Q4 2023 Ranger Energy Services Inc Earnings Call

Yes.

Unknown Executive: Thank you and welcome to Ranger Energy Services' fourth quarter and full year 2023 results conference call. Ranger has issued a press release summarizing operating and financial results for the three and 12 months ended December 31, 2023.

Thank you and welcome to Ranger Energy services fourth quarter and full year 2023 results conference call.

Ranger has issued a press release summarizing operating and financial results for the three and 12 months ended December 31st 2023.

Unknown Executive: This press release, together with accompanying presentation materials, is available in the investor relations section of our website at www.rangerenergy.com. Today's discussion may contain forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update our forward-looking statements.

This press release together with accompanying presentation materials are available in the Investor Relations section of our website at Www Dot Ranger energy Dotcom.

Today's discussion may contain forward looking statements about future business and financial expectations.

Actual results may differ significantly from those projected in today's forward looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission.

Except as required by law, we undertake no obligation to update our forward looking statements.

Unknown Executive: Further, please note that non-GAAP financial measures may be disclosed during this call. A full reconciliation of GAAP to non-GAAP measurements is available in our latest quarterly earnings release and conference call presentation. All participants will be in a listen-only mode.

Further please note that non-GAAP financial measures may be disclosed during this call.

A full reconciliation of GAAP to non-GAAP measurements are available in our latest quarterly earnings release and conference call presentation.

All participants will be in a listen only mode.

Unknown Executive: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad.

Should you need assistance, please signal a conference specialist by pressing the star.

Our key followed by zero.

After todays presentation, there will be an opportunity to ask questions.

To ask a question you May press Star then one on your telephone keypad.

Unknown Executive: To withdraw your question, please press star then two. Please note this event is being recorded. With that, I would now like to turn the conference call over to Stuart Bodden, Ranger CEO, and Melissa Cougle, Ranger CFO, for their prepared remarks. Thank you and good morning, everyone.

To withdraw your question. Please press Star then two.

Please note this event is being recorded.

With that I would now like to turn the conference call over to Stuart.

Rangers CEO and Melissa Kugel Rangers CFO for their prepared remarks.

Thank you and good morning, everyone.

Stuart N. Bodden: I'm pleased to welcome you to our fourth quarter and full year 2023 earnings call. 2023 was a year of significant milestones and achievement for Ranger. Before we delve into the specifics of our fourth quarter and full year 2023 financial and operational performance, I'd like to take a moment to reflect on the journey we've undertaken, the strategic decisions that have shaped our path, and a few highlights from the year. In 2023, Ranger achieved the highest annual earnings in our company's history. Despite facing tight winds stemming from macroeconomic conditions and industry-wide challenges, which resulted in a 20% decline in drilling rig count, it delivered revenue of $636.6 million, marking a 5% increase from the prior year.

I'm pleased to welcome you to our fourth quarter and full year 2023 earnings call.

2023 was a year of significant milestones and achieved a range.

Before we delve into the specifics of our fourth quarter and full year 2023 financial and operational performance.

To take a moment to reflect on the journey we've undertaken.

These are decisions that have shaped our path.

A few highlights from the year.

In 2020 free reign to achieve the highest annual earnings in our company's history.

Sure.

Despite facing headwinds stemming from macroeconomic conditions and industry wide challenges.

Which resulted in a 20% decline in drilling rig count we delivered revenue of $636 6 million, marking a 5% increase from the prior year.

Stuart N. Bodden: This growth trajectory was supported by our unwavering commitment to safety, superior service quality, and our production cycle focus, which continues to prove resilient to market fluctuations. Notably, our net income surged to $23.8 million, or $0.95 per fully diluted share, up from $15.1 million, or $0.65 per share in the previous year. Our success in 2023 underscores the strength of our business model and the dedication of our team members. Throughout the year, we remain steadfast in our commitment to maximizing shareholder value guided by our four strategic pillars. Maximizing cash flow, fortifying our balance sheet, returning capital to our shareholders, and exploring growth through acquisition. Ranger continues to prioritize cash flow generation throughout 2020, leveraging our capitalization business model and strong operating leverage. We generated $84.4 million in adjusted EBITDA, reflecting a 6% increase from the prior year.

This growth trajectory supported by our unwavering commitment to safety Superior service quality in our production cycle focus which continues to prove resilient to market fluctuations.

Notably our net income surged to $23 8 million.

<unk> 95 per fully diluted share up from $15 $1 million or <unk> 65 per share in the previous year.

Success in 2023 underscores the strength of our business model and the dedication of our team members throughout the year, we remain steadfast in our commitment to maximizing shareholder value.

By our four strategic pillars, maximizing cash flow and fortifying our balance sheet, returning capital to our shareholders and exploring growth through acquisitions.

<unk> continues to prioritize cash flow generation throughout 2023, leveraging our capital efficient business model and strong operating leverage we generated $84 4 million and adjusted EBITDA, reflecting a 6% increase from the prior year and thanks to consistent price discipline in the face of access.

Stuart N. Bodden: Thanks to consistent price discipline and the pace of activity declines, we achieved free cashflow of $54.3 million, or 64% of adjusted EBITDA. Converting cash at these levels is a mark of differentiation for range and resulted in free cash flow per share of approximately $2.36, providing for a more than 20% free cash flow yield per share at recent trading levels. Maintaining a robust balance sheet is essential for navigating uncertainties and seizing opportunities in our dynamic industry landscape. In the second quarter of 2023, we achieved a significant milestone of effectively becoming debt-free, paying off nearly $80 million. Since the first quarter of 2022, when our debt peaked after our 2021 string of acquisitions, we have remained debt-free and into 2023 with over $85 million in liquidity.

We achieved free cash flow of $54 3 million or 64% of adjusted EBITDA.

Converting cash at these levels is a market differentiation for Ranger and resulted in free cash flow per share of approximately $2.30, providing for a more than 20% free cash flow yield per share at recent trading levels.

Maintaining a robust balance sheet is essential for navigating the uncertainty and seizing opportunities to our dynamic industry landscape.

In the second quarter of 2023.

A significant milestone effectively becoming debt free and nearly $80 million since the first quarter of 2020.

