Q1 2021 Ranger Energy Services Inc Earnings Call
[music].
Greetings and welcome to brings your energy services incorporated first quarter 2021 earnings conference call.
At this time all participants on a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded I would now like to turn the conference over to your host Mr. Darron Anderson Chief Executive Officer. Please proceed sir.
Thank you operator, good morning, and welcome to Ranger Energy services first quarter 2021 earnings conference call joining.
Joining me today is Brandon <unk>, but it's always on our CFO, who will offer his comments in a moment.
The first quarter presented some very unique challenges for Ranger.
The compounding effect of several activity disruption, but I'll talk about in a moment had a material impact to our quarter's performance.
However, while we had planned for better result.
The fundamentals of our business and performance metrics are all pointing in the right direction as indicated by our Q1 exit rates and the start to Q2.
As I walk through the business today.
Hope to clearly communicate our challenges of the quarter.
But it equally point out the current performance of our business line.
In addition, I'll provide more detail on the fifth strategic opportunities that we've been working on <unk>.
As well as a reminder of the balance sheet improvement made since our last quarter.
Starting out with our balance sheet.
We've long tail to a three pronged strategy underpinning our intention to be the best M&A partner in our space.
Sorry to be a top quality operator.
Second to be as efficient as possible in our cost structure and third to have an attractive balance sheet.
To further enhance our balance sheet strength, we successfully monetize our DJ basin operating facility for $13 million any sale leaseback transaction.
With this transaction occurring in early April it is not reflected in our Q1 ending balance sheet.
This transaction has allowed us to reduce our revolver draw to zero.
Lauren on net debt by striking 40% to just $18 million.
Concurrently we entered into a long term lease at attractive rate. So.
There will be no change to our DJ basin operations.
We are very pleased to have monetize this attractive piece of real estate to which the equity equity market was assigning a little value to.
Now moving on to our segment, starting with high spec rig.
On our keep our call.
Bulk of the ramp we are experiencing within our high spec rig segment, which resulted in a 43% sequential increase in rig hours for that quarter.
This strong activity continued until the last couple of weeks of December when select 24 hour rigs Pos as a result of customer consolidation.
Because we anticipated this interruption to be temporary in nature combined with considerable new inbound calls per rig we maintain our staffing levels. While also preparing additional rigs for deployment.
By the fourth week of January our high spec rig finally returned to the revenue levels that were being achieved prior to pre holiday and customer consolidations and shutdowns.
Unfortunately, we were only able to fully operate for 14 days until our North Dakota operations began to cease due to winter storm Yuri.
On average each of our seven rig location from North Dakota to South, Texas lost seven operating days as the winter storm moved across the U S.
With operations not returning in full until February 20 <unk>.
In spite of these impactful interruptions for the quarter.
Our key one regards actually came in slightly ahead of our Q4 hours.
This is a clear demonstration of the activity growth that would have occurred across Q1, if not hindered by activity interruptions.
To better highlight at this point.
December of 2020, with our best month per rig hours in the fourth quarter, yet our Q1 March exit rate was 22% higher.
Furthermore, as we have begun to implement price increases we are starting to see the impact at March exit rates were $27 per hour or 5% higher than our Q4 exit.
The last metric I want to highlight is the trajectory of our high end 24, our rig activity.
At year end, we are running $5 24 hour rigs.
At the end of Q1, we were at 7%.
And currently we have just deploy the 11th rig with another three possible in the coming months.
As evidenced by the combination of both ours and pricing increases.
Our growth is not coming at the expense of customer quality, our undercutting competitive pricing.
Whether this is the continued manifestation of the groundwork we have been laying over the last three years and high grading our customer base to those top tier clients that are willing to pay for value rather than just settling for the lowest quoted rate.
Sustainable pricing that supports training maintenance and acceptable return levels is good for the entire industry, both e&ps and service providers.
On the expense side of the equation note that our activity ramp with during the disruptive event previously mentioned, meaning we were already carrying extra non revenue ramping expenses expenses, which did negatively impact our Q1 bottom line.
Next moving to completion and other services.
Starting with wireline.
Here, we see a similar story to the highest spec rigs during.
During the quarter, our wireline basis averaged six three active truck, a 12% increase and a nice growth rate for the business.
However.
Total stages were down 10%.
This data points highlight the level of interruption experienced in the quarter and the resulting in efficiency.
Windstorm jewelry with even more impactful to our wireline business as activity not only stopped for seven days due to weather, but was followed by another three days of startup issues due to sand mine delay.
