Good day, and welcome to the ProPetro Holding Corp. Second Quarter 2025 Conference Call. Please note, this event is being recorded. I would now like to turn the conference back over to Matt Augustine, Vice President of Finance and Investor Relations for ProPetro Holding Corp. Please go ahead.

Thank you, and good morning. We appreciate your participation in today's call. With me are Chief Executive Officer, Sam Sledge; President and Chief Operating Officer, Adam Munoz; Chief Accounting Officer and Principal Financial Officer, Celina Davila; and our new Chief Financial Officer, Caleb Weatherl. Caleb will introduce himself later in the call. But given he's new to the company and wasn't with us for the second quarter, he will not be participating in the question-and-answer session today. This morning, we released our earnings results for the second quarter of 2025. 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 Act. 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. Thanks for joining us today. Before I discuss our results this quarter, I'd like to take a moment and introduce you to Caleb Weatherl, our new Chief Financial Officer. We're excited to have him on board as his wealth of experience in the energy and financial sectors is a perfect match for us here at ProPetro. We are confident that he will be instrumental in helping us drive long-term shareholder value, and I look forward to having him as part of the team. Caleb, would you like to say a few words?

Thanks, Sam, for the warm welcome. I am truly thrilled to join the incredible team at ProPetro. Having grown up and built my career in Midland, I've long admired ProPetro's reputation for excellence and its deep roots in the community. It's an honor to join such a respected first-class organization. While I just joined the company a few weeks ago, I've hit the ground running and I'm enjoying working closely with Sam and the rest of the leadership team. With a clear focus on capital discipline and efficiency, I'm excited to help advance ProPetro's next chapter of success as we build on its strong financial and operational foundation. I want to assure you that the company's disciplined approach to capital allocation and commitment to maintaining a strong balance sheet while investing for growth will not change. I'm looking forward to getting to know you all better in the coming quarters. And with that, I'll turn it back to Sam.

