Good morning, and welcome to the ProPetro Holding Corporation Second Quarter 2022 Earnings Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Matt Augustine, Investor Relations. Please proceed.

Thank you, and good morning. We appreciate your participation in today's call. With me today is Chief Executive Officer, Sam Sledge, Chief Financial Officer, David Schorlemer; and President and Chief Operating Officer, Adam Munoz. Yesterday afternoon, we released our earnings announcement for the second quarter of 2022. Please note that any comments we make on today's call regarding projections or our expectations for future events are forward-looking statements covered by the Private Securities Litigation Reform. Forward-looking statements are subject to several risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and risk factors discussed in our filings with the SEC. Also during today's call, we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release. Finally, after our prepared remarks, we will hold a question-and-answer session. With that, I would like to turn the call over to Sam.

Thanks, Matt, and good morning, everyone. We're excited to report another quarter of excellent operating and financial results generated by the ProPetro team. Our margin over market share strategy continues to prove to be the prudent way to navigate this cycle, as our financial performance continues to improve. Major thanks to the entire ProPetro team for remaining focused and executing well during what is a dynamic time. Before we go into our highlights for the second quarter, I want to take a moment to provide our view on the state of the global energy industry and the North American pressure pumping market. It is apparent that liquidity issues, coupled with higher risk-free rates and concerns of the recession have caused recent weakness in the energy equity and commodity markets. Despite these near-term issues, our forward view is that the global crude oil market is structurally undersupplied, with short-cycle energy investment in crude oil production, particularly in the Permian Basin, being less impacted by recessionary concerns than in previous cycles. Moreover, we believe energy markets are currently more at risk of a supply crisis than a demand-side downturn. We see clear evidence of that from the shape of the forward WTI crude curve, which is currently backwardated in an unprecedented manner. It is important to acknowledge this given the current shape of the WTI crude curve differs materially from that of prior periods of economic weakness. Consequently, our confidence in the sustained crude oil upcycle remains high, and we are planning our business accordingly, as are the largest and most sophisticated producers in our area, many of which ProPetro currently serves. In the North American pressure pumping market, we see continued evidence of an effectively sold-out market. This is most obvious in the recent trajectory of spot pricing for vintage Tier 2 equipment, where we see robust inquiries for future deployments. Moreover, we see bifurcation in demand for pressure pumping services, where our ability to reduce risk and bring forward the present value of high-priced oil production in a predictable manner is priced at a premium. Because of these variables and others, our forward view of pricing for our services and for the whole field service sector remains positive. Now moving on to the second quarter highlights. I'm proud to report that our team achieved the highest level of fleet utilization per quarter since the pandemic. Equally important, we did this without marketing any additional capacity. Our returns-focused strategy has revised intentionality around internal optimization as we move forward in the cycle. We'll continue to challenge our team in taking a holistic and inward approach to do more with less. I'd like to thank our team and employees for their focus and efforts around optimization and striving to improve our business every day. In the second quarter, our team continued to take delivery of more Tier 4 dual fuel units and successfully converted a third Tier 2 conventional fleet into a Tier 4 dual fuel fleet at the end of the quarter. We expect this transition to develop further over the next couple of quarters with four to five fleets expected to be in operation by the end of this year. Including the additional units announced in our earnings release yesterday, we expect to have a capacity of at least six Tier 4 dual fuel fleets early in 2023. Our ability to reduce greenhouse gas emissions and lower fuel costs with this technology is proving to be valuable to our customers and shareholders alike. We're also delighted to report that mid-cycle return levels were achieved in the quarter on a minimal amount of repositioning and repricing. The current operating environment, coupled with continued capital discipline in our industry, gives our team confidence in the sustainability of pricing that supports returns above a reasonable investment hurdle rate. This is a great time to be in our industry, and we look forward to being able to support our customers in a mutually beneficial manner. Lastly, I want to comment that the demand for electric solutions from efficient frac providers is gaining momentum, and ProPetro plans to play a significant role in the electric future of the Permian Basin. We have assessed multiple electric track offerings with plans to deploy electric solutions in 2023, therefore putting our team and our company in a position to participate directly in the electrification and industrialization of the Permian Basin oilfield. With that, I'd like to turn the call over to David to discuss our second quarter financial performance and capital resources.

