Q4 2019 Earnings Call
[music].
Good morning, ladies and gentlemen, welcome to the quite can well service fourth quarter and year end 2019 earnings results Conference call and webcast. As a reminder, this conference is being recorded I would now like to turn the meeting over to Mr. Dale desktop President and Chief Executive Officer try kind of lost service limited. Please go ahead mr. drop.
Thank you very much good morning, ladies and gentlemen, I like to thank you for attending the Tri County, well service annual and fourth quarter 2019 conference call.
There was a brief outline of how we intend to conduct the call first Robert skilled <unk>, our CFO will give an overview I'll be honest one quarterly results.
I will address issues pertaining to current operating conditions and near term outlook.
Well then open the call for questions, Mike Dolan, Our executive Vice President is also available to answer questions.
I'd now like to turn the call them in a Rob to provide an overview of the results.
Thanks, Dale before we begin I'd like to point out at this conference call may contain forward looking statements and other information based on current expert expectations our results for the company.
Certain material factors, our assumptions were applied in drawing any conclusions or making a projection as reflected in the forward looking information section of our 2019.
A number of business risks and uncertainties could cause actual results to differ materially.
These forward looking statements and financial.
Please refer to our 2018.
And that business risk section of our Mdna for the year ended December 31st 2019 for a more complete description of business risks.
Certainly spacing trial.
This conference call makes reference to a number of common industry terms and certain non-GAAP measures, which are more fully described in our 2019 M.B. Riley.
Following discussion focuses primarily on the financial results of try cats continuing operations.
Further details related to try catch discontinued operations as described in our annual financial statements in EMEA.
Our annual and fourth quarter results were released this morning and are available on SEDAR.
As we've discussed at our last conference call.
Fourth quarter activity saw sequential improvements, mostly due to customers the bird work from Q3.
Improved gas prices and deferred work for Q3 resulted in customer being more active in Q4 relative to Q3.
We anticipate it seeing an uptick in activity, but the increase activity was slightly more than anticipated. In addition improved activity combined with our prior quarters reduction of active equipment.
Resulted in improved sequential margins.
For our hydraulic fracturing business profit volumes increase from the third quarter by 58% and our average active horsepower increased by nearly 50%.
We exited Q4 2019 would eat fracturing cruise, operator, which was consistent with prior quarters exit levels.
Overall, the improved activity resulted in stronger sequential gross profit at adjusted EBITDA levels.
Loss per share was down modestly sequentially due to the lower average share account and the effect of $10 million specific asset.
Legacy right.
Evidence of our aggressive cost reduction efforts was reflected in our margins. Although on a revenue levels were only 2 million higher than Q4, 2018, we were able to generate adjusted EBITDA up approximately 14.6 million compared to negative adjusted EBITDA in Q4 2018.
The improved adjusted EBITDA level occurred despite lower average pricing levels in Q4 2019 compared the prior year.
Over the past 12 months, we have a job adjusted or active fracturing crew count to better align with industry activity levels, which has resulted in more stable utilized utilization levels.
In Q4, 2018, we averaged 44% utilization on her tended to have cruise compared to 71% utilization on our eight crews in Q4 29 team.
Adjusting our crew count we've been able to adjust our support cost structure. The net result.
Better business structure is a primary contributor to our improved gross profit at adjusted EBITDA margins.
Operating cash flow has also benefited from our ongoing cost reduction efforts.
Before considering changes in working capital operating cash flow generation was approximately 18 million in the fourth quarter. Despite significant industry headwinds positive operating cash flow allowed us to fully fund or 2019 capital expenditures for.
Operating cash flow.
Our 2019 capital expenditure program of approximately 33 million was comprised a sustaining capital and in it infrastructure expenditures with modest growth capital focused on items that offered a quick payback in approved our operational efficiency.
In addition, we incurred approximately 4 million of expenditures related to the replacement of equipment.
That was damaged in a 2018 and shirt fire event.
