Q4 2021 ProPetro Holding Corp Earnings Call
Good morning, and welcome to the Pro Petro holding Corp, fourth quarter 2021 conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.
Please note this event is being recorded.
I would now like to turn the conference over to Josh Jones Director of Finance. Please go ahead.
Thank you and good morning, we appreciate your participation in today's call.
With me today is Chief Executive Officer, Sam Sledge, Chief Financial Officer, David <unk>, President and Chief operating Officer, Adam Munoz.
Yesterday after an afternoon, we released our earnings announcement for the fourth quarter of 2021. 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 our 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, Josh and good morning, everyone.
Firstly I'd like to congratulate the entire perpetual team on successfully navigating the challenges of 2021.
Beginning in late 2020 and throughout the entirety of 2021, our team dedicated themselves to helping our business recover while at the same time, maintaining or even improving our level of operational and safety execution.
I am proud of our team's resilience and I'm excited to see more great things come from the <unk> team in 2022 and beyond.
Moving to the fourth quarter, we were pleased with our operating performance and fleet repositioning, which reflects our intent to set the conditions for and pivot to the optimal path for profitability and value creation in 2022.
As we prepared our fleets for this new year, our activity levels decreased slightly in the fourth quarter, resulting in a 2% decrease in revenue.
And a 12% decrease in adjusted EBITDA.
Despite the operational inefficiency created and repositioning assets, along with normal seasonality, our team executed well and continue to differentiate our well site performance from our peers.
Again, I want to thank our team for all the hard work that went into preparing the company for the year to come.
As demand for oil and gas continues to increase across the world in certain countries fall behind their respective oil production quotas.
All on short cycle crude from the U S is growing louder with Debbie Ti pricing above $90 dollars per barrel.
While we foresee many U S producers, taking a capital disciplined approach activity additions others are seeing new areas of leasehold become economically viable for the first time in years.
Incremental services demand from these non core areas of the North American oil and gas basins is expected to cause further tightening.
In the U S pressure pumping market during 2022.
We also anticipate rig productivity from these noncore areas to be lower requiring incremental drilling and completions activity for the U S to meet the call on short cycle barrels.
Higher aggregate drilling activity will cause all types to rise in oilfield services, but particularly in pressure pumping where utilization began the year at extremely elevated levels.
As a result, we believe higher demand for pressure pumping continued equipment attrition and the risk of supply chain issues on equipment deliveries sets up an environment, where the north American pressure pumping market could be effectively 100% utilized during the third quarter of this year.
Our recent focus has been to prepare for the supply demand imbalance in pressure pumping that we anticipate later this year.
As I already mentioned, we repositioned a portion of our assets to more profitable work during the fourth quarter.
While this caused lower utilization in the interim we believe the opportunity cost experienced in the fourth quarter will improve our financial and operational performance.
In the first quarter of 2022 and beyond.
During the quarter. Our team also took the opportunity to conduct certain preparatory maintenance repairs on our equipment.
We felt that the fourth quarter was a more appropriate time to conduct this time intensive work given our forward view of pressure pumping and pressure pumping pricing.
That said the reliability of our equipment in 2022 will be to the benefit of our customers and our shareholders.
Lastly, we continued to make strategic investments and stock certain supplies and equipment that we believe will be at risk of the deliverability in future months. This includes the continued deliveries of additional tier four DGB dual fuel units, which I'll speak to more later during this call.
With that I'd like to turn the call over to David to discuss our fourth quarter financial performance and capital resources David.
Thanks, Sam and good morning, everyone.
During the fourth quarter, we generated $246 million of revenue a 2% decrease from the $250 million of revenue generated in the third quarter.
Effective utilization was 12 five fleets.
Which decreased nine 4% from 13 eight fleets during the prior quarter.
The lower revenue was a function of lower fleet activity and seasonality.
Notably the drop in activity was partially offset by some limited higher pricing.
Our guidance for the first quarter average effective fleet utilization is 12 to 13 fleets with visibility to some downtime due to winter storms in February sand supply and logistical constraints and continuing repositioning of fleets included in that range.
In January our effective fleet utilization was 13 four fleets.
Cost of services, excluding depreciation and amortization for the fourth quarter was 187 million versus $189 million in the third quarter with the decrease driven by lower activity levels.