Thank you, Sam, and good morning, everyone. During the second quarter, we generated $315 million of revenue, an 11.5% increase from the $283 million of revenue generated in the first quarter. The increase is largely attributable to additional net pricing gains, increased fleet utilization, and our team's ability to consistently outperform for our customers. We also had our highest revenue month in July since February of 2020, with more pricing improvements expected in this quarter and going forward. Our effective fleet utilization for the second quarter was above our prior guidance of 13.5 to 14.5 fleets, coming in at 14.8 fleets, which increased 8% from the 13.7 fleets utilized during the prior quarter. Our guidance for second half effective fleet utilization is a range of 14 to 15 fleets. As Sam mentioned, we believe our capital and disciplined approach continues to pay off. We have achieved healthy sequential top-line and bottom-line growth for the past two quarters without deploying any additional fleets. This disciplined foundation that we've currently installed at our company will propel the ProPetro team forward as our asset base shifts to a higher percentage of ESG-friendly equipment by the end of this year and again in 2023. Cost of services, excluding depreciation and amortization for the first quarter was $219 million versus $197 million in the first quarter, with the increase driven by higher activity levels and inflationary impacts, including labor and material costs. Second quarter general and administrative expense was $25 million compared to $32 million in the first quarter. Adjusted G&A was $20 million and excludes $5 million related to nonrecurring and noncash items. Depreciation was $31 million for the second quarter. The company posted a net loss of $33 million or $0.32 loss per diluted share compared to our first quarter net income of $12 million or $0.11 of income per diluted share. The net loss recorded in the second quarter of 2022 was primarily driven by the nonrecurring and noncash impairment expense of $57 million in connection with the evaluation of our DuraStim equipment, as part of our quarterly financial review process. While we determined an economic impairment of the equipment was appropriate, the equipment remains on our books with a residual value of approximately $11 million, and at the appropriate time, we may consider further evaluation. Operating income, excluding the impairment, increased 200% to $17 million. Margins expanded again in the second quarter, with adjusted EBITDA coming in at $76 million or just over 24% of revenues for the first quarter, representing an over 900 basis point increase from the fourth quarter of 2019. Adjusted EBITDA increased 13% sequentially compared to $67 million for the first quarter. The sequential increase was primarily attributable to additional pricing gains, increased activity, and continued fleet repositioning, while also being partially offset by rising cost inflation and other supply chain issues. Our steady focus on achieving full cycle cash-on-cash returns across our operating fleet paired with additional operating leverage in the form of a 15th active fleet in the fourth quarter of this year gives us confidence to guide to a full year 2022 EBITDA expectation of at least $300 million, which is over a 100% increase from last year. During the quarter, we incurred $89 million of capital expenditures. Of that amount, $36 million was related to Tier 4 dual fuel upgrades, with the remaining balance predominantly related to maintenance CapEx. Actual cash used in investing activities, as shown on the statement of cash flows or capital expenditures in the second quarter was $78 million, with positive cash flow of approximately $1 million. This figure differs from our incurred CapEx number due to differences in timing of disbursements. Based on projected activity levels and our plan to purchase additional Tier 4 dual fuel units, our outlook for full year CapEx spending has changed with new guidance ranging between $300 million and $350 million. Given robust industry fundamentals and our desire to transition our fleet to more gas-burning and electric offerings, which command higher relative pricing, we are confident in our capital allocation strategy. Accordingly, on the backdrop of completing our 2022 equipment reinvestment cycle, capital expenditures in 2023 are expected to come in meaningfully lower than 2022, setting the company up for strong free cash flow next year. As of June 30, 2022, total cash was $70 million, and the company remained debt-free. Total liquidity at the end of the second quarter of 2022 was $185 million, including cash and $116 million of available capacity under the company's asset-based credit facility. Despite our aggressive reinvestment this year, our cash position and total liquidity have remained strong, which in turn sets a strong foundation for us to execute on our strategy moving forward. On that note, and as we have previously stated, we will not waver from our commitment to direct capital in support of transitioning our fleet to lower emissions and natural gas alternatives that not only further our ESG efforts and the goals of our customers but also generate improving profitability.

