carbon capture technology. And if carbon-free goes public, our $5 million investment converts into common stock. Total debt outstanding was $152 million at the end of December. down from a high of $222 million in the third quarter of 2019, while net debt at the end of the year was $120 million. We have reduced our term loan by $13 million in the fourth quarter, primarily using the proceeds from the sale of our shares in Standard Lithium, consistent with what we previously communicated. The 26 percent reduction in the term loan has reduced our annual interest expense by at least $4 million a year. As a result of the improved EBITDA, proceeds from the sale of standard lithium, and the reduction of the term loan, we have improved our net debt ratio to 2.7 times, which is the lowest since the third quarter of 2020. We have less than $1 million outstanding at the end of February on our $80 million asset-based revolver. Liquidity at the end of the fourth quarter was $68 million. At the end of the fourth quarter, unrestricted cash was $30 billion, and availability under our credit facility was 36. We have been aggressively paying down debt to create borrowing capacity as we move towards bringing to market our Arkansas smack-over formation bromine and lithium assets, or potentially investing in calcium chloride production facilities to support carbon-free. Also, in preparation to expand into the low-carbon energy initiatives and to source the most cost-effective capital We have been having discussions with the Department of Energy, exploring opportunities for grants and low-cost loans. To date, we have had three very promising virtual meetings with different individuals and departments within the Department of Energy. We are taking the steps to apply for various loans and grants to help us advance some of the lithium battery storage with pure flow and carbon capture initiatives that we have been discussing. This year we will spend between $2.5 and $3 million to drill the brine well that Brady mentioned and to conduct studies to further refine our exploratory target assets to more tightly define inferred resources, bromine and lithium assets in Arkansas. We then expect to complete the preliminary economic assessment that will further define the investments required and the related returns on capital as we move towards developing our bromine and lithium assets in Arkansas. This PEA will help us quantify the potential revenue in EBITDA, cash flow, and CAPEX from our assets in Arkansas. We will publicly announce the results of the Inferred Resources Target and the PEA when they are complete. Finally, we reached agreement with our insurance underwriters for a claim on one of our Gulf of Mexico properties that sustained hurricane damage last year. As a result, we expect to receive cash proceeds of $3.75 million in March this year that will further improve our liquidity and cash position. We encourage everyone to read our news release that we issued yesterday and the 10K that we filed last night with all the supporting details and additional financial and operational metrics. With that, let me turn it over to Brady for closing comments.
spk01: Thank you, Elijo. So in closing, overall, despite the challenges that we discussed earlier, we had a strong quarter, but more importantly, We are a much stronger and more diversified company than we were a few years ago. Both of our business segments are approaching pre-pandemic financial metrics well ahead of pre-pandemic activity levels. We're very well positioned for improved results from improving U.S. and Argentina unconventional share markets and improving outlook on deep water activity and rapidly growing markets for lithium, energy storage, and carbon capture. supported with what we believe is our strongest balance sheet since 2012. Just one year since announcing our low-carbon energy initiative, we're generating profitable results with minimal additional capital investment, and we expect these emerging businesses to grow significantly over the coming years. With that, we'll open it to questions. Thank you.
spk05: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. To enjoy your question, please press Start in Two. At this time, we will pause momentarily to assemble our roster. And today's first question comes from Stephen Jangaro with Stifel. Please go ahead.
spk03: Thanks. Good morning. Good morning. I just wanted to start with the arrangement you have with EOS. When you think about, and maybe not 22, but at 23, I think people expect them to do about $200 million in revenue as an entity based on the consensus for EOS. Are we thinking about it right if we think that translates to $30 or $40 million in revenue for you guys? I'm trying to correlate the two, and I was curious if you could give us some color. I imagine your product has to be a pretty big input cost to what they're doing.
spk02: Good question, Stephen. We clearly don't want to comment on what EOS's consensus or revenue expectations are, but we clearly believe that if they increase proportionate in the coming years that our increase in the sale of pure flow will be proportionate to the increase in revenue. So, if they're going from 5 million this year to call it 50 for the sake of argument, we expect that they're going to increase by the same magnitude. Now, they also have not divulged to us, and we're not privy to what percent Pure Flow represents as a percent of their cost of goods sold or as a percent of revenue, but we think we are a meaningful part of that number.
spk03: Male Speaker Okay. Thanks. And then, Two others. One is, and you touched on this a little bit in the opening remarks, your fluids business had a $10 million sequential increase in revenues and the margins slipped a bit. I think adjusted margins went down about 200 basis points, so like 20 and a half on the EBITDA line. And I think it's raw materials, but can you just talk about how you think that shakes out going forward and how are you doing recovering those revenues? higher cost with pricing.
