8-K
ProPetro Holding Corp. (PUMP)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 3, 2021
ProPetro Holding Corp.
(Exact name of registrant as specified in its charter)
| Delaware | 001-38035 | 26-3685382 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) |
1706 South Midkiff,
Midland, Texas 79701
(Address of principal executive offices)
(432) 688-0012
(Registrant’s telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | --- | --- || ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | | --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.001 per share | PUMP | New York Stock Exchange |
| Preferred Stock Purchase Rights | N/A | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR230.405) of Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
| Emerging growth company | ☐ |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02 Results of Operations and Financial Condition.
On August 3, 2021, ProPetro Holding Corp. (the “Company”) issued a press release announcing its results for the quarter ended June 30, 2021. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
On August 3, 2021, the Company posted an investor presentation to its website pertaining to the financial and operational results for the quarter ended June 30, 2021. The presentation is posted on the Company's website at ir.propetroservices.com/presentations and attached hereto as Exhibit 99.2.
The information furnished with this report, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit<br>Number | Description of Exhibit |
|---|---|
| 99.1 | Press Release dated August 3, 2021 |
| 99.2 | Investor Presentation dated August 3, 2021 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 3, 2021
| PROPETRO HOLDING CORP. |
|---|
| /s/ David S. Schorlemer |
| David S. Schorlemer<br>Chief Financial Officer |
Document
EXHIBIT 99.1
ProPetro Reports Financial Results for the Second Quarter of 2021
MIDLAND, TX, August 3, 2021, (Business Wire) – ProPetro Holding Corp. ("ProPetro" or "the Company") (NYSE: PUMP) today announced financial and operational results for the second quarter of 2021.
Second Quarter 2021 and Recent Highlights
•Total revenue for the quarter increased 34% to $217 million compared to $161 million for the first quarter of 2021.
•Net loss for the quarter was $9 million, or $0.08 per diluted share, compared to net loss of $20 million, or $0.20 per diluted share, for the first quarter of 2021.
•Adjusted EBITDA(1) for the quarter increased 78% to $36 million compared to $20 million for the first quarter of 2021.
•Effective utilization for the second quarter was 13.1 fleets compared to 10.3 fleets for the first quarter of 2021.
•Net cash provided by operating activities for the quarter of $44 million as compared to $17 million for the first quarter of 2021.
•Positive Free Cash Flow(2) of approximately $16 million as compared to negative Free Cash Flow of approximately $5 million for the first quarter of 2021.
(1) Adjusted EBITDA is a Non-GAAP financial measure and is described and reconciled to net income (loss) in the table under “Non-GAAP Financial Measures.”
(2) Free cash flow ("FCF") is a Non-GAAP financial measure and is defined as net cash flow provided from operating activities less net cash used in investing activities. During the quarter ended June 30, 2021, net cash provided by operating activities of approximately $44 million less net cash used in investing activities of approximately $29 million resulted in free cash flow of approximately $16 million. During the quarter ended March 31, 2021, net cash provided by operating activities of $17 million less net cash used in investing activities of $22 million resulted in free cash flow of $(5) million.
Phillip Gobe, Chairman and Chief Executive Officer, commented, “Improving oil prices and expectations of market equilibrium are unfolding as the global economy begins to recover from 2020. As the recovery in North American oilfield services improved, the ProPetro team continued to deliver solid operational performance at the wellhead. We are squarely focused on meeting customer needs in a safe and efficient manner amid a dynamic operating environment. The first half of 2021 clearly demonstrated the value of our dedicated business model focused in the most prolific oil play in the lower 48, the Permian Basin."
"Additionally, the transition of our fleet to more ESG-friendly alternatives continues as we deploy more Tier IV DGB dual-fuel units and continue field trials of our DuraStim electric pump assets. Our innovative Modified AcidTM product introduced earlier this year is also contributing to improved completion efficiencies and water savings for our customers. The ability to deliver more ESG-friendly alternatives to our customers is a value-added opportunity which benefits all
EXHIBIT 99.1
stakeholders. We remain committed to providing solutions to our customers while remaining highly efficient in wellsite performance."
"We are also making investments within our business to mitigate global supply chain risks as the restart unfolds while working to recover "pandemic pricing discounts" to enable further reinvestment in our asset base," said David Schorlemer, Chief Financial Officer. "Improved pricing is required to mitigate inflationary pressures and return to sustainable profitability. We have been successful in moving some pricing higher and are continuing collaboration with customers to ensure cost recovery, improved profitability and our ability to remain capital disciplined while appropriately reinvesting in our fleet."