Thanks, David. We're very excited about the future of our company. The purchase of the additional Tier 4 dual fuel units announced yesterday reinforces our commitment to meet our customers' urgent desire for gas-burning engines that can lower their completion costs and emissions. Accordingly, we are seeing higher demand and higher pricing for this equipment today and in the quarters to come. This should provide ProPetro with an early catalyst in achieving a healthy cash-on-cash return for these investments. We did the same thing last year around this time, and our investment has paid off handsomely with significant margin expansion earlier this year and continued. Market conditions today are even better than they were then. Given our view on the state of the global energy industry and the associated severe undersupply of crude oil, we at ProPetro are convinced that we are in the early stages of a sustained multiyear long cycle. For that reason, ProPetro is committed to playing a critical role in the next phases of industrializing our energy through initiatives like electrification of the region. Our conversations with our customers suggest that demand for this equipment is high and sustainable. We're expeditiously working to meet that demand and expect to provide a reliable electric solution for our customers in 2023. Also, it is important to acknowledge that the equipment discussed today will be deployed under our existing margin over market share strategy. While it's too early to project our total fleet count for 2023, we will ensure that we are striving to achieve proper cash-on-cash returns for our entire deployed portfolio of assets. Lastly, I'd like to mention how proud we are here at ProPetro to be a vital part of an energy value chain in the Permian Basin that is one of the best sources of reliable energy in the world. We believe that the oil and natural gas produced in this region and across the United States will be fundamental to producing products that empower all other industries here at home and across the globe for decades to come. We along with our peers and customers across the oil and gas value chain will continue to innovate and improve as we continue to provide the most reliable and secure energy for the foreseeable future. Finally, I'd like to thank my ProPetro teammates once again for another quarter of reducing risk and creating value for our customers and other stakeholders through safe, reliable and predictable operational performance. We'd now like to open it up for Q&A.

Sam, you currently have the sixth DGN fleets and at least one electric fleet. Since you work with reputable customers, I assume you’re noticing the advantages of the fuel-efficient fleet. This raises the question: what is the ideal fleet combination for ProPetro in terms of DGB, electric, and legacy fleets? If you could share your thoughts on that and the timing as well.

Sure. That's a fantastic question, John. I think the answer is slightly different for what we think the right mix is short term and what we think the right mix is long term. On a short-term basis, we feel good about our portfolio going into next year, given these most recent orders we've placed on the dual fuel side and what we're working on the electric side. I think this most recent order we placed kind of finishes off the mix of equipment that we think is optimal. I can't say that without mentioning what's going on in the Tier 2 diesel-powered space, given the market is effectively fully utilized. Many of our competitors would agree that the pull on conventional diesel equipment is also very hard, if it's not very differentiated from some of these next-gen solutions. So we feel really good about where we're positioned there. Just a brief comment on the long term, John, I don't know what the right timeframe is — is it five years or 10 years — but there's going to be a lot more natural gas burns through frac equipment as we go into the medium and long term, and we're positioning ProPetro today to be a proactive participant in that natural gas future of frac equipment.

And just one more for me and I'll turn it over. This is for Adam. But on the DuraStim, is there another application where the technology might work, you know, vertical frac or pump down? Just any color on what the potential use of the asset could be, if any?

Yes, John, I would say right now, no, we're not really focused on that either. But as I mentioned in the past, we just wanted to focus on getting our margins back on the Tier 2 and then converting our fleet going into the future of the gas-burning equipment.

Fair enough. Just curious. Thanks, guys, good quarter.

The next question comes from Scott Gruber with Citigroup. Please go ahead.

Yes, good morning. I wanted to ask somewhat of a follow-up question to John's question. In renewal and the ongoing dynamic, you laid out where you'll be at year-end and into next year. But how do we think about fleet renewal over the long run, you know, if rates stay healthy, do you go out and maybe order two new frac fleets a year or maybe it's one in a few DGB based on customer preference, gas availability? Or maybe it's $100 million that you're willing to commit to fleet renewal every year. Just how would you frame up the kind of multiyear fleet renewal program for you guys?

Scott, great question. This is Sam. I think as we think about that today, this has been pretty topical here within our team in terms of trying to figure out the most appropriate long-term capital allocation. But today, it's based mostly on specific customer conversations. We're seeing, as it pertains to gas-burning equipment, both dual fuel and electric, a very high willingness from the sophisticated customers, E&Ps in the Permian Basin, to contract this gas-burning equipment. So right now, most of those conversations are led by that customer willingness to emit more commercially around that. Long term, as more gas-burning equipment comes into the system, there might be a more specified year-over-year capital allocation to converting the fleet.

Yeah, Scott, this is David. I think the way we look at it is we want to facilitate the industrialization of this business, and we think that lower operating cost solutions are part of that. Whether or not we get contracts is secondary. Our primary pursuit is ensuring that we're putting in place a model that's sustainable going forward and that enhances margins over the long term.

