Q3 2023 Expro Group Holdings NV Earnings Call

October 26, 2023

After the.

Patients will be taking any questions, which you can ask by pressing star followed by the number one on your telephone keypad I'll now turn the call over to Quinn Fanning Chief Financial Officer. Please go ahead welcome to <unk> third quarter 2023 conference call.

Im joined today by extra CEO, Mike charges.

First Mike and I have some prepared remarks, then we will open up for questions.

We have an accompanying presentation on our third quarter results that is posted on the extra website X pro dot com under the investors section.

In addition, supplemental financial information for the third quarter and prior periods is downloadable on the extra website likewise under the investors section.

I'd like to remind everyone that some of today's comments may refer to or contain forward looking statements.

Such remarks are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

Such statements speak only as of today's date and the company assumes no responsibility to update forward looking statements as of any future date.

The company has included in its SEC filings cautionary language identifying important factors that could cause actual results to be materially different from those set forth in any forward looking statements.

A more complete discussion of these risks is included in the company's SEC filings, which may be accessed on the Sec's website, SEC dot Gov or on our website again at X Pro Dot com.

Please note that any non-GAAP financial measures discussed during this call are defined and reconciled the most directly comparable GAAP financial measure in our third quarter 2020 earnings release, which can also be found on our website.

With that I'd like to turn the call over to Mike.

Good afternoon, everyone as Colin noted, we posted slides with Q3 highlights the extra website.

Refer to several of the slides during our prepared remarks today.

In my remarks. This afternoon I'll begin by reviewing the third quarter financial results presented in today's earnings release.

I'll also discuss the overall macro environment, which we believe supports a favorable multiyear outlook for energy services in the international and offshore markets towards extra was most levered <unk>.

<unk> will then share our revised outlook for the fourth quarter and full year 2023.

As highlighted in our press release third quarter revenue was $370 million and adjusted EBITDA was $50 million or 14% of revenue adjust.

Adjusted EBITDA for the three months ended September 30 includes $15 million of <unk> related demobilization and other unrecoverable operating cost X.

<unk> such costs, the adjusted EBIT would have been $66 million or 18% of revenue.

Our net loss for the third quarter was $14 million or <unk> 13 per diluted share compared to a net income in the second quarter of $9 million or <unk> <unk> per diluted share adjust.

Adjusted net income for the third quarter of 2023 with $6 million or <unk> <unk> per diluted share compared to the second quarter adjusted net income of $19 million or <unk> 17 per diluted share primarily reflecting lower adjusted EBITDA.

Our third quarter was a challenging quarter with headline results in several discrete issues masking, what we believe to be a favorable long term outlook and good business momentum for EXPAREL, we acknowledged headwinds in certain geographies and several extra specific challenges as well all of which we are addressing with appropriate urgency.

We also want investors to understand underlying business trends and what we are doing to capitalize on these trends.

As a recap on September 27th we issued a press release, describing an intimate offshore Australia that occurred on September 19th that involved our vessel deployed <unk> system and our suspension of vessels deployed <unk> operations.

Have not yet recovered our equipment, but we are coordinating recovered operations with our customer and other stakeholders and expect to recover our equipment within the next several months after which we will then be able to determine the time and cost required to return our <unk> system to operational status and a path forward for our vessel deployed <unk> business.

We believe that there is strong customer demand for cost effective subsea interventions and vessel deployed like wealth solutions and that the value proposition for our technology is compelling less clear at this point is the best service delivery alternative and most appropriate apportionment of commercial risk amongst stakeholders as we gather additional information.

Formation and refine our go to market strategy, we will try to be as transparent with investors as circumstances permit.

Then we'll have some additional comments on this topic in a few moments.

In addition to <unk> related costs, our third quarter results reflected reduced activity in our north and Latin America region MLA results fell short of expectations for several reasons first revenue from our U S onshore tubular running services business, which is a part of our well construction product line was down about 10 <unk>.

Sequentially, so approximately $7 million continuing what has been a multi quarter reduction in activity and weaker pricing in the U S onshore Trs market overall.

Overall extra currently generates less than 5% of its revenue from U S onshore Trs operations, but quarterly revenue is about 40% lower than our expectations. When we prepared our 2023 budget.

Similarly, the quarterly shortfall in contribution margin has been about $3 million. Consequently, we are simply not generating acceptable returns for this business.

In our view there is too much marketing Trs capacity in the U S onshore market and several competitors appear to be prioritizing market share more southern pricing.

As a result, we have begun to rationalize our Trs operating footprint in the U S land market and to redeploy equipment to select U S basins as well as to international markets.

Rationalizing costs and repositioning assets may take a few quarters I believe we will achieve better utilization pricing and returns with a more focused U S onshore strategy.

Second consistent with recent comments from some of our public peers Q3 results also reflect a drilling related softness in some of the offshore markets with an MLA, which we believe will rebound over the near to medium term.

In Mexico, a series of dry wells negatively impacted scheduled well test activity, which is captured within our wealth management product line. In addition, during the third quarter several contracted rigs in the U S Gulf of Mexico, and the Caribbean, we're undergoing maintenance or conducting non drilling operations, which negatively impacted offshore Trs.

Speaker 1: After the presentation, we will be taking any questions which you can ask by pressing start followed by the number one on your telephone.

Capacity in the U S onshore market and several competitors appear to be prioritizing market share more southern pricing.

Speaker 2: I'll now turn the call over to Quinn Fanning, Chief Financial Officer. Please go ahead. Welcome to XPro's third quarter 2023 conference call. I am joined today by XPro CEO Mike Jardim.

As a result, we have begun to rationalize our Trs operating footprint in the U S land market and to redeploy equipment to select U S basins as well as to international markets.

Activity within the La region.

While rationalizing cost and repositioning assets may take a few quarters I believe we will achieve better utilization pricing and returns with a more focused U S onshore strategy.

Relative to expectations the impact on Q3 revenue and contribution margin was approximately $17 million and $10 million, respectively. An MLA as noted in our press release sequentially lower revenue, resulting from dry wells and rigs schedule should be transitory in nature, and we expect a rebound in MLA offshore.

Speaker 2: We have an accompanying presentation on the third quarter results that is posted on the XPRO website, xpro.com under the investor.

Speaker 2: In addition, supplemental financial information for the third quarter in prior periods is downloadable on the EXPER website, like what?

Activity in the coming quarters.

Results for Europe, and sub Saharan Africa, the Middle East North Africa, and the Asia Pacific Excluding El Wi regions were generally consistent with what our expectations were in the quarter.

In Mexico, a series of dry wells negatively impacted scheduled well test activity, which is captured within our well flow management product line. In addition, during the third quarter several contracted rigs in the U S Gulf of Mexico, and the Caribbean, we're undergoing maintenance or conducting non drilling operations, which negatively impacted offshore tier.

Speaker 2: I'd like to remind everyone that some of today's comments may refer to or contain forward-looking states.

Speaker 2: Such remarks are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. …imNW

Activity is picking up in our business mix is trending in a positive direction.

In addition to a number of technology awards that are highlighted in our press release, we had a number of operational and commercial highlights during the third quarter.

Activity within the La region.

Speaker 2: company assumes no responsibility to update forward-looking statements as of any future date.

And Northern Latin America, we delivered a well cementing project for a large international operator in the U S Gulf of Mexico, compared to offset wells, we saved approximately 18 hours of cement related drill out clean out and waiting on cement time, we are building momentum within our cementing technologies offering that was bolstered with the recent acquisition.

Relative to expectations the impact on Q3 revenue and contribution margin was approximately $17 million and $10 million, respectively. An MLA as noted in our press release sequentially lower revenue, resulting from dry wells and rig schedule should be transitory in nature, and we expect a rebound in MLA offshore.

Speaker 2: and the TCC filings, cautionary language identifying important factors that could cause actual results to be materially different from those set forth in any forward-looking state.

Speaker 2: more complete discussion of these risks who's included in the company's SEC filings, which may be accessed on the SEC's website, SEC.gov, run our website, again, at xpro.com.

Submitting specialists Delta Tech.

Activity in the coming quarters.

As we've discussed on previous earnings Conference calls Delta Tech supplements, our offering of low risk open water cementing solutions, including <unk> technology, which allows customers to increase operational efficiency reduce rig time and cost and improve the quality of submitting operations.

Results for Europe, and sub Saharan Africa, the Middle East North Africa, and the Asia Pacific Excluding El Wi regions were generally consistent with what our expectations were in the quarter activity is picking up in our business mix is trending in a positive direction.

Speaker 2: Please note that any non-GAAP financial measures discussing this call are defined and reconciled the most directly comparable GAAP financial measure in our third quarter, 2023 earnings release, which can also be found on our website.

In addition to a number of technology awards that are highlighted in our press release, we had a number of operational and commercial highlights during the third quarter.

In the Europe, and sub Saharan Africa region, our Eni Congo project design construct operate and maintain a fast track onshore LNG pretreatment facility continues to progress on time and on budget with first production scheduled for the first half of 2024.

Speaker 2: Good afternoon, everyone. As Quinn noted, we post some slides with Q3 highlights to the expert website. We will refer to several of these slides during our prepare remarks today. In my remarks, this afternoon, I'll begin by reviewing the third quarter financial results presented in today's earnings release.

And Northern Latin America, we delivered a well cementing project for a large international operator in the U S Gulf of Mexico.

To offset wells, we saved approximately 18 hours of cement related drill out clean out and waiting on cement time, we are building momentum within our cementing technologies offering that was bolstered with the recent acquisition of cementing specialists Delta Tech.

During the third quarter NII combo project team achieved 250000 hours LTI free and long lead items have begun to arrive on site for assembly.

Speaker 2: I'll also discuss the overall macro environment, which we believe supports a favorable multi-year outlook for energy services and the international and offshore markets to which expo is most leveraged.

We really appreciate the cargo team's dedication to safe and sustainable operations and best in class service delivery.

Speaker 2: Quentin will then share a revised outlook for the fourth quarter and full year 2020.

The cargo facility expansion is designed to allow incremental gas production for low carbon electricity generation. It will link to Eni offshore floating LNG operations supporting both the local energy market and increased global demand for LNG to help secure energy supply is back to Europe.

Speaker 2: As highlighted in our press release, third quarter revenue was $370 million and adjusted EBITDA was $50 million or 14% of revenue.

Speaker 2: Adjusted even for the three months ended September 30, included $15 million of LWI-related demobilization and other unrecoverable operating costs.

In the Middle East and North Africa extra completed the first worldwide installation of our kenley check valves using a non explosive technology for an omani customer that was challenged with a failed electric submersible pump on a production well.

Speaker 2: Extruding such costs the adjusted e but it would have been 66 million or 18% of raven

Speaker 2: Our net loss for the third quarter was 14 million, or 13 cents per diluted share, compared to a net income in the second quarter of 9 million, or 8 cents per diluted share.

During the third quarter NII combo project team achieved 250000 hours LTI free and long lead items have begun to arrive on site for assembly.

Following two successful runs in a gas lift stimulation the well achieved over 2000 barrels per day production.

Speaker 2: Adjusted net income from the third quarter of 2023 with $6 million or $6 cents per deluded share Compared to the second quarter adjusted net income of $19 million or $17 cents per deluded share Primarily reflecting lower adjusted EBITDA

Lastly, in the Asia Pacific Region, we achieved $5 5 million man hours without lost time incident, which is a tremendous testament to the Asia Pacific teams commitment to overall champion safety.

We really appreciate the cargo team's dedication to safe and sustainable operations and best in class service delivery.

Also in Asia Pacific experts <unk> annual of intervention technology was utilized to assist with the remediation of sustained casing pressure for a major LNG project.

Speaker 2: Our third quarter was a challenging quarter, with headline results and several discrete issues asking what we believe to be a favorable, long-term outlook and good business momentum for X-Pro. We acknowledge headwinds and certain geographies and several X-Pro specific challenges as well, all of which we are addressing with appropriate urgent.

The success of the work provided occupancy is now being used on a multi well trial project.

In the Middle East and North Africa extra completed the first worldwide installation of our Kimberley check valves using a non explosive technology for an omani customer that was challenged with a failed electric submersible pump on a production well.

<unk> is the only certified and your intervention system in the world that enables direct intervention of alive annulus without the expense of a heavy workover rig and with a reduced environmental footprint. The system offers a safe and efficient method for addressing sustained casing pressure that can be deployed to replace annual is fluid increased.

Speaker 2: We also want investors to understand underlying business trends and what we are doing to capitalize on these trends.

Speaker 2: As a recap, on September 27th, we usually to press release, describing an incident offshore Australia that occurred on September 19th that involved our vessel deployed LWI system and our suspension of vessel deployed LWI operation.

Following two successful runs in a gas lift stimulation the well achieved over 2000 barrels per day production for.

We have completed the first worldwide installation of our Kimberley check valves using a non explosive technology for an omani customer that was challenged with a failed electric submersible pump on a production well.