Our approach to capital expenditures and 2020 will be similar to our approach in 2019, we will adjust capital spending levels to activity in cash flow levels and our overall expectation is for similar spending levels in 2020 relative to 2018.
During the past 24 months, we've monetized 50 million up strategy capital from our ongoing asset disposition program.
Asset sales represent permanently idled equipment that is no longer competitive in western Canada, what sales is any specialized oil and gas equipment occurring outside of Canada.
32 million up monetize assets sales in 2019 allowed us to continue to repurchase shares.
Our company.
Since we initiated our anti be around the company has castle more than 22% or the other companies outstanding common shares.
For the year ended December 31st 2019, the company repurchased and canceled 30.1 million common shares at a weighted average price per share of a dollar.
The company continues to be or ability to repurchase shares at below book value through our modest modest positive cash flow and proceeds from selling non revenue generating equipment in non core assets at prices approximating book value as reasonable uses of these cash flows.
I was at the current data, we have repurchased approximately 60% of our allotment under our current and see IB program in less than 40% at the time expired and that same and she I'd be program.
For this reason the pace or share repurchases under it and see IB program will slow relative to the prior few months.
Our approach to share repurchases will be measured given the lack of clarity regarding current operating conditions and as always we will weigh share repurchases against other investment opportunities.
As discussed on previous calls we maintain are believed in the importance of having a robust balance sheet. During the current on certain market and we will only utilize the balance sheet, yeah, the appropriate opportunity as presented.
Despite the downward activity and pricing pressures on our operations tried academy changed its commitment to financial discipline.
The company exited 2019 with a credit facility debt balance net of cash of 39 million, which is approximately equal to or exit 2018 debt balance continuing operations noncash working capital remains strong at 97, and a half million dollars for 2019 relative to 105 million in 2018.
In addition to our working capital we had assets net of liabilities for sale 35 million approximately half of this balance is represented by our fluid management service like with a balance related to real estate that has now reached on into our previously due to our previously noted cost reduction efforts.
As described in our jet fuel January news release, the sale of our fluid management service line was completed.
Although we anticipate we will monetize the remainder of these assets held for sale, our financial strength affords us the flexibility to ensure we realized strong values on these asset sales.
I'll now turn the call over to Dale who will be providing comments on operating conditions that strategic outlook.
Thanks, Rob.
Q1, 2020 activity started strong largely aligned with the expectations. We discussed at the time of our last call.
We have already seen crashing utilization levels in the high 80% to 90% range at January to that's quite in February.
All right fraction crews 22 spot yet at the nine called sitting at it spreads I fully up to January February March and we expect to see seasonal declines in the latter half of marketing into spring break up.
We are operating lots equipment relative to the first quarter last year and we believe that all competitors are simply are they reduced their equipment and personality complement.
Example, I view is that there are eight to 10 fewer fraction crews running this year exotic compared to last year.
Yeah, I would also be reductions or the number of spec crews running as Albert that's where the stock market in Canada.
Similarly cloud capacity is also being reduced.
Equipment reductions combined with the higher year over year, a rig count will result in a very little spare capacity in the basin as actively crude equipment and all service lines only modestly exceeds demand and the case was batting is under supply tied to that.
We believe that Canadian market overall, it's very close to <unk> dollars.
Lives basis, a small amount of additional I'll talk route.
All right out of equipment reductions will create an environment in which they will not be enough equipment to service our customers states.
Although there remains credit those talk to us that we believe that we in our competitors will not be adding equipment to the base out until acceptable returns our chief.
Pricing remains competitive but stable since the third quarter of 2019, but pricing for a contract services in Q1 2020 remaining flat against Q4 2019.
Given that the equipment supply and demand isn't.
Isn't balance we did not anticipate further pricing erosion throughout the remainder of 2020, providing provided industry activity remains still there till last year.
We're not anticipating a price increase at this time, however, we will monitor the market for opportunities.
We have maintained our strong group of customers in 2020 and continue to work with them to improve daily pumping efficiencies, which lowers their cost proves our margins.
