Good day, and welcome. I would now like to turn the call over to Matt Augustine, Director of Corporate Development 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 today are Chief Executive Officer, Sam Sledge, Chief Financial Officer, David Schorlemer, and President and Chief Operating Officer, Adam Munoz. This morning, we released our earnings results for the fourth quarter and full fiscal year 2024. 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 their 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. I'm proud to report another strong quarter and a great year for ProPetro Holding Corp. Despite the challenging operating environment for our entire industry, ProPetro closed out the year strong with a clear path ahead for future growth. Our strategy continues to yield results. We continue to demonstrate how our industrialized approach to the oilfield service business is both sustainable and profitable through the cycle. While the fourth quarter was impacted by typical seasonality and extended customer holiday shutdowns, our ability to generate free cash flow remained intact, proving once again that our capital-light, high-efficiency model is working as designed. Strategic focus on next-generation service offerings, operational efficiency, and disciplined capital allocation has made ProPetro a stronger and more resilient company, which in turn has spurred the ongoing transformation of our business over the past year to better align with macro trends and the evolving needs of our customers here in the Permian Basin. Today, approximately 75% of our fleet consists of next-generation gas-burning equipment, including our Tier 4 dual fuel and electric fleets. These assets continue to be highly utilized and in strong demand as customers prioritize efficiency, fuel cost savings, and emissions reductions. Looking ahead, our forced electric fleet remains a key area of growth for us. With four forced electric fleets operating under long-term contracts, we expect to deploy a fifth force fleet in 2025 under a similar structure. These contracts are designed to de-risk our future earnings and provide stability in what remains an uncertain market environment. Additionally, our cementing, Silvertip Wireline, and Aqua Prop sand logistics businesses continued to succeed, contributing to our company's overall financial strength. While utilization across all service lines was impacted by seasonality in the fourth quarter, we are encouraged…

Thanks, Sam, and good morning, everyone. ProPetro's performance in 2024 showcased the results of our strategy at work. Despite revenue declining 11% from 2023, we reduced capital expenditures by 57% and increased free cash flow adjusted for acquisition consideration over nine times to $118 million. The year-over-year improvement is a direct result of our more industrialized and capital-light investments, our ongoing operational optimization, and our operational excellence that provides us the opportunity to work with the best customers in the Permian Basin. Additionally, since the inception of our share repurchase program in May 2023, we have returned $111 million of capital to our shareholders. Simultaneously, we have significantly improved our working capital position year over year. Our efficient capital management and strategic growth funding underscore our company's unique strengths and unwavering commitment to financial and operational discipline, which were particularly evident in 2024. Moving to the fourth quarter, while financial results for the fourth quarter decreased relative to the third quarter, we were still able to generate strong free cash flow, particularly when considering adjusted EBITDA less incurred capital expenditures. We also continue to take market share across our service lines, most notably in frac and cement. Moreover, despite the headwinds we faced as a result of typical seasonality and general market softness, we generated strong free cash flow and continue to execute on our strategy, further illustrating the industrialized nature of our business. Fourth quarter revenues decreased 11% versus the third quarter, net loss was $17 million, and adjusted EBITDA decreased 26% sequentially to $53 million. Notably, the net loss for the fourth quarter included a non-cash impairment expense of $24 million related to the full impairment of the goodwill in our wireline reporting unit. Additionally, we incurred an operating lease expense related to our electric fleets of $15…