When our debt peaked after our 2021 string of acquisitions.

We have remained debt free and ended 2023.

$85 million in liquidity, we believe we have minimal debt is crucial maximizing shareholder returns and preserving optionality through cycles, and we remain committed to preserving and growing our balance sheet strength.

Stuart N. Bodden: We believe that minimal debt is crucial for maximizing shareholder returns and preserving optionality through cycles, and we remain committed to preserving and growing our balance sheet. With our balance sheet targets in place in the first half of the year, we turned our attention to capital returns for our shareholders. In 2023, we announced the company's first dividend and repurchased approximately 1.8 million shares, and those repurchases have continued into 2024. As of today, we have now repurchased over 10% of Ranger's outstanding shares.

With our balance sheet targets in place in the first half of the year, we turned our attention to capital returns for our shareholders. In 2023, we announced the Companys first dividend and repurchase of approximately one 8 million shares and those repurchases have continued into 2024 as of today.

We have now repurchased over 10% of renters outstanding shares.

Stuart N. Bodden: When we discuss acquisitions and strategic opportunities, we are keenly aware that our own stock remains one of the most attractive uses of capital available to us, and any M&A must compete against it. When we launched our shareholder returns program in the second quarter, we committed to returning at least 25% of annual cash flows to shareholders through dividends and share repurchase. And I'm pleased to report that we far exceeded that commitment in 2023 by returning 40% of free cash flow back to our shareholders, reaffirming our dedication to creating long-term value. Delivering meaningful returns to our shareholders will remain a top priority for Ranger.

When we discuss acquisitions and strategic opportunities, we are keenly aware of our own stock remains one of the most attractive uses of capital available to us in any M&A must compete against it.

When we launched our shareholder return program in the second quarter, we committed to returning at least 25% of annual cash flows to shareholders through dividends and share repurchases.

I used to report and we far exceeded that commitment in 2023 by returning 40% of free cash flow back to our shareholders reaffirming our dedication to creating long term value deliver.

Delivering meaningful returns to our shareholders will remain a top priority for Ranger.

Yeah.

Stuart N. Bodden: We also intend to increase Ranger's size, and throughout 2023, we remain actively engaged in evaluating strategic opportunities for growth through acquisition. Our disciplined approach ensures that any potential transactions are value-creating and accretive for our shareholders. Would we like to do another transformational corporate transaction? Absolutely.

We also intend to increase range your size and scale and throughout 2023.

<unk> actively engaged in evaluating strategic opportunities for growth through acquisitions.

The other approach ensures that any potential transactions are value, creating and accretive for our shareholders would we like to do another transformational corporate transaction, absolutely, but we are committed to maximizing value and we will not overpay.

Stuart N. Bodden: But we are committed to maximizing value, and we will not overpay. As a result of the unfavorable bid-ask spread in 2023, we pivoted to evaluating smaller asset acquisitions that folded into our current operations portfolio. In the third quarter, we successfully closed a modest acquisition of pump-down assets and support equipment, further enhancing our operational capability.

As a result of the unfavorable bid ask spread in 2023 evidence of evaluating smaller asset acquisitions that folded into our current operations portfolio.

In the third quarter, we successfully closed a modest acquisition of outbound assets and support equipment further enhancing our operational capabilities, we have the balance sheet and the resources to execute quickly on these types of opportunities and we'll continue to be nimble in evaluating both large and small deals on behalf of our shareholders.

Stuart N. Bodden: We have the balance sheet and the resources to execute quickly on these types of opportunities and will continue to be nimble in evaluating both large and small deals on behalf of our shareholders. While our four-year results demonstrated our resilience and growth trajectory, the fourth quarter did present some unique challenges. We experienced the impact of falling oil prices, customer budget exhaustion, and early weather shutdowns in addition to our typical holiday slowdown. Despite these headwinds, our high-specification rigs business demonstrated stability, reflecting its production cycle focus, which is less tied to the ups and downs of U.S. land rig activity, not to mention our ongoing dedication to service quality and strong customer relationships. Our wireline segment faced more significant weakness than expected in Q4, driven by frac slowdowns and seasonal factors, particularly in the northern region where our business is strong.

Our full year results demonstrated our resilience and growth trajectory in the fourth quarter did present some unique challenges.

We experienced the impact of falling oil prices customer budget exhaustion and early weather shutdowns. In addition to our typical holiday slowdown.

Despite these headwinds our high specification rigs business demonstrated stability, reflecting a collection cycle.

Which is less tied to the ups and downs in U S land rig count not to mention our ongoing dedication to service quality and strong customer relationships.

Our wireline segment faced more significant weakness than expected in Q4, driven by Frac slowdowns and seasonal factors, particularly in the northern region, where our business is stronger.

Stuart N. Bodden: Finally, our processing solutions and ancillary services segment increased revenues year over year in most business lines, but adjusted EBITDA declined due to higher operating costs and operational and scheduling inefficiencies that crept into certain service lines during the year due to the overall market slowdown. Looking ahead in the near term, the first quarter has started slower than we planned, similar to many of our peers. Given macro uncertainties and continued pressure in gas markets, our E&P customers have been cautious with their activity levels to start the year. We have also experienced customer-driven shutdowns this quarter related to a safety incident with other service providers that caused stand-downs across all services.

Finally, our processing solutions and ancillary services segment increased revenues year over year in most business lines, but adjusted EBITDA declined due to higher operating costs and operational excellence and efficiency increases of certain service lines during the year due to the overall market slowdown.

Looking ahead in the near term the first quarter has started slower than we planned similar to many of our peers given the macro uncertainties and continued pressure on gas markets. Our E&P customers have been cautious with our activity levels to start the year.

<unk> also experienced customer driven shutdowns this quarter related to a safety incident of other service providers that cost stand downs across all sources.

Stuart N. Bodden: On the positive side, we are already seeing activity levels pick back up in the back half of February, paving the way for a stronger. For full year 2024, we built a budget assuming slight year-over-year improvement, underpinned by a relatively stable customer. Given the footfall and takes I mentioned at the start of the year, we expect demand to be stronger in the second half of the year, and we remain optimistic about our ability to grow our business We are encouraged that the well services space has already shown resilience to weaker activity levels, providing a reliable floor to our business. We also feel there are upsides to the year that are not fully yet realized, such as the extended work associated with the key customer agreement we signed in 2020.