Second Quarter 2021 Financial Summary
Revenue for the second quarter of 2021 was $217 million compared to revenue of $161 million for first quarter of 2021. The 34% increase was primarily attributable to our increased effectively utilized fleet count, and a normalized operating environment from first quarter weather disruptions.
Cost of services, excluding depreciation and amortization of approximately $33 million, for the second quarter of 2021 increased to $163 million from $123 million during the first quarter of 2021. Contributing to the increase were higher activity levels and other increased operational costs.
General and administrative expense of $18 million for the second quarter of 2021 decreased slightly from $20 million in the first quarter of 2021. General and administrative expense, exclusive of a net benefit of $0.8 million relating to non-recurring items (insurance recovery legal settlement of $3.7 million offset by stock-based compensation of $2.9 million), was $18 million, or 8% of revenue, for the second quarter of 2021 consistent with the first quarter of 2021.
Net loss for the second quarter of 2021 totaled $9 million, or $0.08 per diluted share, compared to net loss of $20 million, or $0.20 per diluted share, for the first quarter of 2021.
Adjusted EBITDA increased to $36 million for the second quarter of 2021 from $20 million for the first quarter of 2021. The sequential improvement in Adjusted EBITDA was primarily attributable to normalized profitability from the extreme winter weather events experienced in February 2021 and a full quarter of contributions from fleets reactivated during the first quarter of this year.
Liquidity and Capital Spending
As of June 30, 2021, total cash was $73 million and the Company remained debt free. Total liquidity at the end of the second quarter of 2021 was $141 million including cash and $68
EXHIBIT 99.1
million of available capacity under the Company’s revolving credit facility. As of July 28, 2021 total cash was $71 million and the Company had no debt outstanding. Total liquidity as of July 28, 2021 was $140 million including cash and $69 million of available capacity under the Company’s revolving credit facility.
Capital expenditures incurred during the second quarter of 2021 were $31 million, the majority of which was maintenance spending. Capital expenditures paid (as appears in the Investing Activities section of the Statement of Cash Flows) in the second quarter were $29 million. Based on our current and projected activity levels for 2021, and consistent with prior guidance, which is dependent on market conditions, the Company expects full year 2021 incurred capital expenditures to be between $115 million and $130 million. Our full year incurred capital expenditure guidance includes approximately $37 million allocated to our investment in 90,000 HHP of Tier IV DGB dual-fuel equipment and the remainder mostly comprised of maintenance spending. Full year capital expenditures paid may differ slightly due to the timing of payments.
Outlook
Mr. Gobe concluded, “Our commitment to our employees, customers and stakeholders will continue to bolster the value proposition for our Company. We believe the pressure pumping industry is faced with an impending reinvestment cycle that will require innovative solutions to meet the needs of the market. We believe ProPetro's focused business model, commitment to innovation, capital discipline and conservative capital structure will result in a sustainable company going forward that is well positioned for the future.”
Conference Call Information
The Company will host a conference call at 8:00 AM Central Time on Wednesday, August 4, 2021 to discuss financial and operating results for the second quarter of 2021. The call will also be webcast on ProPetro’s website at www.propetroservices.com. To access the conference call, U.S. callers may dial toll free 1-877-879-1183 and international callers may dial 1-412-902-6703. Please call ten minutes ahead of the scheduled start time to ensure a proper connection. A replay of the conference call will be available for one week following the call and can be accessed toll free by dialing 1-877-344-7529 for U.S. callers, 1-855-669-9658 for Canadian callers, as well as 1-412-317-0088 for international callers. The access code for the replay is 10158134.
About ProPetro
ProPetro Holding Corp. is a Midland, Texas-based oilfield services company providing pressure pumping and other complementary services to leading upstream oil and gas companies engaged in the exploration and production of North American unconventional oil and natural gas resources. For more information visit www.propetroservices.com.
