Q4 2021 Tetra Technologies Inc Earnings Call
Good morning, and welcome to the Hudson technologies fourth quarter and for year 2021 results Conference call.
Speakers for today's call are Brady Murphy, Chief Executive Officer, and Leo Sorrento, Chief Financial Officer.
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Please note today's event is being recorded.
I will now turn the conference over to Mr. Serrano. Please go ahead. Thank.
Thank you Rocco.
Good morning, and thank you for joining tetra fourth quarter and year 2021 pulse call.
I would like to remind you that this conference call may contain statements.
Our or may be deemed to be forward looking.
These statements are based on certain assumptions and analysis made by Tetra and are based on a number of factors.
These statements are subject to a number of risks risks and uncertainties many of which are beyond the control of the company.
We caution that such statements are not guarantees of future performance and that actual results may differ materially from those projected in the forward looking statements.
In addition in the course of the call we may refer to EBITDA adjusted EBITDA.
Adjusted EBITDA gross margin adjusted free cash flow net debt liquidity or other non-GAAP financial measures.
Please refer to yesterday's press release on our public website for a reconciliation of non-GAAP .
Financial measures to the nearest GAAP measure.
These reconciliations are not a substitute for financial information prepared in accordance with GAAP and.
And should be considered within the context of our complete financial results for the period.
In addition to our press release announcement that went out yesterday, we encourage you to refer to our 10-K that was filed yesterday.
With that I'll turn it over to Brady.
Thank you Leo good morning, everyone and welcome to Tetra as fourth quarter and full year 2020 earnings call.
I'll summarize some highlights for the fourth quarter and current outlook and then provide an update on our low carbon energy initiatives before turning it back over to Lee, who will discuss cash flow the balance sheet and liquidity.
Let me start by thanking all of our Petro employees for delivering strong fourth quarter operating results and a solid year given the number of extraordinary headwinds, we faced including a second year of COVID-19 pandemic on.
Unprecedented inflation, a record breaking first quarter freeze and the devastating third quarter hurricane.
Right. All of this we finished another year of positive cash flow, 13% adjusted EBITDA margins and strong momentum in the fourth quarter with the best quarterly operating results not including the Mark to market gains from standard lithium in CSI Compressco and the last seven quarters and since the start of the pandemic.
For the year 2021, we delivered $50 million of adjusted EBITDA on $388 million in revenue with depends on the 10th that make largely behind us in the past two years, we were able to achieve positive free cash flow. So it's going to significantly reduce total debt outstanding.
And improving adjusted EBITDA margins to nearly 13% despite an average 32% revenue drop from 2019 and before the impact of COVID-19.
This again shows the resiliency and strength of our business model and less and the severest of downturns, but as importantly, coming out of the downturn from the prior two years, we are a stronger company with a much improved balance sheet well positioned for a recovery in oil and gas industry and the opportunity to execute on our high growth energy transition market.
Revenue for the fourth quarter of 113 million grew 19% sequentially and 50% year on year, we generated over 13 million of adjusted EBITDA in the fourth quarter in the face of continued inflation and global logistics challenges.
Excluding the realized and unrealized mark to market adjustments for standard lithium and CSI Compressco. This was the highest adjusted EBITDA since the pre pandemic first quarter of 2020.
We generated $7 4 million of free cash flow in the fourth quarter and again reduced our term loan this time by $13 million for a total of $68 5 million over the past two years.
Water and flowback has seen a significant recovery from the negative impacts of COVID-19, as fourth quarter revenue of $53 million increased 14% sequentially and 70% from the fourth quarter of 2020.
Fourth quarter revenue was down only 7% from the pre pandemic first quarter of 2020.
This compares to the U S rig count an active Frac fleet, count down, 29% and 36% sequentially or respectively from the same period.
Overcoming inflation, we were able to improve our adjusted EBITDA margins by 200 basis points from the third quarter and the $12 nine adjusted <unk> adjusted EBITDA for the quarter was the best since the third quarter of 2019 again on much lower activity levels.
These results comparing to pre pandemic numbers reflect the strength of our business through market share gains ongoing pricing improvements efficiency through our automation technology.
Our strategy focused on treatment and recycling our produced water.
<unk> proprietary technology, such as sandstorm, and Tetra steel and another record quarter with 62 integrated water management projects.
Regarding sand storms, we gained 24 new customers in 2021, 11 of which were gained in the fourth quarter.
Argentina continues to be a bright spot as the most active unconventional share market outside of the U S. In addition to our currently fully deployed sandstorms in Argentina.