Static pressure and solve casing shoe leaks by placing ceiling material on the bottom of the annulus utilizing our unique design occupant is deployed on annual enlist we're moving workover rig requirements offering an alternative that can be rapidly deployed across all types of installations, both onshore and offshore to maximize operational ups.

Speaker 2: We have not yet recovered our equipment, but we are coordinating recovery operations with our customer and other stakeholders and expect to recover our equipment within the next several months, after which we will then be able to determine the time and cost required to return our LWI system to operational status and a path forward for our vessel deployed LWI business.

Following two successful runs in a gas lift stimulation the well achieved over 2000 barrels per day production.

Lastly, in the Asia Pacific Region, we achieved $5 5 million man hours without lost time incident, which is a tremendous testament to the Asia Pacific teams commitment to overall champion safety.

Time, while reducing overall HSE exposure.

In terms of commercial activity, we started 2023 with a healthy order book and I am pleased that we have continued to build on this momentum during the third quarter, we captured approximately $235 million of new contract awards, including an integrated service contract worth roughly $30 million for a customer in Norway, and which extra will provide.

Speaker 2: We believe that there is strong customer demand for cost-effective substance interventions and vessel deployed light-well solutions and that the value proposition for our technology is compelling. Less clear at this point is the best service delivery alternative and most appropriate apportionment of commercial risk among stakeholders.

Also in Asia Pacific experts <unk> annual of intervention technology was utilized to assist with the remediation of sustained casing pressure for a major LNG project. Following the success of the work provided okta potent is now being used on a multi well trial project.

Drilling well test subsea and our proprietary coil Ho services again, just as a reminder, coil hoses a cost effective lightweight alternative to traditional cold tubing interventions.

Speaker 2: as we gather additional information and refine our go-to-market strategy, we will try to be as transparent with investors as circumstances permit. Quinn will have some additional comments on us.

Other notable contract awards during the quarter included several well test contracts in the Middle East North Africa, and well construction contract in Europe Sub Saharan Africa for a customer with whom we are currently providing wealth management services.

Speaker 2: In addition to LWI related costs, our third quarter results reflected reduced activity in our North and Latin America region. NLA results fell short of expectations for several reasons. First, revenue from our US onshore to their running services business, which is a part of our well-construction product line was down about 10 percent sequentially to approximately $7 million. Continuing with what has been a multi-quarter reduction activity and weaker pricing in the US onshore TRS mark.

The system offers a safe and efficient method for addressing sustained casing pressure. It can be deployed to replace annually fluid increased hydrostatic pressure and solve casing shoe leaks by placing ceiling material on the bottom of the annulus utilizing a unique design octopodes deployed on annual enlist we're moving workover rig requirements off.

I will also note that where we have complementary services and operating footprints extra is increasingly working with the larger any energy services companies to deliver integrated solutions for our common customers leveraging our reputation for safety service delivery and cost effective innovative solutions.

Bring in alternatives that can be rapidly deployed across all types of installations, both onshore and offshore to maximize operational uptime, while reducing overall HSE exposure.

Speaker 2: Overall, EXPRO currently generates less than 5% of its revenue from US on short-key or US operations, but quarterly revenue is about 40% lower than our expectations when we prepared our 2023 budget.

At quarter end, our backlog was approximately $2 4 billion or up approximately 6% from the June 30 period.

In terms of commercial activity, we started 2023 with a healthy order book and I'm pleased that we have continued to build on this momentum during the third quarter, we captured approximately $235 million of new contract awards, including an integrated service contract worth roughly $30 million for a customer in Norway, and which extra will provide.

In early October we also completed the previously announced acquisition of PRT offshore.

Speaker 2: Similarly, the quarterly shortfall in contribution margin has been about $3 million. Consequently, we are simply not generally acceptable returns for this business.

Just as a reminder, PRT offshore is a Houston based <unk>.

Company and is the only company that provides a complete hook to hanger solution, enabling comprehensive well completions interventions and decommissioning services from surface to subsea. It's unique system is designed to allow customers to access the wellbore safely and efficiently all while reducing the number of personnel on board.

Drilling well test subsea and our proprietary whole house services again, just as a reminder, coil hoses a cost effective lightweight alternative to traditional cold tubing interventions.

Speaker 2: In our view, there's too much marketed TRS capacity in the US onshore market, and several competitors appear to be prioritizing market share more Southern price.

Speaker 2: As a result, we have begun to rationalize our TRS operating footprint in the US land market and to redeploy equipment to select US basins as well as to international markets.

The PRT acquisition will enable <unk> to expand our portfolio of cost effective technology enabled services within the subsea well access sector and in Northern Latin America region, and also to accelerate the growth of PRT offshore surface equipment, offering and the Europe and sub Sahara Africa, and Asia Pacific regions.

Speaker 2: While rationalizing costs and repositioning assets may take a few quarters, I believe we will achieve better utilization, pricing, and returns with a more focused US onshore strategy.

Speaker 2: Second, consistent with recent comments from some of our public peers, Q3 results also reflected drilling-related softness in some of the offshore markets with an NLA, which we believe will rebound over near-to-medium terms.

As was noted in our press release October one marked the second anniversary of our completing the business combination of Expo in Frank's International.

In addition to broadening our services and solutions offering and leveraging complementary operating footprints and customer relationships. The extra Frank's merger has allowed us to substantially reduce support costs and improve the combined company's operating leverage in advance of an anticipated up cycle.

At quarter end, our backlog was approximately $2 4 billion are up approximately 6% from the June 30 period.

Speaker 2: In Mexico, a series of dry wells negatively impacted scheduled well test activity, which has captured within an hour well flow management product line. In addition, during the third quarter, several contract grids in the U.S. Gulf of Mexico and the Caribbean were undergoing maintenance or conducting non-drilling operations, which negatively impacted offshore tier ice activity within the NLA region.

In early October we also completed the previously announced acquisition of PRT offshore.

Just as a reminder, PRT offshore is a Houston based <unk>.

Over the last five quarters support costs have averaged 20% of revenue an improvement of approximately 10 percentage points relative to pre merger overheads over the same period capital expenditures have remained within our guidance range of 7% to 8% of revenue.

Speaker 2: Relative to expectations, the impact on Q3 revenue and contribution margin was approximately $17 million and $10 million respectively in NLA. As noted in our press release, sequentially lower revenue resulting from dry wells and rig schedules should be transits were in nature and we expect to rebound in NLA offshore activity in the coming quarter.

As we progress through what we believe will be a multiyear growth phase cost and capital discipline should result in margin expansion and a step change in free cash flow generation.

Also in October Quinn and his team reached an agreement to amend our revolving credit facility and extend the maturity of the facility for a further three years.

Speaker 2: Results for Europe and sub-Saharan Africa, the Middle East North Africa, and the Asia Pacific, excluding LWI, regions were generally consistent with what our expectations were in the quarter.

Total bank commitments are $250 million of which two thirds is available for drawdowns as loans and one third is available for letters of credit.

As was noted in our press release October one Mark the second anniversary of our completing the business combination of Expo in Frank's International.

Speaker 2: activities picking up on our business mix is trending in a positive direction.

Ex broke and increased the facility size to $350 million utilizing a conventional accordion feature.

Speaker 2: In addition to a number of technology awards that are highlighted in our press release, we had a number of operational and commercial highlights during the third quarter.

In addition to broadening our services and solutions offering and leveraging complementary operating footprint and customer relationships. The extra Frank's merger has allowed us to substantially reduce support costs and improve the combined company's operating leverage in advance of an anticipated upcycle.

We very much appreciate the support of our bank group during the amend and extend process and their vote of confidence in our business plan.

Speaker 2: And North and Latin America, we delivered a well-semending project for a large international operator in the U.S. Gulf of Mexico.

At September 30, $50 million draw was placed on our facility in anticipation of closing the PRC offshore transaction $35 million of which was repaid this week.

Speaker 2: Compared to offset wells, we saved approximately 18 hours of cement related drill out, clean out, and waiting on cement time. We are building momentum within our cementing technologies offering that was bolstered with recent acquisition of cementing specialist delta tech. We are building momentum within our cementing technology.

Over the last five quarters support costs have averaged 20% of revenue an improvement of approximately 10 percentage points relative to pre merger overheads.

Total liquidity, including cash on the balance sheet and borrowing capacity under the amended credit facility is currently in excess of $350 million.

Over the same period capital expenditures have remained within our guidance range of 7% to 8% of revenue.

Speaker 2: As we've discussed on previous earnings conference calls, Delta Tech supplements are offering of low risk open water submitting solutions, including pure technology, which allows customers to increase operational efficiency, reduce rig time and cost, and improve the quality of submitting operation.

Turning to our outlook for the remainder of 2023 and enter 2024, we expect the energy services market to further strengthen as oil demand continues to increase with consumption expected to reach an all time high of more than 102 million barrels per day in the fourth quarter of 2023.

As we progress through what we believe will be a multiyear growth phase cost and capital discipline should result in margin expansion and a step change in free cash flow generation.

Also in October Quinn and his team reached an agreement to amend our revolving credit facility and extend the maturity of the facility for a further three years.

Speaker 2: In the European Sub-Saharan Africa region, our E&I Congo project designed, construct, operate and maintain a fast track on-shore LNG pre-treatment facility continues to progress on time and on budget with the first production scheduled for the first half of 2024.

Positive macroeconomic data from China, and a continuing stabilization of Europe U S and European economies demand is forecast to further rise in 2024 against this supply remains constrained following the announced production cuts from OPEC plus an additional voluntary cuts by Saudi resulting in a liquids market that is imbalanced if not trend.

Total bank commitments are $250 million of which two thirds is available for drawdowns as loans and one third is available for letters of credit.

<unk> broke and increased the facility size to $350 million utilizing a conventional accordion feature.

Speaker 2: During the third quarter, the ANI combo project came achieved 250,000 hours LTI-free. And long-lead items have begun to arrive on site for a sem-

We very much appreciate the support of our bank group during the amend and extend process and their vote of confidence in our business plan.

<unk> towards a deficit.

As of now supply demand fundamentals are supporting the recent rise in oil prices with EIA revising upwards their average Brent price forecast to $84 per barrel in 2023 and $95 per barrel in 2024.

Speaker 2: We really appreciate the Congo team's dedication to safe and sustainable operations and best in class service delivery.

At September 30, $50 million draw was placed on our facility in anticipation of closing the PRC offshore transaction $35 million of which was repaid this week total.

Speaker 2: The Congress facility expansion is designed to allow incremental gas production for low carbon electricity generation. It will link to E&I's offshore flooding LNG operations, supporting both the local energy market and increased global demand for LNG to help secure energy supplies back to here.

Total liquidity, including cash on the balance sheet and borrowing capacity under the amended credit facility is currently in excess of $350 million.

The impact on both supply and demand and conflicts in Europe, and the Middle East of course remains a.

Key risk factor for the energy services industry as well as the overall economy.

In the gas markets robust stores in Europe, and slower demand growth in Asia have eased upward pricing pressure, resulting in a global gas market that remains in an uneasy nearer term equilibrium seemingly tied to winter demand in the eurozone as.

Speaker 2: In the Middle East and North Africa, Expo completed the first worldwide installation of our Kenley check valves using a non-explosive technology for no-money customer that was challenged with a failed electric submersible pump on a production well.

As with liquids the ongoing conflicts in Europe, and the middle East increased near to medium term risk for supply and demand in gas prices.

Speaker 2: Following two successful runs and a gas lift simulation, the well achieved over 2000 barrels per day production.

With positive macroeconomic data from China, and a continuing stabilization of Europe U S and European economies demand is forecast to further rise in 2024 against this supply remains constrained following the announced production cuts from OPEC plus an additional voluntary cuts by Saudi.

Speaker 2: Lastly, in the Asia Pacific region, which used 5.5 million man hours without a lost time incident, which is a tremendous testament to the Asia Pacific teams' commitment to overall championcy.

Longer term supply demand dynamics energy security and diversification of supply considerations support continued investment in LNG as a structural source of low carbon electricity generation and a critical transition fuel on the path towards global net zero.

<unk> and our liquids market that is imbalanced, if not trending towards a deficit.

Speaker 2: Alpha-Nage Pacific, exposed Octopoda Analyst intervention technology was utilized to assist with through a radiation of sustained casing pressure for a major LNG project. Following success of the work provided, Octopoda is now being used on a multi-well trial project.

As of now supply demand fundamentals are supporting the recent rise in oil prices with EIA revising upwards their average Brent price forecast to $84 per barrel in 2023, and <unk> $95 per barrel in 2024.

Strong and generally stable commodity prices are allowing operators to reduce debt increase investments in conventional and renewable resources and increase distributions to shareholders.

