Propetro Holding Corp. · NYSE:PUMP
Propetro — Q1 2024 Earnings Presentation
27 slides from Propetro's earnings presentation, May 1, 2024
Slide 1: Investor Presentation First Quarter 2024
Investor Presentation First Quarter 2024 May 1, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements Except for historical information contained herein, the statements and information in this presentation, including the oral statements made in connection herewith, are forward- looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securitie
Slide 3: Non-GAAP Reconciliations
Non-GAAP Reconciliations This presentation references “Adjusted EBITDA” and “Free Cash Flow,” which are not financial measures presented in accordance with GAAP. We define EBITDA as net income (loss) plus (i) interest expense, (ii) income tax expense (benefit) and (iii) depreciation and amortization
Slide 4: ProPetro's Investment Thesis
ProPetro’s Investment Thesis Increasing free cash flows Over $1 billion invested with Discounted valuation from reduced capex and a refreshed asset base, new multiple relative to peers targeted M&A technology, and diversified with no net debt (1) service offering Exposure in the world’s The “Gold St
Slide 5: Company Snapshot
Company Snapshot NYSE 1Q24 Revenue Premium oilfield services leader in the Permian Basin providing complementary PUMP $406 million completions services in 1Q24 Net Income 1Q24 Adjusted EBITDA (1) Hydraulic Fracturing, CCC Cementing, and Wireline to $20 million $93 million leading upstream oil and ga
Slide 6: Premium Completions Services
Premium Completions Services 2024e REVENUE MIX BY SERVICE LINE Wireline Cementing Hydraulic Fracturing NOTE: “e” indicates management estimate. © 2024 ProPetro Holding Corp. All Rights Reserved. 66
Slide 7: Recent Highlights & Our Strategy
Recent Highlights & Our Strategy ✓ Sequential improvements: 1Q24 Revenues +17%, Adjusted EBITDA +45% with increasing free cash flows ✓ Contracted two FORCESM electric hydraulic fracturing fleets and Silvertip wireline services on three-year contracts with ExxonMobil ✓ Repurchased and retired 8.8 mil
Slide 8: Financial Highlights: Strong Sequential Improvement
Financial Highlights: Strong Sequential Improvement (in millions TOTAL NET EARNINGS ADJUSTED CASH FLOW FREE TOTAL except %’s REVENUE INCOME PER EBITDA(2)(3) FROM CASH LIQUIDITY(4) and per share data) SHARE(1) OPERATIONS FLOW(2) 1Q24 $406 $20 $0.18 $93 $75 $41 $202 A Strategy Yielding Results 1Q24 be
Slide 9: A Strategy That's Working to High-Grade Capital Allocations
A Strategy That’s Working to High-Grade Capital Allocations Uses of Cash Incurred Capex(1) Capital Returns & Acquisition Consideration(2) $400 $300 (in millions) $200 Increasing shareholder returns and $100 strategic capital allocations 1Q24 share $0 repurchases 2022 2023 2024e(3) (1) Incurred Capex
Slide 10: Investing in Our Future
Investing in Our Future OVER $1 BILLION INVESTED IN 2022 AND 2023 • Transformation of our frac fleet to Next-Generation Tier IV DGB dual- fuel and FORCESM electric to create the youngest and most desirable fleet in the industry • Acquired high EBITDA to free cash flow conversion businesses 2023 Leas
Slide 11: Our New Next-Generation Fleet Transformation
Our New Next-Generation Fleet Transformation – Dual-Fuel and FORCE SM Electric TRANSFORMATION OF OUR FLEET DUAL-FUEL AND ELECTRIC FLEETS • One of the youngest and most desirable • Tier IV DGB dual-fuel fleets that use natural gas fleets in the industry with Tier IV DGB • FORCESM electric-powered fra
Slide 12: Tier IV DGB Dual-Fuel Fleet Performance
Tier IV DGB Dual-Fuel Fleet Performance Tier IV DGB Natural Gas ✓ Using natural gas to reduce costs and lower emissions for customers Substitution Rates ( 1) ✓ Fleets utilizing CNG are delivering 60-70% substitution rates 80% 60% ✓ Seven Tier IV DGB fleets 40% 20% 0% 1Q23 2Q23 3Q23 4Q23 1Q24 (1) Rep
Slide 13: FORCE Electric-powered Hydraulic Fracturing Fleet Update
FORCE SM Electric-powered Hydraulic Fracturing Fleet Update ✓ Three FORCESM fleets operating with a fourth to be deployed by June 2024 ✓ High equipment reliability, proven performance, and lower capital intensity ✓ Power source agnostic – powered by natural gas generators or electric grid power ✓ Lo
Slide 14: Acquisition of Silvertip Completion Services
Acquisition of Silvertip Completion Services completed in November 2022 2024e Purchase Price Adjusted EBITDA (2) $148 million $40-50 million Headquarters Midland, TX Equity Consideration (1) Adjusted EBITDA-to-Cash Flow Conversion Rate (2) Provider of wireline 10.1 million perforating and pumpdown s
Slide 15: Acquisition of Par Five Energy Services
