Liberty Energy Inc. · NYSE:LBRT
Liberty Energy — Liberty Oilfield Services — Investor Presentation (August 2019)
19 slides from Liberty Energy's investor presentation, Aug 12, 2019
Slide 1: Investor Presentation August 2019
Investor Presentation August 2019 NYSE: LBRT www.LibertyFrac.com
Slide 2: Important Disclosures: Forward Looking Statements
IMPORTANT DISCLOSURES FORWARD LOOKING STATEMENTS The information in this presentation includes “forward‐looking statements”. All statements, other than statements of historical fact included in this presentation regarding Liberty Oilfield Services Inc.’s (“Liberty” or the “Company”) strategy, future
Slide 3: Shale Revolution
Shale Revolution 12,000 • Technological 100 Years of US Oil Production Shale Oil innovations starting in the late 1990's launched 10,000 the Shale Revolution that has transformed world energy markets 8,000 • Shale Revolution doubled US oil 6,000 production; turned US into net natural gas exporter; a
Slide 4: Liberty Snapshot
Liberty Snapshot Liberty: The Facts • Market leading, returns–focused provider of Williston hydraulic fracturing services with Basin demonstrably superior financial performance Powder River Basin 14 Fleets • Relentless pursuit of efficiency driven by: • Differentiated technology DJ • Exceptional ope
Slide 5: Where we play – Hydraulic Fracturing
Where we play – Hydraulic Fracturing • Frac enables production from unconventional reservoirs • Largest single component of well capital spend • Total estimated 2018 lower 48 drilling and completion capex spend1: $90 Billion Breakdown of Avg. D&C Well Spend2 Other 22% Frac 42% Drilling 36% (1) Sourc
Slide 6: Second Quarter 2019 Financial Highlights
Second Quarter 2019 Financial Highlights Driving Profitable Growth QTR vs • Revenues increased 1% $ MM's except Per Share and Fleet numbers Q2 2019 Q1 2019 QTR Revenue$ 542 $ 535 1% • Pre‐tax net income up 19% to Net Income Before Tax$ 48 $ 40 19% Fully Diluted EPS$ 0.32 $ 0.26 24% $48M Adjusted EBI
Slide 7: YTD 2019 Cash Flow and Shareholder Returns
YTD 2019 Cash Flow and Shareholder Returns Cash Tax and Interest Debt Repayment Returns to 3% 1% Shareholders • YTD 2019 Adjusted EBITDA of $177M 16% • YTD 2019 Capex of $95M Increase in Working • ~ $175M in projected for Capital 23% Growth Capital full year Use of Cash 57% • $31M of Cash Returned
Slide 8: Returns-Focused Company
Returns‐Focused Company Pre‐Tax Return on Capital Employed (ROCE)(1) ‐ LTM 2Q2019 Superior Returns 32% on Capital 23% Meticulous Focus on Frac and Frac 9% 7% Only 5% 2% Highly Profitable Operating (5%) Structure (9%) Disciplined Capital (26%) LBRT Pumper Pumper Pumper Pumper Pumper Pumper Large Cap
Slide 9: Strong Returns on Capital from Day One
Strong Returns on Capital from Day One Cash Return on Capital Invested (CROCI)(1,2) 47% 45% 44% 43% 35% 29% 28% ‐ LBRT 7 Year avg 25% (3) 19% 24% S&P 500 ‐ 7 Year avg 15% 14% 5% (1%) (5%) 2012 2013 2014 2015 2016 2017 2018 Compounding Share Value by reinvesting cash flow at high rates of return (1)
Slide 10: How We Generate Our Differential Returns
How We Generate Our Differential Returns People and Culture 2 Treat people right, empower employees, foster an innovation based culture, significantly lower turnover, common sense safety culture Technology Develop disruptive solutions that reduce our customers’ cost per BOE, maximize fleet efficienc
Slide 11: Liberty – The Employer of Choice
Liberty – The Employer of Choice Employee‐centered culture which attracts and retains high potential talent • Get the best talent and you win • Lower personnel turnover • Zero layoffs during the downturn • Safety first ‐ incident rate less than half of industry average • Highly variable compensation
Slide 12: Liberty DNA: Technology Meets Execution
Liberty DNA: Technology Meets Execution Technology Highlights Impact Liberty FracTrends™ • 60,000+ well database Proprietary Database • Proprietary viewer and analysis tools Fraconomics™ • Integrated engineering & “big data” approach to lower a customer’s cost to produce a barrel of oil • Liberty te
Slide 13: Liberty ESG Frac
Liberty ESG Frac LOW‐EMISSION FLEETS Liberty Commitment to ESG Goes Far Beyond Emissions • Safe, efficient and fast fracs • Advanced traffic management • 50% OF LIBERTY TOTAL • Low‐emission fleets • Environmentally safe fluid systems HORSEPOWER IS LOW‐EMISSION • Dust and noise mitigation • Community
Slide 14: Partnering to Lower the Cost of a Barrel
Partnering to Lower the Cost of a Barrel • Fraconomics™ and Liberty FracTrends™ • Integrated engineering & “big data” approach to lower a customer’s cost to produce a barrel of oil • Proprietary in‐house software • Industry leading simulation techniques • Calibrated Frac and Reservoir Modeling • Adv
Slide 15: Relentless Focus on Operational Efficiency
Relentless Focus on Operational Efficiency • We track all 1,440 minutes on every fleet, Higher Throughput By Lowering Non‐Performing Time (NPT) every day Example Pad Customer NPT • Meticulous downtime analysis to Activity Breakdown Breakdown determine root‐cause and engineer 8% technology driven sol
Slide 16: Our Strategy – Maximize per Share Value
Our Strategy – Maximize per Share Value 1 Disciplined Organic Growth 2 Reinvest Cashflow at High Rates of Return 3 Return Capital to Shareholders Investment Highlights 4 Balance sheet strength – low leverage and ample liquidity 5 Highly competitive Tech Nerds ‐ unmatched rate of innovation Long‐term
Slide 17: Appendix
Appendix NYSE: LBRT www.LibertyFrac.com
Slide 18: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended Year Ended 30‐Jun‐19 31‐Mar‐19 31‐Dec‐18 30‐Sep‐18 31‐Dec‐18 Net Income (loss)$ 40.5 $ 33.9 $ 33.9 $ 66.4 $ 249.0 Deprecia�on & Amor�za�on 40.4 38.4 34.2 32.3 125.1 Interest Expense 3.6 4.2 3.5 3.6 17.1 Income
Slide 19: Calculation of Pre-Tax Return on Capital Employed
Calculation of Pre‐Tax Return on Capital Employed Calculation of Pre-Tax Return on Capital Employed Twelve Months Ended June 30, 2019 2019 Net income 1 $ 174,737 Add back: Income tax expense 29,519 Pre-tax net income $ 204,256 June 30, June 30, Capital Employed 2019 2018 Total debt, net of discount
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