On the positive side, we are already seeing activity levels pick back up in the back half of February paving the way for a stronger second quarter regarding full year 2024, we built the budget assuming flat year over year improvement underpinned by relatively stable customer demand given the puts and takes I mentioned at the start of the year.

We expect demand to be stronger in the second half of the year and we remain optimistic about our ability to grow our business in the medium and long term. We are encouraged that the well services space has already shown resilience.

Levels, providing them a LIBOR floor to our business.

We also fueled our upside for the year that are not fully you have to realize such as expanded work associated with the key customer agreement. We signed in 2023. We think this is a model for future customer relationships and continue to have encouraging conversations with our customers. We continue to be encouraged that our highest quality customers are <unk>.

Stuart N. Bodden: We think this is a model for future customer relationships and continue to have encouraging conversations with our customers; we continue to be encouraged that our highest quality customers are willing to commit additional operating dollars to Ranger. We fully stand behind our ability to convert approximately 60% of our epitophe cash flow, even under flat fish conditions, and have shown diligence in deploying these cash flows in the most secretive way possible, for sure. Today, we have spent more than $25 million of our original $35 million of repurchase authorization announced one year ago, which has resulted in the repurchase of over 10% of the company's outstanding shares. Given our belief in the underlying value of our stock and our continued commitment to returning capital in the most efficient way possible, the board has increased our share repurchase authorization by an additional $50 million, resulting in a total share repurchase capacity of $85

To commit additional operating dollars stranger.

We fully stand behind our ability to convert approximately 60% of our EBITDA to free cash flow you've been under flattish conditions and has shown diligence and deploying these cash flows and the most accretive way possible for our shareholders. Today, we have spent more than $25 million of our original $35 million.

Our repurchase authorization announced one year ago, which has resulted in the repurchase of over 10% of the company's outstanding shares given our belief in the underlying value of our stock and our continued commitment to returning capital in the most efficient way possible. The board has increased our share repurchase authorization by an additional $50 million.

Resulting in total share repurchase capacity of $85 million.

Stuart N. Bodden: Along with all of the notable financial achievements, the entire Ranger team is proud to announce the release of our first ever sustainability report. This report reflects our commitment to operating responsibly and underscores our efforts to promote environmental, social, and governance initiatives. We remain dedicated to fostering a culture of safety and sustainability across all aspects of our operation.

Along with all of the notable financial achievements the entire range. Our team is proud to announce the release of our first ever sustainability report issued.

Acquired reflects our commitment to operating responsibly and underscores our efforts to promote environmental social and governance initiatives, we remain dedicated to fostering a culture of safety and sustainability across all aspects of our operations.

Stuart N. Bodden: As we embark on the new year, Ranger is well-positioned for continued strong performance and value creation. Our strategic priorities for 2024 center on driving toward growth, addressing challenging market conditions, and targeting. We will focus on high quality and safe execution to differentiate ourselves with a relentless commitment to customer satisfaction, all the while remaining fully committed to providing meaningful capital returns to our shareholders. Our acquisition strategy will be complemented by ongoing dividends and share repurchases reflecting our confidence in the long-term prospects of our business. In conclusion, I want to express my gratitude to our dedicated team members whose hard work and dedication have been instrumental in our success.

As we embark on the new year Ranger is well positioned for continued strong performance.

Our strategic priorities for 2024 zero on driving toward growth the challenging market conditions and targeted acquisitions, we will focus on high quality and safe execution to differentiate ourselves.

Relentless commitment to customer satisfaction, all while remaining fully committed to providing meaningful capital returns to our shareholders.

Our acquisition strategy will be complemented by ongoing dividends and share repurchases, reflecting our confidence in the long term prospects of our business.

In conclusion I want to express my gratitude to our dedicated team members, whose hard work and dedication have been instrumental in our success as we navigate the year ahead, I am confident in <unk> ability to deliver sustainable growth and value for our shareholders with that let me turn the call over to Melissa to review our key financial results.

Melissa Cougle: As we navigate the year ahead, I am confident in Ranger's ability to deliver sustainable growth and value for our shareholders. With that, let me turn the call over to Melissa to review our key financial resources. Good morning, everyone, and thank you for joining us today.

Yes.

Good morning, everyone and thank you for joining us today.

Melissa Cougle: I'm pleased to provide an overview of our financial performance for the full year 2023 and the fourth quarter in particular. Let's start with a summary of our full year 2023 financial performance. Overall, we achieved year over year growth and made substantial progress across key financial metrics. Our revenue for the full year totaled $636.69, marking a 5% increase from $608.59 in 2021. This growth was primarily driven by our continued focus on service quality, effectively managing white space in the calendar, and operational efficiency, despite encountering challenges in customer activities that dampened our four-year program. Moving on to profitability, our net income for the full year stood at $23.8 million, or $0.95 per fully diluted share.

Im pleased to provide an overview of our financials.

For the full year 2023 in the fourth quarter.

Let's start with a summary of our full year 2020 financial results overall, we achieved year over year growth and made substantial progress across key financial metrics.

Our revenue for the full year totaled.

36 <unk>.

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Marking a 5% increase from $685 million in 2020.

This growth was primarily driven by our continued focus on service quality.

Advantage you might face in Macau.

Lender and operational efficiency, despite encountering challenges congrats for activity.

Full year performance.

Moving on to profitability, our net income for the full year stood at $23 $8 million or 95 per fully diluted share. This represents a substantial increase from the previous year's net income of $15 1 million.

Melissa Cougle: This represents a substantial improvement from the previous year's net income of $15.1 million, or $0.65 per share. Our ability to deliver higher earnings reflects the effectiveness of our business model and underscores its resilience in the face of declining market conditions. The Destiny Gazette also saw a notable uptick, reaching $84.4 million for the full year, compared to $79.5 million in the prior year.

Our 65 per share our ability to deliver higher earnings reflect the effectiveness of our business model and underscores its resilience.