Sequentially, our sense is that operators, particularly the IOC, but increasingly <unk> are taking a balanced portfolio type approach to their medium term spending plans, which we expect will result in a steady, but a more sustainable up cycle.

Speaker 2: Octopoda is the only certified annual intervention system in the world that enables direct intervention of a live annulus without the expense of a heavy workover rig and with a reduced environmental foot...

The impact on both supply and demand and conflicts in Europe, and the Middle East of course remains a key risk factor for the energy services industry as well as the overall economy.

Speaker 2: The system offers a safe and efficient method for addressing sustained casing pressure. It can be deployed to replace annual fluid, increased hydrostatic pressure, and solved casing casing issue leaks by placing sealing material on the bottom of the end.

Operators are prioritizing projects with high and sustainable returns with significant emphasis on both cost and carbon intensity.

While the recent announcements by Exxonmobil and Chevron highlight the premium operators place on scale based economies.

Speaker 2: Utilizing a unique design, octopoda is deployed on annuals inlets, removing workover rig requirements, offering an alternative that can be rapidly deployed across all types of installations, both onshore and offshore, to maximize operational uptime while reducing overall HSC exposure.

There is also recognition that a global liquids demand will remain above 100 million barrels per day at least through 2030 significant investment is required to replace produced reserves.

As with liquids the ongoing conflicts in Europe, and the middle East increased near to medium term risk for supply and demand in gas prices.

Operator's desire to maximize production from existing wells stock and reduce emissions is driving increased demand for our production related activities within our wealth management, and well intervention and integrity product lines, especially across the Asia Pacific and Latin America regions.

Speaker 2: In terms of commercial activity, we started 2023 with a healthy order book. And I'm pleased that we have continued to build on this momentum. During the third quarter, we captured approximately $235 million in new contract awards, including an integrated service contract worth roughly $30 million for a customer in Norway in which extra will provide drilling, well-test, subsea, and our proprietary co-host service.

Strong and generally stable commodity prices are allowing operators to reduce debt increased investments in conventional and renewable resources and increase distributions to shareholders.

Perhaps more importantly, despite some near term macroeconomic uncertainty long cycle development, and particularly deepwater development is generally cost and carbon advantaged and offshore project sanctioning has grown significantly in 2023 with further growth expected in 2024, and a robust pipeline of projects poised to be sanctioned.

Sequentially, our sense is that operators, particularly the IOC, but increasingly the nrc's too are taking a balanced portfolio type approach to their medium term spending plans, which we expect will result in a steady, but a more sustainable up cycle.

Speaker 2: Again, this is a reminder, coil hose is a cost effective lightweight alternative to conventional cold tubing interventions.

Between now and 2030.

Speaker 2: Other notable contractor words there in a quarter, included several well-test contracts in the Middle East, North Africa, and a well-construction contract in Europe , Sub-Saharan Africa for a customer with whom we are currently providing well-slow management service.

The growth in our backlog reflects positive trends in international and offshore markets, especially across.

Operators are prioritizing projects with high and sustainable returns with significant emphasis on both cost and carbon intensity.

Europe, and sub Saharan Africa, Asia Pacific regions, and in Latin America, and the Caribbean as operators look to progress new developments such that we have observed in Norway, Angola, India, Indonesia, Brazil, and Guyana and.

While the recent announcements by Exxonmobil and Chevron highlight the premium operators place on scale based economies.

Speaker 2: I will also note that where we have complimentary services and operating footprints, X-PRO has increasingly working with the larger energy services companies to deliver integrated solutions for our common customers, leveraging our reputation for safety, service delivery, and cost effect and innovative solutions.

Also recognition that a global liquids demand will remain above 100 million barrels per day at least through 2030 significant investment is required to replace produced reserves.

In recent Investor meetings, I've noted that Africa has been underrepresented in the recently sanctioned projects.

As I suspect will be the case, we see additional projects sanctioned in Africa in 2024, and 2025 that will be assigned at the current growth cycle will likely have legs into 2027 or beyond.

Speaker 2: At quarter end, our backlog was approximately $2.4 billion or up approximately 6% from the June 30th period.

Speaker 2: In early October , we also completed the previously announced acquisition of PRT offshore. And just as a reminder, PRT offshore is a Houston-based company and is the only company that provides a complete hook to hang or solution, enabling comprehensive well-complicions, interventions, and decommissioning services from surface to subsea. A unique system is designed to allow customers to access the well-born safely and efficiently all while reducing the number of personnel on board.

This combination of increasing investments in sanctioning is driving demand for our services and solutions, especially within our well construction subsea well access at elements of our wealth management businesses for which we expect good growth in 2024 and beyond.

Perhaps more importantly, despite some near term macroeconomic uncertainty long cycle development, particularly deepwater development is generally cost and carbon advantaged and offshore project sanctioning has grown significantly in 2023 with further growth expected in 2024, and a robust pipeline of projects poised to be sanctioned which way.

In support of the industry sustainability goals and demand for low carbon energy sectors. We're also seeing additional activity in the geothermal sector and increased investment in carbon capture use and storage projects further indicators of our growth of expected growth in offshore activity and a positive long term outlook.

Now in 2030.

The growth in our backlog reflects positive trends in international and offshore markets, especially across Europe, and sub Saharan Africa Asia Pacific regions, and in Latin America, and the Caribbean as operators look to progress new developments such that we have observed in Norway, Angola, India, Indonesia, Brazil and.

Speaker 2: The PRT acquisition will enable experts to expand our portfolio of cost-effective technology-enabled services within the Sub-C-Well Access sector and in North and Latin America region, and also to accelerate the growth of PRT off-shorted surface equipment offering and the Europe and Sub-Saharan Africa and Asia-Pacific region.

Spike the positive macroeconomic outlook and robust commodity pricing the number of mature assets, reaching the end of their economic environmentally sustainable life. Also continues to increase this is underpinning increased activity, particularly in Europe, and the Gulf of Mexico, and the decommissioning market and additional demand for cost effective plug and abandonment solutions, which we.

Speaker 2: As was noted in our press release, October 1, marked the second anniversary of our completing the business combination of expro and French international.

<unk> and.

In recent Investor meetings, I've noted that Africa has been underrepresented in the recently sanctioned projects.

As I suspect will be the case, we see additional projects sanctioned in Africa in 2024, and 2025 that will be assigned at the current growth cycle will likely have legs into 2027 or beyond.

Speaker 2: In addition to broadening our services and solutions offering and leveraging complementary operating footprints and customer relationships, the extra Frank's merger has allowed us substantially reduced support costs and approved the combined companies operating leverage in advance of an anticipated upside.

<unk> will become a growth driver for the energy services industry and extra overall.

A significant increase in global activity and capacity constraints across the energy services sector, both for people and equipment should support net pricing gains for value, adding service providers over the next several years as a result of express global operating footprint and differentiated offering across our product lines, we should be able to extract more value from our service.

This combination of increasing investments in sanctioning is driving demand for our services and solutions, especially within our well construction subsidy well access at elements of our wealth management businesses for which we expect good growth in 2024 and beyond.

Speaker 2: Over the last five quarters, support costs have averaged 20% of revenue and improvement of approximately 10 percentage points relative to pre-merger over.

Speaker 2: Over the same period, capital expenditures have remained within our guidance range of 7 to 8% of revenue.

And solutions.

All combined the outlook for <unk> and the broader sector remains quite positive with that I will hand, the call over to Quinn to discuss our updated outlook for the fourth quarter and full year 2023.

Speaker 2: As we progress through what we believe will be a multi-year growth phase, cost and capital discipline should result in margin expansion and a step change in pre-cashable de mediatorry

Thank you Mike first as was noted in our September 27th Press release, there is an ongoing investigation regarding the crane wire failure on the vessel that was deploying the subsea module for our vessel deployed lwr system.

Speaker 2: Also in October , Quinn and his team reached an agreement to amend our evolving credit facility and extend the maturity of the facility for further three years.

Spike the positive macroeconomic outlook and robust commodity pricing the number of mature assets, reaching the end of their economic and environmentally sustainable life. Also continues to increase this is underpinning increased activity, particularly in Europe, and the Gulf of Mexico, and the decommissioning market and additional demand for cost effective plug and abandonment solutions, which we.

Speaker 2: Total bank commitments are $250 million, of which two-thirds is available for drawdowns as loans and one-third is available for letters of credit. X-Pro can increase the facility size to $350 million utilizing a conventional accordion feature.

As Mike noted, we have not yet recovered our equipment, but expect to do so in Q4 or early in Q1 of 2024.

Third quarter results reflect unrecoverable operating costs totaling $15 million, including an estimate for demobilization costs.

<unk> will become a growth driver for the energy services industry and extra overall.

Speaker 2: We very much appreciate the support of our bank group during the men and extend process and their vote of confidence in our business plan.

As noted in our earnings press release third quarter results do not include an estimate for recovery and repair costs.

Speaker 2: September 30th, $50 million draw was placed on a facility at anticipation of closing the PRC off-short transaction, $35 million of which was repaid this week.

However, based on the information that is currently available to US we do not think that such recovery and repair costs net of insurance will be material to excellent financial results.

Speaker 2: Total liquidity, including cash on the balance sheet and borrowing capacity under the amended credit facility, is currently in excess of $350 million.

After we have recovered our equipment, we will also be able to determine when our lwr system will return to operational status.

And solutions.

All combined the outlook for <unk> and the broader sector remains quite positive.

But alternative service delivery options and service partner options are available to the company and the timing and cost of completing <unk> related customer work scopes.

Speaker 2: Turning to our outlook for the remainder of 2023 and into 2024, we expect the energy services market to further strengthen as oil demand continues to increase with consumption expected to reach and all time high of more than 102 million barrels per day in the fourth quarter of 2023.

With that I will hand, the call over to Quinn to discuss our updated outlook for the fourth quarter and the full year 2023.

Mike first as was noted in our September 27th press release, there is an ongoing investigation regarding the crane wire failure on the vessel that was deploying the subsea module for our vessel deployed lwr system.

At this time, we are not able to assess the timing and potential costs of completing customer work scopes, and whether such costs could be material to expose financial results.

Speaker 2: with positive macroeconomic data from China and a continuing stabilization of US, European economies, demand is forecast to further rise in 2024. Against this, supply remains constrained, following the announced production cuts from OPEC, plus an additional voluntary cuts by Saudi, resulting in a liquid market that is in balance if not trending towards a deficit.

Once we had moved beyond the startup and commissioning phase I E. In 2024 and beyond we expected annual revenue from our vessel deployed <unk> business, a $50 million to $75 million.

As Mike noted, we have not yet recovered our equipment, but.

I expect to do so in Q4 or early in Q1 of 2024.

Third quarter results reflect unrecoverable operating costs totaling $15 million, including an estimate for demobilization costs.

Until we return to operational status.

As expected revenue will obviously not be a part of our financial results contribution margin from vessel deployed <unk> services has been negative to date.

As noted in our earnings press release third quarter results do not include an estimate for recovery and repair costs.

Speaker 2: As of now, supply demand fundamentals are supporting the recent rise in oil prices with EIA revising upwards their average print price forecast to $84 per barrel in 2023 and $95 per barrel in 2024.

However, our further expectation was that we would have achieved 20% to 25% contribution margin in 2024.

However, based on the information that is currently available to US we do not think that such recovery and repair costs net of insurance will be material to excellent financial results.

This is generally lower than contribution margin generated by our other product lines and reflects high pass through costs, including the cost of chartering of vessel as part of delivering an integrated solution to the end user customer.

Speaker 2: The impact on both supply and demand and conflicts in Europe and the Middle East, of course, remains a key risk factor for the energy services industry as well as the overall economy.

After we have recovered our equipment, we will also be able to determine when our lwr's system will return to operational status.

Alternative service delivery options and service partner options are available to the company.

Speaker 2: In the gas markets, robust stores in Europe and slower demand growth in Asia have eased upward pricing pressure resulting in a global gas market that remains in an uneasy near-term equilibrium seemingly tied to winter demand in the Eurozone.

As Mike noted, we believe that there is a strong customer interest in cost effective subsea interventions and vessel deployed lwr solutions.

And the timing and cost of completing lwr related customer work scopes.

At this time, we are not able to assess the timing and potential costs of completing customer work scopes, and whether such costs could be material to extra financial results.

That extra has compelling <unk> technology, and a differentiated offering of services solutions.

Speaker 2: As with liquids, the ongoing conflicts in Europe and the Middle East, increased narrative and media in term risk for supply and demand and gas price.

As a result, we would like to participate in this space subject to finding an appropriate contracting model and our ability to achieve sustainable risk adjusted returns.

Once we had moved beyond the startup and commissioning phase I E. In 2024 and beyond we expected annual revenue from our vessel deployed lwr business of 50 million to $75 million.

Speaker 2: longer-term supply demand dynamics, energy security, and diversification of supply considerations, support continued investment in LNG as a structural source of low carbon electricity generation and a critical transition fuel on the path towards global net zero.