I've got clients I pumping up 20 to 22 hours per day, and we have a group within the company that is working to move all backed class to higher popping efficiencies.
This effort will generate more profit from access the asset base.
The North American pressure pumping business remains competitive that companies are able to improve efficiencies and offer a low cost high efficiency save served us well maintained the best customers generate the best returns for shareholders.
Despite our high utilization in the first quarter. This year, we anticipate that operating conditions for the full year 2020, well present many of the same challenges as last year as we project a similar yearly ball town similar customer spending figures year over year.
Afterwards that maintain tight capital discipline in the face a challenging market dynamics.
Now it's that last the next outflow, preferring to focus on debt repayment and returning funds to shareholders and we believe this trend will possess the 2020.
Yes, well drafted activity continues to be impacted by the Lotto pipeline take away capacity, which creates a little incentive for producers to invest capital.
That is needed to maintain current production.
Say that there is additional I'll take away capacity coming later in 2020 that should improve this situation going into 2021.
There has been an improvement in Aiko natural gas prices. This weather as result of in house. That's it's a natural gas transmission lines of supply agreements combined with reduced natural gas storage levels.
Canadian natural gas storage levels are at their lowest level of five years America tribute and are contributing factor to the steady improvements even the gas prices at the summer law was up 2019.
Changes made to the pipeline a regulatory system and I'll turn it over the last years should should provide a better for pricing for natural gas as summer.
The second quarter April but things are currently higher than last year in our crises service line.
Whatever will benefit from the cost reductions we implemented in the second half of last year.
There's still a confirmation from our customers regarding activity for May and June and the second half of the here, but it may and June is similar to last year, we will see an improved second quarter year over year.
That's present time, we have as usual low visibility of our class second half programs.
Back to have them confirmed that the next few months.
The moment, we expect our customers to continue to adopt a cautious view for the next 12 months and we're not anticipating significant changes to their capital plans for 2020.
Our company's cost structure to better align to current industry activity levels than it was a year ago, and we continue to make cost reduction side throughout our operations.
We have a number of lean six sigma projects underway that will lower our cost through automation better efficiency in our operations and it's pretty much as previously discussed better pumping efficiency on location.
The cost reduction initiatives undertaken to date and the ones. We are currently working on will ensure that even with lot of activity, we should be able to generate modestly improved adjusted EBITDA in 2020 over 19.
The 2019, we converted approximately 27000 horsepower on diesel only to natural gas I feel capability being I've I feel to possibly.
Yeah, I'm trying to catch up about 145000 horsepower, which is almost half of the working flight.
We continue to see strong demand for natural gas powered equipment, which lowers costs and has and we have the balance sheet to continue to recondition, our existing fleet. The fact job can be justified.
We have also reconfigured one crew and I always ask technology that reduces emissions and improves fuel and repair and maintenance costs.
Our primary goals for 2020 remain consistent with those we presented last year.
First we will focus on having top quartile returns our sector by increasing the returns of my car business lines to greater utilization and I permanently lowering cost structure. This will improve the ROI c., we generated from our active equipment.
We will continue to pursue opportunities to generate fives for parked equipment or I last night that no longer can be used in Canada.
Hey, getting a healthy balance sheet, it's still a top priority. We will continue to evaluate returning capital to our shareholders. So, whereas the IB program, well monitoring cash flow from operation and not compromising our financial strength.
Our strong financial position applies S class the flexibility to find cost reducing technologies programs and training and Ishares suite and stay disciplined in a highly competitive market at the same time, let's explore investments in our existing business and potentially new service lives that sorry to put asset returns combined with long term.
Improve return on invested capital for the company.
On behalf of the board anti can't exactly that I want to thank all of my staff as we continue to pursue excellence by working safely providing great customer service.
Switching costs and improving efficiencies through our lean six Sigma program.
I'm pleased that all business lines have improved their safety performance in service quality and this ultra competitive market, which is why our card customer retention rate loyalty remained very high in 2019.
