Q4 2025 Atlas Energy Solutions Inc Earnings Call

February 24, 2026

Speaker #1: Greetings and welcome to Atlas Energy Solutions Inc. fourth quarter and year end 2025 Earnings Conference Call . At this time , all participants are on a listen only mode .

Operator: Greetings, and welcome to Atlas Energy Solutions Inc. Q4 and Year-End 2025 Earnings Conference Call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kyle Turlington, VP, Investor Relations. Thank you. You may begin.

Speaker #1: A question and answer session will follow the formal presentation . If anyone requires operator assistance during the conference , please press Star Zero on your telephone keypad .

Speaker #1: As a reminder , this conference is being recorded . It is now my pleasure to introduce your host , Kyle Turlington VP , Investor Relations .

Speaker #1: Thank you . You may begin

Speaker #2: Hello and welcome to the Atlas Energy Solutions Conference call and webcast for the fourth quarter of 2025 . With us today are John Turner , president and CEO Blake McCarthy CFO Tim Ondrak President of Power and Bud Brigham Executive chairman .

Kyle Turlington: Hello, welcome to the Atlas Energy Solutions conference call and webcast for Q4 2025. With us today are John Turner, President and CEO; Blake McCarthy, CFO; Tim Ondrak, President of Power; and Bud Brigham, Executive Chairman. John, Blake, and Bud will be sharing their comments on the company's operational and financial performance for Q4 2025, after which we will open the call for Q&A. Before we begin our prepared remarks, I would like to remind everyone that this call will include forward-looking statements as defined under the US securities laws. Such statements are based on the current information and management's expectations as of this statement and are not guarantees of future performance. Forward-looking statements involve certain risks, uncertainties, and assumptions that are difficult to predict. As such, our actual outcomes and results could differ materially.

Speaker #2: John Blake and Budd will be sharing their comments on the company's operational and financial performance for the fourth quarter of 2025. After which, we will open the call for Q&A. Before we begin our prepared remarks, I would like to remind everyone that this call will include forward-looking statements as defined under the US securities laws.

Speaker #2: Such statements are based on the current information and management's expectations as of this statement , and are not guarantees of future performance Forward looking statements involve certain risks , uncertainties and assumptions that are difficult to predict As such , our actual outcomes and results could differ materially .

Kyle Turlington: Forward-looking statements involve certain risks, uncertainties, and assumptions that are difficult to predict. As such, our actual outcomes and results could differ materially. You can learn more about these risks in the annual report on Form 10-K we will file with the SEC on 24 February 2026, our quarterly reports on Form 10-Q, and current reports on Form 8-K, and our other SEC filings. You should not place undue reliance on forward-looking statements, and we undertake no obligation to update these forward-looking statements. We will also make reference to certain non-GAAP financial measures such as adjusted EBITDA, adjusted free cash flow, and other operating metrics, and statistics. You will find the GAAP reconciliation comments and calculations in yesterday's press release.

Speaker #2: You can learn more about these risks in the annual Report on Form 10-K . We will file with the SEC on February 24th , 2026 .

Kyle Turlington: You can learn more about these risks in the annual report on Form 10-K we will file with the SEC on 24 February 2026, our quarterly reports on Form 10-Q, and current reports on Form 8-K, and our other SEC filings. You should not place undue reliance on forward-looking statements, and we undertake no obligation to update these forward-looking statements. We will also make reference to certain non-GAAP financial measures such as adjusted EBITDA, adjusted free cash flow, and other operating metrics, and statistics. You will find the GAAP reconciliation comments and calculations in yesterday's press release. With that said, I'll turn the call over to John Turner.

Speaker #2: Our quarterly reports on Form 10-q and current Reports on Form 8-K , and our other SEC filings . You should not place undue reliance on forward looking undertake no obligation to update these forward looking statements .

Speaker #2: We will also make reference to certain non-GAAP financial measures , such as adjusted EBITDA , adjusted free cash flow and other operating metrics and statistics .

Speaker #2: You will find the gap reconciliation comments and calculations in yesterday's press release . With that said , I will turn the call over to John Turner .

Kyle Turlington: With that said, I'll turn the call over to John Turner.

Speaker #3: Thank you . Kyle For the fourth quarter , Atlas generated $36.7 million of adjusted EBITDA on $249 million of revenue , representing a 15% adjusted EBITDA margin for the full year 2025 .