Fine.

Adjusted EBITDA also saw notable.

And $84 $4 million for the full year compared to 79.

In the prior year.

Melissa Cougle: This 6% increase demonstrates our ability to generate strong operating cash flow and underscores our commitment to maximizing shareholder value. Furthermore, we are incredibly proud to have achieved free cash flow for the year of $54.3 million, representing over 60% of adjusted EBITDA. This robust free cash flow generation reflects our disciplined approach to capital allocation and underscores our financial strength. Now, let's delve into the financial performance for the fourth quarter. Despite encountering headwinds during this period, we maintained our focus on operational excellence and remained agile in responding to market demand. For the fourth quarter, our net income totaled $2.1 million, or $0.09 per pulling day each year.

First one is increase demonstrates our ability to generate strong operating cash burn and underscores our commitment to maximizing shareholder value.

Furthermore, we are incredibly proud to have achieved free cash flow for the year.

$4 $3 million representing over 60%.

Right.

This robust free cash flow generation reflects our disciplined approach to capital allocation and understood.

Yeah.

This performance in the fourth quarter.

Cowen has lessened during this period, we remain we maintain our focus on operational excellence.

And remain agile in responding to market.

For the fourth quarter, our net income totaled two plus one.

$9 90 per fully diluted share.

Melissa Cougle: While this represents a decrease from the prior year, it's important again to note the broader market cap challenges in the fourth quarter, the customer budget exhaustion, and a notable holiday slowdown during this period. Despite these challenges, we remain resilient and focused on optimizing our operations. I just leave it out for the fourth quarter with $18.4 million, with the lion's share of the year's free cash flow coming in and totaling $2

This represents a decrease from the prior year, it's important again to note.

Router market challenges in the fourth quarter.

Exhaustion and notable holiday slowdowns during this period.

These challenges we remain resilient.

Optimizing our operations.

Adjusted EBITDA for the first quarter was $18 $4 million with the lion's share of the years free cash flow coming in.

Pipeline volumes.

Melissa Cougle: Turning to our balance sheet and liquidity position, I'm pleased to report that Ranger's balance sheet strength continues to improve. We ended the year with $85.1 million in liquidity, consisting of $59.4 million of capacity on our revolving credit facility and $15.7 million of cash. This represents a significant improvement from the previous year, underscoring our commitment to financial discipline and improving capital management. We would call attention to what we expect will be our typical first order decline in cash flows, largely due to compensation commitments at the start of every year. Our total debt at the end of December was virtually zero, but we're committed to maintaining the highest degree of financial flexibility to seize opportunities in the future.

Turning to our balance sheet and liquidity position I'm pleased to report that for your staff.

Thank you.

We ended the year with $85 $1 million in lumpy.

69 4 million.

Lastly, on our revolving credit facility and $57 million of cash.

This represents a significant improvement from the previous year underscoring our commitment.

And for any capital gains.

Let's call it.

Success will be our typical.

First quarter decline in cash flows.

As indicated compensation commitment.

Sure.

That would be into December Hercules truckload, our commitment to maintaining a high degree of financial flexibility to seize opportunities in the future.

Unknown Executive: Our ability to achieve these results amidst a challenging operating environment highlights the effectiveness of our strategic initiatives and underscores our commitment to creating long-term value for our shareholders. In conclusion, I'd like to reiterate that despite the challenges we faced in 2023 that have continued into 2024, we remain confident in not only the resilience and strength of our business but also the longevity of the U.S. onshore market and Ranger's ability to provide fruit cycle returns in its factory. We will continue to focus on executing our strategic priorities, driving operational excellence, and delivering value for our shareholders. Thank you for your attention, and I will now turn the call back over to the operator for the question and answer. We will now begin the question and answer session. To ask a question, you may press the star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key.

Our ability to achieve these results challenging operating environment.

The effectiveness of our strategic.

First our commitment to creating long term value for our shareholders.

In conclusion I'd like to reiterate despite the challenges we face.

Great and that continued into April.

We remain confident not only resilient.

But after the longevity of the U S onshore March and <unk> ability to provide a recycle returns.

We will continue to focus on executing.

Our strategic priority driving operational excellence and delivering value for our shareholders. Thank you for your attention I will now turn the call back over to the operator for the question Peter.

We will now begin the question and answer session.

To ask a question you May press Star then one on your telephone keypad.

If you are using a speakerphone please pick up your handset before pressing the key.

Luke Lemoine: If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble the roster. And our first question comes from Luke Lemoine of Piper Sandler. Please go ahead. Hey, good morning.

So at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble the roster.

Okay.

Yeah.

Okay.

Yeah.

And our first question comes from Luke Lemoine of Piper Sandler. Please go ahead.

Hey, good morning.

Good morning, Luke Stuart Hey, good morning, Stuart all the large operator market consolidation should really help you guys.

Stuart N. Bodden: Stuart, all the large operator market consolidation should really help you guys. You know, the high spec, we're excited with your focus on safety, relative to smaller peers. I know this doesn't kick up in a linear manner, and there might be some pauses, as operators kind of determine and sort out plans.

The high spec and we're excited with your focus on safety relative to smaller peers I know this doesn't kick up in a linear manner and there might be some pauses.

Operators kind of determined and sort out plans.

Stuart N. Bodden: Could you just speak to the change in the operator market structure and how this could benefit you, probably not in the back part of the question? Sure, thanks for the question, Luke. We do think it has helped us and will continue to help us because of our focus on, as you said, maintaining equipment, training crews, and on safety as well. So we do think it's going to help us. I think we're, you know, we're conscious that sometimes when the EMPs consolidate, 1 plus 1 doesn't equal 2, it equals 1.7. And so sometimes that can be a negative thing.

Could you just speak to the change in the operator market structure and how this could benefit you're probably not in the back part of the year.

Sure. Thanks for the question look we do think it has helped us.

We will continue to help us because of our focus on as you said.

Maintaining equipment training crews.

And on safety as well so we just think it's going to help us.

I think we're conscious that sometimes than when the e&ps consolidate one plus one doesn't equal two and equals $1 seven.