spk01: Right. Yeah. So we did see a small drop in the margin on our completion in the fourth quarter, and that was nearly all inflation-related, Stephen, energy costs, raw materials costs, and global logistics, kind of all in the double-digit range. And it got a little bit ahead of us in terms of being able to get our pricing improvements out. I would say in the fourth quarter, you know, inflation – was out ahead of us in terms of getting our pricing increases with our customers. I think as we go into Q1, assuming inflation doesn't continue to grow, at least flattens out somewhat, we were getting ahead on the pricing side. So we do expect our margins to improve as we go from Q4 to Q1. And then we'll just have to see how inflation either stabilizes or starts going down, hopefully, in the second half of the year. and how that plays out.
spk02: And Brady, I'll also add and remind everybody that the second quarter is our peak for Northern Europe calcium chloride sales. And historically, we've seen about a $15 million sequential increase, Q1 moving to Q2. And the EBITDA impact has historically been in the $4 million range. And we don't see any shift in that seasonal pattern this year. So we've got a couple of good quarters, we think, coming up to... demonstrate sequential improvements.
spk03: And you said about $14-15 million in revenue for EBITDA? That's correct. That's what we have seen historically with the ramp. Okay. And just one final one. The water business, it had a very good third quarter. Should we just think about that as kind of, obviously you have some international stuff, but kind of mimicking what's going on on the U.S. land side and I would imagine your incremental EBITDA margins there should be 25%, 30% range as we go through 22% if you continue to see growth there.
spk02: We're gaining traction with pricing. We're gaining traction with the sandstorm technology. We're seeing a ramp-up of sandstorms also in Latin America that Brady mentioned. All three, we think, are going to contribute to the goal that we set out and we communicated in the press release of 15 percent margin for this business this year.
spk03: All right. And just a clarification, did you say double-digit fluids growth in the first quarter, sequentially?
spk01: Yes, over Q4. Thank you.
spk03: Okay.
spk01: And then, as Elijo said, the second quarter, we'll see our European revenue ramp up from the numbers that Elijo discussed, 15 million.
spk03: Great. Thank you, gentlemen.
spk01: Thank you, Steven.
spk05: And our next question today comes from Samantha Hunt with Evercore ISI. Please go ahead.
spk04: Hey, guys. Good morning. Quick question about the CapEx plan. You know, thank you for outlining how much you're spending on this brine well, but I think a lot of CapEx last year went towards growing the water business, and with the expanded Argentina contract, we have awards for the two early production facilities, I'm just kind of wondering how much you're dedicating CapEx to really growing your capacity in the water space again?
spk02: Samantha, good question. The majority of our additions on the water management and flow back are either sandstorm related or related around the EPF. We announced that we secured two significant EPFs in South America, and they have historically been very profitable for us in the past. And everything else that we're doing in North America is targeting paybacks of 18 months or better. So we believe that we do have some capacity expansion coming up in North America with paybacks at 18 months or less.
spk04: Any sense of what your market share is in North America for cancer? I mean, I feel like there's not really a comparable offering to it.
spk01: Sorry, Samantha, just to clarify, were you asking market share just on Sandstorm or overall water and flowback?
spk04: Both, if you have that, Andy.
spk01: Yeah, so we are gaining traction continuously with Sandstorm. Sandstorm is replacing a lot of traditional production testing assets. There's a fairly significant amount of traditional PT assets in North America, and Sandstorm is continuing to encroach on that. I would say we're probably still below 10% of the overall combined production testing and sand management or sandstorm market share. But we're growing rapidly, as we indicated in 2021 and even in the fourth quarter when we picked up 11 new customers. And we're also now penetrating to Haynesville with our 15K units. So we expect that market share traction to continue. and also a strong position in Argentina. Overall, water and flow back, our strongest market share is in the Permian Basin, where we believe we have a very strong market share, one or two, depending on which day in terms of the number of crews that we are following, frack crews that we are following. And then it varies from that around the basins in North America, but certainly a number two position in overall across North America.
spk02: And, Samantha, I would also add that in the trips that Brady and I and Matt have made to the field, we have seen our organization make nice inroads with the private companies, the private oil and gas operators, and picking up quite a bit of market share in that sector at good margins given the capital discipline on the publicly traded oil and gas operators. That has also contributed to our growth in revenue and margins.
spk01: And just to further clarify, Samantha, we don't participate in the infrastructure side of water, whether it's sourcing fresh water or it is pipeline disposals-type assets. But on the pure services, where we have our integrated water management surface, that's where we believe we have our strongest market share position. And as I said, either one or two in the Permian Basin, just depending on the current frack count followings that we have.