I have long stated that you also said it was business is at its current a bit a people business and I'm consistently impressed by the dedication and commitment demonstrated by our people in the face of all the industry volatility.
To the field personnel location the operational folks that are numerous basis and those working at our Calgary offices no that your efforts are appreciated in value.
Thank you for your attention today and your interest and try can I like to turn the call back to the offer as credit costs, yes. Thank you.
Well now begin to question and answer session to join the question Q You May Press Star then one on your telephone keypad.
We'll hear tone at managing your request if you're using a speakerphone. Please pick up your handset before pricing any keys to withdraw your question. Please press Star then too.
Well pause for a moment as call has joined the Q.
The first question.
Comes from Taylor circa with Tudor Pickering Holt. Please go ahead.
Hey, good morning. Thank you daily I realize you got to a pretty probably have a pretty wide book of business in terms of some small pads and larger pads that you're working on but you talked about how some of your best clients are pump and 20 to 22 hours per day. Some curious what that looks like on an average basis across your your active fleet.
Today and.
On the back end of that you know how much further room for a efficiency improvement there is within the active fleet today moving for.
Yeah within the active fleet were targeting another two hours per day across our average customers. Some open that up and yeah. We got qualify that we still do some 12 hour work in there and so you know there that that influences the numbers, but we if you looked at our overall company well, we'd be setting a lot closer to that.
12 hour out popping average comping for all of our clients now that it close some of its while our clients in there as well, but the average is there and if we have where we're targeting moving that to the party range.
Okay.
As it relates to the 2020 Capex budget I mean, you talked about similar spend levels versus 2019, and 2019, you did about I call. It 30 million a capex about 17 million of sustaining Capex said the balance that kinda that the growth wedge and there could you talk about what what the operative further opportunities you see.
From a growth project perspective in prepared remarks, you talked about.
Improving demand, we're continually improving demand for some of these dual fuel fleet some carriers and if that's an.
An area of further investment you see in 2020, and what other kind of growth buckets, you see in 2020 from a capex for sector.
Yeah, I guess, so first of all.
The way, we lucked out at any additional growth capex.
Is that it it has to have a relatively short paybacks and has to improve efficiency lower our cost structure and.
Makes us a either improve our customer service I'm, a patient or or make us more efficient company and and improve our EBITDA level and so we evaluate all those as we go and initiatives that we've undertaken last year I was I don't reduction technology or the by feel capacity.
Yeah electronics improvements however, I question equipment automation of some of our equipment and those are really this very similar to what will be looking out for 2020 with maybe an increased focus on automation as we have an outbreak projects under way to that to reduce our cost structure.
Sure and make us a little more efficient through some automation automation initiatives.
Okay got it and I'll squeeze one last one and you built some working capital here in the back half the year, a pizza that's for probably seasonal but as we think about your working capital levels exiting 2019, and and how that should trend over the course of 2020 <unk> do you care to share any thoughts there I'm just on a full year basis 2020 years 2019.
I think we would just expect similar types of trends in that we will start to see working capital and why after Q2 rebuild it.
Q3, and Q4 of next year again.
You know probably I would say our presence.
Expectations for a little stronger Q3 than we probably had last year. So maybe a little more a little more even between Q3 in Q4 next year.
Got it okay. Thank you.
I guess.
The next question comes from N Gillies with Stifel. Please go ahead.
Morning, everyone.
Uh huh.
Acknowledging I'm sure customer conversations are very fluid at this point in time, given the rapid changes in commodity prices, but could you maybe provide a bit of detail around how customer conversations have changed maybe over the last week or so versus a month ago and how you're thinking about that working through your business.
Yeah, they haven't changed at all.
At the kind of the recent crowd of Iris tight oil.
Oil price drops are very recent and sell we have had no conversations with clients have changed anything not saying that they wanted to I think our clients are much like I said I waited to see how this all shakes out.