John Turner: Thank you, Kyle. For the Q4, Atlas generated $36.7 million of adjusted EBITDA on $249 million of revenue, representing a 15% adjusted EBITDA margin. For the full year 2025, we delivered $221.7 million of adjusted EBITDA on $1.1 billion of revenue, achieving a 20% adjusted EBITDA margin. Our Q4 results exceeded our initial expectations. Volumes came in at 5.3 million tons, flat sequentially with the Q3. The typical end-of-year seasonality was notably muted as customers took minimal downtime around the holidays. This was particularly encouraging following the steep decline in West Texas completion activity we experienced over the summer. It now appears that most operators have adjusted their activity levels to align with a $50 to $60 WTI strip and are comfortable maintaining operations at these levels.

Speaker #3: We delivered 221.7 million of adjusted EBITDA on $1.1 billion of revenue , achieving a 20% adjusted EBITDA margin . Our Q4 results exceeded our initial expectations Volumes came in at 5.3 million tons , flat sequentially , with the third quarter the typical end of year seasonality was notably muted as customers took minimal downtime around the holidays This was particularly encouraging following the steep decline in West Texas completion activity .

Speaker #3: We experienced over the summer . It now appears that most operators have adjusted their activity levels to align with the 50 to $60 WTI strip and are comfortable maintaining operations at these levels The quarter also marked the highest utilization we've seen to date on the Dune Express , as Delaware Basin customers increasingly recognize the efficiency and reliability benefits of this system brings to their logistics , supply chains .

John Turner: The quarter also marked the highest utilization we've seen to date on the Dune Express, as Delaware Basin customers increasingly recognize the efficiency and reliability benefits of this system brings to their logistics supply chains. We view this as a strong indicator of the system's performance heading into 2026. In November, we announced the order of 240 MW of power generation equipment, accelerating our strategic evolution into a leading provider of behind the meter, long-term power solutions across a broad range of domestic industries. We see the evolving power market over the next decade as a truly generational opportunity, and we're moving aggressively to capitalize on it.

Speaker #3: We view this as a strong indicator of the system's performance heading into 2026 . In November , we announced the order of 240MW of power generation equipment , accelerating our strategic evolution into a leading provider of behind the meter long term power solutions across a broad range of domestic industries .

Speaker #3: We see the evolving power market over the next decade as a truly generational opportunity , and we're moving aggressively to capitalize on it After years of relatively flat US electricity consumption .

John Turner: After years of relatively flat US electricity consumption, the grid is now confronting surging demand, which hit record levels in 2025 and is projected to grow by as much as 25% by 2030, driven by the explosive expansion of data centers and the resurgence in domestic manufacturing. Utilities are struggling to keep pace amidst infrastructure constraints and reliability challenges. While rising residential electricity prices, up 7.4% in 2025 alone, are creating political and economic pressure for more affordable, dependable alternatives. This dynamic is pushing developers to secure dedicated, behind-the-meter power assets to de-risk their projects and meet timelines. For many of these companies, grid constraints represent a new and urgent challenge, compressing decision-making windows dramatically. Since the summer of 2024, Atlas has been positioning itself as the go-to solution in this space.

Speaker #3: The grid is now confronting surging demand , which hit record levels in 2025 and is projected to grow by as much as 25% by 2030 , driven by the explosive expansion of data centers and the resurgence in domestic manufacturing .

Speaker #3: Utilities are struggling to keep pace amidst infrastructure constraints and reliability challenges , while rising residential electricity prices up 7.4% in 2025 alone , are creating political and economic pressure for more affordable , dependable alternatives .

Speaker #3: This dynamic is pushing developers to secure dedicated behind the meter power assets to de-risk their projects and meet timelines . For many of these companies , grid constraints represent a new and urgent challenge compressing decision making .

Speaker #3: Windows dramatically . Since the summer of 2024 . Atlas has been positioned in itself as the go to solution in this space . The merger , acquisition , completed this time last year , provided a cash flow platform in critical engineering expertise that complements our strength in large scale project execution .

John Turner: Since the summer of 2024, Atlas has been positioning itself as the go-to solution in this space. The Moser acquisition, completed this time last year, provided a cash flow platform and critical engineering expertise that complements our strength in large-scale project execution. Over the past nine months, we've been actively transitioning the business from a traditional short-term generator rental model to a power-as-a-service approach, selling electrons under longer-term arrangements. This shift has involved upgrading communication systems, refining our sales process, and focusing our commercial efforts towards customers seeking dense, long-term deployments. We're encouraged by the progress. We've reached a tipping point in this transformation.