EXHIBIT 99.1
Forward-Looking Statements
Except for historical information contained herein, the statements and information in this news release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words “may,” “could,” “plan,” “project,” “budget,” “predict,” “pursue,” “target,” “seek,” “objective,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” and other expressions that are predictions of, or indicate, future events and trends and that do not relate to historical matters identify forward‑looking statements. Our forward‑looking statements include, among other matters, statements about our business strategy, industry, future profitability, expected fleet utilization, sustainability efforts, the future performance of newly improved technology (such as our DuraStim® fleets), expected capital expenditures and the impact of such expenditures on our performance and capital programs. A forward‑looking statement may include a statement of the assumptions or bases underlying the forward‑looking statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable.
Although forward‑looking statements reflect our good faith beliefs at the time they are made, forward-looking statements are subject to a number of risks and uncertainties that may cause actual events and results to differ materially from the forward-looking statements. Such risks and uncertainties include the volatility of oil prices, the operational disruption and market volatility resulting from the COVID-19 pandemic and other factors described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, particularly the “Risk Factors” sections of such filings, and other filings with the Securities and Exchange Commission (the “SEC”). In addition, the Company may be subject to currently unforeseen risks that may have a materially adverse impact on it, including matters related to shareholder litigation and the SEC investigation. Accordingly, no assurances can be given that the actual events and results will not be materially different than the anticipated results described in the forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements and are urged to carefully review and consider the various disclosures made in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings made with the SEC from time to time that disclose risks and uncertainties that may affect the Company’s business. The forward-looking statements in this news release are made as of the date of this news release. ProPetro does not undertake, and expressly disclaims, any duty to publicly update these statements, whether as a result of new information, new developments or otherwise, except to the extent that disclosure is required by law.
EXHIBIT 99.1
Investor Contacts:
David Schorlemer
Chief Financial Officer
investors@propetroservices.com
432-227-0864
Josh Jones
Director of Finance
investors@propetroservices.com
432-276-3389
EXHIBIT 99.1
PROPETRO HOLDING CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, 2021 | March 31, 2021 | June 30, 2020 | ||||
| REVENUE - Service revenue | 216,887 | 161,458 | 106,109 | |||
| COSTS AND EXPENSES | ||||||
| Cost of services (exclusive of depreciation and amortization) | 162,837 | 123,378 | 68,193 | |||
| General and administrative (inclusive of stock-based compensation) | 17,529 | 20,201 | 20,331 | |||
| Depreciation and amortization | 33,243 | 33,478 | 40,173 | |||
| Impairment Expense | — | — | — | |||
| Loss on disposal of assets | 15,025 | 13,052 | 8,734 | |||
| Total costs and expenses | 228,634 | 190,109 | 137,431 | |||
| OPERATING LOSS | (11,747) | (28,651) | (31,322) | |||
| OTHER EXPENSE: | ||||||
| Interest expense | (159) | (176) | (791) | |||
| Other expense | (302) | 1,789 | (267) | |||
| Total other expense | (461) | 1,613 | (1,058) | |||
| LOSS BEFORE INCOME TAXES | (12,208) | (27,038) | (32,380) | |||
| INCOME TAX BENEFIT | 3,697 | 6,663 | 6,460 | |||
| NET LOSS | ||||||
| NET LOSS PER COMMON SHARE: | ||||||
| Basic | ||||||
| Diluted | ||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||
| Basic | 102,398 | 101,550 | 100,821 | |||
| Diluted | 102,398 | 101,550 | 100,821 |
All values are in US Dollars.