Thanks, Caleb. Now I'd like to share some thoughts on the environment we're operating in and provide an overview of our performance in the second quarter. Despite recent macroeconomic uncertainty, ProPetro delivered a resilient quarter, both operationally and financially. Our strategy is proving effective, driven by our emphasis on capital-light assets and disciplined investments as well as our continued implementation of our industrialized business model. Our legacy completions business continues to generate sustainable free cash flow, supported by ongoing cost optimization and targeted capital programs. These efforts are fueling our growth trajectory, including new initiatives like PROPWR, which I'll discuss further in a moment. With regard to the current operating environment, both the broader energy markets and more specifically, the completions market in the Permian Basin continue to face challenges. We believe the Permian frac fleet counts are likely approaching 70 compared to approximately 90 to 100 fleets operating at the start of this year. Increased market uncertainty driven by tariffs and rising OPEC+ production has resulted in more idle capacity than anticipated. Furthermore, price discipline has weakened at the lower end of the market, particularly among subscale frac providers. While we've had the opportunity to keep virtually all of our fleets active, we have proactively chosen to idle certain fleets rather than run our fleets at subeconomic levels, therefore, preserving them for more favorable market conditions in the future. That said, we are prepared to navigate this market by controlling what we can control, our everyday behaviors inside of ProPetro. Our strategic investments, including past M&A activity, PROPWR growth and FORCE electric fleet transition have strengthened the company's foundation so that we can withstand market turbulence. ProPetro is a strong business, led and operated by an experienced team with low debt and first-class customers in one of the world's leading regions for hydrocarbon production, the Permian Basin. Regardless of market conditions, we are confident that these strengths and our resilient capital-light cash flow generative business model will enable us to continue delivering shareholder value. Market cycles like this create opportunity as changes in the environment can offer up new ways for companies like ProPetro to profitably grow and better serve our clients, allowing us to emerge on the other side of the cycle healthier than before and well positioned to operate in a market that has improved with respect to both supply and demand. In contrast, many of our smaller peers, often the less disciplined competitors in the market and those who have not invested in next-generation technology may struggle to withstand a downturn for as long, given their limited ability to earn returns on their deployed assets. With that, I'd now like to discuss our capital-light investments. I'm pleased to report that demand for our next-generation services, particularly our FORCE electric fleet remains very strong. Approximately 75% of our fleet is next generation between the Tier IV DGB dual-fuel and FORCE electric fleets. Moreover, as we reported last quarter, over 50% of ProPetro's active hydraulic horsepower is now under long-term contracts. This is inclusive of 2 Tier IV DGB dual fuel fleets and 4 electric fleets. Notably, one of the FORCE fleets is a very large simul-frac fleet utilizing equipment equivalent to 2 standard zipper fleets. As a result, we currently have 5 fleets worth of FORCE equipment supporting 4 deployed fleets. Importantly, we plan to continue and potentially accelerate the transition from our Tier 2 diesel equipment to our FORCE electric equipment, given its high demand, successful contracts and commercial leverage, which we expect to offer lower risk for future earnings. On the PROPWR side, we currently have approximately 220 megawatts on order with deliveries that began recently and are expected to be completed by midyear 2026. We are especially proud to announce our inaugural contract during the quarter, which was executed in collaboration with a Permian-focused E&P operator and commits 80 megawatts of power generation capacity to deliver turnkey power to a distributed microgrid installation. Asset deployment is scheduled to begin in the third quarter of this year and continue throughout 2026. This 10-year midstream-like agreement marks a major milestone for our PROPWR and serves as a future blueprint and a testament to our commitment to innovation and long-term growth. Furthermore, over the coming weeks and months, we anticipate announcing multiple long-term contracts with oil and gas customers to meet their infield power requirements. Based on our ongoing discussions, we are confident that we will secure long-term agreements for all 220 megawatts of currently ordered equipment by the end of 2025. Additionally, we are actively engaging with our power generation suppliers regarding our next equipment orders. While these developments are exciting, we believe this is still just the beginning for this business. We will continue to align our actions with PROPWR's mission to rethink the grid, therefore, unlocking more exciting opportunities to serve our existing and prospective clients, both in oil and gas and other industries to create long-term value for ProPetro shareholders. Now turning to capital allocation, which is more important than ever in an environment like this. Our dynamic capital allocation strategy allows us to continue to grow PROPWR and our FORCE electric fleets while also pursuing disciplined M&A and focusing on shareholder returns. We have been taking and will continue to take a balanced approach to executing this strategy to maximize value. In fact, our financial improvements and the value we have created over the past 2 years are a direct result of this very approach. Celina will share more details about our financial results in a moment, but I wanted to highlight that in the second quarter, we generated resilient free cash flow in our Completions business. Utilization across all segments was down due to larger macro impacts, including lower commodity prices, heightened uncertainty and weather downtime. However, our pricing remained largely stable and our operational excellence and cost controls remain strong, particularly as it relates to maintenance capital expenses. Looking ahead, our visibility into our activity outlook remains somewhat limited. As I touched on earlier, the impacts of tariffs and OPEC+ production increases have caused ongoing uncertainty in the back half of this year, and we expect that to persist into 2026, even with the recent stability of oil prices. Accordingly, in the third quarter, we expect to see a reduction in activity, particularly with our more conventional equipment, and we anticipate normal seasonal patterns in the fourth quarter. As a result, we expect to operate an average of 10 to 11 fleets in the third quarter with the possibility of running fewer fleets in the fourth quarter. That said, as we navigate a fluid and uncertain environment, ProPetro remains in a solid position supported by our strong balance sheet, first-class customers, refreshed next-generation asset base, growth through PROPWR, sustainable cash generation and long-term contractual stability. Most importantly, these results and strengths are made possible by and due to our outstanding team. On that note, Celina, I'll turn it over to you.