Thank you, David. Before we wrap up, I want to reiterate my enthusiasm and confidence about the future of our business. Demand remains strong, and we continue to grow our presence in the Permian Basin with our sophisticated bifurcated service offerings that now include Pro Power, along with next-generation frac assets, cementing services, wireline services, and web sales solutions. Much like 2024, we expect 2025 to be another year filled with growth and success for the company. We've industrialized more of our business, built a strong free cash flow profile, and expanded into a transformational new market with Pro Power. And despite recent ongoing headwinds, ProPetro is nonetheless uniquely positioned to capitalize on opportunities just as we did in 2024. As we move through 2025, we will continue to execute on our strategy, grow our force fleet presence, scale Pro Power, and maintain a disciplined approach to capital allocation, always with an eye on operating safely, efficiently, and responsibly. Lastly, before we open it up to Q&A, I want to take a minute to thank ProPetro teammates for their hard work and dedication to our company, our mission, and to each other. It is because of you that our success is possible. Regrettably and sadly, we were recently reminded of the inherent risks faced by the brave men and women working on our locations every day. Late last month, a ProPetro employee tragically lost their life, and another was seriously injured at a job site. Our hearts are with both of those teammates, their families, and loved ones at this very difficult time. Safety is of paramount importance to ProPetro, and we continue to work diligently to determine the cause of the incident and ensure that it never happens again. I ask that you keep our fallen teammate, all of our teammates, and everyone working in the field that helps provide the energy we all rely on in your thoughts and prayers. Thank you. With that, operator, we'd now like to open the call to questions.

The first question is from Kurt Hallead with Benchmark. Please go ahead. Hey. Good morning, everybody. I'm Kurt. Sam and team, honestly, I want to applaud your dynamics here in pursuing an emerging growth opportunity and being creative on how you go about doing it. See how the market kind of played it out over time. But let me start on the power front if I may. Right? So you guys have obviously started the process back in December with that 110 megawatts of power, increasing that somewhere between potentially 150 to 200. Can you just give us a quick refresher on how we could start thinking about what kind of incremental revenue and EBITDA generation, say, 150 to 200 megawatts of power, could provide and maybe just in conjunction with that? Right? I'm just thinking about it on an annualized run rate, not a specific year.

Sure. Yeah. I'll let David kind of chime in maybe with some numbers and timing on all of that. But yeah, thanks for asking about how our business works. Super excited about that. You know, given kind of the cycles that we've played through the last several years, it's definitely exciting to have something that we can grow and kind of move back to our entrepreneurial roots and growing things organically. We believe that that's the best, you know, the lowest cost and the highest value way to do something like this. Doesn't mean that we're not out in the market exploring other options to possibly accelerate that. But we're really excited to put this together with what we believe is great leadership for the business and to make it sturdy and very competitive for the future. David, I don't know if you want to talk about timing of earnings and revenue and things like that a little bit.

Sure. Yeah. Kurt, you know, I think the way to look at this on the power side is really it's going to be a 2026 impact. We're spending 2025 placing orders, getting our commercial architecture put in place, and I think the impact is going to show up then. And if you think about our guidance of 150 to 200 megawatts, apply about a $300,000 to $400,000 per EBITDA per megawatt per year to that business. And I think you can start getting to the range of returns that we would expect. You know, these assets have longer lives than some of our older conventional equipment. The return on invested capital there is on the higher teens. So a three to four-year payback is going to give you, I think, should be a reasonable expectation there.

Yeah. Kurt, the only thing I'd add to what David just said is that, you know, we expect these first deliveries to start trickling in around midyear this year. That said, it doesn't show up all at once. So we'll be taking deliveries over time for what we've announced, starting midyear this year into Q1 next year.

Okay. Appreciate that timing update. And then just a follow-up question for me is on the frac business. You know, obviously, some of the other larger companies have already reported, and the dynamic at play there was talk of, you know, some pricing pressures. And, clearly, these companies do operate, you know, in the higher-end frac business. So it kind of struck me that you referenced that, yeah, pricing was relatively stable. So I'm just, you know, trying to kind of educate myself and connect the dots as to how you see things going on. See, how do you think things are going through your business and how the market's evolving from a pricing standpoint?

Sure. Yeah. And I think it's always important to make sure we aren't trying to compare apples and oranges too much when we're thinking about the market that way. This is all Permian, and this is all blue-chip E&P for us. So it is, you know, we're very proud to have a very consistent and sturdy outlook because of the customers that we work for with the type of equipment and agreements that we have with those customers. It'll be more of the same from us as it pertains to those things this year. And to state the obvious, we, you know, we can't speak about basins or customer types that aren't the Permian and are these larger, more sophisticated E&Ps.