EXHIBIT 99.1
PROPETRO HOLDING CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| June 30, 2021 | December 31, 2020 | |||
|---|---|---|---|---|
| ASSETS | ||||
| CURRENT ASSETS: | ||||
| Cash and cash equivalents | $ | 72,701 | $ | 68,772 |
| Accounts receivable - net of allowance for credit losses of $140 and $1,497, respectively | 138,309 | 84,244 | ||
| Inventories | 2,641 | 2,729 | ||
| Prepaid expenses | 3,469 | 11,199 | ||
| Other current assets | 14 | 782 | ||
| Total current assets | 217,134 | 167,726 | ||
| PROPERTY AND EQUIPMENT - net of accumulated depreciation | 847,512 | 880,477 | ||
| OPERATING LEASE RIGHT-OF-USE ASSETS | 562 | 709 | ||
| OTHER NONCURRENT ASSETS: | ||||
| Other noncurrent assets | 1,578 | 1,827 | ||
| Total other noncurrent assets | 1,578 | 1,827 | ||
| TOTAL ASSETS | $ | 1,066,786 | $ | 1,050,739 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
| CURRENT LIABILITIES: | ||||
| Accounts payable | $ | 136,364 | $ | 79,153 |
| Accrued and other current liabilities | 20,062 | 24,676 | ||
| Operating lease liabilities | 351 | 334 | ||
| Total current liabilities | 156,777 | 104,163 | ||
| DEFERRED INCOME TAXES | 64,980 | 75,340 | ||
| NONCURRENT OPERATING LEASE LIABILITIES | 286 | 465 | ||
| Total liabilities | 222,043 | 179,968 | ||
| COMMITMENTS AND CONTINGENCIES | ||||
| SHAREHOLDERS’ EQUITY: | ||||
| Preferred stock, $0.001 par value, 30,000,000 shares authorized, none issued, respectively | — | — | ||
| Common stock, $0.001 par value, 200,000,000 shares authorized, 103,227,040 and 100,912,777 shares issued, respectively | 103 | 101 | ||
| Additional paid-in capital | 837,971 | 835,115 | ||
| Retained earnings | 6,669 | 35,555 | ||
| Total shareholders’ equity | 844,743 | 870,771 | ||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,066,786 | $ | 1,050,739 |
EXHIBIT 99.1
PROPETRO HOLDING CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Six Months Ended June 30, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
| Net loss | ||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
| Depreciation and amortization | 66,721 | 80,377 | ||
| Impairment expense | — | 16,654 | ||
| Deferred income tax benefit | (10,360) | (7,773) | ||
| Amortization of deferred debt issuance costs | 269 | 270 | ||
| Stock-based compensation | 5,396 | 3,433 | ||
| Provision for credit losses | 140 | 448 | ||
| Loss on disposal of assets | 28,076 | 28,588 | ||
| Changes in operating assets and liabilities: | ||||
| Accounts receivable | (53,762) | 146,181 | ||
| Other current assets | 325 | 1,613 | ||
| Inventories | 89 | (369) | ||
| Prepaid expenses | 7,711 | 5,833 | ||
| Accounts payable | 44,932 | (135,592) | ||
| Accrued and other current liabilities | 828 | (8,635) | ||
| Accrued interest | — | (394) | ||
| Net cash provided by operating activities | 61,480 | 96,910 | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
| Capital expenditures | (52,187) | (80,702) | ||
| Proceeds from sale of assets | 1,267 | 2,677 | ||
| Net cash used in investing activities | (50,920) | (78,025) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
| Repayments of borrowings | — | (130,000) | ||
| Payment of finance lease obligation | — | (30) | ||
| Repayments of insurance financing | (4,093) | — | ||
| Proceeds from exercise of equity awards | 3,235 | — | ||
| Tax withholdings paid for net settlement of equity awards | (5,773) | (585) | ||
| Net cash used in financing activities | (6,631) | (130,615) | ||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 3,929 | (111,730) | ||
| CASH AND CASH EQUIVALENTS - Beginning of period | 68,772 | 149,036 | ||
| CASH AND CASH EQUIVALENTS - End of period | 72,701 | 37,306 |
All values are in US Dollars.
EXHIBIT 99.1
Reportable Segment Information
| Three Months Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2021 | March 31, 2021 | |||||||||||
| (in thousands) | Pressure<br><br>Pumping | All Other | Total | Pressure<br><br>Pumping | All Other | Total | ||||||
| Service revenue | $ | 213,461 | 3,426 | $ | 216,887 | $ | 158,191 | 3,267 | $ | 161,458 | ||
| Adjusted EBITDA | $ | 46,826 | $ | 35,693 | $ | 31,870 | $ | 20,017 | ||||
| Depreciation and amortization | $ | 32,256 | 987 | $ | 33,243 | $ | 32,513 | 965 | $ | 33,478 | ||
| Capital expenditures | $ | 30,744 | 29 | $ | 30,773 | $ | 30,023 | 2,305 | $ | 32,328 |
All values are in US Dollars.