Fourth quarter, G&A expense was $24 million compared to $21 million in the third quarter.
G&A exclusive of $2 3 million relating to nonrecurring and noncash items was $22 million consistent with the third quarter of 'twenty one.
We expect first quarter G&A exclusive of nonrecurring and noncash charges to decrease to approximately $18 million to $19 million.
Depreciation was $33 million in the fourth quarter consistent with the third quarter.
Our net loss for the fourth quarter was $20 million compared to a third quarter net loss of $5 million.
The fourth quarter was a transitional quarter for our team and.
And we believe <unk> ability to execute on its financial goals. This year will partially be a function of how the stage was set at the end of 2021.
To add to the preparatory work Sam mentioned, our team continued to dedicate efforts on managing cost and supply chain inflationary pressures, which we anticipate continuing this year.
We believe our emphasis on proactively managing these items will play a significant role in margin expansion in 2022.
Finally, adjusted EBITDA of $37 million for the fourth quarter decreased 12% sequentially compared to $42 million for the third quarter.
The sequential decrease was primarily attributable to seasonality and a conscious effort to reposition assets to more profitable work.
Although these factors are expected to diminish in 2020 to the first quarter will be negatively impacted by sand availability and logistics issues in the Permian basin.
However, we expect significant margin expansion sequentially with our net price increases effective in January and others achieved during this quarter.
Our challenge going forward is to achieve economic supportive of reasonable full cycle cash on cash returns for all our working fleets. So margin expansion is a priority over marketing additional horsepower.
We call it the pursuit of margin over market share.
Which is our most capital efficient way to improve profitability.
We've made substantial progress in this area over the last two months and look forward to making additional improvements throughout the year.
For the fourth quarter, we incurred $49 million of capital expenditures, which included approximately $15 million of accelerated 2022, capex largely in connection with the previously announced tier four DGB conversions.
Actual cash used in investing activities was $19 million as shown on the statement of cash flows which is derived from capital expenditures of $56 million less proceeds of 37 million largely related to the sale of our underutilized turbine generators in the fourth quarter.
This opportunistic disposition resulted in cash proceeds received in December of $36 million.
The capital expenditure figure differs from our incurred capex due to differences in timing of receipts and disbursements.
Free cash flow for the fourth quarter was $26 million.
While we remain debt free we increased our cash position and liquidity by $27 million and $16 million, respectively. During the quarter with cash of 120, <unk> hundred $12 million.
And total liquidity of $169 million.
Total availability under our asset based revolving credit facility decreased to $57 million due to the seasonality of our revenues, but has since increased to $75 million at the end of January .
Our outlook for full year 2022, Capex spending is a range between $250 million and $300 million with the spend weighted in the first half of the year as we take delivery of our previously announced tier four DGB conversions.
The wider range is largely a function of the variance and expected and potential activity levels and potential capex spend related to 2023 customer demand and activity for our ESG friendly offerings.
While we expect liquidity will decrease in the near term, we believe the strength of our debt free balance sheet strong cash position availability on our ABL credit facility and the strong generation of cash from operations will be adequate to support our investment cadence through the remainder of.
The year.
Within this guidance range routine annualized maintenance Capex per fleet is expected to be approximately $9 million, which reflects expanded increases and our Simon Frac service offering where we provide significantly more equipment on location and where we currently anticipate supply.
Chain and inflationary pressures on materials and services.
In addition, the full year guidance range includes approximately $100 million of fleet, refurbishments and upgrades, including $50 million related to our previously announced tier four DGB conversions to be delivered in the first half of this year and the remainder to other opportunities.
As we make decisions in this opportunity to energy rich environment, we reiterate our commitment to maintaining a solid financial position that provides maximum financial and operating flexibility.
With that said our ability to maintain a healthy balance sheet and capitalize on potential opportunities will largely be a function of the success of our priority of margin over market share.
In January with our more comprehensive net pricing increases across our fleets preliminary adjusted EBITDA margin was approximately 25% with total monthly adjusted EBITDA landing at just over $24 million.
This is a significant improvement and a direct example of our recent progress.
However, we caution that january's results are not likely to be indicative of the full quarter as sand supply constraints and winter weather in February have created downtime that disrupted our operations.
