STEP Energy Services Ltd.

Good day ladies and gentlemen and welcome to the STEP Energy Services Q2 2023 conference call and webcast. At this time all lines are in listen only mode. Following the presentation we will conduct question and answer session. If at any time during this call you require immediate assistance please press star zero for the operator. This call is being recorded today Thursday, August the 3rd, 2023. I would now like to turn the conference over to Dana Benner, Senior Advisor, Corporate Development and Investor Relations. Please go ahead.

Thanks, Operator, and good morning, everyone. Welcome to STEP's second quarter 2023 conference call and webcast. It was another excellent second quarter for the company. I am pleased to introduce today's roster of speakers. Steve Glanville, our President and CEO, will give some opening remarks. Klaas Deemter, our CFO, will follow with an overview of the financial highlights before turning it back to Steve for some strategy and outlook focus commentary. He'll host a Q&A session to follow. Before I turn it over to Steve, I would like to remind everyone that this conference call may contain forward-looking statements and other information based on current expectations or results for the company. Certain material factors or assumptions that were applied in drawing conclusions or making projections are reflected in the forward-looking information section of our Q2 2023 MD&A. Several business risks and uncertainties could cause actual results to differ materially from these forward-looking statements and our financial outlook. Please refer to the risk factor and risk management section of our MD&A for the quarter ended June 30th 2023 for a more complete description of business risks and uncertainties facing STEP. This document is available both on our website and on CDAR. During this call, we will also refer to several common industry terms and certain non-IFRS measures that are fully described in our MD&A, which again is available on CDAR and on our website. With that, I will pass the call over to Steve.

Yeah, thanks, Dan, and good morning. Welcome to our second quarter conference call. My name is Steve Blanvel, and I'm the President and CEO of STEP Energy Services. Hopefully, you've had the opportunity to look through our results. As you see, it was another excellent quarter for the company, and more importantly, it was an excellent second quarter, which historically has been a challenging one for a Canadian-based energy services company. Spring breakup conditions typically suppress activity to such a degree that companies often spend the second half of the year making up traction loss in Q2. This is the second year in a row that we have achieved impressive results because of our alignment with very active Canadian clients and our best-in-class sand and logistics management group, which navigated spring road bands and an early and unpredictable start to the wildfire season. In the U.S., we posted healthier margins in fracturing, while our U.S. co-tubing division had another record quarter. Before I turn the call over to class, I'd like to highlight two numbers. First, we posted $47.4 million of adjusted EBITDA, which was ahead of consensus and also higher than our first quarter number of $45.3 million. Although we didn't reach the $55.2 million record set one year ago, it was still a very strong quarter and would have been stronger if work wasn't delayed due to the wildfires in BC and Alberta and also the flooding in some key operational areas. Second, our net debt position improved to approximately $116 million, down from $133 million from Q1. On a trailing 12-month basis, our net debt is down to 0.6 times adjusted EBITDA. Although we continue to plan for more debt retirement through strong free cash flow, we have given ourselves some strategic latitudes. Historically, this amount of leverage would have been considered an unlevered balance sheet. We now call it a strong balance sheet, and it will get stronger, even as we continue to upgrade our equipment to meet the growing performance demands of our clients, including lower emissions. And speaking of upgrades, I'm happy to report that our Tier 4 dual-fuel fracturing fleet is complete and working for our Canadian client, and we're seeing displacement rates of up to 85%. which is reducing operational emissions. I will return at the end of the call to address our strategy and outlook, and now I'll turn it over to Klaas, our CFO, to give a review of our key financial highlights.