Non-GAAP Financial Measures
Adjusted EBITDA is not a financial measure presented in accordance with GAAP. We believe that the presentation of this non-GAAP financial measure provides useful information to investors in assessing our financial condition and results of operations. Net income (loss) is the GAAP measure most directly comparable to Adjusted EBITDA. Non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measure. Non-GAAP financial measures have important limitations as analytical tools because they exclude some, but not all, items that affect the most directly comparable GAAP financial measures. You should not consider Adjusted EBITDA in isolation or as a substitute for an analysis of our results as reported under GAAP. Because Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
EXHIBIT 99.1
Reconciliation of Net Loss to Adjusted EBITDA
| Three Months Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2021 | March 31, 2021 | |||||||||||
| (in thousands) | Pressure Pumping | All Other | Total | Pressure Pumping | All Other | Total | ||||||
| Net loss | $ | (7,702) | $ | (6,700) | ||||||||
| Depreciation and amortization | 32,256 | 987 | 33,243 | 32,513 | 965 | 33,478 | ||||||
| Interest expense | — | 159 | 159 | — | 176 | 176 | ||||||
| Income tax benefit | — | (3,697) | (3,697) | — | (6,663) | (6,663) | ||||||
| Loss on disposal of assets | 15,379 | (354) | 15,025 | 13,032 | 20 | 13,052 | ||||||
| Stock-based compensation | — | 2,909 | 2,909 | — | 2,487 | 2,487 | ||||||
| Other expense (income) | — | 302 | 302 | — | (1,789) | (1,789) | ||||||
| Other general and administrative expense, net (1) | — | (3,737) | (3,737) | — | (961) | (961) | ||||||
| Severance expense | — | — | — | — | 612 | 612 | ||||||
| Adjusted EBITDA | 46,826 | $ | (11,133) | 35,693 | 31,870 | $ | (11,853) | 20,017 |
All values are in US Dollars.
(1) Other general and administrative expense, (net) relates to nonrecurring professional fees paid to external consultants in connection with the Company's pending SEC investigation and shareholder litigation, net of insurance recoveries. During the three months ended June 30, 2021 and March 31, 2021, we received approximately $5.1 million and $1.6 million, respectively, from our insurance carriers in connection with the SEC investigation and Shareholder litigation.
| Three Months Ended | ||||
|---|---|---|---|---|
| (in thousands) | June 30, 2021 | March 31, 2021 | ||
| Cash from Operating Activities | $ | 44,472 | 17,008 | |
| Cash used in Investing Activities | (28,650) | (22,270) | ||
| Free Cash Flow | $ | 15,822 |
All values are in US Dollars.
10
exhibit992investorpresen
Q2 2021 INVESTOR PRESENTATION August 3, 2021 EXHIBIT 99.2
2 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 Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include the words “may,” “could,” “plan,” “project,” “budget,” “predict,” “pursue,” “target,” “seek,” “objective,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” and other expressions that are predictions of, or indicate, future events and trends and that do not relate to historical matters identify forward-looking statements. Our forward-looking statements include, among other matters, statements about our business strategy, industry, future profitability, expected fleet utilization, sustainability efforts, the future performance of newly improved technology (such as our DuraStim® fleets), expected capital expenditures and the impact of such expenditures on our performance and capital programs. A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement. We believe that we have chosen these assumptions or bases in good faith and that they are reasonable. Although forward-looking statements reflect our good faith beliefs at the time they are made, forward-looking statements are subject to a number of risks and uncertainties that may cause actual events and results to differ materially from the forward-looking statements. Such risks and uncertainties include the volatility of and recent declines in oil prices, the operational disruption and market volatility resulting from the COVID-19 pandemic and other factors described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, particularly the “Risk Factors” sections of such filings, and other filings with the Securities and Exchange Commission (the “SEC”). In addition, we may be subject to currently unforeseen risks that may have a materially adverse impact on us, including matters related to shareholder litigation and the SEC investigation. Accordingly, no assurances can