With that I'll turn call back to Sam for some closing comments.
Thanks, David.
To see where margins are landing early in the year and as a result, it's nice to be in a position, where we can take advantage of an opportunity rich environment in 2022.
On that note I do want to take a moment to provide an update on our ESG related service offerings and.
And how we're viewing it going forward.
To date all of our previously announced tier four DGB dual fuel investments are sold out and are expected to be put into service with dedicated customers as they are delivered throughout the first half of 2022.
We continue to see demand for lower missions natural gas burning equipment, particularly when that offering is coupled with an efficient operation like pro Petro.
We believe our operations like simultaneous <unk>.
Coupled with our ESG friendly services are delivering the solutions that the most efficient operators are needing.
Our dual gas offering is most important to aid in supporting our customers' emissions goals, but it is equally a financial benefit to perpetual as these units and the pricing associated with them allow our company to effectively scale without placing additional net supply of horsepower on the pressure pumping market.
Moreover, conversions provide scale in a way that is asset and margin accretive to pro Petro.
When considering all investment options, whether organic or inorganic we believe asset and margin accretion as the most risk mitigated strategy toward improving our bottom line.
We do not believe that scale for the sake of scales pragmatic in this business, but as long as demand warrants and a healthy balance sheet allows we will continue to transition our fleet to more natural gas burning and lower emissions equipment with premium pricing and strong economic returns.
As we turn the page in 2022 focus for pro Petro is the generation of economic supportive of reasonable full cycle cash on cash returns for all working fleets as David mentioned earlier.
Even though we have additional assets to put to work, we see very little upside in marketing more capacity prior to achieving proper economics on all active fleets.
As a result, our team is improving the respective return profiles of our currently operating fleets prior to adding working capacity to the market.
This requires discipline and force ranking projects every day, along with a balance of continued willingness to collaborate with e&ps that value consistent and high quality services.
As mentioned during our previous call disruptions related to supply chain issues and labor shortages in the Permian basin should be anticipated in 2022.
Even with the year, just beginning perpetual has experienced negative impacts related to sand and sand logistics all.
While these disruptions appeared to be transitory in nature, we expect no shortage of challenges like this in 2022.
Team remains prepared and will continue to provide efficient services and industry, leading performance that our customers expect from perpetual.
Lastly, as you all know safety is Paramount at pro Petro.
Adam David and I want to congratulate our customers and our teammates on an outstanding safety performance in 2021 and year to date in 2022.
No words can describe how how proud I am of our team for executing at the highest level of operational and safety performance. During this transitional period.
From all of us in the room today, congratulations and keep up the great work.
With that I'd like to turn the call back over to the operator for Q&A.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we will moment's pause momentarily to assemble our.
Roster.
And the first question will come from Stephen <unk> with Stifel. Please go ahead.
Thanks, Good morning, gentlemen.
Morning, Stephen.
Two things for me what I wanted to start with you mentioned is the sand issues that are out there can you talk a little bit about what you guys are doing as far as delivering sand customers, maybe on a percentage of fleet basis and is there a profit opportunity there for four for you guys to.
Managed deliver sand given what has happened with spot prices in the Permian as well.
Yes, Stephen this is David regarding sand, we provide that to just a small percentage of our fleets today.
Many of our customers provide that directly.
One of the things that we've been working on is the discipline of passing through the actual cost.
On jobs and so.
I don't think thats going to be a significant driver of profitability I think we're getting that through our primary pricing mechanisms, but it's certainly something for us to be disciplined around it.
And Stephen this is Sam just to add on top of that in times of volatility in the market much less volatility and a more focused area like sand.
This effort and discipline of actually passing through all your costs much less trying to capture margin on top of those costs is a is a real task.
We struggled with it at times in the past, we know that a lot of our peers have struggled with it as well we feel really good about how were transacting in that part of our business now and our ability to protect ourselves and even capture some value from from that volatile market that is the San market today.
Great. Thank you and then the second question was you mentioned on the call and also in the press release about I think you used the word repositioning assets and I was curious maybe you can tie this into price, but is that when you say that is that two customers with more visibility and less white space is it.
Our pricing move is it just the strategic alignment with the customer could.