Got you. But it sounds like as long as the contracts are in place, you would place the order for additional equipment that meets your payback or return hurdles to think about at this juncture?

It really depends, Scott. Anything we have sidelined requires various investments to get it back off the sidelines. I think in our scripted remarks, we mentioned the 15th fleet, which will be put into the system this year. We've been operating right around 14 fleets since the beginning of the year. That will be one of those fleets created by the additional Tier 4 DGB program that we continue to execute on. So at the minimum, we think we can get a 15th fleet into the system by the end of this year and we'll see what the market gives us going into next year. With what we know today, it looks like we're looking at 15 going into next year.

Got it. I appreciate the color. Thanks, Sam.

The next question comes from Arun Jayaram with JPMorgan. Please go ahead.

Good morning. Sam, one of the trends that we saw from public E&Ps, starting in the 2014 timeframe, was the fact that they were debundling their service offering. If you're a vertically integrated frac supplier during that time, you're kind of forced to discount some of your ancillary services to compete. It feels like the market is changing a little bit, maybe given the rising role of privates, and we are starting to see some margin benefits accrue to at least in this cycle to more integrated frac service providers. So I wanted to get your thoughts on where your heads are at potentially for ProPetro to expand its service offering just beyond pure frac, you know, sand and things. And what's your thoughts on that? What are you thinking about from an R&D perspective?

Good question, Arun. You described the circumstances of the past and present fairly accurately. We were very competitive against some of our bundled competitors and peers back in prior cycles because of exactly what you described. We have a strong conviction about the length of the cycle that we're in right now. As we look through that lens, I think it's forcing our team to evaluate other strategic opportunities a little bit differently than we have in the past. I personally look at that in kind of two different ways. You can integrate vertically or horizontally. When I say horizontally, I'm talking about different services offered out of the well site related to our frac services right now. So, there’s probably more to look at there for a company like ProPetro than there has been in the past. That said, there’s a lot to choose from in the Permian Basin. This is a well-equipped resource play in North America by a long shot. If you're talking about bundling services in South Texas, East Texas, or somewhere like the Bakken, it might look a little different than bundling services in the Permian Basin.

Great. And just my follow-up, maybe a difficult question to answer, but I wanted to get an update on where we stand with the negotiations with Pioneer. They highlighted some of the efficiency gains that they're citing. It seems like you guys are executing well for them in the field. Where do we stand with that? Are some of the investments we're seeing in next-generation technology with Pioneer in mind as a key customer as you move into e-fleets and a higher mix of Tier 4 equipment?

Sure. Yes, as I usually remind investors or analysts, the historical context of what Pioneer and ProPetro have achieved together has been significant. We're proud of what the Pioneer and ProPetro relationship has done over the past few years in terms of creating value. We're talking to Pioneer almost daily as we have for the last few years, and we'll continue to do that as we plan for next year. That said, our leadership team is highly interested in ensuring that we're putting our equipment and people in the greatest opportunities to succeed and create value. We think Pioneer will definitely be a part of that going forward. But there’s a lot of work going on in that arena right now to ensure we are exposing our offering to the best value-creating opportunities in 2023 and beyond.

The next question comes from Waqar Syed with ATB Capital Markets. Please go ahead.

Thank you. And good morning. Sam, there's a slide in your presentation deck where you guys are reporting your pumping productivity. If I remember correctly, last quarter, it was around 71% and now it's around 53%. If I understand correctly, that would mean that there was a big dip in productivity in Q2. Am I understanding it right? Or is there something that I'm missing?

I think when you look at it, and this is pretty consistent with the slide that Arun just referred to, pumping productivity has increased nearly 100% over the period that we show. So I think that's what we're looking at. The numbers you might be looking at are annual versus quarterly. But again, the productivity has indeed increased significantly.

Right. For onboarding purposes, because we actually use that in our models, was there a dip quarter-over-quarter then? Is it fair to assume?

No, it wasn't.

Okay. Fair enough. And then one other question that you mentioned next year would be very strong free cash flow. How do you define strong? What would you be happy with in terms of the use of the word strong, whether you want to describe it as a percentage of revenue or EBITDA conversion or anything like that?

I think in the neighborhood of 40% to 50% of EBITDA conversion to me represents strong. When we look at EBITDA per fleet and the cadence that we're expecting next year, we could see that up 25% to 40%. So that's kind of how I would expect strong to play out.