be given that the actual events and results will not be materially different than the anticipated results described in the forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements and are urged to carefully review and consider the various disclosures made in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings made with the SEC from time to time that disclose risks and uncertainties that may affect our business. The forward-looking statements in this presentation are made as of the date of this presentation. We do not undertake, and expressly disclaim, any duty to publicly update these statements, whether as a result of new information, new developments or otherwise, except to the extent that disclosure is required by law. EXHIBIT 99.2
© 2021 ProPetro Holding Corp. All Rights Reserved. 3 PROPETRO AT A GLANCE 2005 Founded 2010 Begins hydraulic fracturing operations in the Permian Basin 2013 Company recapitalization 2017 Initial public offering (NYSE: PUMP) 2019 Announces initial phase of DuraStim project 2020 Electrically Powered DuraStim field trials 2021 Announces Tier IV DGB sustainability investment Teamwork & Collaboration Execution Capital Discipline 0.49 Full Year 2020 TRIR 38% lower than 2019 Industry Average Customer Focused Team Driven Sustainability Investments 100% Concentration of Frac Operations in the Permian 2011 50,000 HHP 2016 420,000 HHP 2019 1.4 million HHP 2021 1.4 million HHP (as of June 30, 2021) EXHIBIT 99.2
© 2021 ProPetro Holding Corp. All Rights Reserved. 4 ProPetro is solely focused where capital is migrating CAPITAL MIGRATING TO OUR BACKYARD Over $60 billion in Permian E&P transactions since 2018 99% Permian 1% Non-Permian ProPetro FY2021 Revenue Mix $6bn $13bn $3bn $3bn $13bn Date Buyer Value ($MM) 4/1/2021 Pioneer Natural Resources $6,400 10/20/20 Pioneer Natural Resources $7,621 10/19/20 ConocoPhillips $13,337 12/16/19 WPX Energy $2,500 12/21/20 Diamondback Energy Inc $2,962 10/14/19 Parsley Energy Inc $2,270 11/19/18 Cimarex Energy Co $1,616 8/14/18 Diamondback Energy Inc $9,200 8/8/18 Diamondback Energy Inc $1,245 3/28/18 Concho Resources Inc $9,500 Recent Permian Upstream Transactions Notable Transactions * Source: Company filings and industry research, values as of time of announcement. $8bn EXHIBIT 99.2
© 2021 ProPetro Holding Corp. All Rights Reserved. 5 YE2021 YE2020 POSITIONING FOR A CLEANER FUTURE Hydraulic Horsepower (HHP) Composition (1) Emissions data from EIA website (www.eia.gov). (2) Management estimates subject to change, DuraStim contribution dependent upon commercialization. (3) Total investments since 2019. DuraStim $145mm Tier IV DGB $37mm Investing in displacement of legacy fuels(3) Emissions Friendly Conventional Diesel Conventional Diesel Displacing Conventional Diesel Fleets with Tier IV Dynamic Gas Blending (DGB) Dual Fuel Equipment through Conversions and New-Build Purchases Pounds of CO2 per mmbtu Diesel Propane Flared gas Natural Gas (CNG/LNG) 0 50 100 150 200 (1) (2) EXHIBIT 99.2
© 2021 ProPetro Holding Corp. All Rights Reserved. 6 Net Loss: $9 million 2Q21 FINANCIAL HIGHLIGHTS Adj. EBITDA: $36 million(1), increased 78% vs. 1Q21 Free Cash Flow: $16 million(2) (1) Adjusted EBITDA is a Non-GAAP financial measure, please see appendix for reconciliation to Net Income. (2) Free cash flow (FCF) is a Non-GAAP financial measure and is defined as net cash flow provided from operating activities less net cash used in investing activities. Please see appendix for reconciliation to Net Cash from Operating activities. (3) Inclusive of cash and available capacity under revolving credit facility as of the end of the quarter. Durable Capital Structure: • Cash: $73 million • Total Debt: $0 • Total Liquidity: $141 million(3) Revenue Mix 99% Permian 1% Non- Permian 98% Pressure Pumping 2% All Other Revenue: $217 million, increased 34% vs. 1Q21 EXHIBIT 99.2
© 2021 ProPetro Holding Corp. All Rights Reserved. 7 FINANCIAL TRENDS (1) For a reconciliation to net income (loss), please see Appendix (2) Free cash flow (FCF) is a Non-GAAP financial measure and is defined as net cash flow provided from operating activities less net cash used in investing activities. Please see appendix for reconciliation to Net Cash from Operating activities Prudent approach to utilization • Effective utilization of 13.1 fleets in 2Q21 • Deploying 90,000 HHP of Tier IV DGB by YE 2021 ◦ Purchased and deployed 50,000 HHP of new-build Tier IV DGB Dual-Fuel ◦ Investing in converting 40,000 HHP to Tier IV DGB Dual-Fuel Valuable through-cycle partner • Collaboration with customers to reduce costs amid unprecedented downturn and now during recovery • Future re-investment cycle will be underwritten by customer relationships built on collaboration Revenue Adj. EBITDA(1) Free Cash Flow(2) Net Loss (in millions) $133.7 $154.3 $161.5 $216.9 3Q20 4Q20 1Q21 2Q21 $(29.2) $(44.1) $(20.4) $(8.5) $17.4 $23.8 $20.0 $35.7 $17.0 $9.1 $(5.3) $15.8 Pumping Hour Productivity 58% Change in pumping hours per day indexed to 1Q19 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 EXHIBIT 99.2