Could you kind of shed some light on what you exactly mean by that and how it pertains to pricing profitability sure I think the simple answer is that it's a little bit of all of that.
Really it's it's mostly <unk>.
Around our pursuit of.
Increased margins in this in this more healthy cash on cash return that David and I, both mentioned in our scripted remarks.
And repositioning fleets and assets can be a significant part of that at certain points in the cycle, but with that.
Repositioning also comes pricing I don't think we would be moving assets, if there werent differentiated pricing.
With the opportunity that you are moving them to Youre also looking for more consistent work schedule.
You are looking for an ability to transact and manage and cover your costs better really kind of all the above.
That repositioning results in just a better value proposition overall can also differ a little bit on a customer by customer basis. How many of those opportunities are are available with with that repositioning and Stephen just to add to that this David.
I think the way we're thinking about it is every fleet needs to generate.
Full cycle cash on cash returns independently of itself, we're not looking for incremental contribution.
That is that is not meeting that objective, so that's where the discipline around our fleet deployment.
Plays in and moving some of these fleets around getting them in a position to be priced correctly to generate this full cycle.
Cash on cash returns is a priority for us.
Great. Thank you gentlemen.
Steven.
And the next question will come from Taylor Zurcher with Tudor Pickering and Holt. Please go ahead.
Hey, good morning, Thanks to everyone for taking my question My first one.
Q1.
I think you said in January the monthly run rate from an adjusted EBITDA perspective was.
Close to just north of $24 million, if I heard you correctly and obviously there are some issues you are encountering here in February and likely next month as well with respect to sand and other sort of transitory hopefully transitory issues that I was wondering if you could help us think about just EBITDA margins over.
The balance of 2022, you're talking about 25% margins for January .
Almost 1000 bps higher than what you were doing in.
Q4 of 2021, so should.
Should we take that comment to mean that at some point, whether it's Q2 Q3 or Q4, you should start.
Start generating 25% EBITDA margins on a consolidated basis for the company in 2022.
Yeah.
Think that we want to be careful given some of the weather related impacts in February .
But I think certainly given that we've reset pricing across our entire fleet and we still have some yet to bake in that has already been achieved.
I think certainly being able to get back to that 25% level is.
<unk> for us and certainly possible.
Okay. Good to hear and just a follow up there so on the capex budget of $250 million to $300 million.
If I assume you did get back to 25% margins or close to it.
It seems like you could maybe see a free cash flow positive for 2022, and I just wanted to clarify or.
I ask you to help us think about cash flow for 2022 do you think on the budget you've outlined you can stay positive at the free cash flow line for 2022 .
Yes, Tyler this is Sam I do I do think that opportunity is there. This year, there's there's kind of a few things that need to shake out for us to talk a little bit more confidently about that.
But given what you saw what we're seeing in January from a profitability standpoint, as a direct result of the work we did at the end of the year last year and the work that we're going to continue to do from a pricing and <unk>.
Repositioning standpoint.
That opportunity is very real.
Awesome, Thanks, Dan and David.
You bet.
And again, if you have a question. Please press Star then one.
The next question is from Evan <unk> with ATB capital markets. Please go ahead.
Yeah. Good morning, guys. Thanks for taking my question.
Just around the <unk> fleets can you just comment on are they working and how are they running operationally kind of what's the outlook there.
Yeah, Evan this is Adam.
Apparently there is no dearth stem trial schedule.
A harder throughout the script the team towards the end of last year as our back half of last year.
Made the decision to be focused going into 2022 and repositioning of our fleets to more profitable work.
These full cycle cash on cash on cash returns.
And also.
Putting a focus on mitigating any supply chain issues that could help or prevent us from doing so so that's where our focus lies right now.
Okay. Then just one quick follow up then as you guys look to upgrade your fleet are you guys looking at different kind of equally technology like in 2023 are you just focusing on tier four DGB for the time being.
Yeah, Great question, having the spam.
We're looking at everything right now.
You've known us long enough to know that our operating model is usually very customer focused and customer driven.
Our move into the dual fuel DGB space is largely a product of what our customers are asking for.
We're going to continue down that road as you've seen.
But we're also in various congress conversations across almost our entire customer portfolio about.