Got it. Appreciate the color. Thank you.

The next question comes from John Daniel with Simmons. Please go ahead. Hey, John. Sam, I think you mentioned in the prepared remarks you guys are estimating 85 full-time fleets in the Permian today. As you think about continued completion efficiencies and all of that good stuff, can you maybe provide a range of where you think the Permian Basin could be four to five quarters from now?

And the all else being equal scenario other than efficiencies, I think it's pretty flat, John, but I think, you know, flat is the simple way to say it, but as you know, the nuance inside of that is how big are some of these fleets, what type of work are they doing. You know, if you look back four or five years, the average fleet size in the Permian from a horsepower standpoint is as much as 50% larger than it was five years ago. I'm not telling you anything you don't know. So to make that, you know, comparable number, if you were going to try and compare that to five years ago, it'd be, you know, 50% more fleets active right today because of the efficiencies continue to go up. And look, I mean, I think a lot of people can make that kind of a bad or a bear story as it pertains to pressure pumping. But if you play at the high end of the efficiency game, you'll always have work. You'll always have a great value proposition, and that's where we think we stand today.

Okay. Fair enough. Just one quick follow-up for me. On the CapEx, I think if I remember the press release correctly, $150 million to $200 million would be dedicated towards the completion segment, and I think your CapEx in 2024 was, like, $140 million-ish ballpark. Okay. And I know there's some leases in the 2024 number, but I'm curious, is that $150 million to $200 million, does that include anything above and beyond fleet five?

No. It doesn't. But what it does include is some refurbishment of our Tier 4 DGB equipment. So we've got a little bit more of that in 2025 than we did in 2024.

Got it. Okay. Thanks for including me, guys.

The next question comes from Eddie Kim with Barclays. Please go ahead. Hi. Good morning. Just wanted to ask if you could talk about your general outlook for 2025 or this year in the frac business. Most have been calling for kind of a flattish activity environment in North America this year. Is that how you're seeing the market as well? And related to that, you said you expect to run 14 to 15 active fleets in the first quarter. Is that a good run rate to use through the end of the year? Or what's the right way to think about that progression?

Yeah. I mean, the last question is yes. That's probably pretty good. That would go along with our comments of, you know, that we just made to John about the market being relatively flat throughout the year. You know, that said, as I think about kind of the market outlook in general a little bit more and something that I think is underappreciated, is the attrition that continues to happen, that we continue to see firsthand. We get inbounds from other customers about maybe some of our smaller, less sophisticated customers that are priced towards the lower end of the market and are starting to really see issues with maintaining their equipment, their efficiencies, and things like that due to not having the equipment that they need to do the job at the highest level that's expected these days on frac locations. Look, I think a flat market is really good for a company like ProPetro. With pricing in a very, you know, balanced place where you have to fight for what you have and you have to fight to keep what you have, especially on the efficiency side. But in that market, there will likely continue to be more and more attrition at the lower end that will naturally tighten things over time. So that's what we're hopeful for in the back half of the year going into next is that that kind of story continues to play out, that even in a flat activity market, the frac market could tighten up quite a bit.

Got it. And my follow-up is just on the Pro Power business. You mentioned that the initial focus of this business will be on oil and gas applications, but that you do see opportunity in data centers somewhere down the line. So is it fair to say that nearly all the negotiations you're having currently on that initial 140 megawatts on order are with oil and gas operators or service companies, or are you having conversations with data centers now as well? Or maybe put another way, should we assume that the vast majority of that initial 140 megawatts will go towards oil and gas?

Yeah. I think you should assume that for now. And our initial strategy is to work through many of the customers that we already have. That's one of the main reasons why we even started this business and did it the way we did. Because we could hardly pass through a customer's office without hearing about electricity needs. So we're really excited about some of the projects that we're working on right now. Highly confident that, you know, you'll see more from us in the future about specific contracts and commitments. That said, kind of an interesting thing that's happening is, and that I want to make sure everyone understands, is that it's highly likely that almost all of these initial orders are non-frac applications, which speaks, I think, to the opportunity we see in diversifying our business and adding more consistency to our business. I think, you know, the first few things we're working on are very related to production, midstream, things like that. We are entertaining opportunities to possibly power some or many of our existing frac fleets or our growing electric capacity, but the demand on the production, midstream, non-frac side is quite large.