And well located out you'll have conversations as they go into their third quarter appliance, which we always do this time here, but at the moment zero.
Yeah, Okay. That's.
That's what I figured.
<unk>.
Rob <unk> going back to you some of the comments in the assets held for sale I don't know if I missed it but is it primarily real estate outside of the water management or is there other capital assets in there that we should be thinking about.
Entirely real estate.
Okay.
And then last one for me I mean, you realized 40 million of annualized cost savings through a variety of initiatives in 2019 are there any quantitative goals around additional cost savings in 2020 at this point.
Yeah, I think so the 40 million of annualized we should get.
The benefit of those fully this year and I think this year through a bunch of the lean projects, we'd like to see another 15 million of annualized savings, but those would be a fully realized 2021.
Most likely and that's that's going to be a combination of a whole bunch of different items, but ultimately that's that's what we're targeting of physically.
Perfect they'll turn call back over thank very much.
Okay.
The next question comes on what kind of sided with Altacorp capital. Please go ahead.
Thank you for taking my call up there a couple of questions here first phone as she our pumping out was increase across the fleet, how does that change your maintenance capex numbers and food and costs.
Yeah, well basically I think it's not on a per hour basis. So that you do see at correspondence with the OCC in its we've always kind of left in our maintenance capital on our fracturing or just a percentage of revenue.
So if the revenue increases, which it does when you increase your.
Your.
Hours per day.
That you'll have a slight corresponding a maintenance capital increase as well so it definitely asphalt.
But the EBITDA benefits or even more yeah.
Uh huh.
Yeah, So it's still going to be free cash flow accretive.
Yes, okay. So just in thinking on the U.S.
Typically you see maintenance capex around four to 6 million U.S. dollar is booked through you know given a very high service and density of the jobs, what's the compatible number in Canada on annual basis.
Yeah, we were a lot more in that three to 3.5 range.
On the intensity Oh, yes, Chris part of that it's because we've got slower second quarters as well I think a good way to look at it recognizing that the 17 million a sustaining capital isn't all fracturing, but but if you just take that number.
Yes, our.
Gross revenue levels as a percentage that kind of gives you a flavor for the variability in it.
Right so.
So the 17, we disclose our outlook section and if you just take that I guess that will give you sort of a flavor for the maintenance capital.
Okay. Good up and then in terms of should do if you want to a fleet or is that tier two or are they tier four engines incident DDB new ones.
Hi, there two tiers right now.
We've certainly evaluating the two floors.
Kind of like what we've seen out of them, but haven't converted.
And if that added agrees that we made today to be tier two it's quite a bit cheaper because you have to replace the whole motor if you do a tier two tier four sorry out away just put it to bring a kid onyx here too.
We're looking at it though as I could we have an interest in that technology.
Okay. So right now on your tier two fleet that you have it doesn't have more high utilization then your either a active fleet.
Yes, very much so it's it's the most utilized equipment in <unk> and <unk> and the company and strong demand for our two we adopted <unk> Mad men exceeds arcade our capacity.
And the fuel savings that your customers are experiencing Oh, you shedding any portion of that.
In some cases, we do it depends on a on the situation.
We have a we haven't started charge that we apply Oh, we shared outweigh I guess in all cases, we are actually automatic say that in some cases, it's a little bit more than others, because we have about search actually apply.
To help cover at recover our cost so.
Equipping our fleet with this technology and and that in other cases, we actually show to feel.
Thanks.
Yeah.
And then yep.
You know some of your larger or maybe at least one a feel very large competitors.
Yeah, it's considered in closing down some basis do you have any updates on you know what's going on you know within your competitive landscape, a if you hitting about additional less supply, leaving the market.
Yeah, Hi, it's hot.
That's a hard when there's so many rumors out there all the time that competitors might be reducing or late in the market, but it's it's too hard to comment on <unk> because that's all they are it.
Except stat substantiated.
Okay and then just just one final question could you maybe a it talk about the pumping supply demand how many couldn't clues you think odd into market today, how much supply and.