Slide number three of our accompanying presentation summarizes our revised guidance for full year 2023.

Until we return to operational status. This expected revenue will obviously not be a part of our financial results contribution margin from vessel deployed Lwr services has been negative to date.

The midpoint of our previous full year guidance for revenue and adjusted EBITDA was $1 $5 billion and $300 million respectively.

Speaker 2: Strong and generally stable commodity prices are allowing operators to reduce debt, increase investments in conventional and renewable resources, and increase distributions to shareholds.

Our current expectation is for Q4 revenue of $375 million to $385 million.

However, our further expectation was that we would have achieved 20% to 25% contribution margin in 2024.

Speaker 2: Consequently, our sense is that operators, particularly the IOC, but increasingly NOCs too, are taking a balanced portfolio type approach to their medium-term spending plans, which we expect will result in a steady but a more sustainable upside.

Adjusted EBITDA of $75 million to $85 million and adjusted EBITDA margin of plus 20%.

This is generally lower than contribution margin generated by our other product lines and reflects high pass through costs, including the cost of chartering a vessel as part of delivering an integrated solution to the end user customer.

Our Q4 outlook implies a full year revenue range of $1 48 billion to $1 $49 billion.

Speaker 2: Operators are prioritizing projects with high and sustainable returns, with significant emphasis on both costs and carbon intensive

As Mike noted, we believe that there is a strong customer interest in cost effective subsea interventions and vessel deployed lwr solutions in.

And adjusted EBITDA range of between 235, and $245 million and adjusted EBITDA margin range of between 16 and 17%.

Speaker 2: While the recent announcements by ExxonMobil and Chevron highlight the premium operators place on scale-based economies, there is also recognition that if global liquid demand will remain above 100 million barrels per day at least through 2030, significant investment is required to replace produced reserves.

And that extra has compelling lwr technology, and a differentiated offering of services solutions.

Note that Q4 and full year 2023 guidance does not contemplate additional <unk> related charges.

As a result, we would like to participate in this space.

Subject to finding an appropriate contracting model and our ability to achieve sustainable risk adjusted returns.

Excluding <unk> related I'm gonna recoverable operating costs of approximately $32 million that we have recognized year to date.

Speaker 2: Operators desire to maximize production from existing well stock and reduce emissions is driving increased demand for our production related activities within our well flow management and well intervention and integrity product lines, especially across the age of Pacific and Latin America region.

Slide number three of our accompanying presentation summarizes our revised guidance for full year 2023.

Our expectation is for full year, adjusted EBITDA of between $265 million and $275 million and an adjusted EBITDA margin of between 18 and 19%.

The midpoint of our previous full year guidance for revenue and adjusted EBITDA was $1 $5 billion and $300 million respectively.

As you can see from the bridge provided other than <unk> related Unrecoverable operating costs. The key negative variances are the year to date underperformance in our U S land business.

Speaker 2: Perhaps more importantly, despite some near-term macroeconomic uncertainty, long cycle development, and particularly deep water development, is generally cost and carbon advantage. An offshore project sanctioning has grown significantly in 2023 with further growth expected in 2024, and a robust pipeline of projects poised to be sanctioned between now and 2030.

Our current expectation is for Q4 revenue of $375 million to $385 million.

Adjusted EBITDA of $75 million to $85 million.

And what we believe to be a transient trough and MLA offshore activities included within our wealth management and well construction product lines.

And adjusted EBITDA margin of plus 20%.

Our Q4 outlook implies a full year revenue range of $1 48 billion to $1 $49 billion.

Offsetting such negative variances is a modest adjusted EBITDA contribution from recently acquired PRT offshore.

Speaker 2: The growth in our backlog reflects positive trends and international and offshore markets, especially across our Europe and South China and Africa, Asia-Pacific regions, and Latin America and the Caribbean, as operators look to progress new developments such that we have observed in Norway, Angola, India, Indonesia, Brazil, and Gaia.

Adjusted EBITDA range of between 235 and $245 million.

And a combination of additional activity and better activity mix across regions and product lines.

Adjusted EBITDA margin range of between 16 and 17%.

Net pricing gains are not currently a material driver to expected 2023 results.

Note that Q4 and full year 2023 guidance does not contemplate additional lwr related charges.

I will now turn the call back over to Mike for a few closing comments.

Speaker 2: In recent investor meetings, I've noted that Africa has been underrepresented in the recently sanctioned projects. If, as I suspect, we'll be the case, we see additional projects sanctioned in Africa in 2024 and 2025. That will be assigned at the current gross cycle, will likely have legs in the 2027 or being on.

Excluding <unk> related I'm gonna recoverable operating costs of approximately $32 million that we have recognized year to date.

Thanks Quinn I'd.

I'd like to leave all of you with three key takeaways before we open up the call to questions and answers first EXPAREL continues to outpace market growth delivering an expecting double digit revenue growth by capturing market share and by introducing new technologies in our established markets. This result of us being able to leverage our global operating footprint excellent.

Our expectation is for full year, adjusted EBITDA of between $265 million and $275 million and an adjusted EBITDA margin of between 18 and 19%.

Speaker 2: This combination of increasing investments and sanctioning is driving demand for our services and solutions, especially within our well construction subsea well access and elements of our well flow management businesses for which we expect good growth in 2024 and beyond.

As you can see from the bridge provided other than <unk> related on recoverable operating costs. The key negative variances are the year to date under performance in our U S land business.

Track record and World Class service delivery.

While <unk> related to startup and commissioning costs. The recent incident involving our vessel partners crane, while failure and the softness in MLA, particularly in Q3 have resulted in downward adjustments to our 2023 outlook expert remains well positioned to deliver strong topline growth and benefit from improved operating leverage.

And what we believe to be a transient trough and MLA offshore activities included within our wealth management and well construction product lines.

Speaker 2: the industry's sustainability goals and demand for low carbon energy sectors. We're also seeing additional activity in the geothermal sector and increased investment in carbon capture, use and storage projects, further indicators of a growth of expected growth in offshore activity and a positive long-term outlook.

Offsetting such negative variances is a modest adjusted EBITDA contribution from recently acquired PRT offshore.

As we drive more activity and revenue across a more efficient support structure, we should be able to expand EBIT margins and improve free cash flow generation.

And a combination of additional activity and better activity mix across regions and product lines.

Speaker 2: Despite the positive macroeconomic outlook and robust commodity pricing, the number of mature assets reaching the end of their economic and environmentally sustainable life also continues to increase.

Finally, we win business because of the quality of our execution, we're successful in achieving and exceeding our merger related synergy targets. Because we have worked very hard to develop strong and detailed plans and then we set about by implementing them as the inevitable challenges arise in a dynamic operating environment, we will address them in a straight away manner.

Net pricing gains are not currently a material driver to expected 2023 results.

I will now turn the call back over to Mike for a few closing comments.

Speaker 2: This is underpinning increased activity, particularly in Europe and the Gulf of Mexico, in the decommissioning market, an additional demand for cost-effective, plug-in abandonment solutions, which we expect will become a growth driver for the energy services industry and expereo overall.

Thanks Glenn.

We'll also continue to be transparent with investors regarding any course corrections to our business plan, but we will not change is our commitment to deliver and derive value by providing cost effective technology enabled services and solutions.

Speaker 2: significant increase in global activity and capacity constraints across the energy services sector both for people and equipment Should support net pricing gains for value adding service providers over the next several years as a result of extra Global operating footprint and differentiated offering across our product lines. We should be able to extract more value for more services and pollution.

With that I'll turn the call back to the operator for the Q&A session.

Track record and World Class service delivery.

While <unk> related to startup and commissioning costs. The recent incident involving our vessel partners crane, while failure and the softness in MLA, particularly in Q3 have resulted in downward adjustments to our 2023 outlook expert remains well positioned to deliver strong top line growth and benefit from improved operating leverage.

Thank you. Thank you I'd like to ask a question. Please do so now by pressing star followed by the number one on your telephone keypad.

Speaker 2: I'll combine the outlook for X-Broom and the broader sector remains quite positive.

Your mind I would like to be remains from Mckinney.

Speaker 2: With that, I will hand the call over to Quinn to discuss our updated outlook for the fourth quarter and the full year 2020.

If I can.

Our first question comes from the line of <unk> from the mine with Piper Sandler.

Speaker 3: Thank you, Mike. First, as was noted in our September 27th press release, there's an ongoing investigation regarding the crane wire failure on the vessel that was deploying the subsea module for a vessel deployed LWI system. As Mike noted,

As we drive more activity and revenue across a more efficient support structure, we should be able to expand EBITDA margins and improve free cash flow generation.

Please go ahead. Your line is now open.

Thank you hi, good afternoon.

Mike Quinn.

Talking about the issues.

Talking about the issues and impacts NOI and <unk>.

As far as our wealth management U S land Trs well construction the Gulf of Mexico, Caribbean, just kind of want to understand these pieces, a little bit better, but maybe if we could start with the U S land and Mike you touched on a little bit.

Speaker 3: But I expect to do so in Q4 or early in Q1 of 2024. Third quarter results.

As the inevitable challenges arise in a dynamic operating environment, we will address them in a straight away manner. We will also continue to be transparent with investors regarding any course corrections to our business plan, but we will not change is our commitment to deliver and derive value by providing cost effective technology enabled services and solutions.

Speaker 3: totaling $15 million, including an estimate for de-bombalization.

What are you doing here how is that business restructured.

Do you need to divest pieces, you've talked about mobilizing equipment in different basins and just kind of.

Speaker 3: noted in our earnings press release. Third quarter results do not include an estimate-free covering repair.

How do you see this U S land Trs business evolving kind of in the next six to 12 months and then I'll have a few follow ups as well kind of a restaurant in L. A.

Speaker 3: However, based on the information that has currently available to us, we do not think that such recovery and repair costs...

With that I'll turn the call back to the operator for the Q&A session.

Speaker 3: Net of insurance will be material to lack of forced financial reasons.

Sure no problem Luca thanks for the questions.

Thank you. Thank you I'd like to ask a question. Please do so now by pressing star followed by the number one on your telephone keypad. If you change your mind I would like to be remains for Mckinney.

Speaker 3: After we have recovered our equipment, we will also be able to determine when our LWI system will return to operational status.

So fundamentally what we're really experiencing within Trs in U S. Land is it's a very competitive landscape and as I said in the prepared remarks, what we're really seeing is and these are much smaller competitors. These arent the bigger broader.

Speaker 3: that alternative service delivery options and service parker options are available to the company and the timing and cost of completing LWI-related customer work.

<unk>.

Our first question comes from the line of the mine with Piper Sandler.

Please go ahead. Your line is now open.

Normal competitors you'd think of their smaller privately held.

Speaker 3: At this time, we are not able to assess the timing and potential costs of complex

Thank you hi, good afternoon.

One and two man's job kind of kind of operations and really appears right now that they are really just trying to stay afloat and theyre chasing market share. They are not chasing pricing. So so we've been continuing to press price in U S land.

Mike Quinn.

Speaker 3: and whether such costs could be material to actual financial results.

About the issues.

Talking about the issues and impacts NOI and <unk>.

Speaker 3: Once we had moved beyond the Startup and Commissioning phase, IE and 2024 and beyond, we expected annual revenue from our vessel deployed LWI business of $50 million to $75 million. Until we returned operational status.

As far as our wealth management U S land Trs well construction the Gulf of Mexico Caribbean.

And frankly, what we're what we're not seeing is the type of discipline that you see from the drillers are you see from the pressure pumper is in U S land, where they are all kind of consciously made a decision that they will lay equipment down before they start giving up pricing.

Kind of want to understand these pieces, a little bit better, but maybe if we could start with U S land and Mike you touched on a little bit.

What are you doing here how is that business restructured.

Do you need to divest pieces, you talked about mobilizing equipment in different basins, and just kind of how you see this U S land Trs business evolving kind of in the next six to 12 months and then I'll have a few follow ups as well kind of a restaurant in L. A.

Speaker 3: Contribution margin from vessel deployed LWI services has been negative today.

So really what we've been doing is.

We've been closing a few facilities, we're starting to concentrate our assets into some of the basins that we can.

Speaker 3: However, our further expectation was that we would have achieved 20 to 25% contribution margin in 2024.

We think we can achieve some better pricing with we do have still have some technology elements in U S land, especially regimentation that we think is.

Speaker 3: generally lower than contribution margin generated by our other products.

Sure no problem Luca thanks for the questions.

So fundamentally what we're really experiencing within Trs in U S. Land is it's a very competitive landscape and as I've said in the prepared remarks, what we're really seeing is and these are much smaller competitors. These arent the bigger broader.

Speaker 3: and reflects high pass-through costs, including the cost of chartering a vessel as part of delivering an integrated solution to the end user costs.

As valuable to our customers allows us to have some pricing traction, but we're going to contract that business back to a level that.