And so sometimes that can be a negative but what we're seeing right now in the conversations we're having with the largest players. We certainly think this is going to benefit us that we think that we will get additional work and we think that it will start to shake itself out as the year progresses.

Stuart N. Bodden: But what we're seeing right now in the conversations we're having with the largest players, we certainly think it's going to benefit us, that we think that we'll get additional work, and we think that it'll start to shake itself out as the year progresses. And then on your share repurchases, I mean, Stuart, you kind of outlined what you did in 23 as far as paying down debt, and then you bought back about 10% of shares so far. I think with the remaining authorization, you have a little over 20% of your market cap that's available.

Okay.

And then on your share repurchases I mean, Stuart you kind of outlined.

Did it in 'twenty, three as far as paying down debt and any fault back about 10% of shares so far I think with the remaining authorization you have a little over 20% of your market cap. That's available could you just talk about and a lot of free cash flow coming this year or two could you just talk about how aggressive you would like to be with.

Stuart N. Bodden: Could you just talk about, and with a lot of free cashflow coming this year too, could you just talk about how aggressive you would like to be with that buyback? I mean, I know you have the goal of returning at least 25% of free cashflow, but you exceeded that in 23, and I'm kind of guessing you'll probably exceed that this year as well. Again, thanks for the question, Luke.

That buyback.

You have the goal of returning at least 25% of free cash flow, but you exceeded that in 'twenty, three and I'm kind of guessing you're probably exceed that this year as well.

Again, thanks for the question look certainly we're committed to returning at least 25% of cash flow.

Stuart N. Bodden: Certainly, we're committed to returning at least 25% of cash flow at a minimum back to shareholders. I think what we saw in 23, and I think we'll take the same stance in 24, was that as the stock price came under pressure, we felt like it was a great buying opportunity. So our intention is to kind of take that same stance as we go forward. Again, I think that, you know, we do want to grow the company, but we want to preserve capital to be able to do that. But we know that anything we do has to compete with our own shares, and what we saw was that the value of our own shares was incredibly attractive, with no integration risk.

At a minimum and back to shareholders I think what we saw in 'twenty three I think it will take the same stance in 'twenty four wise.

As the stock price came under pressure, we felt like it was a great buying opportunity. So our intention is to kind of take that same stance as we go forward.

Again, I think that we do want to grow the company, while we want to preserve capital to be able to do that but we know that anything we do has to compete with our own shares and what we saw was the value of our own shares was incredibly attractive with no integration risk.

Stuart N. Bodden: So again, I think, going forward, you could expect us to take a pretty similar stance that if we see an opportunity, we'll get pretty aggressive. And the board is very supportive of that stance as well. Okay, thanks a lot. Thanks, Luke. The next question comes from Don Crist of Johnson Rice. Please go ahead. Morning, guys.

So again I think.

Going forward you can expect us to take a pretty similar stance that if we see an opportunity will get pretty aggressive and the board is very supportive of that stands as well.

Okay. Thanks, so much.

Thanks Luke.

The next question comes from Don Crist of Johnson Rice. Please go ahead.

Good morning, guys.

Donald Peter Crist: I wanted to ask a question on pricing. You know, the per hour rate on the workover rigs and per stage on the wireline really kind of surprised me this quarter. Is there anything there?

Today I wanted to ask a question on pricing.

The power per hour rate on the Workover rigs and per stage on the wireline I'm really kind of surprised me. This this quarter.

Is there anything there or is it more bundling or just just not chasing kind of unprofitable work in your average came up just can you add any details there.

Stuart N. Bodden: Is it more bundling or just not chasing the kind of unprofitable work, and your average came up? Can you add any details there? It's mainly the latter. It's mainly that, you know, not chasing unprofitable work. I think that's the first part I'd highlight. And then I would say that there is some, you know, bundling, meaning more ancillary equipment going out with some of the rigs, which tends to increase kind of the revenue, you know, the overall average revenue per hour. Yeah, the other thing Don to probably call attention to is when you look at, I think Stuart's comments apply really strongly to high-tech rigs. One of the dynamics we had in wireline, although challenged as far as a quarter, there were a few jobs that were really productive jobs. So overall activity is depressed, but the jobs we had were really, really productive jobs, which I think kind of drove that stage count pricing up. I think you'll probably see that it's probably, that's probably not going to stay there in the first quarter.

It's mainly the ladder its mainly.

Not chasing unprofitable work I think that's the first part I'd highlight and then I would say that there is.

Bundling, meaning more ancillary equipment going out with some of the rigs.

Which tends to increase kind of the revenue. The overall average revenue per hour yeah. The other thing dawn to probably call attention to is when you look at I think Stuart's comments apply.

Really strongly to high spec rigs one of the diamond actually had in wireline, although challenged as far as the quarter. There were a few jobs that were really productive jobs. So overall activity depressed, but the jobs, we have a really really productive job, which I think kind of drove that stage count pricing.

Thank you will probably see that it's probably that's probably not going to stay there in the first quarter, we will see how the year shakes out as kind of Frac frac crews kind of go back to work in the coming months, but I think that will you'll see that pull off here in the first quarter.

Melissa Cougle: We'll see how the year shakes out as kind of frac, frac crews kind of go back to work, you know, in the coming months. But I think you'll see that cool off here in the first quarter from a wireline pricing perspective. Okay, and just two quick modeling questions for me.

From a wireless perspective I think.

Okay, and just two quick modeling questions for me.

Donald Peter Crist: CapEx this year, I'm assuming with kind of flat activity, CapEx will come in a little bit from last year? A little bit. We had kind of suggested last year we were putting a little bit of dollars behind the new customer contract. There's still a few of those fall, you know, kind of falling through. So I think we think of it mostly as a flattish year as much as a pullback year, but that sort of remains to be seen, I think, as we get into the year. Fair enough. Yeah, and I'm assuming that the second and third quarters would be the highest growth quarters and the highest EBITDA quarters with, you know, the first a little bit light, and the fourth kind of in the middle. Is that the right way to think about it as well? That's how we're seeing it. Yeah. Okay. I appreciate it. I'll turn it back.

Capex this year I'm, assuming with kind of flat activity Capex will come in a little bit from last year.