John Turner: The Moser acquisition, completed this time last year, provided a cash flow platform and critical engineering expertise that complements our strength in large-scale project execution. Over the past nine months, we've been actively transitioning the business from a traditional short-term generator rental model to a power-as-a-service approach, selling electrons under longer-term arrangements. This shift has involved upgrading communication systems, refining our sales process, and focusing our commercial efforts towards customers seeking dense, long-term deployments. We're encouraged by the progress. We've reached a tipping point in this transformation. Earlier this year, we successfully deployed our first microgrid with a Permian E&P customer, which has since been upsized. In Q1 2026 alone, we anticipate deploying at least 30 MW under long-term microgrid multi-basin contracts with E&P and midstream customers.

Speaker #3: Over the past nine months , we've been actively transitioning the business from a traditional short term generator rental model to a power as a service approach .

Speaker #3: Selling electrons under longer term arrangements This shift has involved upgrading communication systems , refining our sales process , and focusing our commercial efforts towards customers seeking dense , long term deployments .

Speaker #3: We're encouraged by the progress—we've reached a tipping point in this transformation. Earlier this year, we successfully deployed our first microgrid with the Permian E&P customer, which has since been upsized.

John Turner: Earlier this year, we successfully deployed our first microgrid with a Permian E&P customer, which has since been upsized. In Q1 2026 alone, we anticipate deploying at least 30 MW under long-term microgrid multi-basin contracts with E&P and midstream customers. Based on our current pipeline, we are targeting more than 50% of our existing fleet under long-term contracts by year-end. January also marked the initial deployment of our patented hybrid battery solution, which integrates with generators as a grid-forming system, delivering meaningful improvements in cost and maintenance efficiency. The commercial potential for this technology extends far beyond the oil field.

Speaker #3: In the first quarter of 2026 alone, we anticipate deploying at least 30 MW under long-term microgrid, multi-contracts with the and midstream customers.

Speaker #3: Based on our current pipeline , we are targeting more than 50% of our existing fleet under long term contracts by year end . January also marked the initial deployment of our patented hybrid battery solution , which integrates with generators as a grid forming system delivering meaningful improvements in cost and maintenance efficiency The commercial potential for this extends far beyond the oil field While these advancements in our existing power business are promising , the larger behind the meter project represents a true step change opportunity for Atlas We have active commercial negotiations underway and expect to provide greater visibility on equipment placement and the resulting economic impact to Atlas in the near term .

John Turner: Based on our current pipeline, we are targeting more than 50% of our existing fleet under long-term contracts by year-end. January also marked the initial deployment of our patented hybrid battery solution, which integrates with generators as a grid-forming system, delivering meaningful improvements in cost and maintenance efficiency. The commercial potential for this technology extends far beyond the oil field. While these advancements in our existing power business are promising, the larger behind the meter projects represent a true step change opportunity for Atlas. We have active commercial negotiations underway and expect to provide greater visibility on equipment placement and the resulting economic impact to Atlas in the near term. Our pipeline features a broad range of behind-the-meter power projects across multiple industries, including energy, data centers, manufacturing, and others, with contract terms typically spanning 5 to 15 years, creating durable, long-term cash flows....

John Turner: While these advancements in our existing power business are promising, the larger behind the meter projects represent a true step change opportunity for Atlas. We have active commercial negotiations underway and expect to provide greater visibility on equipment placement and the resulting economic impact to Atlas in the near term. Our pipeline features a broad range of behind-the-meter power projects across multiple industries, including energy, data centers, manufacturing, and others, with contract terms typically spanning 5 to 15 years, creating durable, long-term cash flows. We have particular strength and see especially compelling risk-adjusted returns in projects in the 50 to 500 megawatt range, where our modular platform enables efficient execution and high density deployments.

Speaker #3: Our pipeline features a broad range of behind the meter power projects across multiple industries , including energy , data centers , manufacturing and others with contract terms typically spanning 5 to 15 years .

Speaker #3: Creating durable long term cash flows . We have particular strength in key , especially compelling risk adjusted returns in projects in the 50 to 500 megawatt range , where our modular platform enables efficient execution and high density deployments at the same time , our differentiated track record with large CapEx infrastructure projects such as our high capacity plants and the Dune Express conveyor system , combined with our scalable design and growing expertise , advantage us for the execution of even larger scale opportunities as customer demand intensifies .

