ProPetro Reports Financial Results for the 2nd Quarter of 2021

Source: www.gulfoilandgas.com 8/3/2021, Location: North America

ProPetro Holding Corp. 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.

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 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 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.”


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