A little bit we had we had kind of suggested last year, we were putting a little bit of dollars behind it and customer contracts, there's still a few of those.

Kind of following through.

I think we think of it mostly as a flattish year as much as a pull back here that sort of remains to be seen I think as we get into the air fare.

Fair enough yeah.

Yes.

And I'm, assuming that the second and third quarters would be the highest growth quarters in highest EBITDA quarters with the first a little bit light in the fourth kind of in the middle is that the right way to think about it as well.

Yes, the way, we're seeing it yet.

Excellent.

Okay I appreciate it I'll turn it back.

Alright, thanks, Thank you.

Donald Peter Crist: All right, thanks Don. The next question comes from Derek Podhaizer of Barclays. Please go ahead. Hey, maybe just sticking on the wireline theme. Can you talk about maybe the interplay between the different services under that brand? I know you have the completions focus work, production focus work, and then the pump down work. I know there's different margin profiles.

The next question comes from Derek <unk> of Barclays. Please go ahead.

And maybe just sticking on the wireline theme can you talk about maybe the interplay between the different services under that brand yet I know you have the completions focus work production focus work and then pumped down work I know theres different margin profiles and did that affect some of the per stage pricing that we're seeing but just thinking about it more from those different verticals under wireline.

Derek John Podhaizer: And did that affect some of the per stage pricing they were seeing? But just thinking about it more from the different verticals under wireline. Yeah, thanks for the question, Derek. On the first stage pricing, that really is just tied specifically to the plug and per business or the completions business. So it's not really impacted by either the pump down or the production side.

Yeah. Thanks, Thanks for the question Derek on.

On the first stage pricing that that really is tied specifically to the plug and perf business or the completions business. So it's not really impacted by either.

Im down.

Or that was the production side I think as we've kind of talked about in the past on the completion side, it's been a pretty challenging market.

Stuart N. Bodden: I think, as we've kind of talked about in the past, on the completion side, it's been a pretty challenging market. It remains pretty challenging. There are some, I would say, some kind of deals being shopped that might potentially help on the consolidation side. We'll see if they come to fruition or not.

It remains pretty challenging there are some I'd say some kind of deal is being shopped that might potentially.

Help on the consolidation side, we will see if they come to fruition or not.

Stuart N. Bodden: But, again, I think on the plug and per side, we've seen the market remain pretty challenged. And truthfully, some of the AMP operators are kind of re-bidding a lot of that work to see if they can lock in lower prices. And again, as we've said, as a result, we've really been kind of focusing our attention more on the more resilient through-cycle production type work on the wireline side. And it's probably worth mentioning, Derek, we've talked a bit in the past about shifting that focus over. I think what you saw in the fourth quarter and what's continued, and we've talked about this before, Stuart made a comment about the North region. Remember, the North region really is the bigger business, and it has a really external sort of weather impact. So they start to see significant declines in November, and it doesn't really start to pick back up until late March. We see that phenomenon again this year. And so we do feel strongly that we are going to be pursuing the pivot. But I think that's that much more difficult to do in the middle of winter.

But.

Again, I think on the plug and perf side, we see the market remains pretty challenged in interest for some of the E&P operators are kind of re bidding a lot of that work to see if they can lock in lower prices.

And as again as you said as a result, we're really been kind of focusing our attention more on the more resilient through cycle production type work on the wireline side, and it's probably worth mentioning Gary.

Let's talk a bit in the past about shifting that focus over I think what you saw in the fourth quarter with continued and we've talked about previously sort of made a comment about the north region remember in the North region really is the bigger business and it has a really outsized or whatever and so they may start to see significant declines in November.

And it doesn't really start to pick back up until late March we see that phenomenon again this year and so we do feel strongly we are going to be pursuing the payday I think that that much more difficult to do in the middle of winter. So I think you had sort of.

Melissa Cougle: So I think you had sort of an outsized effect, if you will, because you had us sort of saying we're not chasing the unproductive completions work. And as we're trying to sort of pivot over to production and pump down, we're kind of doing it as, you know, we only had a couple of months to start doing that before we really start to see some winter. So we're optimistic this year. It'll probably take a little bit to get off the ground.

Outside of that effect, if you will because you're at a sort of saying, we're not chasing the unproductive completions work and as we're trying to sort of pivot Alberta production has popped out we're kind of doing it.

Well I had a couple of months sort of start at that before we really start to see some winter. So we're optimistic this year it will probably take a little bit to get off the ground it'd.

Melissa Cougle: It'd be fair to say we probably expect depressed results off the wireline again in Q1. But I think we really are expecting that to pick up here in Q2. Yeah, for sure.

It would be fair to say, we probably expect depressed results off of wireline again in Q1, I think we really are expecting.

That can pick up here, yes for sure I would agree with that.

Derek John Podhaizer: I'd agree with that. And then, I mean, on the margin profile, obviously, it's bounced around quite a bit over the last few years. I mean, is there, do you have a gauge on what you think kind of through cycle?

And then I mean on the margin profile, obviously, it's bounced around quite a bit over the last few years. I mean is there do you have a gauge on what do you think kind of through cycle.

Melissa Cougle: margins could look like for this business. I mean, I know there's just been a lot of volatility, but as far as cost, addressing the cost structure, addressing the right mix of work under the wireline brand, just in order to help us gauge what we, how we should think about the margin profile over the next couple of years for wireline. You know, how we think about it internally, Derek, is that certainly we think it's kind of a north at 15% business is what it ought to be. That's kind of how we're modeling it kind of through the cycle, obviously a little bit of work to do still to get there. But that's how we're thinking about it, and that's really a blend.

Margins could look like for this business I mean, I know theres, just been a lot of volatility, but as far as the cost of addressing the cost structure addressing that right mix of work under the wireline brand.

In order to help us gauge what we how we should think about margin profile over the next couple of years for wireline.

How do we think about it internally as Eric has certainly we think it was kind of a north of 15% business is what it ought to be.

How we're modeling it kind of through cycle.

Say, a little bit of work to do still to get there, but that's how we're thinking about it and that's really a blend.

