Greetings, and welcome to the Mammoth Energy Services Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Ken Dennard. Please go ahead, sir. Thank you, operator, and good afternoon, everyone. We appreciate you joining us for the Mammoth Energy conference call to review 2022 third quarter results. This call is also being webcast. It can be accessed through the audio link on the Events & Presentations page of the Investor Relations section of mammothenergy.com. Information reported on this call speaks only as of today, October 27, 2022. So please be advised that any time-sensitive information may no longer be accurate as of the date of any replay listening, or transcript reading. I would also like to remind you that statements made in today's discussion that are not historical facts, including statements of expectations, or future events, or future financial performance are forward-looking statements made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Management will be making forward-looking statements as part of today's call that, by nature, are uncertain and outside of the Company's control. Actual results may differ materially. Please refer to the earnings release that was issued today for a disclosure on forward-looking statements. These factors and other risks and uncertainties are described in detail in the Company's filings with the Securities and Exchange Commission. Management may also refer to non-GAAP measures, including adjusted EBITDA. The definition of these non-GAAP measure and its reconciliations to the nearest GAAP measure can be found at the end of the earnings release and in the investor presentation, which can be found on the website, and Mammoth Energy assumes no obligation to publicly update or revise any forward-looking statements. And now, with that behind me, I would like to turn the call over to Mammoth Energy's CEO, Arty Straehla. Arty?

Thank you, Ken, and good afternoon, everyone. We are extremely pleased with our third quarter performance and the momentum we are seeing across our three major business segments. I'll provide an overview of each of these businesses before turning the call over to Mark to review our financials in more detail, and then we will take your questions. In the third quarter, total revenue grew to $107.2 million, representing an increase of 86% year-over-year, and up 20% sequentially. This strong performance resulted in adjusted EBITDA of $29.8 million compared to a loss in Q3 of last year and a sequential increase of 30% compared to last quarter. As demonstrated by these results, we continue to experience strong demand environments across our three largest segments, Infrastructure Services, Well Completion Services, and our Sand business. Our Well Completion Services division continues to improve performance, generating strong growth both at the top and bottom line, where the macro demand in the pressure pumping industry remains robust. We currently have four of our six pressure pumping spreads operating, which have full schedules through the end of the year, and we expect to add a fifth spread during the fourth quarter. Looking to 2023, we plan to activate our sixth fleet in the first half of the year. In addition, we have plans to upgrade one of our existing spreads to Tier 4, dual fuel. This would give us a total of three dual fuel fleets. We exited Q4 with annualized net income per fleet of $10 million in annualized adjusted EBITDA per fleet of roughly $15 million. Turning to our Sand business. Demand also remained strong and is supported by increased pricing. We believe this trend will continue in the fourth quarter and into 2023. While we experienced some railroad constraints during the quarter that were a constraint on total volume, pricing was up sharply, and we anticipate the transportation constraints to ease going forward. In our Infrastructure Services division, operational improvements are driving enhanced results, and we continue to add crew capacity for a sector that has a healthy bidding environment. The need for seasonal storm restoration services as well as the overall infrastructure project opportunities that have come about as a result of the historic investment in our nation's infrastructure, which was passed by the federal government last fall, continues to present prospects for growth in this business. Across all of our business segments, I'm proud of our team's continued commitment, hard work, and perseverance to manage through today's macro environment relative to supply chain constraints and labor and inflationary challenges. As we have stated before, we believe our diverse portfolio and ability to adapt quickly to changing environments positions us well in these segments. Moving forward, we continue to see improved macroeconomic trends that we believe will drive increased demand. We believe the future for Mammoth is brighter than the past, and we remain committed to enhancing value for all of our stakeholders. Turning now to an update on PREPA. We continued our efforts to hold PREPA accountable for their contractual and financial obligations. We look forward to seeing PREPA's plan of adjustment, which we currently anticipate will be filed in early December. Now let me turn the call over to Mark to take you through Mammoth's financial performance during the third quarter before we open the call to questions.