John Turner: We have particular strength and see especially compelling risk-adjusted returns in projects in the 50 to 500 megawatt range, where our modular platform enables efficient execution and high density deployments. At the same time, our differentiated track record with large CapEx infrastructure projects, such as our high-capacity plants and the Dune Express conveyor system, combined with our scalable design and growing expertise, advantage us for the execution of even larger scale opportunities as customer demand intensifies. The opportunity set continues to expand rapidly, with several prospects advancing from initial discussions to formal proposals and active negotiations. We are targeting more than 500 megawatts deployed across our fleet in 2027, with the potential for substantial additional growth beyond that as we secure larger scale projects and build on our initial orders.

John Turner: At the same time, our differentiated track record with large CapEx infrastructure projects, such as our high-capacity plants and the Dune Express conveyor system, combined with our scalable design and growing expertise, advantage us for the execution of even larger scale opportunities as customer demand intensifies. The opportunity set continues to expand rapidly, with several prospects advancing from initial discussions to formal proposals and active negotiations. We are targeting more than 500 megawatts deployed across our fleet in 2027, with the potential for substantial additional growth beyond that as we secure larger scale projects and build on our initial orders.

Speaker #3: The opportunity set continues to expand rapidly , with several prospects advancing from initial discussions to formal proposals and active negotiations targeting more than 500MW deployed across our fleet in 2027 , with the potential for substantial additional growth beyond that as we secure larger scale projects and build on our initial orders .

Speaker #3: The ordered equipment is slated for delivery starting in the second half of 2026, with energisation targeted to begin in Q1 2027. Each of these projects has the potential to meaningfully enhance Atlas's cash flow profile, and I am very excited to share more details with you as we close transactions.

John Turner: The ordered equipment is slated for delivery starting in the second half of 2026, with energization targeted to begin in Q1, 2027. Each of these projects has the potential to meaningfully enhance Atlas's cash flow profile. I am very excited to share more details with you as we close transactions. Stay tuned for the updates. I will now turn the call over to our CFO, Blake McCarthy, through our financials in more detail.

Speaker #3: So stay tuned for the updates . I will now turn the call over to our CFO , Blake McCarthy for our financials . In more detail

Speaker #4: Thanks , John . The underlying performance in our sand and logistics business improved in the fourth quarter , despite a continued challenging pricing environment .

Blake McCarthy: Thanks, John. The underlying performance in our sand and logistics business improved in Q4, despite a continued challenging pricing environment. Plant OpEx per ton declined sequentially to $12.28, despite elevated costs in October related to the operational challenges in Q3 and higher maintenance spending during December. Our cost of production, although improved, remain elevated at our flagship Kermit complex due to current limitations on our dredge feed. This is expected to be alleviated with the deployment of our 2 new Twinkle dredges, which are scheduled for commissioning in Q2. The market backdrop for West Texas sand and logistics remains challenging, with current pricing at the industry's marginal cost of production. Premium completion activity is expected to be down year-over-year, although it appears to have stabilized at Q4 levels for now.

Speaker #4: Plant operating expense per ton declined sequentially to $12.28 despite elevated costs . In October related to the operational challenges in Q3 and higher maintenance spending during December .

Speaker #4: Our cost of production, although improved, remains elevated. Our flagship Kermit complex is limited due to current limitations on our dredge feed. This is expected to be alleviated with the deployment of our two new Twinkle dredges, which are scheduled for commissioning in the second quarter.

Speaker #4: The market backdrop for West Texas sand and logistics remains challenging , with current pricing at the industry's marginal cost of production , Permian completion activity is expected to be down year over year , although it appears to have stabilized at Q4 levels now Despite the challenging market environment .

Blake McCarthy: Premium completion activity is expected to be down year-over-year, although it appears to have stabilized at Q4 levels for now. Despite the challenging market environment, Atlas's commercial team has positioned us well to grow volumes in 2026. Leaning on our cost-advantaged mines and logistics network, we were able to increase our share of current customer sand procurement spend while also adding some key new customers, relationships we expect to grow and scale over the course of 2026 and beyond. The current oil macro environment remains quite opaque. We don't have significant visibility into all of our customers' full year plans, but our Q1 schedule is very busy, with sales volume expected to be up approximately 10% sequentially and further growth expected in the Q2.