Melissa Cougle: I know we've probably talked offline, your production and pump down are closer to 20 completions, arguably right now. So the other wild card in that mix is completions, arguably 10, or in some months less. But when you get high-productive jobs, you can reach 10% even in completions.

Probably talk offline production and pop down is closer to 20 completions are arguably right now so the other wildcard in that mix. It is completion is arguably tanner and some months last but when you get high productive jobs. You can you can't always 10% even in completions were just not seeing that lately given the market dynamic.

Melissa Cougle: We're just not seeing that lately given the market dynamics. But I think to Stuart's point, our prosperity is to kind of get continuously above 10 every month. And then, and then we'll be stretching as we get more and more of our footing and our foundation set in the production business. I think you'll see that it might take us a couple years, but I think you'll see it start to get more resilient. You can see that here. That's helpful. Just a final one for me.

Hi.

But I think to your point are our friends for our kids to kind of get continuously Boston every month, and then and then we'll be stretching as we get more and more of our footing and our foundation set on the production business I think you'll see that.

Might take US a couple of years I think you'll see that start to get more resilient.

Sure.

Got it Thats helpful and just a final one for me.

The outlook for 2024, it seems to be softening quite a bit primarily driven from the weakness in the natural gas basins, but any initial high level takes on how we should think about top line 2024 and EBITDA.

Derek John Podhaizer: The outlook for 2024 seems to be softening quite a bit, primarily driven by the weakness in the natural gas spaces. But any initial high-level thoughts on how we should think about top line 2024 in EBITDA, just where you guys are thinking right now? I think we're thinking about a pretty similar year, this, or 24 being a pretty similar year in total to 23.

Just where you guys are thinking right now.

I think we're thinking about it pretty similar year. This R 24, being a pretty similar year end total to 23.

Yeah as I said in my earlier remarks, Q1 kind of got off to a slow start.

But we do have some things in place and.

What kind of optimistic optimistic on how things will kind of come together in the back half of the year.

Stuart N. Bodden: As I said in my earlier remarks, Q1 kind of got off to a slow start, but we do have some things in place, and we're kind of optimistic about how things will kind of come together in the back half of the year. So again, I'm going to think kind of year over year, and it feels like 24 is pretty similar to 23, but again, Q1 is going to be kind of a bit of a slow start. It's probably also worth it to mention this year what Ranger's been able to do in pullback times. The last time we saw this, in 2021, we pulled off three acquisitions. So I think that that's getting to be higher on our radar screen this year, too. So we'll see anybody's guess, but I think that's something that's certainly on our radar screen as well. Thanks for the caller. I'll turn it back.

So again, I think kind of year over year.

24, it was pretty similar to 'twenty, three but again Q1 is going to be.

So a bit of a slow start it's probably.

It's probably also worth worth it to mention this year, but <unk> been able to do and pull that time.

The last time, we saw that in 2021 were pulled off pre acquisition. So I think that that's getting to be higher on our radar screen as well this year.

Yeah, So, let's see if anybody's guess, but I think that that's something that certain of our radar screen as well.

Got it thanks for the color I'll turn it back.

Alright appreciate it Eric.

The next question comes from John Daniel of Daniel Energy partner.

Melissa Cougle: All right. Appreciate it, Derek. The next question comes from John Daniel of Daniel Energy Partners. Please go ahead. Good morning Stuart and Melissa. How are you? Hey John, how are you?

Please go ahead.

Good morning, Stuart Masa, how are you hey, John how are you.

Alright, well I.

My first question is how would you characterize it.

Seller expectations today, just kind of given natural gas weakness.

John Daniel: I am well. My first question is, how would you characterize seller expectations today, just kind of based on the Natural Gas Weakness and fears of more EMP consolidation and the impact on the business. Have you seen a change today versus maybe a year ago? I think we've definitely seen a change. We're taking more inbound calls than we have in the past. I think we feel like the bid-ask is narrowing. I'm not sure it's all the way there yet, but it does feel like it's starting to narrow. Okay, and then, I thought the commentary and the release date on the prepared remarks were helpful, but as you look at the difference between small or bolt-on deals versus the larger deals. Again, a very general question, but how would you...

Or is it more E&P consolidation and the impact on the business have you seen a change today versus maybe a year ago.

I think we've definitely seen a change where we're taking more inbounds than we have in the past I think we feel like the bid ask is narrowing.

Sure. It's all the way there yet, but it does feel like it's starting to narrow.

Okay, and then when you.

I thought the commentary that really stand out in the prepared remarks. It is helpful. But as you look at it.

France between smaller bolt ons.

Versus the larger deals.

Get very general question, but how would you.

Stuart N. Bodden: There's more realistic in their expectations and ease of application. I hope that makes sense. Yeah, I think what I would say is we're probably more focused on the bigger transactions than the smaller ones. And part of that, John, is that I think on the smaller ones, unless it's really tied to a specific region that we're not in, right, so it's a geographic expansion, or, you know, perhaps they have some technology or a sort of a defensible position. I think those are interesting to us. But in general, a lot of the smaller players feel like, you know, we have equipment. And a lot of the smaller players don't really give us much.

Theres more realistic in their expectations in Asia.

If you could just opine on that.

That makes any sense.

Yeah.

I think what I would say is we're probably more focused on the bigger transactions and the smaller ones.

And part of that John is that I think on the smaller ones unless it's really tied to a specific region that we're not in right. So it's a geographic expansion or perhaps they have a.

Technology or a sort of a defensible position I think those are interesting to us but in general a lot of the smaller players we feel like we have equipment.

And a lot of the smaller players don't really they don't give us a lot, whereas I think we feel like with some of the bigger ones. We can really kind of continue the consolidation theme.

Stuart N. Bodden: Whereas I think we feel like with some of the bigger ones, we can really kind of continue the consolidation theme that we've been pursuing. So I think we're more focused on the bigger ones. Big one. Fair enough. And then the last one for me is just on coil tubing.

That we've been pursuing so I think we're more focused on the bigger ones Big one fair enough and then the last one for me is that.

Just on coiled tubing I know, it's not the big Big instead of your businesses, but just your thoughts on.