We were awarded two significant early production facilities that will positively impact us beginning in the second quarter of 2022, and which will also include additional sand storms as part of those facilities.
In addition to the significant increased interest and produced water recycling for Frac reuse in part due to the increased seismic activity and key disposal areas. We're also seeing a new area of interest from both the operators in the midstream companies for extracting key minerals from produced water cuts historic core competency in English.
History and experience with extracting and manufacturing products from such minerals is a good fit with this growing opportunity.
Overall I'm pleased with the continued improvement in our water and flowback services business and our performance demonstrates we are a much stronger business heading into a recovering market in 2022, I'm optimistic we will surpass our next level adjusted EBITDA margins margins target of 15% earlier in 2022 than we previously anticipated.
Completion fluids <unk> products fourth quarter revenue increased 23% sequentially and 36% year over year as we saw strong demand from our previously mentioned Gulf of Mexico, and International Deepwater Awards on top of the recovery from the Hurricanes in the Gulf of Mexico.
Our eastern Hemisphere energy services revenue more than doubled from Q3, and we believe is indicative of improved international market activity going forward.
Although Q4 had mild weather for our seasonal calcium chloride sales January and February weather has changed dramatically in our favor and will contribute to even stronger revenue for the first quarter of 2022.
Excluding the benefit of the realized mark to market gains completion fluids <unk> products adjusted EBITDA increased 14% sequentially with 24% EBITDA margins. This represents the 11th straight quarter of adjusted EBITDA margins of over 20% despite double digit inflation across most of our raw materials energy prices.
Energy prices for the plants and global logistics.
As we look towards the first quarter of 2022, we expect further double digit over the fourth quarter from a recovering double digit growth over the fourth quarter from a recovering oil and gas market and strong chemical sales supported by our five year distribution agreement with a new industrial chemicals customer for the Western U S and a ramp up.
Our pure flow zinc bromide sales for energy storage.
We secured our first generation one C S Neptune job for the North Sea, which is scheduled for completion in the second quarter. As a reminder, the typical see a step tune job in the north sea will be considerably smaller than what we have historically seen in the Gulf of Mexico.
But as it is an indication of continued acceptance of our technologies outside of the Gulf of Mexico. The previously mentioned plant investment in Northern Europe for 25% increase in calcium chloride production capacity continues to be on track for completion.
In the third quarter of 2022.
<unk>.
For the full year and beyond deepwater showing signs of recovery as well and given the new outlook on much lower U S shale growth production compared to the years from 2014 to 2019, we believe deepwater activity will be key to support oil and gas demand for years to come.
Considering that the 2021 global active drillship rig count was 58% below the 2014 to 2015 peak there was considerable deepwater growth potential at current oil and gas prices.
In a review of our CS Neptune pipeline in the pre pandemic period of Q1 2020, we found that nearly every CS Neptune project, we have been tracking at that time is still in our pipeline.
But in nearly every case the pandemic have dramatically slowed Oregon pause the projects for moving forward.
That now seems to be changing as the customer dialogue on these key projects as active again. This was supported by the fact that the first 20000 Psi rated ultra deepwater drillship is scheduled for a Gulf of Mexico Project. Later this year followed by the second drillship for an additional projects in early 2023.
Other than the North sea jobs scheduled for the second quarter that I mentioned previously we do not yet have additional wells confirmed for this year, but the project pipeline and the customer discussions are encouraging compared to the past two years, we do expect that to continue to supply chain challenges to have some impact on the timing of customer deepwater projects as well in the meantime.
We continue to strengthen our IP position for CS Neptune with over 13 patents granted and 10 patents allowed.
Our low carbon energy business initiatives continue to progress at a rapid pace on December 16th 2021, we announced our long term partnership with the U S energy, a leading U S provider of safe scalable efficient and sustainable zinc based long duration energy storage systems. This partnership aligns well with our strategy to utilize.
Our aqueous chemistry core competency and U S manufacturing capabilities to enable the supply chain for low carbon energy solutions.
Cetera, supplying us with our high purity zinc bromide pure flow to support the manufacturing of <unk> innovative zinc aqueous zinc batteries.
From the recent Q4 earnings call they will be increasing their revenues from 5 million in 2000 $21 million to $50 million in 2022, with a backlog of $148 million booked orders.
They also increase their operative opportunity pipeline from $3 7 billion at the end of the third quarter to $4 1 billion or 25 gigawatt hours of energy storage.