Additionally, last quarter I spoke of our first thermal frack trial with a select customer.
To date, we have not performed from a frac operations with all of our customers.
While our clients are now implementing this type of operations as the Gulfport practice, our first quarter and even April was highly inefficient as customers had not yet transitioned their well pad designs for consistent simultaneous operations.
While we are excited for the return of our historical efficient operations. Our excitement is tempered by the continued low price and within the wireline market to date.
We are confident that pricing levels have reached bottom with select examples of price increases being successfully implemented.
We still this service line.
Now it is prime for consolidation a point I'll talk about in my closing comments.
To round out our completion and other services.
The activity levels of our remaining smaller Novus service lines were relatively flat to Q4 with a proportion of the decline to the loss of weather days.
And finally processing solutions.
The top line for this segment was sequentially down $100000 due to the relief of let gasco within the quarter some of which are set to return to rent during the month of may at higher rate.
As I've stated before the traditional use of these assets lagged drilling and completion activity.
Given the increase in commodity prices and growing activity levels, we expect greater utilization of these assets as we move further into 2021.
While the traditional use of these assets has been closer to a midstream application. We are now bringing these assets to completion operations.
We have successfully completed gas processing jobs from core.
<unk> dual fuel fuel and E Frac fleet and anticipate more to come.
There are several rewarding attribute to this transition.
We're tangibly contributing to the ESG efforts of our industry.
We're able to accomplish this with our same technology and asset base, requiring only minor modifications to increase their mobility for frequent moves.
And based on early results processing infill gas for fuel applications is yielding considerable savings to our customers.
While we are in the early innings of a long transformation. We are in a great position of owning a strong applicable asset base with the required negligible levels of incremental investment.
I will now turn the call over to Brandon for detailed discussion on the numbers.
Great. Thanks, Dan and good morning to everybody on the call.
Go ahead and do the standard walk through of the first quarter details.
First on the consolidated net numbers Q1 consolidated revenue was came in at $38 3 million down, 8% or $3 2 million as compared to Q4 is $41 $5 million.
Consolidated adjusted EBITDA went to just negative at a $200000 loss, which was down $3 4 million from Q4's $3 $2 million print.
Note that in our reported non adjusted EBITDA It was higher than our adjusted number by $1 4 million. This delta reflects the inclusion in EBITDA, but not an adjusted EBITDA of a $1.4 million benefit reflecting forfeited 401, K matching amounts that were.
In prior periods also note that this quarter's earnings similar to previous quarter did not include. The addition, or do sorry do include the additional expense of $1 $1 million associated with high spec rig we activations.
And now on to the segment details starting with revenue.
High spec rig revenue was flat at $22 million. The result of a slight increase in rig hours offset by an equally slight decrease in composite rig rates, specifically revenue hours increased from 43100 hours to $43200 or less than 1% change as <unk>.
<unk>.
Both as slow January ramp and weather played a role in dampening the Q over Q hours increase more reflective of the actual ramp we saw activity across Q1.
The metric that Darren just mentioned the 22% increase in rig hours, we saw at Q1's exit versus Q4's peak hourly run rate.
Q4's average rig count was up four rigs to 65, but again that metric masked quite a bit of volatility both due to February as weather disruptions and some swapping out of customers as we move to more 24 hour work.
Quarterly average composite hourly rig rates decreased just slightly again down 2% or $10 an hour moving from $503 an hour to $193 an hour.
The quarter over quarter decline in pricing was the result of February as weather disproportionately hurting 24 hour work, leading to a mix shift for the months towards towards lower rate day light.
<unk> work specifically on average for the entirety of Q1 24 hour work dropped to just 19% of total rig activity as compared to 26% for Q4.
However that sequential drop was driven solely by February as activity in March 35% of the rig activity was related to 24 hour work a recent high point.
And on completion other services segment revenue saw a decrease of 17% or down $3 1 million to $15 5 million in Q1 from Q4 is $18 6 million.
The other portion of our non wireline services in this segment did see a modest revenue decline. However, the primary driver of this segment's decline was our mallard wireline business.
Here, our wireline business saw revenues down 18% sequentially.
Driven by a 9% decrease in composite price per stage, along with a 10% decrease in period over period stage count.
The decline in stage count was counter to the 12% increase in the quarterly average truck count. This is Dan on detailed that the result of both weather and a temporary reduction in stages per truck day efficiencies as the final frac operations ramped up.
Also note the decline in pricing that we saw on in Q1 was driven by a mix shift rather than any customer specific price change with some lower <unk> work showing an increased percentage of the Q1 total work.