Speaker 3: as Mike noted, we believe that there is a strong customer interest in cost-effective subsea interventions and vessel deployed.

And that we can maintain some some better margins.

We won't necessarily divest assets, we frankly, we'll move those same assets internationally, we've got land markets in Latin America or in the middle East or even in Asia that we can utilize those trs assets. So that's.

Normal competitors, you can think of they're smaller privately held.

Speaker 3: and that extra has compelling LWA technology and a differentiated offering of services solution.

One and two man shop kind of kind of operations and really appears right now that they are really just trying to stay afloat and their chase and market shares are not chasing pricing. So so we've been continuing to press price in U S land.

Speaker 3: We would like to participate in this space, subject to finding an appropriate contracting model, and our ability to achieve sustainable risk adjust.

I think we've all been.

Trying to understand when is when is bottom occur in U S land and what happens with rig rates and just rig count and those type things.

And frankly, what we're what we're not seeing is the type of discipline that you see from the drillers are you see from the pressure pumper is in U S land, where they've all kind of consciously made a decision that they will lay equipment down before they start giving up pricing.

Speaker 3: Slide number three of our accompanying presentation summarizes our revised guidance for full year.

<unk> been softer than I think what anybody anticipated for us, we're starting to accelerate moving equipment.

Speaker 3: the midpoint of our previous four-year guidance for revenue and adjusted diva.

Outside the U S and to a fewer number of basins within the U S.

Speaker 3: $1.5 billion and $300 million respects.

So really what we've been doing is we've been closing a few facilities, we're starting to concentrate our assets into some of the basins that we can do.

Speaker 3: Our current expectation is for Q4 revenue of $375 to $385 million. Adjust the EBITDAW of $75 to $85 million.

That makes sense okay. Thank you.

That's helpful and then on the well testing in L. A is this just you had the Johnson the calendar and mobilize.

We think we can achieve some better pricing with we do have still have some technology elements in U S land, especially around cement patients that we think is.

And then they were dry holes there were no revenues, where the job didn't occur.

Absorption cost along with that.

Speaker 3: a full year revenue range of $1.48 billion to $1.49 billion.

Yeah.

As valuable to our customers and allows us to have some pricing traction, but we're going to contract that business back to a level that.

Absolutely.

A really good that's a really good read of what we were trying to talk about.

Speaker 3: that just the diva dial range of between $235 and $245 million. And that just the diva dial margin range of between 16 and 17%.

We had dry wells were dry holes in Mexico in particular.

That we can maintain some better margins.

We wont necessarily divest assets, we frankly, we'll move those same assets internationally, we've got land markets in Latin America or in the middle east or even in Asia that we.

And we had a series of dry wells.

You don't normally normally we test about.

Speaker 3: Note that Q4 and full year 2023 guidance does not contemplate additional related charges.

About 50% to 60% of our wells that are kind of on the calendar and the way things things lined up for the quarter, We Didnt test.

Can utilize those Trs assets so that's.

Speaker 3: Exploding LWI related on the recoverable operating costs of approximately $32 million that we have recognized here today.

Didn't test wells that we at the same rate, we normally would and overall, what we really had was and I think you've seen it from some of the comments from some of the other peers, but there was a.

Yes, I think we've all been.

Trying to understand when does when does bottom occur in U S land and what happens with rig rates and just rig count and those type things.

Speaker 3: Our expectation is for full year adjusted debata of between $265 million and $275 million.

It's been softer than I think what anybody anticipated for us, we're starting to accelerate moving equipment.

There was a reduction in the Gulf of Mexico in particular on drilling related activity within the quarter.

Speaker 3: on the JustAdebid.Margin, between 18 and 19%.

Outside the U S and to a fewer number of basins within the U S.

It just kind of happen to be there was more completions activity.

Speaker 3: as you can see from the bridge provided, other than LWI-related, unrecoverable operating costs.

Large number of completion operations being run in the quarter and not quite as balanced of drilling and completions is what you normally have so it really was.

That makes sense okay. Thank you.

Speaker 3: The key negative variances are the year-to-date underperformance in our U.S. land business.

That's helpful and then on the well testing in L. A is this just you had the Johnson the calendar mobilize.

Speaker 3: and what we believe to be a transient trough and NLA offshore activities, included within our welfare management and well-construction products.

It was a timing of operations it was rigs in Guyana being in a maintenance mode. It was just kind of how things stacked up from an operational standpoint.

And then they were dry holes there were no revenues, where the job didn't occur.

Kind of absorbed some cost along with that.

Absolutely.

Speaker 3: Offsetting such negative variances is a modus to just a dbid.contribution from recently acquired PRT offshore

So really good that's a really good read of what we were trying to talk about.

As the as the operations kind of kind of layer in over the over the quarter.

We had dry wells were dry holes in Mexico in particular.

Speaker 3: and a combination of additional activity and better activity mix across regions and products.

Okay, and then just one final one sorry to wrap it altogether.

And we had a series of dry wells.

You don't normally normally we test about.

You provided the bridge correct.

Speaker 3: Net pricing gains are not currently a material driver to expected 2023 results. I will now turn the call back over.

EBITDA guidance change, but how do you think performance.

50% to 60% of our wells that are kind of on the calendar and the way things things lined up for the quarter, We Didnt test.

Performance in <unk>.

And when do you think you can kind of get back to more.

On a more normalized performance levels maybe.

Didn't test wells that we at the same rate, we normally would and overall, what we really had was and I think you've seen it from some of the comments from some of our other peers, but there was a.

Speaker 2: Thanks, Clint. I'd like to leave all of you with three key takeaways before we open up the call to questions and answers. First, expert continues to outpace market growth, delivering and expecting double-digit revenue growth by capturing market share and by introducing new technologies in our established market.

Actual smaller U S land to your business.

If you roll it all up Luke it's Quinn.

We were at June.

There was a reduction in the Gulf of Mexico in particular on drilling related activity within the quarter.

130 <unk> trend.

Trending towards $140 million of revenue quarter, and MLA as I am.

Speaker 2: This result of us being able to leverage our global operating footprint, excellent track record and world class service delivery.

It just kind of happened to be there was more completions activity.

Sure you saw from our conference call slides and the press release.

And just a bit over $100 million in the third quarter.

A large number of completion operations being run in the quarter and not quite as balanced of drilling completions is what you normally have so it really was.

Speaker 2: Second, while LWI related to startup and commissioning costs, the recent incident involved into our vessel partner's crane wild failure and the office and NLA, particularly in Q3, have resulted in downward adjustments to our 2023 outlook. Experts remains well positioned to deliver strong top line growth and benefit from improved operating leverage.

So.

At least our expectations is that.

Fourth quarter, if not the fourth quarter and the first quarter youre going to be back in that $130 million to $140 million ZIP code in terms of revenue at least that's our expectation where we sit today.

It was a timing of operations it was rigs in Guyana being in a maintenance mode. It was just kind of how things stacked up from an operational standpoint.

Okay perfect. Thanks, so much.

As the as the operations kind of kind of layer in over the over the quarter.

Thanks Luke.

Speaker 2: As we drive more activity and revenue across a more efficient support structure, we should be able to expand the even of margins and improve free cash flow generation.

Our next question comes from Ashley <unk> with Goldman Sachs.

Okay, and then just one final one sorry to wrap it altogether.

Please go ahead your line is open.

Speaker 2: Finally, we win business because of the quality of our execution. We were successful in achieving and exceeding our merger-related synergy targets because we have worked very hard to develop strong and detailed plans. And then we set about by implementing.

You provided the bridge for.

Hi, Thanks for taking my question.

EBITDA guidance change, but how do you think <unk>.

<unk> business do you now expect.

Performance in <unk>.

And when do you think you can kind of get back to.

I know you mentioned some <unk>.

On a more normalized performance levels maybe.

Expectations, there, but is that going to be a different approach to the business may be helpful. In fact, the expectations around that compared to the approach so far and what would that mean for cost. After you resolve the current issue.

Speaker 2: As the inevitable challenges arise in a dynamic operating environment, we will address them in a straightaway manner. We will also continue to be transparent with investors regarding any course corrections to our business plan. What we will not change is our commitment to deliver and derive value by providing cost-effective technology-enabled services and solutions. With that, I'll turn a call back to the operator.

Ask a smaller U S land to your business.

Yeah.

If you roll it all up Luke it's Quinn.

We were at June.

130 <unk>.

Yes.

Trending towards $140 million of revenue quarter, and MLA as I'm sure you saw from our conference call slides or the press release.

It's a good question and really what we're.

The biggest challenges in our biggest shortcomings we've had.

And just a bit over $100 million in the third quarter.

I'm trying to go operation with the <unk> system over the course of the last year really has been the vessel partner, we've had a number of vessel related issues most significantly around the crane, whether it was the hydraulics issue or it was this now crane wire failure and we've.

So at least our expectations is that fair.

Speaker 1: Thank you. If you would like to ask a question, please do so now by pressing start, followed by the number one on your telephone keypad. If you change your mind, I would like to be removed from the key, that is start for by two.

Fourth quarter, if not the fourth quarter and the first quarter youre going to be back in that 130 $140 million ZIP code in terms of revenue at least that's our expectation where we sit today.

Okay perfect. Thanks, so much.

Speaker 1: Our first question comes from the line of Luke Lamine with Piper Sandler. Luke, please go ahead, your line is now away.

We've had somebody that we've partnered with and we willingly partner with them upfront and they really have.

Thanks Luke.

Yeah.

Our next question comes from Ashley <unk> with Goldman Sachs. Please go ahead. Your line is open.

They have left us kind of standing at the altar so to speak and so really what we're looking at is is there a.

Speaker 4: Good afternoon. Mike Quinn. Absolutely. You'll talk about the issues. Hey, let's hear what you'll talk about the issues and impacts and NLA and 3Q.

Is that the ideal vessel to be partnered with is that.

Hi, Thanks for taking my question.

On the <unk> business do you now expect.

Speaker 4: as far as local management, US land, you're asked, well construction.

As there were.

Over the side deployments today, the original plan was to do.

I know you mentioned some expectations, there, but is that going to be a different approach to the business, maybe help unpack the expectations around that compared to the approach so far and what would that mean for cost after you resolve the cardiac tissue.

Speaker 4: I just kind of want to understand these pieces a little bit better, but maybe we could start with the US land. And Mike, you touched on a little bit, but what are these?

Deployments through a tower. So it's really just looking at.

Who do we partner with how do we partner with do we run the operations.

Speaker 4: Do you need the best pieces? You talk about mobilizing equipment in different basins. It just kind of, how you see this US land terrorist business evolving kind of in the next six to 12 months, and then I'll have a.

Are the kind of front facing element of the customer engagement do we move to more of a traditional we provide the <unk> system and the operator secures the vessel under one we're really looking through all of those options here now because it frankly in the construct we've had quite.

Yes.

It's a good question and really what were.

The biggest challenges in our biggest shortcomings, we've had you know.

I'm trying to go operation with El Wi system over the course of the last year really has been the vessel partner, we've had a number of vessel related issues most significantly around the crane, whether it was our hydraulics issue or it was this now crane wire failure and.

Speaker 2: Sure, no problem looking. Thanks for the questions. So fundamentally, what we're really experiencing within TRS and US land is...

Quite alluded to we're taking a disproportionate amount of the risk here.

Even though our equipment has not been problematic. The end user has the end customer has had to deal with somebody as downtime. So that's why we're really trying to look at and evaluate this the one thing I can tell you is that the operations, we completed and we completed a significant number of these suspensions, they're very efficient they were very.

Speaker 2: It's a very competitive landscape. And as I said, to prepare remarks, what we're really seeing is, and these are much smaller competitors, these aren't the bigger, broader, in normal competitors, you'd think of, they're smaller, privately held, one in two-man shop kind of operations. And really appears right now that they're really just trying to stay afloat and their chase and market share, they're not chasing pricing. We've been continuing to press price in the US land.

We've had somebody that we've partnered with and we willingly partner with them upfront and they really have.

They've they've left is kind of standing at the altar so to speak and so really what we're looking at is is there a.

Operationally went well and and there was a lot of customer interest and excitement around the technology. So how do we how do we be able to deploy that and how do we be able to provide that to customers is really what we're trying to evaluate right now.

Is that the ideal vessel to be partnered with.

Is that.

Is there we're doing over the side deployments today. The original plan was to do.

Speaker 2: and frankly what we're what we're not seeing is the type of discipline that you see from the drillers or you see from the pressure pumpers in the u.s. land where you know they've all kind of consciously made a decision that don't lay equipment down before they start giving up pricing.

Deployments through a tower.

So it's really just looking at.

Got it thanks for that and then you mentioned a rationalization of the North American onshore footprint.

Who do we partner with how do we partner with do we run the operations. We are the kind of front facing element of the customer engagement do we move to more of a traditional we provide the <unk> system and the operator secures the vessel under one we're really looking through all of those options here now.