Blake McCarthy: Despite the challenging market environment, Atlas's commercial team has positioned us well to grow volumes in 2026. Leaning on our cost-advantaged mines and logistics network, we were able to increase our share of current customer sand procurement spend while also adding some key new customers, relationships we expect to grow and scale over the course of 2026 and beyond. The current oil macro environment remains quite opaque. We don't have significant visibility into all of our customers' full year plans, but our Q1 schedule is very busy, with sales volume expected to be up approximately 10% sequentially and further growth expected in the Q2. The winter storm at the end of January impacted everyone's operations in the Permian. We lost approximately four days of production and deliveries. This temporary shutdown is expected to negatively impact Q1 EBITDA by approximately $6 million.

Speaker #4: Atlas Commercial team has positioned us well to grow volumes in 2026 , leading on our cost advantaged mines and logistics network . We were able to increase our share of current customer sand procurement spend , while also adding some key new customer relationships .

Speaker #4: We expect to grow in scale over the course of 2026 and beyond . The current oil macro environment remains quite opaque , so we don't have significant visibility into all of our customers full year plans .

Speaker #4: But our Q1 schedule is very busy with sales volume expected to be up approximately 10% sequentially and further growth expected in the second quarter .

Blake McCarthy: The winter storm at the end of January impacted everyone's operations in the Permian. We lost approximately four days of production and deliveries. This temporary shutdown is expected to negatively impact Q1 EBITDA by approximately $6 million. However, I'm proud to say Atlas was the last sand provider delivering in the Delaware before we had to shut down due to ice. The fact that was made possible by the Dune Express, removing so much road mileage and the related risks. Speaking of the Dune Express, it continues to run extremely well. 12 January marked the one-year anniversary of its first commercial delivery, and thanks to our partners, I'm proud to announce that we have eliminated more than 21 million miles of truck traffic in the Delaware Basin.

Speaker #4: The winter storm at the end of January impacted everyone's operations in the Permian , and we lost approximately four days of production and deliveries .

Speaker #4: This temporary shutdown is expected to negatively impact Q1 EBITDA by approximately 6 million . However , I'm proud to say Atlas was the last sand provider delivering in the Delaware before we had to shut down due to ice The fact that it was made possible by the Dune Express , removing so much road mileage and the related risks Speaking of the Dune Express , it continues to run extremely well .

Blake McCarthy: However, I'm proud to say Atlas was the last sand provider delivering in the Delaware before we had to shut down due to ice. The fact that was made possible by the Dune Express, removing so much road mileage and the related risks. Speaking of the Dune Express, it continues to run extremely well. 12 January marked the one-year anniversary of its first commercial delivery, and thanks to our partners, I'm proud to announce that we have eliminated more than 21 million miles of truck traffic in the Delaware Basin. We are very proud of the fact that the Dune Express is materially improving the quality of life and safety for families and the broader community in the region.

Speaker #4: January 12th marked the one year anniversary of its first commercial delivery , and thanks to our partners , I'm proud to announce that we have eliminated more than 21 million miles of truck traffic in the Delaware Basin .

Speaker #4: We are very proud of the fact that the Dune Express is materially improving the quality of life and safety for families and the broader community in in the region .

Blake McCarthy: We are very proud of the fact that the Dune Express is materially improving the quality of life and safety for families and the broader community in the region. The Dune Express achieved record shipments in the Q4 of approximately 2.1 million tons, including a monthly shipment record in November of 760,000 tons. For the Q1, we expect new customer wins and continued spot volumes to drive improvements in Dune Express volumes, and believe we are positioned to deliver north of 10 million tons via the Dune Express this year. We are grateful to our customers for partnering with us to make the Permian Basin a safer place to live and work. All that said, the obvious question is: if the Dune Express is working so well, why were Q4 service margins so weak?

Speaker #4: The Dune Express achieved record shipments in the fourth quarter of approximately 2.1 million tons , including a monthly shipment record in November of 760,000 tons .