And finally at our processing solutions segment revenues held nearly flat dropping a modest $100000 quarter over quarter from $1 2 million to $1 1 million.
And now onto segment level EBITDA margins overall segment level adjusted EBITDA. This before corporate G&A came in at $4 2 million.
A decrease of 40% or $3 million moving down from Q4, seven $2 million.
All segments showed decline.
<unk> declines at highest spec rigs and processing solutions at a more significant decline at the completions and other services segment.
On the margin front consolidated segment margins again before corporate G&A were down from 17% to 11% on the G&A front G&A expense as adjusted was up $400000 from Q4 is 4 million to Q1's for <unk>.
4 million. This sequential increase was in line with historic first of the year increases that we generally see unemployment tax along with some other non periodic expenses.
And now at the segment level for EBITDA.
Spec rigs segment, EBITDA decreased 7% or $200000 to $2 7 million from $2 9 million in Q4.
This margin is moving down in tandem slightly from 13% to 12%.
And I'll note similar to last quarter adjusting out the $1 1 million of make ready expenses, we incurred in the quarter. In this segment would have resulted in an EBITDA margin of 18%.
Just down from last quarter's as adjusted 19% EBITDA margin and I'll note that these levels are towards the top end of our historic range for this segment.
At completion and other services EBITDA was down $2 7 million moving from three $6 million to $9 million.
Margins here were down from 19% to 6%.
And it's the combined impact of weather disruptions lower efficiencies and pricing as previously detailed.
And finally processing solutions, EBITDA decreased 14% or $100000 $2 6 million from Q4's, 0.7 1 million with segment margins only down slightly to <unk> 55 per cent.
And on the net income.
For Q1, we reported a net loss of $8 3 million, a $1 6 million decrement versus Q4's loss of $6 $7 million.
This delta is largely in line with the net impact of the sequential adjusted EBITDA change, which share was partially offset by the benefit of the $1 $4 million 401, K forfeiture that we discussed earlier.
Now to the balance sheet first debt.
Net debt did show an increase during Q1, moving up $3 8 million from year end $26 million balance to Q1's, ending $30 million on balance.
This increase.
Largely driven by a $2 6 million dollar incremental working capital draw along with $1 2 million of Capex expense obligations incurred during the quarter.
As usual I will note that we did reduce our term debt during Q1, another $2 $5 million, bringing Q1's, ending balance to just $15 million.
On the Capex front Q1 was another quarter, which we saw very little maintenance Capex spend again, this quarter totaling less than $200000 across all business lines.
On the growth Capex side, we did purchase incremental new 24 hour rig ancillary equipment spending here just over a $1 million. The majority of this million dollars was seller financed at very attractive terms over a 36 month period.
As with the last quarter. During Q1, we did see some significant spending in high spec rigs on reactivation and the upgrades. However, as we have historically, we continue to adhere to our high capitalization thresholds, resulting in non resulting in materially none of these amounts showing up as cash.
Realized.
Now on the liquidity.
We ended the quarter with $13 million of liquidity, consisting of an $11 million capacity available on our revolver and $2 million of cash that was down $3 million from Q4 is $16 million was on liquidity.
However, updating those numbers to today, we are currently sitting on $21 million of liquidity with no revolver draw on $20 million of capacity and $1 million worth of cash.
And.
Lastly, just a quick post Q1 update as we noted and as Darin talked about on our last quarter's call. We were working on a couple of sale lease back.
Opportunities.
A smaller $3 $5 million transaction was completed during Q1 and a larger $13 million transaction was completed earlier in April.
The larger transaction is of course reflected on our Q1 ending balance sheet pro forma for that transaction. Our Q1 net debt would have stood at $18 million rather than the reported $30 million as Darron noted that's a dramatic decrease and that does bring us significantly closer to our net debt.
Zero target.
And with that I'll hand, it back over to Darren.
Thank you Brandon.
So you will note that we pushed back earnings a couple of weeks this quarter.
Had two specific reasons for doing so and expect to return to our front of the queue reporting for Q2.
Firstly, we wanted to have a full look at April in order to be able to share some incremental insights in real time.
And second we are currently working on multiple smaller M&A transactions.
All of which were hoping to have done by this earnings call.
Unfortunately, this still has not yet closed.
But the measurement period for completion in days not weeks.
Given the likelihood of a couple of transactions closing prior to our next quarter call I thought it would be appropriate to share some detail around our current M&A thinking.