Stuart N. Bodden: I know it's not the biggest and best of your businesses, but just your thoughts on what you're seeing there. And then, just as laterals are getting longer at the perm, separately, any difference in demand for stick pipe versus coil. It would be helpful in the operation.

What youre seeing there and then just as laterals are getting longer in the Permian.

Separately any.

Difference in demand for stick pipe versus coil.

Some thoughts would be helpful on the operation side.

Stuart N. Bodden: Yeah, I'll start off on the first one on the coil. And again, you know, the quill business for us is in the Rockies. I think what we are seeing is even with the longer laterals, we're seeing demand for, you know, kind of, again, sort of, more capable equipment. So we are starting to see that, and we do have some investments that are planned for the year to satisfy that demand. I think if you look at the drill-out space for us in 23, even with the slowdown in frack that kind of happened through the year, our 24-hour space or our drill-out space was very, very consistent through the year. So, you know, I wouldn't say it's a huge shift, but again, I think we're seeing demand hold up pretty well. It was a little slower in January, but we're kind of back on to the races on that.

Yes.

I'll start off on the first one on the coil and again.

The quell business for US is in the Rockies I think what we are seeing as Hubert even there with the longer laterals, we're seeing demand for.

Yeah kind of.

Again sort of.

We are a capable equipment. So we are we are seeing we are starting to see that and we do have some investments other plan for the year to satisfy that demand I think if you look at on the drill out space for us in 'twenty three even with the slowdown in frac that kind of happened through the year.

Our 24 hour space or our drill out space with very very consistent through the year.

So.

It's I wouldn't say, it's a huge shift, but again I think we're seeing demand hold up pretty well.

It was a little slower in January, but we're kind of back off to the races on that.

Stuart N. Bodden: Okay, thank you for including me. I appreciate it. The next question comes from William Kim of Presidio Asset Management. Please go ahead.

Okay.

Thank you for including me.

Right. Thanks I appreciate it.

The next question comes from William Kim of video asset management.

Please go ahead.

William Kim: Hey Stuart and Melissa, thank you for taking the call. Hello. I guess, you know, it looks great that Rangers is in a great financial position to be able to repurchase shares being debt-free compared to your competitors. I think your shares have been reflecting that versus the other guys, but, You know, my question relates more to the shareholder dynamics today. I know that your largest shareholder has distributed shares to their limited partners partially, but I know there's also a large chunk left. Do you have any color on what the exit strategy may be in, you know, coming here?

Hey, Stuart.

Thank you Paul.

Okay.

I guess.

And it looks great.

There isn't a great financial position to be able to repurchase shares that's to be compared to your competitors.

No I think you're at your shares have been reflecting that nurses Christian he other guys but.

My question relates more to the shareholder dynamics today, I know that your largest shareholder as distributed shares to bet their limited partners partially.

I know there's also a large chunk left do you have any color on what.

Nice exit strategy, maybe in the coming year.

Stuart N. Bodden: Sure, thanks for the question, William. I know in the distribution that happened in the fall, that was related to the end of the fund. So our shares were in two separate funds for that shareholder of CSL. And the first fund timed out, and so that's why those shares were distributed to LPs.

Sure. Thanks for the question why am I know in the distribution that happened in the fall.

That was related to in their funds. So our shares were in two separate funds for that shareholder for CSO.

And the first fund timed.

Time, Dallas, and so Thats why those shares were distributed to Lps.

Melissa Cougle: Beyond that, we don't have a lot of clarity on fund two. You know, we do know that CSL has been very supportive of the business, and constructive of the business. So we don't anticipate any problems in the near term. But truthfully, I don't think we know for certain.

Beyond that we don't have a lot of clarity on fun too.

We do know that CSL has been very supportive of the business construction of the business. So we don't anticipate any near term.

But truthfully I don't think we know for certain but.

Melissa Cougle: But again, they've been pretty supportive and constructive. Got it. Would you, Do you think that there may be an opportunity to repurchase a large chunk of those shares or is that kind of not in discussion around? Yeah, I mean, I guess I'll take a stab at that and say, our best understanding right now is that those are not available to be purchased. One thing Stuart did mention is that there was some selling on the back of the distribution on one. We understood that to be some small rebalancing. So it's not our understanding at this point that those shares are available, and they're interested in actually hitting the market.

They've been very supportive and constructive.

Got it.

Would you.

Do you think that there'd be maybe an opportunity to repurchase.

A large chunk of those shares or is that kind of not not in discussion around the table.

Yeah, I mean, I guess I'll take a stab at that and say our best understanding right. Now is those are not available to be purchased.

One thing Stuart did mention is that there was some selling on the back of the distribution of Taiwan.

We understood that leaves some small rebalancing so.

It's not our understanding at this point that those shares are available and they are interested in actually hitting the market I think if we were to become aware that there was and there was a distribution plan or there was a need to sell further.

Melissa Cougle: I think if we were to become aware that there was a distribution planned, or there was a need to sell further, you know, we, Yeah, the fund, our board member is pretty keenly aware of our desire to repurchase. We have a very active dialogue around that. So we would be very interested in engaging in that discussion. As best we know now, those shares are not coming out.

No.

Yes.

Yeah.

Board member is pretty keenly aware of our desire to repurchase.

We have very active dialogue around that so we would be very interested in engaging in that discussion as best we know now that the shares are not coming.

Melissa Cougle: Thank you so much and keep up the great work. Thanks, William. I appreciate it. This concludes our question and answer session. I would like to turn the conference back over to student Stuart Bodden for any closing remarks. Thanks, Andrea. Thanks everybody for joining the call. Thanks for your interest in Ranger. I very much appreciate it, and I hope everyone has a great day. The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect. www.rangerenergy.org, Pottery Barn Please visit www.potterybarn.com for more ideas and inspiration. Happy Earth Day!

Got it. Thank you so much and keep up the great work.

Great. Thanks, Lee I appreciate it.

This concludes our question and answer session I would like to turn the conference back over to Scott.

Bowden for any closing remarks.

Thanks, Andrea Thanks.

Thanks, everybody for joining the call. Thanks for your interest in Ranger very much appreciate it and hope everyone has a great day.

The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.

Okay.

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