Is this something that became more specifics during this quarter that brought future Jonathan just to write or was this contemplated Byrd for some time now and maybe also talk about the competitive landscape elsewhere, what kind of structural revenue EBITDA impact is backing that out too.

Speaker 2: So really what we've been doing is, is we've been closing a few facilities. We're starting to concentrate our assets into some of the basins that we can, that we think we can achieve some better pricing with. We do still have some technology elements in US land, especially when cementation that we think is.

It frankly in the construct we've had.

As Colin alluded to we're taking a disproportionate amount of the risk here.

Sure.

This is not the U S land Trs.

Speaker 2: is valuable to our customers and allows us to have some pricing traction, but we're going to contract that business back to a level that we can maintain some better margins.

Even though our equipment has not been problematic.

Kind of slimming down our operations, that's not that's something that's not that is not something thats new for us we've been working on that for several quarters.

And user has.

Customer has had to deal with somebody's downtime. So that's why we're really trying to look at and evaluate this the one thing I can tell you is that the operations, we completed and we completed a significant number of the suspensions, they're very efficient they were very.

Speaker 2: We won't necessarily divest assets. We frankly will move those same assets internationally. We've got land markets in Latin America or in the Middle East or even in Asia that we can utilize those TRS assets. So that's...

We've closed some facilities women been reducing some of our footprint.

It was just really exacerbated in this quarter, because we really kind of had the.

Okay, and I don't want to say the stars aligned here because that sounds like an excuse but what we really had was we just had a number of a series of things that kind of happened all concurrently in it it wouldn't normally be that way, we had some well test operations in Mexico, we had rigs in the Gulf of Mexico that were in our completions phase not in the drilling phase.

Speaker 2: I think we've all been, you know, trying to understand when his bottom occur in U.S. land and what happens with reg rates and just reg count those type things. And it's just been softer than I think when anybody anticipated for us, we're starting to accelerate moving equipment outside the U.S. and to a fewer number of basins within the U.S.

Got it thanks for that and then you mentioned in a rationalization of the North American onshore footprint.

It probably put a brighter light on the U S land.

Impact than what it normally would have fundamentally it's a highly competitive marketplace I can tell you in.

Is this something that became more specifics during this quarter that brought future Jonathan just to write or was this contemplated for some time now and maybe also talk about the competitive landscape elsewhere, what kind of structural revenue EBITDA impact of backing that out too.

Speaker 4: That makes sense, look. Okay, yeah, yeah, that's helpful. And then on the well testing in NLA, is this just you have the jobs in the calendar, you're not alive?

An area like the Permian there are 34 Trs providers today.

And these aren't the big guys. These are small privately held companies and as we alluded to in the call. They really appear to be chasing market share and not chasing pricing and they're not showing the level of discipline that we see around the pressure pumper or some of the drilling guys. So we're continuing to try to flex our our.

Speaker 4: and then they were dry holes, they were no revenues or the job didn't occur, and you just kind of absorb them.

Sure and so this is not the U S land Trs.

Speaker 2: Absolutely, that's that's a that's a really good. That's a really good read of what we were trying to talk about. You know, we, we had dry wells. We had dry holes in Mexico in particular, and we had a series of dry wells, you know, normally, normally we test about about 50 to 60% of our wells that are kind of on the calendar and the way things things lined up for the quarter. We, we didn't test. We didn't test wells that we at the same rate. We normally would.

Kind of slimming down our operations, that's not that's something that's not that is not something thats new for us we've been working on that for several quarters.

Our operational footprint to the right size. The other thing that we do bring to this and I alluded to it when I answered the question for Luke.

We've closed some facilities women been reducing some of our footprint.

It was just really exacerbated in this quarter, because we really kind of had the.

We do have technology that we can deploy into this whether it's around cement Asian.

And I don't want to say the stars aligned here because that sounds like an excuse but what we really had was we just had a number of a series of things that kind of happened all concurrently than it would normally be that way, we had some well test operations in Mexico, we had rigs in the Gulf of Mexico that were in our completions phase not in the drilling phase.

Improving some efficiencies around those kind of things. So we're trying to get that balance of providing some higher value added services that we can get paid for and get credit for so to speak in U S land.

Speaker 2: and you know overall what we really had was and I think you've seen it from some of the comments from some of other peers, but there was a reduction in the Gulf of Mexico in particular on drilling related activity within the quarter.

But not trying to compete.

Competing in a highly commoditized business, that's what we're trying to balance in there and we'll continue to move those assets to other parts of the world because we can redeploy them in places like the middle East or Asia in particular.

It probably put a brighter light on the U S land.

Impact.

Speaker 2: It just kind of happened to be there was more completion's activity, large number of completion operations been run in the corner and not quite as balanced of drilling completion's is what you normally have. So it really was a timing of operations. It was, you know, rigs in Guyana being in a maintenance mode. It was just kind of how things stacked up from an operational standpoint.

It normally would have fundamentally it is a highly competitive marketplace I can tell you in.

Got it thank you I'll turn it over.

An area like the Permian there are 34 Trs providers today.

Thanks, Adam.

Our next question comes from Arun <unk> with Jpmorgan.

Please go ahead your line is open.

Yeah. Good afternoon, I wanted to follow up on the <unk>.

Speaker 2: you know, as the operations kind of, you know, layer in over the quarter.

The earnings power.

The company would you highlighted are on an EBIT da outlook around $80 million as we think about.

Our operational footprint to the right size the.

The other thing that we do bring to this and I alluded to it when I answered the question for Luke.

Speaker 4: And then just want to wrap it all together for NLA. You've provided the bridge for the annual EBITDA guidance change, but how do you think NLA performs in 4Q? And when do you think you can kind of get back to more normalized two-key performance levels maybe?

2024, do you think that this represents a good baseline for the kind of.

We do have technology that we can deploy into this whether it's around segmentation.

Given some of the challenges you cited is that a good baseline for thinking about.

2020 forward and would you expect to see some growth on top of that.

But not trying to be.

Just given further expansion of.

Competing in a highly commoditized business. So that's what we're trying to balance in there and we'll continue to move those assets to other parts of the world because we can redeploy them in places like the middle East or Asia in particular.

Speaker 3: If you roll it all up, Luke, it's Gwen. Um, you know, we were at a...

Activity.

Particularly in the international offshore markets.

Speaker 3: 130 trending toward $140 million in revenue quarter in NLA.

Thanks, Ron.

I guess in terms of what the business is currently constituted can do in terms of adjusted <unk>.

Speaker 3: I'm sure you saw from our conference call slides, the press release worked just a bit over $100 million in the third quarter.

Got it thank you I'll turn it over.

Related issues.

Speaker 5: You know, at least our expectations is that, you know, in the fourth quarter, if not the fourth quarter, in the first quarter, you're going to be back in that hundred, thirty, a hundred, forty million hours zip code in terms of revenue. At least that's our expectation when we sit today. Okay.

Thanks Ali.

70 $580 million in the.

Our next question comes from Arun <unk> with Jpmorgan.

Second and third quarter.

Fourth quarter is typically.

Please go ahead your line is open.

A good quarter for us the first quarter tends to be the weakest of the year.

Yes, good afternoon, I wanted to follow up on the <unk>.

So the $75 million to $80 million I would say is kind of normalized performance, where we sit today.

Earnings power.

The company would you highlighted are on an EBIT da outlook around $80 million.

Speaker 1: Our next question comes from Acy Modak with Goldman Sachs.

We're in the budget season today, who will present, our budget to the board in mid December. So I would expect we will give guidance sometime between the first of the year and I.

As we think about.

2024, do you think that this represents a good baseline for the kind of.

Speaker 6: Hi, thanks for the question. On the LWI business, do you now expect to, I mean, I know you mentioned some expectations there, but is that going to be a different approach to the business? Maybe help, I'll impact the expectations around that compared to the approach so far. And what would that mean for cost after you resolve the current?

Given some of the challenges you cited is that a good baseline for thinking about.

I guess at the latest when we report fourth quarter results.

So that's when we can speak specifically to 2024, but we will have obviously a bit of a revenue headwind we.

2020 forward and would you expect to see some growth on top of that.

Just given.

If we have <unk> out of the mix at least for a couple of quarters potentially.

Further expansion of <unk>.

Activity.

As I mentioned that was a.

Particularly in the international offshore markets.

$50 million to $75 million revenue contributor.

Speaker 2: Yeah, it's a good question and really what were...

Thanks, Ron.

Paper before we had this incident.

I guess in terms of what the business is currently constituted can do in terms of adjusted <unk>.

Speaker 2: you know the the biggest challenges and the biggest shortcomings we've had um you know trying to go operation with the LWI system or the course of last year really has been the vessel partner

And what the business is trending in a positive direction and I think as we've talked about in previous calls we have a relatively significant revenue contribution from the C&I Tango project.

<unk> issues.

Speaker 2: We've had a number of vessel related issues, most significantly around the crane, whether it was a hydraulics issue, or it was this now, you know, crane wire failure, and we've had somebody that we've partnered with, and we willingly partnered with them up front, and they've really have, you know, they've left us kind of standing at the altar, so to speak. And so really what we're looking at is, is there,

Which will continue through delivery in the first half of <unk>.

$75 million to $80 million in the.

Second and third quarter.

2024 at least on that project, we'd expect to revenue step down as we move into an O&M phase so the margin should be better during that.

Fourth quarter is typically.

A good quarter for us the first quarter tends to be the weakest of the year.

But even with <unk> out of the mix.

So the $75 million to $80 million I would say is kind of normalized performance, where we sit today.

The DNI Congo.

Change in phases, and we think we will see.

We're in the budget season today, who will present, our budget to the board in mid December. So I would expect we will give guidance sometime between the first of the year end.

The growth in 2024 tough to put a finer point on it before we finalize our budget.

Speaker 2: Is that the ideal vessel to be partnered with? Is that...

Yeah, and I guess, all I would add to that as we continue to see positive customer engagements technical inquiries bidding tendering activity those type things.

I guess at the latest when we report fourth quarter results.

Speaker 2: You know, we're doing over the side deployments today. The original plan was to do, you know, deployments through a tower. So it's really just looking at, you know, who do we partner with? How do we partner with?

So that's when we can speak specifically to 2024, but we will have obviously a bit of a revenue headwind if.

In the end.

The softness that we've had here in Q3, when you look at the numbers.

We have <unk> out of the mix at least for a couple of quarters potentially.

Speaker 2: Do we run the operations? We are the kind of front facing element of the customer engagement. Do we move to more of a traditional? We provide the LWI system and the operator secures the vessel on their own. We're really looking through all of those options here now because

Lwr notwithstanding it was an MLA related issue and it was just kind of the timing of a number of those projects. We still continue to see good solid activity everywhere.

As I mentioned that was.

$50 million to $75 million revenue contributor.

Paper before we had this incident.

But the business is trending in a positive direction and I think as we've talked about in previous calls we have a relatively significant revenue contribution from the C&I Congo project.

And customer engagement and customer sentiment I think continues to be positive overall, so I don't see any difference than I still believe in the fundamentals of offshore international and that's where we're really well positioned for.

Speaker 2: it frankly in the construct we've had as Quinn alluded to. You know, we're taking a disproportionate amount of the risk here. Even though our equipment has not been problematic, the end user has, you know, the end customer has had to deal with somebody's downtime. So that's why we're really trying to look at and evaluate this.

Which will continue through delivery in the first half of two.

2024 at least on that project, we would expect to revenue step down as we move into an O&M phase so the margin should be better during that.

And then just my follow up as we think about.

But even with <unk> out of the mix.

Well pricing for well construction in 2024.

Speaker 2: The one thing I can tell you is that the operations we completed and we completed a significant number of these suspensions, they were very efficient, they were very operationally went well and there was a lot of customer interest and excitement around the technology. So how do we be able to deploy that and how do we be able to provide it to customers is really what we're trying to evaluate right now.

The DNI Congo.

You highlighted how you saw some reduced activity in the Gulf of Mexico.

Change in phases, and we think we'll see.

The growth in 2024 tough to put a finer point on it before we finalize our budget.

And Mexican side in the Caribbean does that.

Yeah, and I guess, all I would add to that as we continue to see positive customer engagements technical inquiries bidding tendering activity those type things.

But that's the impact any thoughts on potential for pricing gains.

We think about 2024.

No because it really it was not.

In the end.

Normally you would have.

The softness that we've had here in Q3, when you look at the numbers.

Speaker 6: God, thanks for that. And then you mentioned rationalization of the North American on-shore footprint. Is this something that became more specific during this quarter that brought future challenges to light or was this contemplated for some time now? And maybe also talk about the competitive landscape elsewhere. What kind of structural revenue EBITDA impact does that net out?

65% of our activity would be drilling related 35% would be completions related.

