Propetro Holding Corp. · NYSE:PUMP
Propetro — Q3 2023 Earnings Presentation
26 slides from Propetro's earnings presentation, Nov 1, 2023
Slide 1: Investor Presentation Third Quarter 2023
Investor Presentation Third Quarter 2023 November 1, 2023
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 non-GAAP financial measures. We define EBITDA as net income plus (i) depreciation and amortization, (ii) interest expense and (iii) income tax expense (benefit). We define Adjusted EBITDA as EBITD
Slide 4: Company Snapshot
Company Snapshot NYSE 3Q 2023 Revenue Premium oilfield services leader in the Permian Basin providing complementary PUMP $424 million completions services in 3Q 2023 Net Income 3Q 2023 Adjusted EBITDA(1) Hydraulic Fracturing, CCC Cementing, and Wireline to $35 million $108 million leading upstream o
Slide 5: Premium Completions Services
Premium Completions Services 2023e REVENUE MIX BY SERVICE LINE Wireline Cementing Hydraulic Fracturing NOTE: “e” indicates management estimate. © 2023 ProPetro Holding Corp. All Rights Reserved. 55
Slide 6: Recent Highlights & Our Strategy
Recent Highlights & Our Strategy ✓ Repurchased and retired 4.2 million shares since May 2023 representing approximately 4% of outstanding shares ✓ Published our first ProPetro ProEnergy ProPeople Sustainability Report for 2023 ✓ Successful FORCESM electric frac fleet commissioning in August ✓ Cement
Slide 7: Investing in Our Future
Investing in Our Future NEARLY $1 BILLION IN INVESTMENT IN 2022 THROUGH YE 2023 • Expected to transition 65% of our frac fleet to Next-Generation Tier IV DGB dual-fuel and FORCESM electric by first half of 2024 to create the youngest and most desirable fleet in the industry • Acquired high cash flow
Slide 8: 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 • Since the start of 2022, we have transitioned over • 7 Tier IV DGB dual-fuel (all currently active) 45% of our frac fleet to Tier IV DGB dual-fuel that • Two FOR
Slide 9: Tier IV DGB Dual-Fuel Fleet Performance
Tier IV DGB Dual-Fuel Fleet Performance Tier IV DGB Natural Gas ▪ Using more natural gas to reduce costs and lower emissions for our customers Substitution Rates ( 1) ▪ 6.6 million gallons of diesel displaced in 3Q23 vs. 6.1 million gallons in 2Q23 ▪ Fleets utilizing CNG are regularly delivering 60-
Slide 10: FORCE electric-powered and dual-fuel equipment on location
FORCE SM electric-powered and dual-fuel equipment on location • Higher Equipment Reliability • Power Source Agnostic • Less Sound Pollution • Lower Emissions • Smaller Footprint • Lower Fuel Costs © 2023 ProPetro Holding Corp. All Rights Reserved. 10
Slide 11: Acquisition of Silvertip Completion Services
Acquisition of Silvertip Completion Services completed in November 2022 2023 Estimated Purchase Price (1) Adjusted EBITDA (2) $150 million $60-70 million Headquarters Midland, TX Equity Consideration (1) Adjusted EBITDA-to-Cash Flow Conversion Rate (2) Provider of wireline 10.1 million perforating a
Slide 12: Recent Financial Highlights
Recent Financial Highlights (in millions TOTAL EFFECTIVE NET ADJUSTED TOTAL except %’s and fleet counts) REVENUE UTILIZATION INCOME EBITDA(1) LIQUIDITY(2) Frac Fleets 3Q23 $424 15.5 $35 $108 $180 Delivering Strong Results 3Q23 showcased the resilience of our business. Despite being 2Q23 $435 15.9 $3
Slide 13: Capital Returns: Conviction in Our Strategy
Capital Returns: Conviction in Our Strategy $100 MILLION SHARE REPURCHASE PROGRAM • Authorization represented ~13% of our market capitalization on the date of announcement • Repurchase highlights: - Retired 1.9 million shares or 2% of shares outstanding(1) for $19 million in 3Q23 - Retired 4.2 milli
Slide 14: Oilfield Services Valuation: Return Metrics Compared
Oilfield Services Valuation: Return Metrics Compared PRICE TO 2023e EARNINGS ENTERPRISE VALUE TO 2023e EBITDA 35.0x 12.0x 30.0x 10.0x 25.0x 8.0x 20.0x 6.0x 15.0x 4.0x 10.0x 2.0x 5.0x 0.0x 0.0x NOTE: Bloomberg, October 31, 2023 ProPetro as well as our direct peers in the pressure pumping space contin
Slide 15: Changing to an Industrialized Model: Valuation Indices Comparison
Changing 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 100% valuation rerate. 0% 2013 2015 2017 2019 2021 2023 Dislocation of OFS Stocks Reaso
Slide 16: 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, refining capacity constraints, and ongoing geo-political conflicts Higher relative refini
Slide 17: Global Hydrocarbon Macro Environment
Global Hydrocarbon Macro Environment A bullish demand outlook coupled with constrained supply availability reinforces our belief that we are in a long-term up-cycle that supports incremental margins and sustainable cash flow generation for completion services. There is vast potential in the Permian
Slide 18: Permian Basin: Large Addressable Market Opportunity
Permian Basin: Large Addressable Market Opportunity THE PERMIAN BASIN STANDS ALONE AS THE RESILIENT PACESETTER OF U.S. PRODUCTION Despite relatively flat total U.S. production growth expectations over the next several years and anticipated near-term market volatility, the Permian Basin stands to see
Slide 19: 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 20: 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 21: Innovation Leading to Our #1 Customer Ratings
Innovation Leading to Our #1 Customer Ratings - A ProPetro Competitive Advantage TRANSITIONING TO FULLY-REMOTE ENGINEERING SUPPORT RECENTLY DEVELOPED TACTICAL OPERATIONS CENTER Reduce maintenance capex 2022 2023e FLEETS Increase capital and logistical efficiency FLEETS Reduce equipment in rotation O
Slide 22: 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 23: Capital Allocation Framework: Strategy Meets Opportunity
Capital Allocation Framework: Strategy Meets Opportunity OPTIMIZE OPERATIONS FLEET TRANSITION DISCIPLINED GROWTH Enhancing operational efficiency by focusing With robust industry fundamentals, transitioning Prudently assessing value-enhancing investment resources on the most relevant technologies, o
Slide 24: ProPetro's Investment Thesis
ProPetro’s Investment Thesis Operating with a disciplined capital Bifurcation in favor of ProPetro due Discounted valuation multiple allocation and asset deployment to $1 billion in investments in 2022- relative to peers suggests a potential strategy and optimizing our business 2023 in new operation
Slide 25: Our Leadership: Committed to Shareholder Value Creation
Our Leadership: Committed to Shareholder Value Creation Company Management Board of Directors SAM SLEDGE PHILLIP A. GOBE ANTHONY BEST Chairman of the Board Lead Independent Director, Chief Executive Officer & Director Audit Committee Chair MICHELE VION JACK B. MOORE ADAM MUÑOZ Independent Director,
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