© 2021 ProPetro Holding Corp. All Rights Reserved. 8 DELIVERING DISCIPLINED EXECUTION Permian Focus Positioned in the low cost basin with sector leading operating scale Blue Chip Customers Large drilling inventories and sizeable rig programs Superior Performance Consistently outperforming the competition on location and efficient Simul-Frac completions partner Sustainable Future Investing in lower emissions equipment to reduce our carbon footprint Capital Discipline Strong Balance Sheet with no debt; disciplined capital allocation and asset deployment Safety Culture Full year 2020 Total Recordable Incident Rate of 0.49 Access to Premier Projects Meeting customer needs on their most complex jobs; dedicated contract with Pioneer Natural Resources including Simul-Frac Technology Leveraging leading cloud-based solutions to drive well-site performance to pull innovation forward EXHIBIT 99.2
Appendix EXHIBIT 99.2
10 NON-GAAP RECONCILIATIONS Three Months Ended (in thousands) June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 Net loss $ (8,511) $ (20,375) $ (44,111) $ (29,184) Depreciation and amortization 33,243 33,478 35,445 37,467 Interest expense 159 176 174 137 Income tax benefit (3,697) (6,663) (12,393) (7,717) Loss on disposal of assets 15,025 13,052 18,262 11,286 Impairment Expense - - 21,349 - Stock-based compensation 2,909 2,487 3,132 2,535 Other expense 302 (1,789) 291 312 Other general and administrative expenses (3,737) (961) 620 2,481 Deferred IPO and retention bonus and severance expense - 612 1,007 37 Adjusted EBITDA $ 35,693 $ 20,017 $ 23,776 $ 17,354 This presentation references “Adjusted EBITDA” and “Free Cash Flow,” which are non-GAAP financial measures. We define EBITDA as our earnings, before (i) interest expense, (ii) income taxes and (iii) depreciation and amortization. We define Adjusted EBITDA as EBITDA, plus (i) loss/(gain) on disposal of assets, (ii) stock-based compensation, and (iii) other unusual or nonrecurring (income)/expenses, such as impairment charges, severance, costs related to asset acquisitions, costs related to SEC investigation and class action lawsuits and one-time professional and advisory fees. Free cash flow (FCF) is defined as net cash flow provided by operating activities less net cash used in investing activities. These non-GAAP financial measures are not intended to be an alternative to any measure calculated in accordance with GAAP. We believe the presentation of Adjusted EBITDA and Free Cash Flow provide useful information to investors in assessing our financial condition and results of operations. Net income is the GAAP measure most directly comparable to Adjusted EBITDA. Net cash flow provided from operating activities is the GAAP measure most directly comparable to Free Cash Flow. Non-GAAP financial measures have important limitations as analytical tools because they exclude some, but not all, items that affect the most directly comparable GAAP financial measures. You should not consider these non-GAAP financial measures in isolation or as a substitute for an analysis of our results as reported under GAAP. Further, Adjusted EBITDA and Free Cash Flow may be defined differently by other companies in our industry, and our definitions of Adjusted EBITDA and Free Cash Flow may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. EXHIBIT 99.2
11 NON-GAAP RECONCILIATIONS Three Months Ended (in thousands) June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 Net Cash from Operating Activities $ 44,472 $ 17,008 $ 21,098 $ 21,116 Net Cash used in Investing Activities $ (28,650) $ (22,270) $ (12,038) $ (4,154) Free Cash Flow $ 15,822 $ (5,262) $ 9,060 $ 16,962 EXHIBIT 99.2
© 2021 ProPetro Holding Corp. All Rights Reserved. 12 CONTACT INFORMATION www.propetroservices.com Corporate Headquarters Investor Relations 1706 South Midkiff Road Midland, TX 79701 432.688.0012 David Schorlemer, CFO investors@propetroservices.com Direct 432.227.0864 Josh Jones, Director of Finance investors@propetroservices.com Direct 432.276.3389 EXHIBIT 99.2