Eddie, this is David. I would encourage you to take a look at page 19 in our IR deck. I think one of the things that is so striking here is that we're expecting two and a half gigawatts of growth of load growth just in the oil and gas sector over the next three years for power. When you then add on to that the additional load growth for the entire Permian Basin over the next, you know, ten, thirteen years, it's just significant. It's a different growth trajectory than the business that we're in. So a lot of opportunities there. Certainly, as Sam has mentioned, we're leveraging on our oil and gas roots and the connectivity that we have with our customers, and we see that as an advantage right now.

Got it. Great. Yeah. Definitely sounds like a lot of viable end markets here. So thank you for all that color, and I will turn it back.

Our next question comes from Waqar Syed with ATB Capital Markets. Please go ahead. Good morning, Sam, David. Couple of questions. Just wanted a little bit more specific guidance for Q1 and for 2025. And how do you see the revenues and EBITDA maybe tracking quarter over quarter in Q1?

This is David McCarra. I think, you know, we'd like to stick with the guidance that we gave. We believe our fleet activity is going to be between 14 and 15 fleets. I think we've seen some positive activity so far early on in the year. But I think we want to be mindful of providing too much guidance there. I think we are benefiting significantly from the cost management efforts over the last couple of years, and those are really beginning to play out. But, you know, about the guidance that we'd like to give at this point.

Yeah. Waqar, I'll just file on top of that. We think Q1's headed back in the direction of Q2 and Q3 last year. Look. Looks something similar to that.

Okay. Great. Okay. And then, you know, how is the EcoProb acquisition coming along? Are you seeing penetration into additional fleets?

Yeah. I mean, AquaProp has been great. That said, the timing of when we acquired that was quite a peculiar time in the sand market in general, where we saw sand prices, dry and wet, crash across the market, which probably hindered some of our growth opportunities. But we're excited about what's to come with that, and we're continuing to push certain customers to consider that as more of an integrated option with what we're doing. I can tell you where we do have fleets where we do have AquaProp and Silvertip Wireline services, we're seeing some of the best efficiencies in our entire portfolio. So that story is definitely proving out as helpful as we go into customers' offices to promote and talk about that.

And could you maybe talk about the pricing environment for your cementing and wireline business?

Yeah. The cementing, I think our cementing business here recently and our outlook throughout this year might be one of the brightest spots in the entire company. You saw that we announced the divestiture of our Vernal, Utah, operation. It was very small in terms of significance compared to our Permian business, but it was our only non-Permian business, and that's helped kind of bolster focus in the Permian. So we've evolved our team. The Par Five edition is continuing to pay dividends with a better outpost on the west side of the Permian Basin. We're super excited about Splinter. Wireline has been a little loose here in the back half of last year, rebounded a little bit in the first part of this year, but that pricing environment is definitely weaker. And I'd say a similar approach to AquaProp this year. We're going to be looking to try and push that service more as an integrated service along with our frac fleets this year.

And Sam, there was a major acquisition announcement made recently in the E&P side with Diamondback planning to acquire Double Eagle. How does that affect ProPetro, if any? Or how could it?

Yeah. Look. We're on, I mean, we're on both sides of that deal right now. So we like deals like that. It's not been uncommon for us to be on both sides of a deal. Back to kind of some of the efficiency and operational performance comments I made earlier, we let that speak for itself. Really. I mean, companies like Diamondback are looking for consistency, reliability, and great performance at a great value and price. And we think we're providing that on both sides of that deal. So overall, look, we're not scared of consolidation in the Permian. We think it's really healthy. We think it creates more rational behavior, I mean, upstream and downstream of us. Maybe every now and then, it causes some turbulence in the near term, but we're not building a business for the next month or the next quarter. We're building a business for the next decade. So the more rational long-term behavior that exists upstream of us, the better. And we'll be here to serve those sophisticated large E&Ps.