Thanks, Sam, and good morning, all. In terms of the numbers, ProPetro generated total revenue of $326 million, a decrease of 9% as compared to the prior quarter. Net loss totaled $7 million or $0.07 loss per diluted share compared to net income of $10 million or $0.09 income per diluted share for the first quarter of 2025. Adjusted EBITDA totaled $50 million was 15% of revenue and decreased 32% compared to the prior quarter. This includes the lease expense related to our electric fleets of $14 million. Importantly, one attributable factor for lower financial performance this quarter was and is our strategic decision to maintain our idle fleets in optimal working conditions. This ensures preparation for rapid deployment once market conditions improve and that we are best positioned to capitalize on future opportunities as they arise. Net cash provided by operating activities and net cash used in investing activities, as shown on the statement of cash flows were $54 million and $36 million, respectively. Free cash flow for our Completions business was $26 million. As Sam mentioned, our legacy Completions business continues to generate sustainable free cash flow. Even in today's challenging market environment, we are operating with the consistency and reliability of a mature industrialized enterprise. Capital expenditures paid were $37 million and capital expenditures incurred were $73 million, including $30 million primarily supporting maintenance in our completions business and $43 million supporting our PROPWR orders. The difference between incurred and paid capital expenditures is primarily comprised of PROPWR-related capital expenditures that have been financed and paid directly by our financing partner and unpaid capital expenditures included in accounts payable and accrued liabilities. In terms of CapEx incurred guidance, we will continue to evaluate the market and scale CapEx with activity realizations. But as we sit here today, given what Sam shared around our activity outlook, we now anticipate our 2025 CapEx for our Completions business to be between $100 million and $140 million. We do still expect to spend approximately $170 million for our PROPWR business, inclusive of finance CapEx. So our total range will be between $270 million and $310 million, down from $295 million to $345 million on last quarter's call. Importantly, cash and liquidity remains strong, which is very important in today's uncertain market. As of June 30, 2025, total cash was $75 million and total liquidity at the end of the second quarter of 2025 was $178 million, including cash and $103 million of available capacity under the ABL credit facility. As for our share repurchase program in May of 2025, the company extended its $200 million share repurchase program to December of 2026. Since the program's inception in May of 2023, the company has repurchased 13 million shares, representing approximately 11% of outstanding common stock. In the second quarter of 2025, the company did not repurchase any shares as it prioritized the launch and scaling of the PROPWR business. In terms of approach, our capital allocation strategy continues to be and will continue to be centered on remaining flexible and dynamic so we can pivot as needed between FORCE electric fleet conversions, PROPWR growth, disciplined M&A investments and share repurchases, while also maintaining a strong balance sheet and commitment to capital discipline. With that, Sam, back over to you.

Thanks, Celina. I'm proud of how our company and team have navigated recent market volatility and positioned ProPetro to thrive in any environment. Our resilience is a direct result of several things, namely a legacy completions business that is profitable through various cycles and will continue to fuel our growth in PROPWR, as well as our investments, including FORCE electric fleets, PROPWR and a thoughtful M&A approach that together provide us with a rock-solid foundation to withstand market turbulence. And lastly, our core strengths of our strong balance sheet with low debt, first-class customers and a first-class team, a team that's proactive and quick on its feet, for which I'm immensely thankful. At the end of the day, we're well prepared for what lies ahead and remain confident in both our strategy and the future of our company. We've built significant momentum and a strong foundation, and I'm certain we will continue to build on this progress. None of our achievements would be possible without the dedication and hard work of our ProPetro teammates. Your commitment to operating safely, efficiently and responsibly inspires confidence in our ability to navigate this dynamic environment. Thanks for everything you do. With that, operator, we'd now like to open the line to questions.

The first question comes from Derek Podhaizer, Piper Sandler.