To put this in perspective, 25 gigawatt hours of energy storage translated into pure flow volumes would equal more than 20% of the current annual production of bromine globally for all industries for this reason along with our ability to recycle the end of life electrolyte, a collaborative long term strategic relationship to support.
Important for both parties.
Which brings us to our Arkansas, Brian leases and plans. We're currently drilling an expert expertise well.
Our Arkansas leases in the area, where tetra retains a 100% of the lithium and bromine rights.
We expect this one will be completed this month and expect the information and data gained will satisfy requirements necessary for an inferred resources report in the second quarter for our current exploration target.
A 2.54 million.
The $8 five 8 million tons of bromine and exploration target of 85000 to 286000 tons of lithium carbonate equivalent.
From these results, we expect to initiate a preliminary economic assessment or P. A to produce lithium produce lithium carbonate and elemental bromine from our acreage.
In December of 2021, we invested $5 million and signed a joint intellectual property agreement with carbon free <unk> capture and mineralization technology company for C. O two free calcium chloride production solution to enable carbon free Skype cycle Sidoti capture technology.
This will allow us to participate in the equity upside as carbon free continues to make progress in commercializing it.
Scott cycle proprietary technology, and we continue to advance our long term business relationship certain jointly working on plans to source and provide substantial volumes of calcium chloride.
Carbon free successfully mineralized <unk>, it's San Antonio Sky cycle pilot plant.
<unk> requires large volumes of calcium chloride is a key part of the conversion chemistry.
Intouch will bring.
Its global leadership in the production of calcium chloride supply chain network and technical expertise to the partnership.
With that I'll turn it over to <unk> to provide some additional color and will close with some comments on our open for some questions. Thank you brain.
Fourth quarter adjusted earnings per share were breakeven compared to about three loss per share in the fourth quarter of 2020.
Loss from continuing operations was $703000 a significant improvement from the loss of $7 $1 million in the fourth quarter of last year.
During the fourth quarter, we sold the shares that we own in standard net him.
Which resulted in a realized gain of $4 6 million in the fourth quarter that was included in our adjusted EBITDA.
The fourth quarter also included <unk> 2 million unrealized mark to market loss on the common units that we own in CSI compressco.
The net of that too is a benefit to adjusted EBITDA of $1 $4 million in the fourth quarter.
As you recall in the third quarter, the unrealized mark to market gains reflected in adjusted EBITDA EBITDA was $6 $2 million from both standard lithium and CSI compressco.
As a reminder, we still own slightly over $5 2 million common units CSI compressco.
$7.3 million.
And we have no restrictions on our ability to monetize this asset.
We excluded from fourth quarter results are unusual items that totaled $891000 in nonrecurring expenses net of nonrecurring income.
Fourth quarter adjusted free cash flow from continuing operations was $7 $4 million. Despite a $12 million sequential increase in accounts receivable on the back of the 19% sequential fourth quarter increase in revenue.
Fourth quarter free cash flow benefited from the $17 $6 million in proceeds from the sale of the one 6 million shares.
Our standard lithium that we announced.
The 8-K filing earlier in the quarter.
And that 8-K filing we had mentioned that we had monetize one 5 million shares and shortly after the 8-K with tissue. We sold the other 100000 shares that we own.
In total we sold one 6 million shares at an average price.
$11 <unk> compared to the standard lithium share price today.
50.
We expect.
To be receiving another 400000 shares of standard that in before the end of April as part of an option agreement that we have with standard lithium.
These 400000 shares will be in addition to a million dollars of cash that we received at the end of December .
At $6 50 per share the value of the shares to be received from standard lithium or approximately $2 $6 million on top of the cash that we received in December .
Adjusted free cash flow for the year was $9 $3 million, reflecting the proceeds the sale of the shares of standard lithium.
Working capital at the end of December was $81 $7 million.
Change up $6 $9 million from year end 2020.
As you recall from 2020 when business slows down we can generate significant cash flow we.
We monetize working capital when the market's pullback.
And as Randy mentioned, we invested $5 million and competency in the form of a convertible note that will enable us to participate in the equity upside as they commercialize our sky cycle carbon capture technology.
Carbon free goes public or $5 million investment convert into common stock.
Total debt outstanding was $152 million at the end of December down from a high up $222 million in the third quarter of 2019.
While net debt at the end of the year with $120 million.
We have reduced our term loan by $13 million in the fourth quarter, primarily using the proceeds from the sale of our shares in standard lithium consistent with what we previously communicated.
