ProPetro Holding Corp. Q4 FY2024 earnings call

• ProPetro closed the year strong despite industry challenges, with a capital-light, high-efficiency model yielding free cash flow. - 75% of the fleet is next-generation gas-burning equipment, with high utilization. - Launched Pro Power business, with 140 MW of power generation equipment on order, anticipating delivery in 2025-2026. - Capital allocation strategy focuses on launching and scaling Pro Power, investing in next-gen fleet transition, executing accretive M&A, and returning capital to shareholders. - Highlighted safety concerns after a workplace fatality and injury, emphasizing safety as a priority.

ProPetro's segments include pressure pumping, cementing, Silvertip Wireline, and Aqua Prop sand logistics. Approximately 75% of the fleet consists of next-generation gas-burning equipment. In the fourth quarter, despite seasonality, the company generated strong free cash flow. Revenue for the fourth quarter decreased 11% vs the third quarter, net loss was $17 million, and adjusted EBITDA decreased 26% sequentially to $53 million. The cementing business is a bright spot, while wireline pricing is weaker. Aqua Prop sand logistics is seen as an integrated option with efficiencies.

• Full-year 2025 CapEx expected to range $300 million to $400 million, with $150 million to $200 million for completions and $150 million to $200 million for Pro Power. - Expect to run 14-15 frac fleets in Q1 2025. - Pro Power assets expected to impact earnings in 2026, with a projected return on invested capital in the high teens and a 3-4 year payback. - Initial Pro Power deliveries start mid-2025.

• Recently, a ProPetro employee tragically lost their life and another was seriously injured at a job site. Safety is a top priority, and the company is working to determine the cause of the incident and prevent recurrence.

Q: Could you provide a refresher on incremental revenue and EBITDA generation for 150-200 MW of Pro Power?

A: Pro Power impact will show in 2026. Applying $300,000 to $400,000 per EBITDA per MW per year, with return on invested capital in the high teens and 3-4 year payback.

Q: What's the outlook for the frac business in terms of pricing and activity?

A: Pricing stable for Permian blue-chip E&Ps. Market may tighten even in flat activity due to attrition at lower end. Fleet activity expected 14-15 in Q1 2025.

Q: How is the EcoProb acquisition coming along?

A: AquaProp has been great, but sand price crash hindered growth. Excited about integrated options with customers, seeing best efficiencies where AquaProp and Silvertip Wireline are used.

Q: Timing of the fifth eFleet?

A: Midyear third quarter.

Q: Operational risks for Pro Power and how they're mitigated?

A: Focus on leadership team building and leveraging existing ProPetro infrastructure. Confident in ability to execute using existing personnel, equipment, and logistics systems. Ordered equipment like turbines and resips with long-term contract expectations.