Thank you, Arty, and hello, everyone. As I usually do, I'm going to take this time to provide additional details on some meaningful metrics and several key highlights. A detailed breakdown of our results can be found in our earnings release and in our 10-Q. Mammoth's total revenue during the third quarter of 2022 came in at $107.2 million as compared to $57.5 million during the third quarter of 2021 and $89.7 million during the second quarter of 2022. The 20% sequential increase in revenue is primarily attributable to the more favorable macroeconomic environment surrounding our key business segments, most notably well completion services as well as enhanced operational performance by our teams. We are also seeing increased demand in pricing across our well completions, sand and infrastructure businesses, which we believe will continue through the remainder of the year and into 2023. During the third quarter of 2022, we pumped 1,897 stages with approximately 3.5 fleets utilized on average. This average compared to an average utilization of 1.2 fleets during the same quarter last year and 3.5 fleets during the second quarter of 2022. Our Sand division sold approximately 341,000 tons of sand during the third quarter of 2022 compared to 315,000 tons of sand during the same quarter last year and 350,000 tons of sand during the second quarter of 2022. The average price for the sand sold during the third quarter of 2022 was approximately $29.95 per ton as compared to $16.58 per ton during the same quarter last year and $26.86 per ton during the second quarter of 2022. Our Infrastructure Services division contributed revenue of $33.3 million in the third quarter of 2022 compared to $25.1 million in the third quarter of 2021 and $25.6 million for the second quarter of 2022. The increase in revenue is primarily due to improved operational execution, coupled with an increase in crew count. Net income for the third quarter of 2022 was $7.7 million as compared to a net loss of $40.9 million for the third quarter of 2021 and net income of $1.7 million for the second quarter of 2022. Adjusted EBITDA, as defined and reconciled in our earnings release, was $29.8 million for the third quarter of 2022 as compared to negative $29.3 million for the third quarter of 2021 and $23 million for the second quarter of 2022. CapEx for the third quarter of 2022 was approximately $5.1 million. This was up from the $2.8 million of CapEx that we incurred during the second quarter. The sequential increase in CapEx was related to our well completion services business, which we anticipated and guided towards last quarter. We expect CapEx for 2022 to be approximately $20 million, which we intend to fund with cash flow from operations, cash on hand, and borrowings under our revolving credit facility. As of September 30, 2022, we had cash on hand of $10.6 million and debt of approximately $92.8 million. Our total liquidity was approximately $17.5 million. In conclusion, we would like to thank our 1,000 employees throughout the company for their hard work, dedication, and commitment to maintaining safe and sustainable work sites for themselves and their teammates. As we look ahead to the remainder of the year in 2022 and into 2023, we believe that the strong macroeconomic backdrop surrounding industrial as well as oil and gas gives us a significant opportunity to capture additional market share. As always, we will maintain our emphasis on operational excellence and efficient execution which we believe will drive meaningful shareholder value.

We would now like to open the call up for questions.

Good afternoon, gentlemen. In the frac business, have you – a couple of questions. For the quarter, were the three – I'm sorry, I guess, 3.5 units in the same basins you referenced last fall – last spring? And have you mentioned where number four will go and speculate on where five – I'm sorry, five will go and six will go?

We are actually – thanks for the question, Carter. We actually have two up in the Northeast in the Marcellus, Utica area, and we have two down here in Oklahoma in a certain area. So we have got all four spreads up and running. We anticipate that the fifth spread will be up and running sometime during the fourth quarter, and it's already got a designated customer for when it's ready to start.

In one of those two basins?

Yes. This one will be – the fifth one will be up in the Northeast, more than likely.

Okay. And when we were able to meet back in New Orleans in May, one of the issues you were facing and everybody else is facing is crew availability and crew retention. Could you comment about that?

Yes. We have seen additional hiring ease up just a little bit. So we're able to bring people on. Quite honestly, one of the constraints is the supply chain and getting the parts out of some of our distributors on a timely basis. But we feel good about being able to hire the crews, and we've changed some of our incentive systems around, and we feel good about bringing people on when the availability of equipment. So we're trying to time that where they come out pretty close together. So we are finding a little bit better success than when we talked back in New Orleans. And we think that it's a bright future. And the sixth spread, by the way, we are anticipating would come on in the first half of 2023.

Okay. I'll get off with one sort of global question around the rest of the business. Is there any hot spots in terms of costs that you're not staying ahead of?

No. We have very strong pricing capability to stay ahead of the inflation curve, and that's – part of that is what you see in our results. We're up to average for Q3, about $15 million annualized per spread, and that's up significantly from where we were. And that was with a little bit weaker at the very beginning. So it's actually strengthened as we've gone.

Okay. And I keep saying this is the last one, but is there such a thing as a capacity limit of the sand production or what you can reasonably sell without, let's say, material CapEx?