I just wanted to start off with more of a bigger picture question on the Permian Basin. So we talked about approaching 70 fleets from the 90 to 100 at the start of the year. This means 20 to 30 idle fleets, and you talked about potential for persistent uncertainty moving into 2026. Just how much of an overhang do you think this will be on the Permian Basin? How can we think about the industry working through this big oversupply with the frac equipment and how it will impact ProPetro going forward?

It's a great question, Derek. I think it kind of boils down to traditional supply and demand. And you've heard us talk a lot about the kind of tiering or stacking of frac supply with electric and all gas offerings at the top and all diesel offerings at the bottom. It's very obvious that the most disrupted part of that supply stack is the diesel equipment. That's been exactly what's happened to us as well. We think because of the looseness in the market and some of the lack of disciplined pricing we've seen at that lower end of the market, it likely is a long-term tailwind via attrition. So we're just choosing not to play in that loose part of the market right now. All the meanwhile, the top end of our stack, several of our dual fuel fleets as well as all of our electric fleets are humming along nicely with absolutely no disruptions to pricing or activity. So I'd hate to be a player in the market that hasn't invested in some of this next-generation equipment and is just sitting on the lower end of that stack. How long does the looseness last? Hard to see. But as you could see by our guidance and kind of our outlook in the back half of the year, we think that that kind of looseness in the market is here to stay for at least 2025, possibly into the first part of 2026. Beyond that, if and when the market does turn up a little bit, I don't know if there's going to be anybody better positioned in the Permian Basin than us to play into a recovering market sometime next year.

Got it. That makes sense. I guess turning over to PROPWR, I’m excited to see the inaugural contract there. You mentioned you're refining your next equipment orders. I'm just curious if you have any thoughts around continuing with the reciprocating engines or the smaller turbines, or if you might step into the larger turbines. Also, are you still planning to focus on the oil and gas industry, or do you think there's potential to expand into more industrial applications and possibly even data centers?

Yes. Look, I mean, we're really happy with the flexibility of the gas recips and the smaller turbines that we have on order right now. It's giving us a lot of optionality in the market from a contracting standpoint and the type of work. So beyond the 220 megawatts that we've ordered, you'll likely see some of the same. But beyond that, we're probably going to hold kind of our cards pretty tight to the best in terms of any other types of power sources that we're getting into, given that that's pretty competitive from a supply chain standpoint. Remind me of the second part of your question?

Just the end markets staying in oil and gas or potentially looking into industrial, yes.

We are currently experiencing strong demand in the oil and gas sector, particularly in production and midstream. In our press release, we indicated that more announcements will be made soon about projects that are nearing completion. These deals will likely have a similar structure to the first contract we recently announced, although they may vary in size. Demand in oil and gas is robust, so we are focusing on opportunities in our immediate area for now. However, we are also engaging in interesting exploratory discussions regarding non-oil and gas opportunities, although it's uncertain how quickly these may develop. For those involved in the power supply chain and managing large-scale operations like ours, opportunities tend to present themselves readily. We are actively evaluating a variety of long-term strategic options that leave us very enthusiastic about the future of PROPWR.

The next question comes from Eddie Kim, Barclays.

Thank you for your insights on the market conditions. I would like to inquire about the expected trajectory for the fourth quarter. In your prepared remarks, you referred to typical seasonal patterns. However, looking at the last two years, your revenue in the fourth quarter experienced a double-digit sequential decline. Does this decline align with your usual expectations for fourth quarter seasonality? Additionally, this year, should we anticipate any extra softness beyond the usual seasonal trends due to current market conditions? I would appreciate your thoughts on this matter.