Our acquisition strategy has been fixed and simple.
We're focusing on potential counterparties with top tier assets, who have a reputation for best in class service quality.
We're looking at both bolt ons to our existing service line and complementary services service line that extend our current core service offerings.
Tactically, we believe in being optimistic.
Optimistic.
There is a right time, and a wrong time and each cycle to be acquisitive and I'll note that what proves to be the right timing decisions in the long run it's often countered to consensus thinking at the time.
With that said I will share a bit about what we have on the front burner.
Coincidentally the deals in process that would rank with the nearest proximity to to close are all wireline companies.
We've spoken for a couple of quarters now about the unsustainable low wireline pricing we are seeing in the market.
We're seeing competitors bid work and their variable cost, leaving low margin to support a management structure.
Excellent small to mid sized organizations carrying proportionately high G&A cost structure are themselves actively looking for consolidation opportunities.
Our mallard business with its proven operating success and streamline cost structure has risen to be a partner of choice for these types of organizations.
Looking forward, we are pleased to be participating in consolidation effort that will add technology scale and geographical diversity to our existing efficient platform.
I'll stop there and note that no deal is real until flow but.
But that should provide some useful flavor what is currently in the works.
With that I'll wrap up my prepared comments and open the lineup for questions operator.
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One moment, while we pull from our first question.
Our first question comes from Jason Bandel with Evercore ISI. Please proceed.
Hi, Good morning, Darren Good morning, Brendan how Basel David.
First question and thanks for all the data points that help to illustrate the impact from the winter weather and clearly a better exit rate coming out of Q1 and a nice ramp here in April for rates in hours and high spec rigs.
But can you quantify further revenue and EBITDA impact of weather had on Q1 and as we think about the revenue progression of Q2, what kind of rig hour growth do you think you guys can achieve.
Yes, so Doug.
Don't have the exact number for quantifying the exact whether amount of as I said in my comments. It was a combination of weather and the slow start to January ramping back up and we had some consolidation with our A&P cuts that occurred in the fourth quarter and we had some pretty material <unk> go down on last couple of weeks.
December and debt and fire back up to.
Until mid January.
Then also on the wireline side, we had one of our thermal Frac operations are back up to mid January so the challenges of January with combination of the weather, but along with.
Somewhat of a slow start to January as we've coming into Q.
Q2, and really focusing on the rig side and my comments here.
The ramp.
If I use the word significant is probably the right word to use where we're very pleased with what we're seeing right now.
We are showing the average rig count I believe was 65 for Q1 as we're sitting here today on April we're at 72 rigs.
As we sit here in April with 11, 72 rigs working 24 hours and with we anticipate a minimum of a number another 324 hour rig going out so.
<unk> that into ours is going to be a very very nice pick up for Q2 brands do you want to add to that.
Sure.
Anything Jason and it will be another non answers so I apologize for that.
To answer simply we have several numbers for the winter impact the wet winter weather impacts that we saw in Q1. The problem is is that as Darren highlighted in his prepared comments, we are carrying a lot of additional cost in anticipation of the rig ramp that has occurred.
So if I include those additional expenses.
As sitting idle, while the weather delayed our ramp we get to a really big number for winter weather impact to the degree it's almost not believable. So we've really shied away from absolutely quantifying that because of that extra expense that we're carrying through this ramp period, which did materially.
<unk> that was delayed by the weather so.
Again, the range is wide in terms of what metric you actually want to use and we again just decided to not quantify it exactly because there would be a paragraph with explanation underneath that that specific metric.
Got it understood, yes, it's always kind of hard to quantify those kind of numbers, especially early on recoveries with incremental from frankly.
Next question on per.
Pricing.
Kind of a hot topic this earning season.
So on service companies that work to recapture some of the concessions that were made in the downturn.
You touched on on a little bit in your prepared remarks, but can you talk more about the trends that youre seeing in both rigs and wireline for pricing on the rig side is it being driven more by mix as completion work comes back in line for what comes back.
Improvements, helping as well and on on the wireline side, what gives you the confidence that you're at a bottom here.
So I would say from a timing standpoint, our rigs are probably a quarter ahead of our wireline from actual price increase if not a mix issue just strictly price increases. So we started moving prices on rigs actually towards the end of Q4.
Coming into Q1, and we're starting from the full impact of that materializing now and are actually preparing for a second round of that to occur whereas on the wireline side. We just started to get our first improvement in the quarter up Q1 and towards the back end of the quarter of <unk>. So again, that's why I say from.
Timing standpoint is about.
What a difference between the two.