Great. And then what's the timing of the fifth eFleet?

Midyear. Midyear third quarter.

Midyear. Okay. And just my last question, Sam, you're entering into a new business, the Pro Power business. It's certainly new business can have operational risk. How do you see those operational risks? How are you trying to mitigate those? You know, how would you kind of give the investors confidence that, you know, there won't be any growing pains or hiccups or things like that? Operational hiccups as you build that business?

Yeah. Two things. Great question. It's something that we're talking about a lot. We're very focused on. Given that we kind of have, you know, we've already made our entrance into the supply chain with these orders, the next focus of that business is obtaining commitments and contracts and then executing once we get it. But I think the two things that leave us confident are one, the leadership that we already have for that business in Travis and Dave and the team that they are currently building. You know, it's really fun to have the opportunity to build the culture that you want to build without inheriting, you know, issues from somebody else. So we're hard at work building that team. Really excited about that. And then after that, you've got to go execute. You've got to go execute in the field, and another thing that we're really confident about is going to be our ability to use the existing ProPetro infrastructure. We believe and can confidently say this that we think we are one of the best organizations at managing personnel, equipment, and logistics. We already have the infrastructure. We already have the customers. We already have the supply chain, the maintenance systems, and we're going to rely heavily on what already exists within our company to make sure that we're able to execute at just as high or higher of a level that you see all of our other business lines currently executing today.

Well, Waqar, this is David. You know, the other example here is, you know, eighteen months ago, we did not have electric frac operating in the field. Today, we've got four fleets on contract. We believe that we are at the top of the technology stack there. And I'd call out another slide in our IR deck, slide 20, which talks about the commercial rationale that Sam just eloquently described. But it really shows you that it's a natural extension of what we've already been doing from a strategic standpoint, bringing in equipment that has longer lives, lower capital intensity going forward, and leveraging on ProPetro's strengths.

Great. Well, thank you very much. That's all from me.

The next question comes from Derek Podhaizer with Piper Sandler. Please go ahead. Just wanted to maybe if you could expand on the type of equipment you're ordering for Pro Power. So you obviously have the initial 110 megawatts. You have this follow-up 30 megawatts. You provide more color around whether these are turbines, resips, you know, maybe kit size, whether it's two and a half megs, the five point seven to sixteens, just maybe some more color around the type of kit that you're using to build up for Pro Power.

Yeah. It's a little bit of both. Our initial order was turbines, five megawatts and up, and our most recent order is resips, that's three megawatts and up.

Got it. Okay. That's helpful. And then just a question of switching over to the eFrac side. I mean, you know, like David just said, you've had them in the field for eighteen months now, four of them. How's the evolution on the maintenance CapEx been moving from conventional to eFrac? Maybe just some color on what maintenance CapEx per fleet looks like, how often are you bringing these things in the shop, you know, what are your major CapEx cycles look like now? Just maybe some more color on the overall maintenance CapEx cycle for these eFleets now that you had them in the field for a while.

Yeah. David can share some particulars, but I'd say in general, it's been phenomenal. It's better than I personally expected. And I think what we're seeing is that things like maintenance CapEx and just day-to-day operational efficiencies kind of run hand in hand parallel. And, you know, the more you can keep that equipment on location, the more you can operate efficiently with it. So, generally, it's been great, which leaves us high conviction. You know, in my prepared remarks, we kind of listed out the stack of capital allocation priorities that we've been pivoting between dynamically in the last couple of years. I'd say that stack is relatively in order today pertaining to what competes for capital in our business. It can change as the market changes, and it has definitely changed a little bit in the last couple of years. But that's a, you know, first or second on that stack because of the successes that we've seen operationally and economically with that equipment. I don't know if David will want to add a little bit of color on the maintenance CapEx.