It’s a bit difficult to predict 4Q right now. We feel confident about our guidance for 3Q, aiming for 10 to 11 fleets. Historically, your numbers for the last couple of years from 3Q to 4Q are accurate, but we’ve also had quarters that moved in the opposite direction. It really depends on commodity prices and the outlook for the exploration and production sector. If companies gain more clarity on their plans going into 2026, they might want to secure some of that work sooner rather than later. Regarding seasonality, we typically reference the 3Q figure. Our guidance of 10 to 11 fleets may include some regular holiday downtime, but we expect these fleets to remain active through the end of the year. Right now, we’re being cautious about the anticipated holiday downtime. While we maintain a rather pessimistic short-term market perspective, we are still engaged with our customers about projects that could significantly alter this outlook quickly. However, we lack certainty at this moment, so we will approach the latter half of the year with a conservative and realistic mindset.

Got it. Great. That's helpful. Just shifting to PROPWR. It's great to hear your confidence in securing long-term contracts for that entire 220 megawatts by year-end. I'm a little surprised just given the challenging market conditions in oil and gas currently. But I mean, does that just suggest that power demand even for microgrids is almost independent of, I guess, drilling and completions activity and I guess it's more tied to midstream and production? Or are operators kind of looking past kind of near-term weakness maybe in anticipation of market conditions kind of rebounding next year? Any thoughts there would be great.

Yes. The initial steps we're taking in terms of power as we enter the market are not related to completions. Our focus is on midstream production, which we've discussed in previous calls. This area is somewhat separated from the volatility seen in the drilling and completions market. Ultimately, our goal is to provide cost savings for our customers. Even if the overall drilling and completion market experiences a downturn, it doesn't mean operators will stop producing their wells; they will still seek ways to enhance production and manage costs more effectively. Currently, we are focused on this effort. As the Permian continues to experience power demand, particularly on the production side, we believe we are well-positioned to maintain stability in our business long-term by staying somewhat distanced from the completions and drilling sectors with our power solutions.

The next question comes from Grant Hynes, JPMorgan.

So you guys messaged 10 to 11 fleets kind of in 3Q, down about 20% from the 13, 14 in the second quarter. But in your prepared remarks, highlighted some of the simul-frac work, particularly on the FORCE fleet side. Could you maybe give us some color, I guess, on how much more simul-frac might be working kind of in the second half versus the first half and perhaps utilization on a horsepower basis when we just think about sequential change kind of versus the 20% reduction in fleet count?

Yes. I don't know how much we want to detail we want to give there. I'd say proportionally, it's pretty similar. Simul-frac continues to be a big part of our business, especially on the electric side. We don't think there's any better safety, cost efficiency way to approach completing your wells other than with an electric simul-frac setup. So more of that probably going into next year as we continue to expand our FORCE offering. But kind of quarter-over-quarter, it's pretty proportional from a simul zipper standpoint.

Got you. And then maybe transitioning to power. You mentioned sort of the initial deployment for that 80-megawatt contract starting in 3Q of '25 and into 2026. How should we think about sort of the lead time on the asset deployment and anything in terms of sort of start-up costs and the deployment there?

Yes, you will notice some start-up costs reflected in our disclosed financials, but they are not significant. This business requires fewer personnel compared to our traditional completions businesses. The equipment will be deployed steadily from the third quarter through mid-2024. As we mentioned earlier, we are actively discussing our upcoming orders with suppliers, which we could potentially receive by 2026 if we place those orders soon. This could positively impact our power business estimates for 2026. Regarding the specifics of the next order, we prefer to keep that information under wraps for now, but we anticipate that each order in the power sector will be substantial. We are focused on rapidly expanding the size of our PROPWR business, as we see a significant pipeline of opportunities.

The next question comes from Waqar Syed, ATB Capital Markets.

Sam, I have a broader question. We're all trying to understand how the decrease in completion activity in the Permian will affect production in the region. From your viewpoint, as the number of completion crews decreases, is it likely that this decline is being balanced out by the simul-fracs? Do you have an idea of how much lower the total footage that is fracked will be if your completion crews are reduced by about 25%?

