Release Date: February 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide insights on the expected revenue and EBITDA generation from the Pro Power business with 150 to 200 megawatts of power? A: (Sam Sledge, CEO) We expect the impact to be more significant in 2026 as we spend 2025 placing orders and setting up our commercial architecture. (David Schorlemer, CFO) For 150 to 200 megawatts, you can apply about $300,000 to $400,000 EBITDA per megawatt per year. These assets have longer lives, with a return on invested capital in the higher teens, leading to a three-to-four-year payback.
Q: How do you view the pricing and market dynamics in the frac business, especially with some companies reporting pricing pressures? A: (Sam Sledge, CEO) Our focus is on the Permian Basin and blue-chip E&P customers, which provides a consistent and sturdy outlook. We maintain stable pricing due to our high-efficiency operations and strong customer relationships, unlike other basins or customer types.
Q: What is your outlook for the Permian Basin's frac fleet activity over the next four to five quarters? A: (Sam Sledge, CEO) We expect the activity to remain relatively flat. However, efficiencies have increased, with average fleet sizes now 50% larger than five years ago. We believe that playing at the high end of the efficiency game ensures consistent work and a strong value proposition.
Q: Can you elaborate on the capital expenditures for 2025, particularly for the completion segment? A: (David Schorlemer, CFO) The $150 million to $200 million allocated for the completion segment includes refurbishment of our Tier 4 DGB equipment. It does not include anything beyond the fifth fleet.
Q: What is the current status and future potential of the Pro Power business, especially regarding contracts and market opportunities? A: (Sam Sledge, CEO) We are initially focusing on oil and gas applications, with significant demand in production and midstream sectors. We expect to secure long-term contracts (three to five years) for our equipment, which will provide consistency and stability in our business.
Q: How is the AquaProp acquisition performing, and what is the pricing environment for your cementing and wireline businesses? A: (Sam Sledge, CEO) AquaProp has been beneficial, although sand market conditions have impacted growth. Our cementing business is performing well, especially after divesting non-Permian operations. Wireline pricing has been weaker, but we aim to integrate it more with our frac services.
Q: How are you managing operational risks as you enter the Pro Power business? A: (Sam Sledge, CEO) We are confident due to the leadership team we have built and our existing ProPetro infrastructure. We excel in managing personnel, equipment, and logistics, which will help us execute effectively in the Pro Power business.
Q: What type of equipment are you ordering for Pro Power, and how does it impact your operations? A: (Sam Sledge, CEO) We have ordered turbines (five megawatts and up) and reciprocating engines (three megawatts and up). This equipment will support our strategy to provide reliable power solutions and diversify our business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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