Blake McCarthy: The Dune Express achieved record shipments in the Q4 of approximately 2.1 million tons, including a monthly shipment record in November of 760,000 tons. For the Q1, we expect new customer wins and continued spot volumes to drive improvements in Dune Express volumes, and believe we are positioned to deliver north of 10 million tons via the Dune Express this year. We are grateful to our customers for partnering with us to make the Permian Basin a safer place to live and work. All that said, the obvious question is: if the Dune Express is working so well, why were Q4 service margins so weak? While Q4 numbers were burdened by large load bonuses to ensure driver availability through the holidays, the real answer to that question is simply pricing.

Speaker #4: For the first quarter , we expect new customer wins and continue spot volumes to drive improvements in Dune Express volumes and positioned to deliver north of 10 million tons through the Dune Express this year .

Speaker #4: We are grateful to our customers for partnering with us to make the Permian Basin a safer place to live and work. All that said, the obvious question is, if the Express is working so well, why were Q4 service margins so weak?

Speaker #4: While Q4 numbers were burdened by large load bonuses to ensure driver availability through the holidays , the real answer to that question is simply pricing , logistics , pricing in the Permian has fallen to completely unsustainable levels , well below those seen during Covid .

Blake McCarthy: While Q4 numbers were burdened by large load bonuses to ensure driver availability through the holidays, the real answer to that question is simply pricing. Logistics pricing in the Permian has fallen to completely unsustainable levels, well below those seen during COVID. To compete with the Dune Express, we have seen increasingly irrational behavior from some of our logistics competitors, which we believe sets both them and their customers up for eventual problems and disruptions. We believe several companies are currently delivering sand at prices where they are effectively subsidizing their customers. The margin differential provided by the Dune Express is there. It's just partially insulating us from historically bad pricing. Encouragingly, we are seeing signs of this market beginning to break the other way.

Blake McCarthy: Logistics pricing in the Permian has fallen to completely unsustainable levels, well below those seen during COVID. To compete with the Dune Express, we have seen increasingly irrational behavior from some of our logistics competitors, which we believe sets both them and their customers up for eventual problems and disruptions. We believe several companies are currently delivering sand at prices where they are effectively subsidizing their customers. The margin differential provided by the Dune Express is there. It's just partially insulating us from historically bad pricing. Encouragingly, we are seeing signs of this market beginning to break the other way. Third-party trucking rates are beginning to see upward momentum, echoing what we're seeing in the broader over-the-road market. That is typically the first sign that trucking companies are tired of subsidizing their customers, and as a result, margins have to come up.

Speaker #4: To compete with the Dune Express , we have seen increasingly irrational behavior from some of our logistics competitors , which we believe sets both them and their customers up for eventual problems and disruptions We believe several companies are currently delivering standard prices where they are effectively subsidizing their customers .

Speaker #4: Thus, the margin differential by the Dune Express is there. It's just partially insulating us from historically bad pricing. Encouragingly, we are seeing signs of this market beginning to break the other way.

Speaker #4: Third party trucking rates are beginning to see upward momentum , echoing what we're seeing in the broader over the road market . That is typically the first sign that trucking companies are tired of subsidizing their customers .

Blake McCarthy: Third-party trucking rates are beginning to see upward momentum, echoing what we're seeing in the broader over-the-road market. That is typically the first sign that trucking companies are tired of subsidizing their customers, and as a result, margins have to come up. In November, Atlas introduced our first last-mile storage pile system to the market. While other pile systems in the market essentially use mining equipment that has been reapplied for the oil field, our system is built for purpose. Today, we have six systems in place to support our wet sand operations, with testing underway for deploying the system in dry sand operations. These systems are key to continuing our further enabling of our customers' continuous pumping initiatives, which are driving record sand consumption per completion group.

Speaker #4: And as a result , margins have to come up . In November , Atlas introduced our first last mile storage pile system to the market , while other pile systems in the market essentially use mining equipment that has been reapplied for the oil field .

Blake McCarthy: In November, Atlas introduced our first last-mile storage pile system to the market. While other pile systems in the market essentially use mining equipment that has been reapplied for the oil field, our system is built for purpose. Today, we have six systems in place to support our wet sand operations, with testing underway for deploying the system in dry sand operations. These systems are key to continuing our further enabling of our customers' continuous pumping initiatives, which are driving record sand consumption per completion group. While the market for sand and logistics in 2026 looks like it will remain challenging, we are looking to take advantage of the weaker market conditions to cement Atlas's position as the provider of choice. The pricing pendulum in our industry has swung too far for too long, and the pricing rubber band is certainly tight.

Speaker #4: Our system is built for purpose Today , we have systems in place to support our wet sand operations , with testing underway for deploying the system in dry sand operations .