Yes, it's difficult to say, Waqar. In my personal opinion, I've been quite surprised that we haven't seen production in the Permian Basin and domestically in the U.S. decline more than it has. It seems to be leveling off and possibly beginning an early downward trend. However, from my perspective on the ground, counting every crew and the simul-frac crews we know of in the Permian Basin, it's hard for me to believe that we are at an activity level that can sustain current Permian production. As you noted, there have been several efficiency improvements over the past few years, like simul-frac, which have increased completed footage per crew. I don't believe we are currently outpacing that. Therefore, I expect that in the future, Permian production will decrease from our viewpoint in the completion services space.

Great. And then by my calculations, you've got like 7 Tier IV DGB fleets, let's say, 4 FORCE fleets. So should we assume that everything that's working is for you, those 11 fleets, all of them are the next-generation fleets? Or do you have any one of the Tier IV DGB fleets being down and a Tier 2 working?

There's a little bit of diesel still in the system right now. But as I mentioned earlier, when I kind of described the supply stack, the dual fuel and electric have been far more resilient.

So you do have a Tier IV DGB fleet down?

We have some Tier IV DGB equipment down right now. We'll not say much more than that.

It appears that your quarter-over-quarter EBITDA progress for the various business lines shows that wireline is closely tracking the fracking business. As we consider Q3, does wireline follow the same trajectory as fracking?

Yes. It will closely follow the trends seen in cementing, which has also closely followed the changes in rig count.

I noticed that in cementing, EBITDA quarter-over-quarter was down about 42% to 43%, compared to 24% to 25% declines for wireline and cementing. Is there anything specific affecting cementing, or is it just that a small scale leads to a larger impact?

That and a full quarter effect of drilling rigs parking that always happens ahead of frac fleets and wireline units. So we started to see cementing deteriorate really towards the end of the first quarter. So you're seeing a full quarter effect of some of that.

The next question comes from Jeff Leblanc, TPH.

Regarding your contracting capacity long term, should we be aware of any price reopeners? Or I guess, more broadly, how should we think about the stability of the pricing given that historically, you've expressed a willingness to work with your long-term customers?

Yes. The contracts we have discussed regarding dual fuel and electric are largely finalized. There are typically semiannual adjustments to those prices, which are formulaic and passive, leading to low single-digit changes that are likely difficult to notice from an external perspective. Therefore, the pricing remains quite stable.

The next question comes from Don Crist, Johnson Rice.

Most of my questions have been answered, but I did want to ask one kind of more macro question, and it relates to just the broader equipment out in the space today. You've seen some of your smaller competitors sell their equipment and that equipment is going overseas. And then NOV talked about 5 or 6 different countries around the world that are exporting unconventional technology to go frac their wells. And just a broader question as to are you seeing demands for the sale of your kind of diesel stuff to go overseas? And do you think that can more balance the market as we kind of look out a year or 2 as more of this equipment moves overseas?

Look, I think the demand is there. And I think there's a lot of different places globally that are taking notice of how we do what we do over here as an industry. No surprise, but America innovates and works harder to figure out how to do more with less than any other country in the world, and that is maybe more evident in the energy space than any other place. And we have fielded inquiries from other countries about not only equipment, but expertise and services as well. It's hard to say if that's like a meaningful variable in what happens domestically to supply and demand, but I think it definitely helps. So we'll watch that closely. And we've been a pure Permian pressure pumping frac provider for the history of our company. But it doesn't mean that we don't answer some of those phone calls and entertain some of those ideas because there are some instances where that could make a lot of economic sense because of some of these other areas across the globe being so interested in what we do and how we do what we do. So I think it could be a help, Don. I think it will likely improve the supply and demand equation a little bit. Hard to say how much.

I appreciate that color. And if I could sneak in one more. If you were going to order some new solar turbines today, what would the lead time on that be? We're hearing it's extended out pretty far.