I mean, the demand is today.
Yeah, if you see it kinda looked a where we think it as is there's about 35 crews working in the market. There's about 1.3 million horsepower. That's actively Craig the demand is right at that level. Yeah. It's it's I don't want does any spare capacity at all in through Q1.
I would say our view is is there.
Potentially then I'll use the big potentially at 1.8 million capacity, maybe as high as to nine capacity.
That's a part but that number has come down or we can never chocolates apart we know what we have part but our competitors.
Now we know what our competitors really apart.
After the market.
I believe the part number or the Unstaffed equipment number is probably less than one play to reality, but we just don't know what that is.
Okay, great and thank you so much if somebody I have some additional question, but I can come back later that does ask questions. Thank you should feel free to execute.
[noise], what's gotten if you have a question. Please press star then one.
The next question comes from Anthony that Linton with National Bank Financial. Please go ahead.
Hey, good morning, guys.
Well my.
In the release, you guys talked about kind of that $40 million, an annualized cost savings how much of that was actually realized in 2019.
Yeah, I think I think a we lucked out it probably would we talk about it was kind of throughout the year. Some of these initiatives. So.
Generally color about half a maybe.
Thereabouts.
Okay.
I know you already made some comments about looking towards another 15 million in but as we move into 2020, but it just what the where the commodity prices or do you could you see taking that 40, any lower or as we move through 2020.
Oh, I think how we've always run our business is that we monitor activity levels at a if activity levels fall off that we adjust our cost structure and are well everybody and everything accordingly.
Elements, we're not anticipating that but as we talked about we really have poor visibility on second half right now other than kind of normal customer commitments.
And we'll have those discussions over the next couple of months.
So it makes sense see been pretty active on the buyback for the last two years do you have a target in mind for where you'd like that share count to end up or is it more just as long as the math is favorable you're going to keep buying back shares because that's the best capital allocation option today.
Yeah, I think it's as we described we look at it every quarter, we talk with our board of directors and we look at different opportunities.
If we saw something that we felt would generate a higher.
Return to our shareholders, we would allocate capital away from the buyback.
But as we.
Our able to monetize equipment at book value.
And then repurchase shares a discount to book we will.
Continue down that path.
Okay makes sense and then just maybe the last one for me on the Capex side. It's just the disposal of noncore assets do you see any capex savings there in 2020.
No <unk> because it was all surplus gear. So it really would not change and I think as we noted to the lost a color.
And questions.
If you looked at it more as are the sustaining capital as a percentage of revenue that's really are.
Driver.
Okay. That's it for me thanks, guys.
Thank you.
The next question comes from Jeff federally with Peters and company. Please go ahead.
Good morning, guys.
Morning.
[noise] following on to the cost reduction side. So when you look at your.
Personnel expenses and direct costs on a year over year basis down a decent amount in absolute terms and obviously on a relative basis as well.
The 40 million of cost saving reductions you talked about would those be fully reflected in Q4.
Hi, largely reflected Jeff Yep Yep.
I mean, that's that's how you can look at year over year 19 verse 18 at similar levels of.
Similar levels of revenue an increase profitability in Q4, yeah.
So when we look at the change in personnel expenses and direct costs, specifically, what would be the bigger lumpier items associated with the cost reduction program for just a change in those items.
So the biggest lumpier items are obviously, there's there's personnel items, but there's a bunch of fixed cost a as weve.
Close down basis, and things of that nature.
But a lot of personnel costs as well Jeff.
And that's that's a head count thing or is it also changing because the cost structure no no change to cost structure.
You know I think there's there's probably slightly less things like overtime and things like that bye.
No change to cost structure at this point.
Okay.
Clarification on the Capex side do you expected maintenance spending in 2020 will be similar that that 17 million level.
Yeah, I think so Jeff.
So if you're <unk>.
