Propetro Holding Corp. · NYSE:PUMP
Propetro — Q2 2024 Earnings Presentation
26 slides from Propetro's earnings presentation, Jul 31, 2024
Slide 1: Investor Presentation
Investor Presentation July 31, 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," "Free Cash Flow" and "Free Cash Flow adjusted for Acquisition Consideration," which are not financial measures presented in accordance with GAAP. We define EBITDA as net income (loss) plus (i) interest expense, (ii) income tax
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 Pure play exposure in the Superior f
Slide 5: Company Snapshot
Company Snapshot NYSE 2Q24 Revenue Premium oilfield services leader in the Permian Basin providing complementary PUMP $357 million completions services in 2Q24 Adjusted EBITDA (1) 2Q24 Free Cash Flow (1) Hydraulic Fracturing, CCC Cementing, and Wireline to $66 million $48 million leading upstream oi
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 ✓ Free Cash Flow adjusted for Acquisition Consideration for the quarter increased 68% sequentially to $69 million and is $110 million year-to-date ✓ Repurchased and retired 2.5 million shares during the quarter and 11.3 million shares or 10% of shares outstanding sin
Slide 8: Financial Highlights: Cash Flows Gaining Momentum
Financial Highlights: Cash Flows Gaining Momentum (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) (LOSS) SHARE(1) OPERATIONS FLOW(2) 2Q24 $357 $(4) -$0.03 $66 $105 $48 $145 A Strategy Yielding Results
Slide 9: A Paradigm Shift in Free Cash Flow Performance
A Paradigm Shift in Free Cash Flow Performance Free Cash Flow and Recent Acquisitions Completed $200 Free Cash Flow Free Cash Flow adjusted for Acquisition Consideration $150 $100 (in millions) AquaPropSM acquisition $21 $50 Share Repurchases $45 $- $(50) Full Year 2022 Full Year 2023 Year-to-Date J
Slide 10: Investing in Our Future
Investing in Our Future OVER $1 BILLION INVESTED SINCE 2022 • 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 Leased Ele
Slide 11: Our New Next-Generation Fleet Transformation – Dual-Fuel and FORCE Electric
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 ✓ Consuming natural gas vs. diesel to reduce costs and lower emissions Substitution Rates ( 1) for customers 80% 60% ✓ Fleets utilizing Compressed Natural Gas (CNG) are delivering 60-70% natural gas substitution rates 40% ✓ Seven Tier I
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 September 2024 ✓ Ordered a fifth FORCESM fleet to be deployed in 2024 ✓ High equipment reliability, proven performance, and lower capital intensity ✓ Power source agnostic – p
Slide 14: Recent Acquisitions and Strategic Rationale
Recent Acquisitions and Strategic Rationale Highly complementary completions service offerings Wireline business acquired in 2022 Substantial free cash flow generation with ~80%+ EBITDA-to-Cash Flow Conversion Rate(1) Cementing business acquired in 2023 Reduces future capital spending burden Complem
Slide 15: Our Integrated Completions Service Offering
Our Integrated Completions Service Offering In an industrialized operating environment, ProPetro is now advantaged with our acquired accretive services that enhance commercial leverage and operational efficiencies. © 2024 ProPetro Holding Corp. All Rights Reserved. 15
Slide 16: Capital Returns: Conviction in Our Strategy
Capital Returns: Conviction in Our Strategy $200 MILLION SHARE REPURCHASE PROGRAM Repurchased $97 Remaining $103 $- $50 $100 $150 $200 (in millions) • Increased plan by $100 million on April 24, 2024, and extended plan to May 2025 (1) • Repurchase highlights: - Retired 11.3 million shares or 10% of
Slide 17: Oilfield Services Valuation: Return Metrics Compared
Oilfield Services Valuation: Return Metrics Compared ENTERPRISE VALUE TO 2024E EBITDA 14.0 x 12.0 x 10.0 x 8.0 x 6.0 x 4.0 x 2.0 x 0.0 x Source: Bloomberg as of July 30, 2024. ProPetro as well as our direct peers in the pressure pumping space continue to be valued at a discount relative to other oil
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% 2014 2016 2018 2020 2022 2024 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: 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 21: 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 22: Proven Success in the Most Challenging Environment
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 23: 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 24: 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 25: 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 MICHELE VIO
Slide 26: 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