It's not getting any shorter. And I'll probably stop quoting an exact number, but we've got a great relationship in that part of the supply chain, and we're pretty confident that we'll be utilizing those relationships to continue to scale our power business in a meaningful way.

The next question comes from John Daniel, Daniel Energy Partners. If you were to order some new solar turbines today, what would the lead time be? We're hearing it's extended pretty far. It's not getting any shorter. I’ll refrain from providing an exact number, but we have a strong relationship in that part of the supply chain, and we are confident that we will leverage those relationships to continue scaling our power business meaningfully.

Sam, looking at the bigger picture, you mentioned in the release that the market in the Permian has shifted from around 90 to 100, and now possibly down to the 70 range. I'm curious, if pricing hadn't been reduced 6 to 9 months ago, would the frac fleet be at 60, or do you think it would still be at 70? What are your thoughts on that?

I don't know. Six to nine months ago, I don't think there were many pricing changes in the market. The recent activity disruptions we've experienced at ProPetro have primarily been due to pricing movements in the last 30 to 60 days.

And that's fine. Call it 90 days ago. My question is, what’s the right level of demand? Is service pricing really influencing whether they keep or release the fleet? That’s what I’m trying to understand.

I don't know. There's probably 10 to 20 fleets in the market that are doing what I just frankly call stupid stuff right now. So could it be lower? And look, I have to commonly remind ourselves and remind others discipline in the frac space is either saying no to work that doesn't make a return or saying no to building the next piece of equipment in a way, we're doing both right now. It would encourage others at the bottom end of the market to do the same because it doesn't turn out well when you're making decisions that don't cover your cash cost to operate your fleets. Another thing, I think, in this that maybe has lost a little bit that we've recently talked about is if fleets have moved from, say, 90 to 70, and we've moved from 15 fleets to 10.5 fleets at the midpoint of our guidance, we've not lost any market share at all. And that's the same market share of the activity that exists in the Permian right now. And we're prioritizing protecting our margins and protecting our equipment because we think that that's the rational right business decision for us.

Fair enough. Sam, I have another question for you. When the fleet count drops from 15 to 10.5%, do you have any awareness from the customers using those four fleets about whether this change is driven by budget constraints or pure price competition? Will they return next year? I'm curious to hear your thoughts on how the Permian frac market might stabilize, if such a thing is possible, for the coming year.

Yes, this is an interesting question, John. I'm glad you asked that. To be candid with you, this is mainly one customer of ours that we're talking about who has had a fairly frantic response to changes in commodity prices and outlook. We then have to make our own voluntary decisions. Do we want to help them with that issue? Or do we want to save our equipment and our margins for a better day? We've chosen the latter.

The next question comes from Stephen Gengaro, Stifel.

I apologize for joining late, Sam, if you've already addressed this. When considering the efficiency improvements throughout the drilling and completion process of a well, have you thought about how to capture the fair value we are deriving? Given that you are more efficient than you were a year or two ago, is it not feasible to drive value for you or the high-end pressure pumpers based on the efficiencies you provide?

I can tell you this much pretty plainly. When you have next-generation equipment, you're able to contract that equipment. We're doing that inside of those contracts. I don't want to say too much more about kind of our commercial model and architecture because we're pretty proud of how creative and innovative we've been on that end. But there is light at the end of that tunnel, Stephen, and we are doing that in some instances. It's mainly around our electric equipment. That's another reason why, given kind of our bullish long-term outlook and our confidence in things like our electric equipment, we start to discuss should we accelerate investment and deployment of more equipment like that. We really like that idea, and we're kind of working through how we can do that going into next year so that we can capitalize on those efficiency gains and the other benefits that things like electric equipment bring to bear.

Ladies and gentlemen, this was our last question, and this concludes our Q&A session. I would now like to turn the conference back over to CEO, Sam Sledge, for closing remarks.

Thanks, everyone, for joining us today. Thanks for your interest in ProPetro. We look forward to talking to you again soon. Have a great day.

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