Lwr notwithstanding it was an MLA related issue and it was just kind of the timing of a number of those projects. We still continue to see good solid activity everywhere.

In a quarter and it was flip flopped. This time it really just happened to be how the rigs were so it wasn't like rigs were we're staffed or those kinds of things just happened to be where they are drilling mode or a completions mode and for US we have a greater service intensity, when where and when the customer is in a drilling mode as opposed to completions. So it wasn't a <unk>.

And customer engagement and customer sentiment I think continues to be positive overall, so I don't see any difference in I still believe in the fundamentals of offshore international and that's where we're really well positioned for.

Speaker 2: Sure, this is not, you know, the US land TRS, you know, kind of slimming down our operations. That's not something that is not something that's new for us. We've been working on that for several quarters. We've closed the facilities. We've been reducing some of our footprint. It was just really exacerbated in this quarter because we really kind of had the...

The mental change in the market. It just happened to be how things kind of stacked up.

Understood.

And then just my follow up as we think about.

To be honest as I've looked through the history of well construction over the last eight or 10 years, you've never we've never seen that phenomenon. It just happened to kind of lineup within this quarter.

Well pricing for well construction in 2024.

You highlighted how you saw some reduced activity in the Gulf of Mexico.

So I don't think that that's going to that's not going to have a pricing effect.

Speaker 2: And I don't want to say the stars are aligned here because that sounds like an excuse. But what we really had was we just had a number of a series of things that kind of happened all concurrently and it would normally be that way. We had some well-test operations in Mexico. We had rigs in the Gulf of Mexico that were in a completion phase, not in a drilling phase. So it probably put a brighter light on the US land impact than what it normally would have.

And Mexican side in the Caribbean does that.

You take you take the activity in the Caribbean.

Potentially impact any thoughts on potential for pricing gains.

We have very strong market share there we didn't lose share there wasn't a change in share it just happened to be.

We think about 2024.

No because it really it was not.

There was there were several rigs that were on maintenance in the quarter and that's not a typical event. So it's just more kind of how the activity sets lined up.

Normally you would have.

65% of our activity would be drilling related 35% would be completions related.

So first of all it doesn't say I guess.

Speaker 2: Fundamentally, it's a highly competitive marketplace. I can tell you in an area like the Permian, there are 34 TRS providers today.

In a quarter and it was flip flop. This time it really just happened to be how the rigs were so it wasn't like rigs were were stacked or those kinds of things just happen to be where they are drilling mode or a completions mode and for US we have a greater service intensity, when where and when the customer is in a drilling mode as opposed to completions. So it wasn't a.

The contracted rigs Hasnt changed its just what they were doing was different during the quarter.

Great. Thanks, Glenn.

Speaker 2: and these aren't the big guys, these are you know small privately held companies and as we alluded to in the call they really appear to be chasing market share and not chasing pricing and they're not showing the level of discipline that we see around the pressure pumpers or some of the drilling guys.

Thanks, Ron Thanks, Ryan.

Our next question comes from Matthew Kim with Barclays.

Please go ahead your line is open.

Fundamental change in the market it just happened to be how things kind of stacked up.

Speaker 2: So we're continuing to try to flex our operational footprint to the right size.

Hi, Good morning, Dan I wanted to follow up on the softness in MLA this past quarter.

To be honest as I look through the history of well construction over the last eight or 10 years.

Speaker 2: The other thing that we do bring to this, and I alluded to it when I answered the question for Luke.

You mentioned one of the factors here was maintenance activity on certain drilling rigs just curious if this was unexpected or unanticipated maintenance activity I know the offshore drillers.

You've never we've never seen that phenomenon. It just happened to kind of lineup within this quarter.

Speaker 2: We do have technology that we can deploy into this, whether it's around cementation, improving some efficiencies around those kind of things. So we're trying to get that balance of providing some higher value added services that we can get paid for and get credit for so to speak in U.S. land.

So I don't think that that's going to that's not going to have a pricing effect.

You take you take the activity in the Caribbean.

Five year special periodic surveys, which I understood where were scheduled.

We have very strong market share there we didn't lose share there wasn't a change in share it just happened to be.

Speaker 2: but not trying to be competing in a highly commoditized business. That's more trying to balance in there.

Our plan for the most part.

Just curious if you could start to see higher maintenance activity on rigs in other regions. Besides MLA and just generally if you could speak to your visibility on offshore rig maintenance going forward.

There was there were several rigs that were on maintenance in the quarter and that's not a typical event. So it's just more kind of how the activity set lined up.

Speaker 2: and we'll continue to move those assets to other parts of the world because we can redeploy them in places like the Middle East or Asia in particular.

Thanks, a lot done, let's say I guess.

Sure.

It's a great question, Ed and thanks for asking it.

Contracted rigs Hasnt changed its just what they were doing was different during the quarter.

It fundamentally it was not unanticipated activity it just happened to be that.

Great. Thanks, Glenn.

Speaker 1: Our next question comes from Aaron J. Ram with J.P. Morgan.

There was maintenance activity at the same time, we have dry holes in Mexico at the same time, we had a greater proportion of our activity being.

Thanks, Ron Thanks, Ryan.

Our next question comes from Andy Kim with Barclays.

Speaker 7: Yeah, good afternoon. I wanted to follow up on the 4Q kind of earnings power of the company with you highlighted around an EBITDA outlook around 80 million. As we think about, you know, 2024, do you think that this represents a good baseline for the kind of, you know, given some of the challenges you cited, is that a good baseline for thinking about

Please go ahead your line is open.

Tied to completions related activity than drilling it really it was just kind of how things kind of feathered in and layered in within the quarter, we had anticipated.

Hi, Good morning, Dan I wanted to follow up on the softness in MLA this past quarter.

Slowness because of the maintenance activity, but quite frankly, we did not anticipate and is completely on and forecasted that we were going to have dry wells in Mexico that would relate to no wells being tested throughout the quarter. So I don't think this is just.

You mentioned one of the factors here was maintenance activity on certain drilling rigs just curious if this was unexpected or unanticipated maintenance activity I know the offshore drillers.

Five year special periodic surveys, which I understood where were scheduled.

This is kind of a unique situation to MLA it wasn't that maintenance took longer or they did maintenance it wasn't planned.

Speaker 7: 2024 and would you expect to see some growth on top of that? Just given, you know, further expansion of, you know, activity, particularly in Internet.

Our plan for the most part.

I don't see where it will have.

In effect on operations elsewhere in the world.

Speaker 5: Thanks, Ron. Well, I guess in terms of what the business has currently constituted can do in terms of just to be back out the LWI related issues. $75,80 million in the...

Okay, Okay understood.

And just a clarification here, but when you mentioned that your <unk> guidance does not include additional <unk> charges is that because you don't expect additional LW charges in <unk> or was that comment made more to indicate that there could potentially be a risked here $75 million to $85 million EBITDA guide.

Sure.

It's a great question, Ed and thanks for asking it.

It fundamentally it was not unanticipated activity it just happened to be that.

There was maintenance activity at the same time, we have dry holes in Mexico at the same time, we had a greater proportion of our activity being.

Speaker 3: You know, a good quarter for us, the first quarter tends to be the weakest of the year.

Additional charges are incurred.

Tied to completions related activity than drilling it really was just kind of how things kind of feathered in and layered in within the quarter, we had anticipated.

Speaker 3: So the $75 to $80 million I would say is kind of normalize performance, you know, where we sit today.

Alright look like they've tried to do is re bucket it into a couple of different pieces. The first of which is operating expenses that are unrecoverable.

Speaker 5: We're in a budget season today, we represent our budget to the board in mid-December. So I would expect we'll give guidance sometime between the first of the year. And I guess it delayed us when we report the report results. So that's when we.

<unk> because of the maintenance activity, but quite frankly, we did not anticipate and is completely on and forecasted that we were going to have dry wells in Mexico that would relate to no wells being tested throughout the quarter. So I don't think this is just.

We did recognize costs for the third quarter and it provided for demobilization costs. So at least we think we have that covered.

The second piece, which is recovering and repair related as I mentioned in my prepared remarks, we do not believe that those costs would be materials results. Because there is insurance at play whether it's tax pros with third parties.

This is kind of a unique situation to MLA it wasn't that maintenance took longer or they did maintenance it wasn't planned.

Speaker 3: But, you know, we'll have obviously a bit of a revenue headwind. You know, if we have LWI out of the mix, at least for a couple quarters potentially.

The other final piece, which we really aren't in a position to assess until we recover the equipment is what is the cost and timing of completing customer work scopes.

I don't see where it will have.

Speaker 5: As I mentioned, that was a $50 to $75 million rather than a contributor on paper before we had this incident.

In effect on operations elsewhere in the world.

Okay, Okay understood.

So.

Speaker 5: But the business is trending in a positive direction. I think as we've talked about in previous calls, we have a relatively significant revenue contribution from the CNI Congo project, which will continue through delivery in the first half of 2024. At least on that project, we'd expect a revenue step down as we move and do an own M phase. The margin should be better during that. But even with LWI out of the mix and the...

And just a clarification here, but when you mentioned that your <unk> guidance does not include additional <unk> charges is that because you don't expect additional LW charges in <unk>. It was a comment made more to indicate that there could potentially be a risked here $75 million to $85 million EBITDA guide.

I wasn't trying to hedge the guidance by highlighting the fact, we have not provided for additional LTV high related costs.

We just don't have visibility on additional costs or have any ability to put any specificity around it.

I'm not saying that there is no chance that we would have cost recognize theres really a delta in the fourth quarter, we don't have visibility on those today.

Additional charges are incurred.

And to the extent that we did we provided for the third quarter.

Looks like they tried to do is re bucket it and do a couple of different pieces. The first of which is operating expenses that are unrecoverable.

Speaker 5: change in phases, we think we'll see good growth in 2024. Tough to put a finer point on it before we finalize our budget.

Okay, Okay got it.

I'm not sure.

Okay.

<unk>, which is the chip cost.

We did recognize cost for the third quarter and it provided for demobilization costs. So at least we think we have that covered the.

Speaker 2: Yeah, I guess, Rune Alla would add to that is, you know, we continue to see positive, you know, customer engagements, technical inquiries, you know, bidding, tendering, activity, those type things.

Got it understood. Thank you.

The second piece, which is recovery and repair related as I mentioned in my prepared remarks, we do not believe that those costs would be materials results because there is insurance in it at play whether it's tax pros for third parties.

Thanks, Ed.

Our next question comes from Steve <unk> with Sidoti and company.

Speaker 2: You know, and the softness that we've had here in Q3, when you look at the numbers.

Please go ahead your line is open.

Thanks, Mike Quinn appreciate all the detail.

Speaker 2: LWI, notwithstanding, it was an NLA-related issue, and it was just kind of the timing of a number of those projects.

The other final piece, which we really aren't in a position to assess until we recover the equipment is what is the cost and timing of completing customer work scopes.

On the call I do want to circle around a topic I know you've already covered but in terms of your 20% margin guidance for <unk>.

Speaker 2: You know, we still continue to see good solid activity everywhere and you know, customer engagement and customer sentiment, I think, continues to be positive.

So.

I wasn't trying to hedge the guidance by highlighting the fact, we have not provided for additional LTV high related costs.

So it would be a pretty big jump from <unk> and you went through some of the issues, but you are right, 18% even without the.

Speaker 2: Overall, so I don't see any difference in I still believe in the fundamentals of offshore international and that's what we're really well positioned for

Excluding el Wi knowing <unk> youre, not going to get a lot of startup projects late in the quarter and maybe some early winding down just your general visibility because you haven't kind of 20% plus margin in quite some time.

We just don't have visibility on additional costs or has any ability to put any specificity around it.

I'm not saying that there is no chance that we would have cost recognize theres related <unk> in the fourth quarter, we don't have visibility on those today.

Speaker 7: And just my follow up, as we think about pricing for well-construction in 2024, you highlighted how you saw some reduced activity in the Gulf of Mexico, a US and Mexican side in the Caribbean. Does that potentially impact any thoughts on potential for pricing gains as we think about 2024? No, because it...

And to the extent that we did we provided for the third quarter.

Yes in fact, we have excluding lwr related costs.

Okay got it.

Okay.

I'm not sure.

Yes, Steve I guess, what I would how I tried to frame. It for you is we do have we do have good visibility about activity for the fourth quarter.

We don't measure, which is the chip cost.

Got it understood. Thank you.

Thanks, Ed.

It's kind of a project by project activity set and.

Our next question comes from Steve <unk> with Sidoti and company.

We gave that guidance because that was a.

Please go ahead your line is open.

Speaker 2: Normally you would have...

Those were good ranges based upon the activity that we see in fourth quarter.

Thanks, Mike Quinn appreciate all the detail.

Speaker 2: 65% of our activity would be drilling related and you know 35% would be completions related

And right now we're.