Definitely on the mixed side, we're going to see on the rig.
Eight probably fairly decent step up in rate composite rate when we report our Q.
Two numbers.
And Thats the combination of the absolute rate increase we have achieved but also the higher component of.
Mixing in more 24 hour rig than the hourly rates are significantly higher on a 24 hour retraction of normal daylight package. So you will see composite rig rates reported in Q2, I believe to move up materially from what we reported here in Q1.
And then on the wireline side there on the wireline side I think look at that as kind of.
Mid single digit here up our initial price increases and the older tangible so thats why we feel like.
That pricing has bottomed out because we've had some success.
The market is still.
Over.
Too much capacity.
So it will be I think a slower timeline for continuing to move pricing up but at least we have come off bottom.
And I'll just add Jason your question, how do we know that pricing has bottomed.
Certainly, we don't know absolutely, but as we look through the kind of the fourth quarter as the second half of 2020 and into the first quarter.
On our math looking at kind of over the fence at some competitors.
We think that their pricing their work at breakeven EBITDA at best and that was sustainable in 2020 and early this year with PPP money coming to our some of our smaller more focused competitors with that use and gone.
Variable price pricing variable cost pricing is not a sustainable business.
Assume just.
From a macro and micro perspective that is not the pricing that can continue to exist in this sector.
Understood. Thanks for that color and then the last one from me.
On time on Frac, there still seems to be some debate around efficiencies that are gains on kind of the value created in doing simultaneous jobs can you touch on what you guys learned from the final Frac trials that you are on and the financial benefit that you guys achieved from the on Frac.
Frac job.
Well I think the efficiencies are real again, we did our first trial job starting at the.
Towards the end of December.
With one customer to day all of our customers have completed thermal frac jobs and all of our customers are adopting them as to gulfport processes. So the operators are definitely seeing the benefit of it.
From a service side, we did see the benefit of it in Q1 spoken about the efficiency and that's because from a drilling standpoint, you need.
A minimum of four wells per pad two per sample frac to be effective.
And the drilling rates hadn't got out in front. So we had situations, where we would do a thermal frac operation net.
Pat we're moving to a three well pad.
We had a crew and the trust that was not needed.
<unk>.
Net bled over into April as we've gotten into may.
Select with these customers to adopt this process Gulfport process day of adapted their drilling program to run full bore on thermal frac and we actually have two trucks on location two crews running for Simon Frac, we're back to our normal type of efficiencies and we're getting the benefit so I think the benefit on our services.
Slide it's still to come the A&P thing on the benefit that day.
Are adopting this as part of their Gulfport strategies.
Great. Thanks for the time and help as always I will turn it back.
Thanks for your question.
Our next question comes from John Daniel with Daniel Energy. Please proceed.
Hey, guys.
Good to see the echo the comments on for the step up in April and really glad to see that progress on M&A.
I know you can't name names in that line, but as you as you look forward Darrin.
It sounds the way you described it.
Are there more tuck ins as opposed to transformative.
Do you think the strategy in the near term will be more tuck ins.
We will see a transformative deal.
Well are you looking at bigger opportunities, obviously leave it there and let you open line.
No great question. So look nothing is off the table John and.
We've looked at what I would define as small tuck ins that.
Move the needle modestly two transformative opportunities that move the needle greatly.
The near term opportunities that we have while arent transformative to an overall ranger from a materiality standpoint to our mallard business. They do move the needle with our Mallard business. So we're excited about these opportunities but to answer your question.
Yes, we continue to look at transformative deal.
Yes, we're hoping to get these two of the finish line will be our first two but the key word is first alright, and we hope to do multiple transactions.
Positioned our balance sheet and we.
We continue to get a lot of inbound.
From smaller opportunities to up.
I would say equal size of sometimes from larger companies looking to partner up with Ranger and build a strong business together.
Got it that's good to hear.
There is a universal theme with all the well service companies about labor issues.
And a significant number of them talk about the inability they're missing jobs, because they don't have the crews.
That clearly.
One would think provides the backdrop to be more assertive on price. It sounds like you guys are taking the first steps that you have the backdrop.
And Forbes getting together.
To me it feels like that part of your business from.
The first time on a long term deals.
Pretty pretty good.
Would you care to elaborate.
Thanks.
I would agree with you 100%.
First off it allows that it builds.
Very good.
Ed.
Our strategies of focusing on the top tier clients I think.
There are too many times about pursuing supermajor to know I didn't even mention that we went to work for our new Super major.
Fourth quarter as we sit here today.