What can be in addition to that in the form of more gas burning equipment I think that's what most of our customers are after from both the cost and emission standpoint is to pursue.
More gas burning equipment.
And that can be in a lot of different.
That can come in a lot of different ways.
So yes, we are we are analyzing multiple opportunities across the equipment space as it relates to.
The end of this year and next year.
Okay. Thank you guys I'll turn it back.
Thank you and once again, if you have a question. Please press Star then one.
Next question is a follow up from Stephen can Garrow with Stifel. Please go ahead.
Thanks Akshay.
I actually have two more things if you don't mind the first.
You talked in the in the press release and you also highlighted on the call some of the.
The desire to really focus on capturing value as opposed to as opposed to market share.
Can you give us a sense for how the competitive landscape is acting are you are you seeing.
Price disciplined approach for most of your bigger competitors.
I'm just kind of curious what youre seeing on the competitive front given how tight the market is.
First Steven I'll take a shot at that one this is Sam again.
At this point in the cycle.
When when utilization is trending up pricing is trending up it's a little bit harder to grab onto consistent data points given theres just so much movement in the market you hear us talking about repositioning of our fleet you've heard <unk>.
<unk> of ours talk about repositioning of fleets, there's going to be marginal incremental activity adds.
They're coming throughout the year.
So a lot of noise that said.
I do feel like.
There is more pricing discipline in our system than there has been.
In in quite some time.
I think everyone in the pressure pumping sectors coming to the realization of how much equipment, we are using and how efficiently. We are using it and what the return profile needs to look like to meet that operating model.
And.
Though it can be a bit bifurcated at times in terms of.
Pressure pumper that are working in kind of the super efficient simultaneous type multi well pad environment. That's that's the game, we're playing and competing in.
And we do feel like there is decent discipline.
In that arena that said.
We're much more focused on the economics, we can generate.
Petro can generate.
Rather than what's going on around us and partnering our our quality operation with E&ps that put a high value on consistent operations.
Okay. Thank you. That's that's good color and then just one final you talked about about.
The simulcast <unk> and the impact it's having kind of on maintenance Capex per fleet are you thinking thats, a reasonable range going forward on the maintenance capex on even as we get into next year or is there something about.
<unk> configurations being larger that's driving that number higher or is it just inflationary pressures.
Yes, Stephen this is David.
I think certainly we've got inflationary pressures that will persist.
But I also think that.
We're continuing to transition our fleet as well.
But I wouldn't I wouldn't be able to give you an estimate on how that moves I think that we definitely moved it up from our prior range given.
The state of our fleet today, and how it's being used and.
That's what we will give you further guidance going forward.
Yeah. Stephen This is Sam just to add on top of that I think.
Just fundamentally for the sector.
I think that might be a data point and an example of just how much equipment is in the system on a per fleet basis sector wide.
A couple of our a couple of our peers have done a good job talking about this we've tried our best to do the same.
There is just a significant amount of equipment on each one of these locations and I think thats.
That's why we're seeing earlier tightening of the market. This cycle as you look at utilization on like a fleet by fleet basis across North America.
Operators don't want to give these efficiencies back therefore, we're trying to work with them to find a way to make the right return on these larger fleets as they exist today. So that obviously comes down through something like maintenance Capex, just because you naturally whether it's simon for Aker, rather irregular zipper operations.
<unk> significantly more equipment on location across the board.
Great. Thank you for the color.
And the next question will come from way car say, Ed with ATB capital markets. Please go ahead.
Thank you so Evan asked all the good questions. Sam just one question from me.
On these bigger Simon Fracs. It looks like you may have about $100 million worth of equipment at the well site.
Two.
Incorporating maintenance capex.
You think you need somewhere in the range of $30 million of EBITDA per crew to make attractive returns on that investment.
Yes, where card 100 teams.
In fact, it is as high.
Significantly high but fund.
Fundamentally what we're trying to do is earn a cash on cash return.
On the value of the assets that we have deployed to any set location. So the math is very similar for us whether it is if our simulcast rack.
The amount the dollar amount of assets that we're deploying needs a specific return in a specific time.
Okay. So is it like in excess of 100000 horsepower at the well site for some effect or is that number too high.
So that's a little high in my mind My comment was off of I think you said $100 million worth of equipment.