On the call I do want to circle around a topic I know you've already covered but in terms of your 20% margin guidance for <unk>.

A third of the way through the quarter almost right now and we still see good good.

Speaker 2: in a quarter, and it was flip-flopped this time. It really just happened to be how the rigs were. So it wasn't like rigs were stacked or those kind of things. It just happened to be were they in a drilling mode or a completions mode. And for us, we have a greater service intensity when we're in a, when the customer is in a drilling mode as opposed to completions. So it wasn't a fundamental change in the market. It just happened to be how things kind of stacked up.

Good alignment with that kind of with that kind of guidance. So it's based on a it's based on projects that are known activity sets that are known.

That would be a pretty big jump from <unk> and you went through some of the issues, but you are right, 18% even without the.

And that's how we anticipate we'll be able to finish up the fourth quarter.

So is that primarily just a recovery yet in.

And then la offshore from where it was the lower level on <unk>, because if you're redeploying land assets is that primarily where the margin bump comes from.

Speaker 2: To be honest, as I've looked through the history of well-construction over the last eight or ten years, we've never seen that phenomenon. It just happened to kind of line up within this quarter.

Yes in fact, we have excluding <unk> related costs.

So I mean.

We won't see much of a benefit from redeployment of U S land assets in the fourth quarter. It will take us more quarters than that but that was an ongoing process, but what you are seeing really is a kind of a more normalized level of activity in an MLA overall in the fourth quarter versus Q3 Q3 three was just.

Okay.

Yes, Steve I guess, what I would I tried to frame. It up for you is we do have we do have good visibility about activity for the fourth quarter.

Speaker 2: So, I don't think that that's going to, that's not going to have a pricing effect.

Speaker 2: You take the activity in the Caribbean. We have very strong market share there. We didn't lose share. There wasn't a change in share. It just happened to be there were several rigs that were on maintenance in the quarter, and that's not a typical event. So it's just more kind of how the activity sets lined up.

We it's kind of a project by project activity set and.

Abnormally low because of how the activity sets were but again it was not a change in the market. It was not a change in market shares of those kind of things. It was just kind of how some of the operations laid out within the quarter.

We gave that guidance because that was a.

Those were good ranges based upon the activity that we see in fourth quarter.

And right now we.

A third of the way through the quarter almost right now and we still see good good.

Speaker 5: Great, great. Some of the things I've done to see, I guess, when it's that contracted rigs hasn't changed, it's just what they were doing was different during the quarter. Yeah, that's. Yeah.

And that's why we've got we've got good visibility.

Good alignment with that kind of with that kind of guidance. So it's based on a U S. Based on projects that are known activity sets that are known.

Have a good level of confidence that we'll be able to deliver the fourth quarter as we've given guidance to.

Great and if I could get one more in just on the buyback.

And that's how we anticipate we will be able to finish up the fourth quarter.

You haven't bought back for a couple of quarters, but now you've expanded it.

Speaker 1: Our next question comes from Eddie Kim with Barclays. Eddie please go ahead, your line is open.

So is that primarily just a recovery yet.

$100 million any reason for the expansion now.

And then la offshore from where it was the lower level of <unk> consumer redeploying land assets is that primarily where the margin bump comes from.

Stock today.

Speaker 8: Hi, good morning, Jay. I just wanted to follow up on the softness and LLA this past quarter.

Well I mean part of it.

Okay.

Sure I'll, let Colin comment on.

So I mean, we won't see much of a benefit from redeployment of U S land assets in the fourth quarter and it will take us more quarters than that but that was an ongoing process, but what you are seeing really is a kind of a more normalized level of activity in an MLA overall in the fourth quarter versus Q3.

Speaker 8: You mentioned one of the factors here was maintenance activity on certain drilling rigs. Just curious if this was unexpected or unanticipated maintenance activity. I know the offshore drillers.

More detail, but part of it was we were able to go through and we had some limitations previously because of the structure of our original revolver, we were able to build in some additional flexibility with the new revolver that was put in place.

Speaker 8: have five-year special periodic surveys, which

And.

We think that will continue to be as we've done previously I will say opportunistic, but we'll go in and buy back stock. When we think it makes good sense for us and we have a balance sheet that gives us that kind of flexibility to be able to do so part of it for us was the the previous.

Speaker 8: I understood we're scheduled or planned for the most part. So just curious that if you could start to see higher maintenance activity on rigs and other regions besides NLA, and just generally if you could speak to your visibility on offshore maintenance, go ahead forward.

Q3, three was just abnormally.

The previous $50 million allowance, we had on stock buyback was going to expire end of November. So this was the right time for us to be able to go in and reload that and because we had the latitude to increase it we felt like that was a good opportunity for us as well.

And that's why we've got we've got good visibility and I have a good level of confidence that we'll be able to deliver the fourth quarter as we've given guidance to.

Speaker 2: Sure, no, it's a great question, Eddie, and thanks for asking it. You know, it fundamentally, it was not an anticipated activity. It just happened to be that there was maintenance activity at the same time we had dry holes in Mexico. At the same time, we had a greater proportion of our activity being...

Great and if I could get one more in just on the buyback.

You haven't bought back for a couple of quarters, but now you've expanded it.

Great that's helpful $50 million in borrowings in the quarter Thats paid down that was just related to the acquisition just because it seems odd given the amount of cash you up on the balance sheet to begin with.

The $100 million any reason for the expansion now and.

Speaker 2: tied to completions related activity and drilling it really was just kind of the How things kind of feathered in and layered in within the quarter? We had anticipated the you know the slowness because of the maintenance activity But quite frankly we did not anticipate you know completely Unforecasted that we were gonna have dry wells in Mexico that would relate to you know No wells being tested throughout the quarter. So I don't think this this is just

Look at the stock today.

Well pardon me as CFO.

Okay.

Yes, it was really.

Sure I'll, let Colin comment on in more detail, but part of it was we were able to go through and we had some limitations previously because of the structure of our original revolver, we were able to build in some additional flexibility with the new revolver that was put in place.

Pre closing draw.

In regards to the PRT offshore acquisition is largely about moving cash around the organization and wanting to make sure that we were sufficiently topped up.

With the parent company in advance of the PRT closing.

Clothes that you know as Mike mentioned on the call.

And we think that will continue to be as we've done previously I will say opportunistic, but we'll go in and buy back stock. When we think it makes good sense for us and we have a balance sheet that gives us that kind of flexibility to be able to do so part of it for us was the.

Speaker 2: This is kind of a unique situation to NLA. It wasn't that maintenance took longer or they did maintenance that wasn't planned. So I don't see where it will have an effect on operations elsewhere in the world.

Repaid the vast majority of what we drew down.

Alright, Thanks, Mike Thanks, Glenn.

Thanks, Steve Thanks, Steve.

We have no further questions I will turn the call back to the management team for any closing comments.

The previous.

Speaker 8: Okay. Okay. Understood. And just a clarification here, but Quinn, you mentioned that your 4Q guide does not include additional LWI charges. Is that because you don't expect additional LWI charges in 4Q, or was that comment made more to indicate that there could potentially be a risk to your 75 to 85 million EBITDA guide if additional charges are incurred?

Emily. Thank you everyone. We appreciate you joining this afternoon for the conference call I know, we've got a number of.

As usual number of session setup with individual investors. So look forward to catching up with all of you in due course, thank you and have a good day.

Great. That's helpful a $50 million in borrowings in the quarter. That's paid down that was just related to the acquisition just because it seems odd given the amount of cash you have on the balance sheet to begin with.

Thank you everyone for joining us today. This concludes our call and you may now disconnect your lines.

Speaker 5: So what I try to do is re-bucket it and do a couple of different pieces, first of which is operating expenses that are unrecoverable.

Yes, it was really.

The pre closing draw.

Speaker 5: We did recognize costs for the third quarter and it provided for T-bombalization costs. So at least we think.

<unk> offshore acquisition is largely about moving cash around the organization and wanting to make sure that we were sufficiently topped up with the parent company in advance of the PRT closing.

Speaker 5: The second piece, which is recovery and repair related, as I mentioned in my prepared remarks, you know, we do not believe that those costs would be material results because there is insurance at play, whether it's ex-pros or third parties.

As we've closed it you know as Mike mentioned on the call.

We repaid the vast majority of what we drew down.

Alright, alright, thanks, Mike Thanks, Glenn.

Speaker 5: The other final piece which we really are in a position to assess until we recover the equipment is what is the cost and timing of completing customer workscopes.

Thanks, Steve Thanks, Steve.

We have no further questions I will turn the call back to the management team for any closing comments.

Speaker 5: I wasn't trying to hedge the guidance by highlighting the fact we have not provided for additional LWAI related costs.

And we thank you everyone. We appreciate you joining this afternoon for the conference call and we've got a number of.

Speaker 5: We just don't have visibility on additional costs or have any ability to put a specificity.

As usual number of session setup with individual investors. So look forward to catching up with all of you in due course, thank you and have a good day.

Speaker 5: I'm not saying that there's no chance that we would have cost recognized. There's relayed the LWI in the fourth quarter. We don't have this ability on those today. And to the extent that we don't we.

Thank you everyone for joining us today. This concludes our call and you may now disconnect your lines.

Speaker 9: Ok, we got it. So it's chime extension GBO ??Ad, which is CheckCourse.

Speaker 3: Thanks Mike, I appreciate all the detail from the call. Do you want to circle around a topic? I know you've already covered, but...

Speaker 10: In terms of your 20% margin guidance for 4Q, that would be a pretty big jump from 3Q when you went through some of the issues, but you're at 18% even without the excluding LWI. Knowing that 4Q, you're not going to get a lot of startup projects late in the quarter and maybe some early winding down. Just your general visibility because you haven't been a 20% plus margin in quite some time.

Speaker 5: Yeah, in fact, we have, you know, excluding LWI, we let it cost.

Speaker 2: how I try to frame it up for you is, we do have good visibility about activity for the fourth quarter.

Speaker 2: It's kind of a project by project activity set. And we gave that guidance because those were good ranges based upon the activity that we see in fourth quarter. And right now, we're a third of the way through the quarter almost right now. And we still see good alignment with that kind of guidance.

Speaker 3: So it's based on projects that are known, activity sets that are known, and that's how we anticipate we'll be able to finish up the fourth quarter.

Speaker 10: So is that primarily just recovery in NLA offshore from where it was the lower level in 3Q, because if you were redeploying land assets, is that primarily where the margin bump comes from?

Speaker 3: We won't see much of a benefit from redeployment of US land assets in the fourth quarter. It'll take us more quarters in that, but that was an ongoing process. But what you are seeing really is a, kind of a more normalized level of activity in NLA overall in the fourth quarter versus Q3. Q3 was just,

Speaker 3: abnormally low because of how the activity sets were But again, it was not a change in the market. It was not a change in market shares of those kind of things It was just kind of how some of the operations laid out within the quarter

Speaker 3: And that's why we've got good visibility and I have a good level of confidence that we'll be able to deliver the fourth quarter as we've given guidance to.

Speaker 10: Great. And if I could get one more in, just on the buyback, you haven't bought back for a couple of quarters, but now you've expanded it to a hundred million. Any reason for the expansion now?

Speaker 10: I mean, theller. So keep that confidential in grade chase. Um.

Speaker 2: Sure, all at Quinn Comma in more detail, but part of it was we were able to go through and we had some limitations previously because of the structure of our original revolver. We were able to build in some additional flexibility with the new revolver that was put in place.

Speaker 2: And, you know, we think that we'll continue to be, as we've done previously, I won't say opportunistic, but we'll go in and buy back stock when we think it makes good sense for us. And we have a balance sheet that gives us that kind of flexibility to build a do. So, part of it for us was...

Speaker 2: The previous $50 million allowance we had on stock buyback was going to expire end of November , so this was the right time for us to be able to go in and reload that. Because we had the latitude to increase it, we felt like that was a good opportunity for us as well.

Speaker 10: Great, that's helpful. The 50 million in borrowings in the quarter that's paid down, that was just related to the acquisition, just because it seemed odd, given the demonic ash you have on the balance sheet, to begin.

Speaker 5: Yeah, it was really, you know, a pre-closing draw, you know, in regards to the PRT, offshore acquisition, largely about, you know, moving cash around the organization and wanting to make sure that we were sufficiently topped up, you know, with the parent company in advance of the PRT closing. As we've closed it, you know, as Mike mentioned on the call, we've, you know, repaid the vast majority of what we drew down.

Speaker 1: We have no further questions, so I'll turn the call back to the management team for any questions.

Speaker 2: Emily, thank you. Everyone, appreciate you joining staff and we're with the conference call. And we've got a number of, as usual, a number of session set up with individual investors. So look forward to catching up with all of you and do course. Thank you and have a good day.

Speaker 1: Thank you everyone for joining us today. This concludes our call and you may now disconnect your line.

Q3 2023 Expro Group Holdings NV Earnings Call

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