The 26% reduction in that term loan has reduced our annual interest expense by at least $4 million a year.
As a result of the improved EBITDA proceeds from the sale of standard lithium and the reduction of term loan. We had we have improved our net debt ratio to two seven times, which is the lowest since the third quarter of 2020.
We have less than $1 million outstanding as of the end of February on our $80 million asset based revolver.
Liquidity at the end of the fourth quarter was $68 million.
At the end of the fourth quarter unrestricted cash of $32 million in availability under our credit facility was 36.
We have been aggressively paying down debt to create borrowing capacity as we move towards bringing to market, our Arkansas smack over formation bromine and lithium assets.
Or potentially invest in calcium chloride production facilities to support carbon free.
Also in preparation to expand into a low carbon energy initiatives and to source the most cost effective capital.
We have been having discussions with the department of energy exploring opportunities for <unk>.
And low cost loans.
To date, we have had three very promising virtual meetings with different individuals and and departments within the department of energy.
We are taking the steps to apply for various loans and grants to help us advance some of the lithium.
Battery storage with pure float and carbon capture initiatives that we have been discussing.
This year, we will spend between two and a half and $3 million to build that Brian well that Brady mentioned and to conduct studies to further refine our exploratory target assets to more tightly defined inferred resources.
Bromine and lithium assets in Arkansas.
We then expect to complete the preliminary economic assessment that will further define the investments required and that really need our returns on capital as we move towards developing our bromine.
In lithium assets in Arkansas.
This PPA will help us quantify the potential revenue and EBITDA.
Cash flow and capex or more assets in Arkansas.
We will publicly announce the results of the inferred resources target and the P. Eight when they are complete.
Finally, we reached agreement with our insurance underwriters for a claim on one of our Gulf of Mexico properties that sustained hurricane damage last year.
As a result, we expect to receive cash proceeds of $3 $75 million in March this year that will further improve our liquidity and.
And cash position.
We encourage everyone to read our news release that we issued yesterday and the 10-K that we filed last night with all the supporting details and additional financial and operational metrics.
With that let me turn it over to Brady for closing comments.
Julio so in closing overall, despite the challenges that we discussed earlier, we had a strong quarter, but more importantly.
We are a much stronger and more diversified company than we were a few years ago. Both of our business segments are approaching pre pandemic financial metrics well ahead of pre pandemic activity levels were very well positioned for improved results.
From improving U S and Argentina won't conventional shale markets.
An improving outlook on deepwater activity in rapidly growing markets for lithium strong installations energy storage and carbon capture supported with what we believe is our strongest balance sheet since 2012.
Just one year since announcing our low carbon energy initiatives will generate profitable results with minimal additional capital investment and we expect these emerging businesses grow significantly over the coming years.
That will open it to questions. Thank you.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
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 pause momentarily to assemble our roster.
And today's first question comes from.
Stevens Zingaro with Stifel. Please go ahead.
Thanks, Good morning.
Good morning.
Just sort of I.
Just wanted to start with the.
The arrangement you have with with <unk>.
When you think about and maybe not 22, but at 23 I think.
People expect them to do about $200 million in revenue as an entity based on the consensus for AOS.
Is that.
I mean are we thinking about it right. If we think that translates to 30 or $40 million in revenue for you guys like I am trying to attract correlate the chew when I was curious if you could give us some color I imagine your product has to be.
Pretty big input cost to what they're doing.
Good question, Steve and we clearly don't Wanna comment on what yields as consensus our revenue expectations are but we clearly believe that if they increase proportionate.
In the coming years that our increase in the sale of pure furlough will be proportionate to the increase in revenue. So if theyre going from 5 million this year to call. It 50 for the sake.
Our argument, we expect that we're going to increase by the same magnitude now. They also have not divulge to us and we're not privy to what percent.
Pure flow represents.
As a percent of their cost of goods sold as a percent of revenue, but we think we are meaningful part of that number.
Okay. Thanks, and then.
Two others, one is and you touched on this a little bit in the opening remarks.
Your your fluids business had a $10 million sequential increase in revenues and our margins slipped a bit I think adjusted margins went down about 200 basis points, so like 20 and a half.
On the EBITDA line.
And I think its raw materials, but can you just talk about how you think.
That shakes out going forward and how how are you doing recovering those those higher cost with.
With pricing.
Yeah.
We did see a small drop in the margin on our completions in the fourth quarter and that was nearly all inflation related saving energy costs.
Our raw materials cost and global logistics.
