ProPetro Holding Corp. announced financial and operational results for the full year and fourth quarter of 2020.
Full Year 2020 and Recent Operational Highlights
? Initiated transition towards lower emissions equipment with investment in fully electric DuraStim® and commitment to purchase Tier IV Dynamic Gas Blending (DGB) dual-fuel pumps.
? Set company safety record with Full Year 2020 Total Recordable Incident Rate (TRIR) of 0.49.
? All time company high operational efficiencies in 2020, including record pumping hours per day and record low downtime per day.
? Reduced Hydraulic Horsepower (HHP) emissions footprint through recent commitment to permanently retire 150,000 HHP of Tier II Diesel equipment.
Full Year 2020 Financial Highlights
? Total revenue of $789 million as compared to the $2.1 billion in the full year 2019.
? Net loss of $107 million as compared to net income of $163 million in the full year 2019.
? Net cash provided by operating activities of $139 million as compared to $455 million in the full year 2019.
? Adjusted EBITDA(1) of $141 million as compared to $519 million in the full year 2019.
? Free Cash Flow(2) of approximately $45 million as compared to an approximately $40 million loss in 2019.
? Effective Utilization of 10.2 fleets as compared to 23.9 fleets in the full year 2019.
? Capital expenditures incurred(3) of $81 million as compared to $401 million in 2019 (capital expenditures paid as shown on the Statement of Cash Flows of $101 million during 2020).
Fourth Quarter 2020 Highlights
? Total revenue of $154 million as compared to the $134 million in the third quarter.
? Net Loss of $44 million as compared to net loss of $29 million in the third quarter.
? Net cash provided by operating activities of $21 million, consistent with the third quarter.
? Adjusted EBITDA(1) increased to $24 million from $17 million in the third quarter.
? Free Cash Flow(2) of approximately $9 million as compared to approximately $17 million in the third quarter.
? Effective Utilization of 9.6 fleets compared to 8.5 fleets in the third quarter.
? Impairment expense of $21 million related to the retirement of approximately 150,000 HHP of Tier II diesel pumping equipment.
? Capital expenditures incurred(3) were $21 million as compared to $8 million in the third quarter (capital expenditures paid as shown on the Statement of Cash Flows of $14 million during the fourth quarter).
Phillip Gobe, Chief Executive Officer, commented, “I would like to thank our customers and dedicated workforce for their resilience throughout 2020. Our best-in-class operations team steered our company to record efficiencies and safety performance despite a challenging market for oilfield services. We worked with our customers in the depths of a historic disruption to keep their operations going at a level that fit their needs, pulling through the downturn together as our relationships are designed to do. The innovation and teamwork I observed were impressive to say the least, especially considering the uncertainty we faced in our day to day lives. The accomplishments of ProPetro can be directly attributed to the close collaborative efforts of our teammates, customers and supply chain partners.”
Fourth Quarter 2020 Financial Summary
Revenue for the fourth quarter of 2020 was $154 million, or 15% higher than $134 million for the third quarter of 2020. The increase was primarily attributable to increased activity. During the fourth quarter of 2020, 98.1% of total revenue was associated with pressure pumping services, consistent with the third quarter.
Costs of services, excluding depreciation and amortization of approximately $35.4 million, for the fourth quarter of 2020 increased to $116 million from $100 million during the third quarter of 2020 primarily due to increased activity. As a percentage of pressure pumping segment revenues, pressure pumping costs of services increased to 74.5% from 72.7% in the third quarter of 2020 primarily due to reactivation of fleets.
General and administrative expense was $20 million as compared to $22 million in the third quarter of 2020. General and administrative expense, exclusive of $3 million of stock-based compensation and $2 million of other general and administrative expense, was $15 million, or 10% of revenue, for the fourth quarter of 2020.
Net loss for the fourth quarter of 2020 totaled $44 million, or $0.44 per diluted share, versus a net loss of $29 million, or $0.29 per diluted share, for the third quarter of 2020.
Adjusted EBITDA increased to $24 million for the fourth quarter of 2020 from $17 million in the previous quarter.
Liquidity and Capital Spending
As of December 31, 2020, total cash was $69 million, and the Company was debt free. Total liquidity at the end of 2020 was $121 million, including cash and $52 million of available capacity under the Company’s revolving credit facility.
Capital expenditures incurred during the fourth quarter of 2020 were $21 million mainly consisting of maintenance capital. Capital expenditures paid (as would appear in the investing section of the Statement of Cash Flows) in the fourth quarter were $14 million.
Consistent with the Company’s previously announced plans, ProPetro has initiated a transition to lower emissions equipment through its commitment to purchase 50,000 HHP, or one fleet, of Tier IV DGB equipment as well as an additional investment of $17 million to convert legacy Tier II equipment to Tier IV DGB. The Company also plans to permanently retire 150,000 HHP of Tier II conventional equipment resulting in a $21 million impairment in the fourth quarter.
In the fourth quarter of 2020, the Company had an effective utilization of 9.6 fleets. In the first quarter of 2021 the Company now expects effective utilization of 9.5-11 fleets, which includes the recent extreme winter weather events in the Permian Basin.
Mr. Gobe concluded, “Notwithstanding recent extreme weather impacts in Texas, we are excited for the opportunities ahead in 2021 as we work to capitalize on our competitive advantages of efficiency and collaboration. Considering the global recovery in commodity prices, ProPetro is well-positioned to benefit from increasing activity and service pricing in the Permian Basin. Importantly, we will strive to enhance our efficiencies and lean on our strong customer relationships to reinvest in technologies that improve the sustainability of our business. Our team is excited to prove, yet again, their ability to adapt and thrive in all conditions. Along with our customers, supply chain partners and stakeholders, we look forward to the opportunity to develop our sustainable, efficient and resilient business model.”