Acquisition of Par Five Energy Services completed in December 2023 2024e Purchase Price (1) Adjusted EBITDA (2) $25 million $10-15 million Headquarters Artesia, NM Adjusted EBITDA-to-Cash Purchase Consideration Flow Conversion Rate (2) Cash Provider of premier cementing services in the Delaware Basi
Slide 16: Capital Returns: Conviction in Our Strategy
Capital Returns: Conviction in Our Strategy $200 MILLION SHARE REPURCHASE PROGRAM Repurchased $74 Remaining $126 $- $50 $100 $150 $200 (in millions) • Increased plan by $100 Repurchased and retired million on April 24, 2024, ~90% of the number of shares and extended plan to May issued in the Silvert
Slide 17: Oilfield Services Valuation: Return Metrics Compared
Oilfield Services Valuation: Return Metrics Compared ENTERPRISE VALUE TO 2024E EBITDA 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x Source: Bloomberg as of April 29, 2024. ProPetro as well as our direct peers in the pressure pumping space continue to be valued at a discount relative to other oilfield service
Slide 18: Transforming to an Industrialized Model: Valuation Indices Comparison
Transforming to an Industrialized Model: Valuation Indices Comparison OIL SERVICES INDEX (OIH) VS. INDUSTRIAL SECTOR INDEX (IXI) 300% OIH Index IXI Index Indices Price Normalized 200% An industrialized model deserves a valuation rerate. 100% 0% 2013 2015 2017 2019 2021 2023 Dislocation of OFS Stocks
Slide 19: Industry Evolving for a Sustainable Future
Industry Evolving for a Sustainable Future PRE-COVID PANDEMIC INDUSTRY DYNAMICS CURRENT INDUSTRY DYNAMICS Oil supply is expected to remain suppressed due to insufficient capital Booming global economy spending, ongoing geo-political conflicts, and OPEC+ remaining disciplined. Higher relative refinin
Slide 20: Global Hydrocarbon Macro Environment
Global Hydrocarbon Macro Environment A bullish long-term demand outlook coupled with constrained supply availability due to global underinvestment reinforces our view that we are in a long-term sustainable upcycle that supports durable earnings and consistent free cash flow generation in our busines
Slide 21: Permian Basin: The Land of Reliable Energy
Permian Basin: The Land of Reliable Energy LEADS THE WORLD IN OIL AND NATURAL GAS PRODUCTION • The Permian is one of the most prolific areas for hydrocarbon production globally and is renowned for its vast reserves of oil and natural gas, as well as its high level of activity and production efficien
Slide 22: Who We Are and Where We Are Going
Who We Are and Where We Are Going Customer Dedicated and Transitioning Relied upon Disciplined Reducing Diversified focused; efficient to a young, by premier capital emissions and customer Team driven customer base efficient, more customers allocation and investing in base including harnessing the c
Slide 23: Proven Success in the Most Challenging Environment: Unrivaled Premium Completions Services
Proven Success in the Most Challenging Environment: Unrivaled Premium Completions Services COMPLETION-RELATED SERVICES HYDRAULIC FRACTURING SPECIAL APPLICATIONS Consistent with ProPetro’s ProPetro’s premier service line Customized treatments and Hydraulic Fracturing, Cementing, delivering industry-l
Slide 24: Commitment to Our People, Our Community, and Our Environment
Commitment to Our People, Our Community, and Our Environment ENVIRONMENTAL SAFETY PEOPLE OPTIMIZED OPERATIONS AND COMMITTED TO AN ACCIDENT-FREE FOCUSED ON OUR TEAM FLEET TRANSITION WORKPLACE • Education and tuition reimbursement to engage • Strong training and development culture and advance our emp
Slide 25: Capital Allocation Framework: Strategy Meets Opportunity
Capital Allocation Framework: Strategy Meets Opportunity OPTIMIZE OPERATIONS FLEET TRANSITION DISCIPLINED GROWTH Enhancing operational efficiency by focusing With an industrializing sector, transitioning Prudently assessing value-enhancing investment resources on the most relevant technologies, our
Slide 26: Our Leadership: Committed to Shareholder Value Creation
Our Leadership: Committed to Shareholder Value Creation Company Management Board of Directors SAM SLEDGE ADAM MUÑOZ PHILLIP A. GOBE ANTHONY BEST Chief Executive Officer President and Chief Chairman of the Board Lead Independent Director, & Director Operating Officer Audit Committee Chair DAVID SCHOR
Slide 27: Investor Contacts
Investor Contacts CORPORATE HEADQUARTERS INVESTOR RELATIONS DAVID SCHORLEMER 303 W Wall St., Suite 102 Chief Financial Officer Midland, TX 79701 david.schorlemer@propetroservices.com 432.688.0012 432.277.0864 www.propetroservices.com MATT AUGUSTINE Director, Corporate Development and Investor Relati