Sure. You know, Derek, this is such a positive aspect of what's been going on. You know, we decreased our CapEx guidance three times last year. And we went from having two electric fleets at the beginning of the year to having four by the end of it, and we saw such a dramatic impact in the CapEx intensity that we had previously experienced in prior years. So just the complexion of the fleet changing and continuing to evolve toward electric is going to be impacting our maintenance CapEx going forward. I think, you know, we're seeing 30% to 50% lower CapEx intensity. And when you think about it, one of the major components on a conventional frac asset is a diesel or a Tier 2 Tier 4 dual fuel engine, which has 3,500 parts in it, many of which are moving. The electric fleets replace that with a transformer and a variable frequency drive box. The moving part is the door handle. So it just kind of shows you the significance and the paradigm shift there. And when we think about the electric equipment, now we're moving even further toward lower capital intensity because they don't have the power ends on the back that are pumping harsh, you know, water and sand at high pressure downhole, you've just got a generator spinning a crankshaft or some type of generator. So we think that that's going to continue to play out and pull our maintenance CapEx down over time, and we're seeing that already.

Great. Appreciate the call, guys. I'll turn it back.

The next question comes from Don Crist with Johnson Rice. Sam, one quick question on the power side. Contract-wise, are you ordering these assets with firm indications and working on contracts, or do you actually have contracts in place? Any kind of color you can give around there?

Great question. We don't have any contracts in place today. That said, we are looking at this very similarly to the way we've looked at our existing business, especially our frac business, where you might not have a contract in hand when you place the order, but you might be talking to three to five customers for any single asset or any fleet. And we said it's the same thing here, you know, with 140 megawatts on order today, I'd say our opportunity set exceeds that. And, you know, we're just kind of in the early days of marketing and commercializing this and kind of making known what we're going to be capable of. So we'd expect that demand to grow, and we'll be balancing, you know, being competitive in the supply chain as many of these items are rather long lead with how many opportunities kind of we're seeing out in the future to do it in a disciplined manner where we're not obtaining assets that don't have work on day number one when they're delivered.

Okay. And then we do, given that there's...

I'm sorry. I'll kind of add on there. You know, we do expect to obtain long-term contracts for all of this equipment. I'd say everything we are negotiating or conversating about right now is three years plus, three years at the minimum, if not five years or more. And that's, I mean, for old frac guys like us, to be able to get that kind of visibility and consistency in our business, I think that's transformational from a value proposition standpoint, creating much more consistency in our outlook.

Well, and Don, this is David, just to add to that. I think when we look at the value proposition that we might provide a customer for our conventional or completions businesses, it's certainly compelling. But when we look at the Pro Power opportunities and the value proposition for our customers there, that is really exciting because the significance of that value is materially greater. So as Sam mentioned, you know, there's a lot of confidence in what we're doing right now. But as we did before, you know, remember, we ordered four electric fleets before we had any contracts. Right? We had confidence in the equipment. This was not unproven technology. We're doing the same thing here on the Pro Power side. And we've got the expertise to support that deployment, and so I think the confidence is very high.

Yeah. Don, sorry. You really got us going here because this is exciting stuff. But I think another thing to consider, which is not, I don't think this is at the forefront of our strategy, but will likely play a significant role in our power deployment in the future, is our growing eFleet demand. Just the growing power demand for eFleets in general. I think we're consuming about 160 megawatts of power on our four fleets today, two of which are simul fracs. These are going to be big operations that are going to need more and more power. Like David mentioned earlier, we kind of outlined that and the demand for that in our investor deck. And back to the contract story, I mean, all of this equipment comes with contracts. And, you know, we're headed towards possibly even contracting almost half of our frac business later this year between what we're doing in the dual fuel and the eFleet market. So if you kind of look out over the hill as it pertains to the contract story and the consistency of what this power business could bring, you pair that with the eFleet and dual fuel progress that we've seen in our business in the last couple of years, we could be going into 2026 and beyond with a majority of our asset base under long-term contracts, which we think is game-changing in the oilfield service market, super excited about that.

I appreciate all the color. It's going to be fun to watch. Thanks, guys.

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

Thanks, everybody, for joining us today. Let us tell you a little bit about our company and our story. I look forward to talking to you again soon.

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