So I was just doing the math if you do Blake kind of 1000, and then like let's say $1000 per horsepower number maybe a little bit lower maybe $80 million, but broadly within that kind of range.
Could also happen in 20000 horsepower at the one site has moderated somewhat fracs, maybe maybe the math you're doing is just doubling.
Doubling of traditional zipper operation, which is a little a little a little too healthy I think we're seeing.
Less than that on our summer frac locations.
Fair enough and then so for Simon Frac, what would be the right number for us.
Including the maintenance Capex, the right EBITDA per crew to get.
Get it done.
Yes.
We don't provide that information.
I think as Sam mentioned.
With respect to our deployment of assets, we look at the full cycle of cash on cash return and so we know what those numbers are and quite frankly.
Some of Frac locations vary between customers and job types. So we may have some Simon frac locations that are looked like a zipper.
So it's really just.
I think that's proprietary.
We'll leave it at that.
Sounds good thank you.
And the next question is from Arun <unk> with J P. Morgan. Please go ahead.
Yeah, I wanted to get a sense of how youre thinking about the pace of.
Of upgrades towards tier four DGB I know Sam in September .
You you placed over 125000 hydraulic horsepower.
You apparently have about one 5 million horsepower conventional tier two equipment.
A little over 100, K of <unk>, but I wanted to get a sense of how do you see the pace of that.
Of upgrade capital over the next few years is that a good run rate as we think about 'twenty three and beyond.
Sure Good question.
As it sits today I think we're somewhere in the ballpark of halfway through.
Taken the delivery on the previously announced tier four DGB.
Plans, we do have as we stated in our script, we do plan to take delivery on that entire investment program by about midyear this year.
And what that will equate to in terms of fleets is probably just a little more than four fleets for opt.
Operating fleets of dual fuel equipment.
As we look forward I think part of.
What we are trying to analyze right now from an opportunity standpoint is how much more of that.
<unk> needs to happen and at what pace.
We havent made any specific decisions around continuing that program in a sizable way right now what we can tell you is that the pricing for those assets is.
The demand is different and the math does make sense at this point.
So we're working hard with certain customers.
To run to ground decisions those opportunities here here in the near term.
Yes, Ron this is David I would just add to that.
They're not necessarily locked into a particular technology here as Adam and Sam have both mentioned, we're evaluating a variety of technologies as.
There is innovation that comes to the marketplace. So.
We've communicated our conversions for this year.
We will see how the market goes if we continue to extend that.
Beyond this year and <unk> or what other technologies, we might incorporate into the mix.
Great.
Follow up question obviously.
Rising activity, but by the privates as been a been a theme.
Over the last several quarters.
I was wondering to get a sense of.
If you could give us a sense of your mix between hub.
Public and private operators that you work with today and are you seeing any deltas in margins or EBITDA per fleet between those two different customer groups.
Well, we're not going to we're not going to talk about.
The profitability across customers, but I think what we can see.
As demand definitely strengthening from privates as their balance sheets are repaired and as they consolidate.
I think steady demand coming from the publics in the majors.
And really at this point, it's almost coming from from every segment majors large independents publics and privates quite frankly, yes.
Yes.
Sam just to add onto that I think is evidenced as you saw on our.
Early January numbers, and really historically with the company, where we're highly interested.
And are.
These booked up calendars that give us opportunity at the most efficient.
Work.
That is in the market.
Private or public.
I don't know if we have a preference like David said, where we are.
We're aiming for cash on cash return on.
On a on a fleet by fleet basis.
Thankfully operating basically solely in the Permian basin, there's a lot of large sophisticated private companies that can that can meet.
That need of ours.
As a very full calendar very efficient planning and.
Operating.
We have obviously.
Some sizable public customers as well so I think it's a little bit less about private versus public it's a little bit more about.
What the operating opportunity is for us on a customer by customer basis.
Great. Thanks, a lot.
Ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to Sam sledge for any closing remarks.
Thanks, everyone.
Look forward to working with all of our stakeholders in 2022 as perpetual in the Permian Basin help meet the global call on oil and gas.
More importantly, dependable and cost effective energy.
We hope to speak with all of you again soon thanks for joining us.
And thank you Sir the conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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