That's great. And then in terms of your total hydraulic horsepower, we've been using a number of about 1.4 million hydraulic horsepower. So number one, is that the correct number? And number two, any of these upgrades that you're doing right now, is that bringing in any incremental horsepower? Or is it mostly all replacement engines?

Okay. This is David. One of the things you should know is that prior to this quarter, we did include the DuraStim in the available horsepower that we had removed that, so we're down to 1.3 million of capacity. The investments we're talking about are essentially replacing investments that otherwise would have been in legacy equipment. Now I think Sam has talked about the fleet cadence for next year. We do think that we'll be able to generate growth, but we haven't laid out our full investment plan for 2023 yet.

That's great. And just one final question. Following the impairment charge, could you provide some guidance for DD&A for Q3?

Yes, that number is going to be right around $32 million, call it $30 million to $34 million.

Okay. Great. Thank you very much. Appreciate all the color.

The next question comes from Stephen Gengaro with Stifel. Please go ahead.

Thanks and good morning, gentlemen. So two things for me. The first, you talked about in July — and I think you said record revenue month. When we think about the puts and takes in the profitability per fleet, I'm just curious what are the headwinds versus pricing, as we think about profitability because it feels like your guidance is solid and beatable. I'm just trying to understand if there's anything that is offsetting what appears to be continued price momentum as we get into the second half of the year.

Steve, this is David. There are continuing headwinds that Sam, Adam, and I have spoken about, inflationary pressures. Some of those are receding a little bit, but we're going to continue to face those. However, the demand for services and the tightness in supply of frac equipment is such that we believe the pace of change on the pricing side is going to be greater than the inflationary pressures that we would have to absorb. So I think that we feel good about that.

Yes, Stephen. Sam. I'll just add to that. Over the last 8 to 10 months, we've tried to employ a more aggressive pricing strategy and our kind of what we call margin-over approach. It’s been baffling as you might be working with one customer in particular to get their pricing in the right spot, and it takes you a month to do that. In the meantime, something pops up in the supply chain that was unpredictable either from a delay or cost inflation standpoint or both. So I think we're trying to be prudent and conservative in factoring in expectations that some of that will continue, as David said, hopefully yet to a lesser extent. But just trying to be realistic with ourselves around the headwinds and crosswinds still exist and may come in the next six months to a year.

Stephen, regarding conservatism, what you've seen out of ProPetro is we typically provide pretty minimal guidance and try to be conservative around that. We are coming out with a bit more guidance regarding EBITDA and our full year. So I think conservatism is something we’d like to stick with.

No, that's fair. I appreciate the commentary. And just as a follow-on, when you are looking at the Tier 4 DGBs and when you're thinking about the electric fleet, are you looking for strong commitments and/or contracts before the build? Or are you pretty confident in the visibility you see that there’s customer demand?

Stephen, it's Sam. It's a little bit of both, actually. We have a strong willingness from multiple customers to contract any gas-burning equipment, whether it be electric or DGB. That said, as David mentioned earlier in an earlier question, we aim to participate in the industrialization of the sector and of the Permian Basin. Some of this next-generation equipment that burns more natural gas is just a more cost-effective solution. As we discuss capital allocation moving forward, we want to allocate capital to the most relevant technologies and tools that bring the best returns profile. We believe we will be securing contracts for many of these different gas-burning offerings. We think it's prudent for the top-tier pressure pumpers like ProPetro and its larger peers to pull equipment into the system that plays to that industrialization and is more efficient, cost-effective, and brings better emissions profiles.

Hey, good morning, guys. I wanted to go back and address the Pioneer contract and if it could be potentially limiting exposure to the rapidly rising pricing environment. Can you talk about your profitability outlook for 2023 when these contracts roll off at year-end? How much pricing leverage could this allow you as you roll into spot market rates, plus you're adding and high-grading the fleet with Tier 4 DGB and any frac? Just a little more color around potential profitability uplift would be helpful.