If it implies call. It in the range of 15 million of bank of growth capital or non maintenance capital. What are what type of things are you going to be spending money on or what are the lumpier things in that we have no commitments to spend any or not at this point I think that's just a guy posted to let you guys.
Think about cash flows in modeling for full year, but but I think as Dale indicated.
We will not just at a time, if there's not an immediate payback and just just to be Claire.
So how do you think about bi fuel and how do you think about idle reduction.
Dale you mentioned that Youve now a quick one crew on the idle reduction side do you intend on equipping more equipment in 2020 with idled production and then similar question on the buy fuel sorry.
Yeah for both of those I kind of what I sat in the prepared and that has to be I thought I. Some height. So if you looked at I will say a biosimilar that for example, there has to be.
And ability to justify that off with your pricing year savings on fuel and customer commitments.
The law I'd I don't know adoption technology that.
We're in evaluation mode. We just started well we just during the process said debt through Q1 out of equip on a fleet, but I do we need to evaluate it now I see how that works and what we're seeing the savings that we anticipated.
Before we invest more there so that you know I think in not particularly technology. We have we want it probably out quarter isn't running it to make sure that repair maintenance is down and fuel consumption is down to that level. We thought before are you a pull the trigger on an excellent.
Okay and on the buy fuel side.
What's the thought process in terms of equipping additional tier two versus potentially looking at for Demoing the tier four off.
It depends on the life of equipment, so if you've got a.
Also we know tier two motor out there converting that over is fine, but if you've got out on older tier four motor you're better off looking at you know if it's got a year or two life left that you're better off looking at potentially a tier cat.
All right here for a bi fuel system. So it's all around that.
Okay, but if as you said earlier if demand is exceeding your capacity on the buy fuel side.
The incentive not unreasonably high right now to look out additional bi fuel in the near term.
It is but we also as I imagine you know.
We need our customers cash commitment on that.
To make sure they're willing to pay additional I know you know that if we get to get ready to the cat or the tier four biofuel are much more extensive I can mention on that.
Already I had that so getting you know we didn't get payback on out to the customers out to pay a little more and show the fuel savings with US we got we're not taking that's all on ourselves and similarly with the tier with a tier two conversion. So that that's always the issue I'm not saying I know these by saying that that doesn't happen because they can customers get a significant value on that.
But it's just a kind of ongoing negotiation in our contacts.
Okay.
Just to last clarification. So from a visibility standpoint, you said your April bookings are tracking higher year over year did I hear that correctly.
That's correct.
And how much confidence do you have in that book of business for April or how much of it is truly from versus at this point penciled in.
Hi, comfortable about one of the wells are drilled and there.
Or being drilled right now ads and so that's usually I guess, how these aren't future wells. So I'd say a high level of confidence in our April bookings that probably as we talked about if you looked at our son recommended it's not it's not like we don't house Mcmaster that's right now I'd say we've got.
Commitments for our clients, saying, Hey, we're going to need all of our Frackers, that's about it but that that gets burned up out they actually put wells in the schedule and that's the thing that happens next year over the next couple of months.
I know it's no it was a little bit of an arm wheezing thing, but if you think at this time last year your visibility going into the summer how would you describe the feel of the market in your customer commitments.
Right now it would be the same as last year at this point in time that our visibility you haven't seen any change at all customer actions or you know with all that commodity price volatility that we saw this week. So no real no change at all and how they.
How they are approaching it probably for the last three or say they they will commit to us and say hey, we want whatever to profit gross or you want to half of a fraction code. They do not quite early make sure they're locked down and then they give us access programs over the next couple of months and it's really this year, so far as being no change at all not from previous years.
Great to hear hopefully hopefully at home Yeah, let's open up [laughter]. Thanks, Thanks for the color.
Yeah. Thanks. Thanks.
This concludes the question and onto a session I'd like to during the conference back over to Mr. dust off for any closing remarks.
Yeah. Thank you very much for your interest in try can't today, and we certainly look forward to talking to you. After our first quarter is released thank you.
This concludes todays conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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Sure.
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