You know kind of all in the double digit range and it got a little bit ahead of us in terms of being able to get our pricing improvements out I would say in the fourth quarter inflation was out ahead of us in terms of getting our our pricing.
<unk> with our customers.
As we go into Q1, I'm, assuming inflation doesn't.
Continue to grow at least flattens out somewhat we were getting ahead on the pricing side. So we do expect our margins to <unk>.
Improve as we go from Q4 to Q1, and then we'll just have to see how.
How inflation, either stabilizes or starts going down hopefully in the second half of the year and how that plays out and Brady I'll also add and remind everybody.
The second quarter as our peak for northern Europe calcium chloride sales.
And historically, we've seen about a $15 million sequential increase Q1 moving into Q2.
And the EBITDA impact has historically been in the $4 million range and we don't see any shift in that seasonal pattern. This year. So we've got a couple of good quarters, we think coming up to demonstrate sequential improvements.
And just as you're you said about 15 $40 $50 million of revenue and for EBITDA.
Correct, that's what we have seen historically with the ramp.
Okay, and then just one final one.
Water business.
It had a very good third quarter should we just think about that as kind of obviously you have some international stuff, but kind of mimicking what's going on in the U S land side and you should I would imagine your incremental EBITDA margins, there should be 25% to 30% range as we as we go through 'twenty. Two if you get if you continue to see growth there.
We're gaining traction with pricing.
We're gaining traction with the.
<unk> technology, we're seeing a ramp up of sand storms also in Latin America that are really.
<unk> mentioned all three we think are going to contribute towards the goal that we set out and we have communicated in the press release, a 15% margin for this business.
This year.
Alright, and then just a clarification did you say double digit fluids growth in the first quarter sequentially.
Yes over Q. Thank you okay.
And then as Leo said, the second quarter, we will see our European revenue ramp up from the numbers that <unk> discussed with a $10 million.
Great. Thank you gentlemen.
Thank you Steven.
And our next question today comes from cement for her.
Evercore ISI. Please go ahead.
Hey, guys.
Good morning.
Our Capex plan.
Thank you for outlining them.
How much you're spending on the spine world.
A lot of Capex last year went towards growing the water business and with the expanded.
Tina contract.
I think the Russian Society.
I'm just kind of wondering how much if any capex.
Capex too.
In the water space again.
So that's a good question the majority of our additions on the.
Water management and flowback are either sandstorm related.
All related around the EPS, because we announced that we secured to cigna.
Significant EPS in South America, and they have historically been very profitable for us.
In the past.
And everything else that we're doing in North America is targeting paybacks of 18 months or better. So we believe that we do have some capacity expansion coming up in North America with paybacks at 18 months or less.
And what your market share gains in North America.
Okay.
A comparable offering.
Sorry, just to clarify were you asking market share just on sandstorm, our overall water and flowback.
Andy.
Yeah. So.
You know we are gaining traction continuously withstand storm you know sandstorm is replacing a lot of traditional production testing assets.
That there's a fairly significant amount of traditional PT assets in North America, and sandstorm is continuing to encroach on that.
I would say, we're probably still below 10% of the overall.
All combined production testing and sand management, our sandstorm market share, but we're growing rapidly.
We indicated in 2021 and even in the fourth quarter, when we picked up 11, new custom.
Customers and we're also now penetrating the haynesville with our 15 K units. So so we expect that market share traction to continue.
And also a strong position in Argentina.
Overall water and flowback, our strongest market share is in the Permian Basin, where we believe we have a very strong market share one or two depending on which day in terms of the number of crews.
That we are following frac crews that were falling.
And then it varies from that around the basins in North America, but certainly a number two position in overall across North America.
Samantha I would also add that.
And it trips at Brady and I and Matt have made to the field.
We have seen our organization, making nice inroads with the private companies private oil and gas operators and picking up quite a bit of market share in that sector at good margins given the capital discipline on the publicly traded oil and gas operators that data has also contributed to our growth in revenue and margins and just.
Just to further clarify Samantha we don't participate in the infrastructure side of water, whether it's sourcing freshwater.
As you know pipeline disposals type assets, but on the pure services, where we have our integrated water management surface.
Where we believe we have our strongest market share position.
As I said, either one or two in the Permian basin, just depending on on the <unk>.
Our current Frac count following so we have.
Okay great.
And I was really intrigued by your comments around extraction.
Yes.
Water.
Yes.
The first I haven't heard of anything like that we're exploring.
Could you maybe give a little bit more details in terms of what is going on in that arena.