spk04: Okay, that's great. And I was really intrigued by your comments around extracting sea minerals from produced water. That's kind of the first I've heard of anything like that being explored. Could you maybe give a little bit more details in terms of what is going on in that arena?
spk01: Sure. As you know, the U.S. is – is looking to have a security supply of key minerals, particularly those that enable the energy transition. So lithium obviously would be at the top of the list, but there are other key minerals that are in produced water, some of them at commercial levels, some of it not at commercial levels. We've been really pleased with the engagement that we've had with multiple operators as well as midstream companies to analyze their produced water. and to determine the commerciality of the minerals that are in these produced waters. Some of them we are very encouraged with. Others, not so much, but I think it's a growing trend that you're going to see a new market evolve out of the produced waters that are being produced.
spk04: So you'll be able to apply your equipment on the surface and actually extract the minerals?
spk01: Correct. Yeah, we have great expertise in that area, Samantha.
spk04: Okay, cool. The other thing that I thought, you know, congrats on the CS Neptune sales into the North Sea NTQ. I was curious if you guys are having dialogues with CS Neptune for the North Sea into 2023, given that, you know, demand is expected to really increase in that region next year. I'm just kind of wondering what sort of, you know, advanced outlook and discussions you guys are having with the customer base at this stage.
spk01: Yeah, the Neptune market, I'll separate into two different views on that. The Gulf of Mexico are more longer-term, multi-well, very deep-water, ultra-high-pressure projects, and those have a long time horizon, but they also have a very significant dollar financial impact to Tetra if we're successful. The North Sea-type projects are more mature projects, and are more spot-type opportunities. There are some that are specific development projects, but they're really more opportunistic opportunities where customers run into pressures that fit the Neptune profile. So I would consider them somewhat different markets, more of a call-out opportunity market in the North Sea with some major projects, but Gulf of Mexico is a very different outlook from that. Okay, thank you.
spk04: And are you still able to source Neptune? I mean, do you have to move that from your production in the Gulf, or can you supply the North Sea market from closer facilities?
spk01: We produce our Neptune product at our West Memphis facility in Arkansas. We can do some blending to weight up or lower the weight of Neptune in the North Sea in Aberdeen or other offshore bases that we have around the world. But the core production product comes out of Arkansas, from our West Memphis facility.
spk04: Okay, great. I think that does it for me.
spk01: Okay, great. Thank you, Smith.
spk05: And our next question today is a follow-up from Stephen Gingaro with Steeple. Please go ahead.
spk03: Thanks. Two things. I just wanted to – and I was just sort of thinking about the pace of your earnings throughout the year. But it sounds like the completion fluid side, you know, given the seasonality in Europe and given the CS Neptune job you mentioned, am I thinking about it correctly? I mean, you could see a very steep rise in 2Q EBITDA in 2021. in fluids, just off those two pieces? Yes. Okay. And I know you probably don't want to specifically comment on this, but it seems like the consensus for the year is give or take $80 million in EBITDA. I know there are some puts and takes that are going on with costs, et cetera. But do you think that's in the ballpark?
spk02: Let me answer it this way, Stephen. I think the oil field services group as a whole has moved away from consensus. We have learned over the last five, six years that there's so many moving parts beyond our control that trying to forecast that part into the future is not beneficial. If you lay out for us the recovery from the coronavirus, the recovery of the global economics, what's going to happen with the war in Ukraine, and whether capital discipline from the buy side on the oil and gas operators. If you lay out all those parameters, we could probably give you a fairly good number for a total year view. What we can say is that our first and second quarters, based on what's in front of us and the feedback we're getting from customers, is that we're looking at a nice sequential improvement in revenue, like we talked about, a very nice step up, Q2 over Q1 with good fall through. Beyond that is pure speculation, and I think we'll refrain from anything beyond Q2.
spk03: Okay. Just one follow-up, though, on the waterfront. Can you just remind us the percentage of that, which is U.S. land in the ballpark? I'm just trying to sort of calibrate what U.S. completion activity is doing and how we should think about that pace of revenue on that part of the business. Well,
spk02: Yeah, so the U.S. has been the predominant part of it, but with the sandstorms that we moved into Argentina, plus also the EPF that we're picking up in Argentina, back after the year, I think those will be a more meaningful part of our business. But today we're predominantly U.S. and Argentina, with the U.S. being the significant part of it.
spk03: Okay, great. Thank you very much.
spk05: Thank you. This concludes today's question and answer session. I'd like to turn the conference back over to Mr. Murphy for any closing remarks.
spk01: Thank you, Rocco. This concludes our fourth quarter 2021 earnings call. Thank you very much for your interest and participation. That ends our call. That ends our call.
spk05: Thank you, sir. This concludes today's conference call. We thank you all for your participation. You may now disconnect your lines and have a wonderful day.
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