First job, we did for them in the fourth quarter as we sit here today, we have four rigs working for them three of them on 24 hour basis. So.
Labor is tight.
Have we missed on job that would call in we just didnt have the crews yes, we have had.
Raise rates on some lower work that we were doing with the objective of moving those crews over yes, we view that strategy as well too.
<unk>, our workforce and asset base to higher paying work. So it is a challenge I think for our program type work. We're loading out rates were 25 basis that we now staying out we're able to go out and recruit the crews.
And get them on but we have turned down from work that called in on more of a spot basis. Because we just we just didn't have crews available.
And just for fun is the senior management team here is on call it.
Need a little bit extra helpful on that.
Labor.
Yes.
I hope so I guess my final question Darrin I mean look you have to strike the balance is leadership move out.
Growth versus returns.
At this point.
What's sort of your mandate internally, hey, guys trying to push from that extra I'm, just making up a number of 5% incremental rate increase before you try to put on a rig or do you try to put on to make to take care of the customer because they have a need how do you how you're striking that balance.
One of our objectives that we're going to be a strong cash flow generating organization and.
<unk>.
The way I would answer that question is.
I would expect that going into Q3.
On the rig side, we are going to be back to pre downturn revenue level for our rig so matching Q1, 'twenty type revenue level, but right running less rig and higher margin.
Okay, So thats well answer that question.
That's very helpful. Thank you and good luck the rest of the quarter.
Thank you.
Our next question comes from Daniel Burke with Johnson Rice. Please proceed.
Hey, guys good morning.
Daniel.
Let me take my little bite of the M&A Apple here as well Darren you talked about.
This is near term.
High probability opportunities as existing in a sector, where we are kind of breakeven ish EBITDA levels entering a recovery cycle, there's going to be working capital requirements. How do you get comfortable with the cash generative nature of the deals Youre looking at.
On Brian.
Yes.
So one.
The deals are going to be cash flow accretive.
Likely from day one.
And day, one means that we accomplished a good portion of.
The transition work not all of it obviously, but all of this stuff is pre mapped and half on a good portion of that happens day. One. So these businesses that we have almost a front burner are expected to be cash flow positive.
The.
Majority.
The consideration for the transactions that we have again on the on partner will be equity.
So the cash out will be little to none they will come with their own working capital as we move them over generally speaking so there won't be a big draw on working capital day, one or no draw on working capital day, one cash flow positive day, one so they should be occur.
<unk> to kind of all the metrics that you would imagine from a credit perspective.
Does that does it.
Yes, no that was that's great I appreciate it I appreciate the inside as well to kind of deal structure. That's helpful to know.
Going into what looks like pretty imminent probability of closure. So I appreciate that that added preview.
I guess the only other one I had left was plenty of indications the press release and the cash.
Call today.
Pivoting back to the model plenty indications on where.
The rig business is could you talk a little bit about.
The completion business it wasn't clear to me if you.
Some of the fits and starts related to Simon from activity of your customers.
Fully cleaned up as we entered April or whether they are considerations to take into account when we think about revenue trajectory on the completion side.
So in the month April we had one of our core customers, who we had a unit down for two weeks due to the total frac based on start.
This return back to full thermal fracking for the rest of the year. So may forward, we believe the fits and starts with from a Frac is now in our rearview mirror I think what we're seeing in our business overall.
We're coming out of this downturn, we saw the first response in activity to come to the maintenance side of our well servicing rigs.
That side continues to grow.
And then we start to see the 24 hour side of our rig activity.
Pick up that is continuing to grow.
On the completion side again running a quarter behind and we think that next level of growth will start to occur here in Q2 and going into Q3 and I think that's just the way the operators are.
We're looking at their spend to get back on from a maintenance standpoint, we will continue to focus on more completion DUC completion activity and then we're starting to see the drilling activity to increase as well too. So I think it's coming back in.
Those type of stages.
And I think our wired on opportunities that we're looking at are going to be well timed from a pricing and activity standpoint.
Got it Darrin thanks for thanks for the answers. Thanks for the time guys I'll leave it there thanks for the questions.
Thank you at this time, we have come to the end of our Q&A session. So I would like to turn the call back over to Mr. Anderson for closing comments.
In closing I just want to thank all of you for your continued support and as always I. Thank our wonderful team member for the great job. They do every day from the sales to our corporate office.
Operator, thank you and that ends the call.
Thank you. This does conclude today's teleconference. You may disconnect. Your lines at this time and thank you for your participation and have a great day.