Sure.
You know as you know the U S is.
Uh huh.
Is looking to have a security supply of key minerals, particularly those that enable the energy transition. So lithium obviously is would be at the top of the list, but there are other key minerals.
That are in produced water some of them are commercial level some of it not at commercial levers we've been really.
Pleased with the engagement that we've had with with multiple.
Operators.
As well as midstream companies to analyze their produced water and to determine the commerciality of the minerals that are that are in these produced water. So some of them were very encouraged with their very encouraged with others not so much but it's a I think it is a growing trend that youre going to see a new market evolve.
Out of out of the produced waters that are being produced.
So youll be able to apply your equipment on the surface.
Scott.
Correct, Yeah, we have we have great expertise in that area.
Okay cool everything that Oh, congrats on this yes, mark himself and human <unk>.
I'm just curious if you guys are having dialogue with the north sea in 2023.
You know demand looks like.
And that leaves our next year I'm, just kind of wondering what sort of.
Advance outlook and discussions you guys are having with your customer base at this stage.
Yeah, the Neptune market I'll separate it into two different views on that but the Gulf of Mexico are more longer term multi well very deepwater ultra high pressure projects and those have a longtime horizon, but they also.
Have a very significant dollar financial impact to tetra for if we're successful the north sea type projects are more mature.
And our more spot type opportunities. There are some that are specific development projects, but they're really more.
<unk> opportunities, where our customers run into pressures that fit the Neptune profile.
I would consider them somewhat different markets more of a call out.
Opportunity marketed in the North sea with some major projects, but Gulf of Mexico is very different.
Different outlook from that.
And are you able to source.
Neptune I mean do you have to.
<unk>.
Move that family of production and the golfer.
It seemed like it shrunk.
Sure.
Yeah.
But we produce our Neptune product at our West Memphis facility in Arkansas, We can do some lending to wait up.
Or lower the weight of Neptune, and the north sea and in Aberdeen or other.
Offshore bases that we have around the world, but the core production product comes it comes out of Arkansas from our West Memphis facility.
That'd be great.
Okay, great Okay, great. Thanks.
Thank you so much.
Our next question today is a follow up from Stephens <unk> with Stifel. Please go ahead.
Thanks.
Two things I just wanted to.
Just sort of thinking about.
The pace of of your earnings throughout the year.
Sounds like the completion fluid side, given the seasonality in Europe and U given the CS Neptune job you mentioned.
Am I thinking about it correctly I mean, you could see a very steep rise in Q2 EBITDA.
In fluids, just just off those two pieces.
Yes.
Okay.
And.
I know you probably don't want to.
To specifically comment on this but.
It seemed like the consensus for the year is give or take $80 million in EBITDA. I know there are some puts and takes that are that are going on with cost et cetera, but do you think that's in the ballpark.
Well, let me answer it this way Steven I think the oilfield services group as a whole has moved away from consensus we have learned.
Over the last five six years that theres. So many moving parts with <unk> beyond our control that trying to forecast that far into the future.
Not a beneficial.
If you lay out for us the recovery from the coronavirus the recovery of the global economics.
What's going to happen with.
The war in Ukraine, and whether capital discipline from the buy side on the oil and gas operators.
Lay out all of those parameters, we can probably give you.
A fairly good number for our total year view, what we can say.
Our first and second quarters based on what's in front of us and the feedback we're getting with customers.
We're looking at a nice sequential improvement in revenue like we've talked about.
A very nice step up Q2 over Q1 with good pull through beyond that is pure speculation and I think we would refrain from anything beyond Q2.
Okay, just one one follow up on the waterfront.
B.
Can you just remind us the percentage of that which is U S. Land just in the ballpark I'm just trying to sort of calibrate what U S. Completion activity is doing and how we should think about that pace of revenue on that part of the basketball yeah. So the U S had been the predominant part of it but with the sandstorm that we moved into Argentina, plus also the EPS that we are.
Picking up in Argentina.
Back half of the year I think those will be a more meaningful part of our business, but today, we're predominantly U S and Argentina with a USB and the significant part of it.
Okay, great. Thank you very much.
Thank you. This concludes today's question and answer session I would like to turn the conference back over to Mr. Murphy for any closing remarks.
Thank you Rocco. This concludes our fourth quarter 2021 earnings call. Thank you very much for your interest and participation.
That ends our call that ends our call. Thank you. So let's conclude today's conference call. Thank you all for your participation you may now disconnect your lines and have a wonderful day.