Sure. This is Sam again. I think our addition of more dual fuel units and our commentary around e-fleets next year is directed towards what we believe is happening in the broader market and maybe even more so directed towards what we think the medium and long-term circumstances are going to be in the North American pressure pumping market for many years to come. We're confident about what the market will look like in the back half of this year and going into next year and beyond. The structural undersupply of oil and gas globally, we think, will take many years to fix. We want to give our company the best tools going into that. Not that we don't do spot work here and there, but it's a very small portion of our work. When you see our financial performance, it is a direct look into a committed, dedicated model, and we would like to keep it that way going into 2023 and beyond. We believe Pioneer will be a part of that. We are working hard to figure out the mix of all customers, as I mentioned earlier today. One interesting development this year that has been different from many cycles past is that we are sitting here from June through today during the bidding and tendering season for 2023. That usually happens in November, so it's four to six months accelerated. This is a fantastic indicator we think of demand and how tight the market is. We've had more inbounds from different operators than we've ever had, really maybe in the history of my tenure here in the last 10 years at ProPetro. We're taking a close look at every opportunity that we think plays towards that dedicated, efficient, predictable model that ProPetro likes to put our equipment and people into.

Yes, Derek, this is Adam. The only thing I would add is, as we look into 2023, any contract, regardless of customer, definitely has to compete with our opportunity cost. We're looking really hard, as Sam mentioned, at that. We’re looking at all our opportunities, especially in the tech market that we sit in today.

Yes, Derek, this is David. Just to chime in on top of Sam and Adam's comments, which they've communicated well. I think you've characterized it quite well in your commentary. Just like every other management team, we're going to be commercial. We owe it to our shareholders and employees, and we're going to look to put our assets in the best place to generate the appropriate returns. Our business development team is very excited about that. We feel like we've got the best services in the basin, and we've proven that, and we're going to take advantage of that going into what we think is going to be a very strong market in the latter half of this year and into 2023.

Got it. That's great. I appreciate all the color. Switching over to the CapEx outlook for 2023. It sounds like growth capital is still up in the air, but maybe we can address maintenance CapEx, which is still very high, almost double that of your peers. You're folding in a few more Tier 4 DGB and bringing in a new electric frac fleet. I'd imagine that's going to drive that number down. Should we think that we can cut that back down to the $3 million to $4 million range that we're seeing from your peers? If you could just help bridge us from where you are today to what you could see next year as you high-grade the fleet?

Yes, you're right. This is something that's happening and may not be recognized by the market. We've been converting assets, replacing legacy assets with new technology. What we announced today is an additional down payment on that, not only in our Tier 4 DGB but for electric. So I think what's happening at ProPetro is a recapitalization of the fleet, where we will provide very relevant assets to the marketplace alongside efficient and effective frac performances that we've delivered historically to top providers. I think it's trending favorably getting into 2023 as we capitalize on the investments we made this year and prior.

Derek, this is Sam. I'll just add that it’s going to be very important for ProPetro and our entire sector in the pressure pumping space to fix this issue and convert as much EBITDA into cash as possible. We have intense internal efforts to do that this year and next, which we think will bear fruit on items like the maintenance CapEx line item. We also believe we are in the early stages of what I call the industrialization of our business and sector to migrate to technologies and tools that are more efficient and effective in terms of cost and equipment life. We're excited to be part of that, and we'll look to continue to do so. There hasn't been significant innovation or change in pressure pumping equipment in the last 30 years, so it will take time for the sector to get its equipment offerings right to minimize maintenance CapEx significantly and make the rationale for investment much more compelling.

That's great. And if I can squeeze one more in. I want to ask about your new e-frac offering. How is it different from DuraStim? Can you give us maybe some techs or specs about what it looks like? And then secondly, on the power generation side, I know you sold your previous turbines, which are not necessarily oilfield ready. Will you be considering power generation ownership, or will you be using third-party power as a service as you start to go into the e-frac space starting next year?

Sure. On your first question regarding the e-frac offering, stay tuned. We're working on some things that we'll hopefully tell you more about soon. On the power side, it's really customer- and geographic-dependent. Our strategy currently is to remain flexible, study all the options out there, and work with our customers to ensure we have the best purpose-built option. So, it could encompass a few different strategies for us.

Got it. Good color. Appreciate it, guys. Thank you.

Thanks, Derek.

This concludes our question-and-answer session. I would like to turn the conference back over to Sam Sledge, Chief Executive Officer, for any closing remarks.

Thanks, Andrew, and thanks, everyone, for joining us on today's call. As I mentioned earlier, we are very proud to play a part in an innovative energy industry where oil and gas remain critical to our everyday lives across the globe. We enjoyed talking with you today, and we hope to talk to you again soon. Please join us on our next quarterly earnings call. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.