We feel pretty good because we're not at full production yet on our sand. As we talked about in our call, we had some constraints with rail and that type of thing. Now we are entering winter which in the sand business is very significant because you have sand piles that are wet that you prepare for the winter so that you can dry them and size them and do everything like that. We are going into winter with a very significant wet pile. So we have seen a lot of our other competitors, and we try to look at different aspects of the business. I think it's very significant with us going in with a very large wet pile into wintertime.

I can't remember who I was talking to, but one of the producers down at Pickering last month was telling me that they were bringing their sand in wet all the time like a slurry as opposed to ever letting it dry out. Is that unique? Or is that for a particular basin? Or is that crazy stuff?

We've heard that. It's not widespread at least from what we've seen. Everybody that we've seen, whether we bring it in via rail or via truck expects it to be dry in the basins where we're operating.

Okay. Well, thank you very much, gentlemen. Great to hear such success.

Thank you.

Thank you. Thanks for including me, guys. So Arty, I've been following you for a long time, and I've been impressed over the years of making good timing decisions, opportunistic M&A or project start-ups, et cetera. As you look at the market today, where do you think the best opportunity is to kind of create value either product expansion, tactical, small M&A? Just your thoughts around that.

Well, I'll tell you. I think – and John, you'll understand this very well with the sand piece. And we think that in the near term, we end up in 2022, starting in the first quarter of 2023, we're still seeing significant pricing capabilities. And we think that having that wet pile where we've gotten it to is going to be a competitive advantage. On the frac side, as you've heard with all the other conference calls, the demand is robust, not enough frac units or frac spreads out there to carry all the demand. And I'll give you an example. We are in a position where we are timing that fifth fleet coming up. And we are in a position where the customer has been waiting on us, and they will wait. And we put things off for a week to 10 days, not because of people, but because of really a few supply chain issues that seem to be getting a little bit better, but still not there completely yet.

Okay. One of the other questions I have as a follow-on to Carter's is about the wet sand. I mean, it depends on who you talk to, but some of the equipment providers have not necessarily embraced the use of it because of purported issues, damage to the equipment, fluids, et cetera. I'm just – you're tied in pretty close with a lot of the capital equipment providers. I'm curious what you've been told then if – and if a customer came to us and said they wanted to pump wet sand, would you do it?

I don't know. You're running some risk there. And for us, having not done it before, unlike for other folks to kind of blaze that trail. It's one of those where we do have our wet piles, and our wet piles are significant at our sand plants. But certainly, when you ship via rail, you're shipping water and weight and that type of thing that take up the sand capabilities. I think a lot of what you're seeing is probably regionals in West Texas where they're doing slurry and they're trucking it there. And so they're not waiting for it to be dried and sized appropriately, I would think. John, one of the considerations that we have is the multiple grades that we produce out of our muds, 40/70 is really kind of the most expensive sand, but we also produce 30/50 and 20/40 as well. So we have to size it for what the customer specifications are.

Okay. Well, that's all I had. I appreciate you guys including me.

Thanks, John. Good talking with you.

Arty, this is Ken. We've had a few email questions, and I thought I'd pop in here after Carter and John's great questions. Can you provide a sense of how your Q3 EBITDA breaks down between frac, sand, T&D and other? Maybe Mark, whichever.

Yes, sure. I'll take that one. In Q3, well completions represented $13 million of our EBITDA; sand represented $3 million; infrastructure at $12 million. We had drilling just above breakeven at the EBITDA level and other was $1 million.

Thanks. And then one more question either one of you want to take. Could you provide some color on what Q4 looks like with the seasonality in everything?

We continue to see robust demand for our OFS services and expect a strong Q4 more specifically in relation to our two largest segments. We expect EBITDA to increase for well completions in Q4 versus Q3, and expect infrastructure to be in a similar range as their Q3 EBITDA with some potential upside in the event of storm work.

Thanks. I think we don't have any other questions on the line. So Arty, why don't you wrap it up and we'll move on to the holidays and get to the fourth quarter.

All right. Thank you, Ken, and thanks, everyone for joining us today to hear about our business. We believe Mammoth is well positioned for continued growth and supported by the best team members in the business. This concludes our conference call. Thank you all for joining. Goodbye.

Thank you very much, sir. This concludes today's teleconference. You may now disconnect your lines at this time, and thank you very much for your participation.