Speaker #4: These systems are key to continuing our further enabling of our customers' continuous pumping initiatives, which are driving record sand consumption per completion.

Speaker #4: Crew . While the market for sand logistics in 2026 looks like it will remain challenging , we are looking to take advantage of the weaker market conditions to cement his position as the provider of choice .

Blake McCarthy: While the market for sand and logistics in 2026 looks like it will remain challenging, we are looking to take advantage of the weaker market conditions to cement Atlas's position as the provider of choice. The pricing pendulum in our industry has swung too far for too long, and the pricing rubber band is certainly tight. We're hearing more anecdotes of competitors struggling to fill customer obligations. I'll echo the comments from the large cap oil field services calls when I say that it's only going to take a very small increase in completions activity for pricing to move. This RFP season, we saw market share shift to the higher quality suppliers, with fewer volumes being spread among the lower quality mines. The supply-demand for sand in the Permian is much tighter than the market realizes, especially for dry sands.

Speaker #4: The pricing pendulum in our industry has swung too far for too long, and the pricing rubber band is certainly tight. We're hearing more anecdotes of competitors struggling to fulfill customer obligations and echo the comments from the large-cap oilfield services calls.

Blake McCarthy: We're hearing more anecdotes of competitors struggling to fill customer obligations. I'll echo the comments from the large cap oil field services calls when I say that it's only going to take a very small increase in completions activity for pricing to move. This RFP season, we saw market share shift to the higher quality suppliers, with fewer volumes being spread among the lower quality mines. The supply-demand for sand in the Permian is much tighter than the market realizes, especially for dry sands. On our last conference call, we set a cost savings target of $20 million in annualized savings. As it stands today, we have executed upon that target through a combination of the elimination of third-party last-mile equipment, reductions in rental equipment, headcount optimization, and procurement savings.

Speaker #4: When I say that it's only going to take a very small increase in completions activity for pricing to move this RFP season , we saw market share shift to the higher quality suppliers with fewer , fewer volumes being spread amongst the lower quality mines .

Speaker #4: The supply demand for sand and the Permian is much tighter than the market realizes , especially for dry sand . On our last conference call , we set a cost savings target of 20 million in annualized savings .

Blake McCarthy: On our last conference call, we set a cost savings target of $20 million in annualized savings. As it stands today, we have executed upon that target through a combination of the elimination of third-party last-mile equipment, reductions in rental equipment, headcount optimization, and procurement savings. Despite the early success of these efforts, we will continue to push for further cost optimization as we look to lower the fixed cost structure of our business across the organization. Moving to our financials. As John touched on earlier, Atlas recorded full year 2025 revenue of $1.1 billion. Total company adjusted EBITDA was $221.7 million, or 20% of revenue.

Speaker #4: As it stands today , we have executed upon that target through a combination of the elimination of third party last mile equipment , reductions in rental equipment headcount optimization , and procurement savings Despite the early success of these efforts , we will continue to push for further cost optimization as we look to lower the fixed cost structure of our business across the organization .

Blake McCarthy: Despite the early success of these efforts, we will continue to push for further cost optimization as we look to lower the fixed cost structure of our business across the organization. Moving to our financials. As John touched on earlier, Atlas recorded full year 2025 revenue of $1.1 billion. Total company adjusted EBITDA was $221.7 million, or 20% of revenue. Deconstructing full year revenues, proppant sales totaled $478 million on volumes of 21.6 million tons, while logistics and power contributed $558.8 million and $58.5 million, respectively.

Speaker #4: Moving to our financials , as John touched on earlier , Atlas recorded full year 2020 revenue of 1.1 billion . Total company adjusted EBITDA was 221.7 million , or 20% of revenue .

Speaker #4: Deconstructing full year revenues . Profit . Sales totaled 478 million on volumes of 21.6 million tons , while logistics and power contributed 558.8 million and 58.5 million , respectively Fourth quarter 2025 revenue of 249.4 million broke down to the following profit sales totaled 105.2 million .

Blake McCarthy: Deconstructing full year revenues, proppant sales totaled $478 million on volumes of 21.6 million tons, while logistics and power contributed $558.8 million and $58.5 million, respectively. Q4 2025 revenue of $249.4 million broke down to the following: Proppant sales totaled $105.2 million, logistics contributed $126.1 million, and power rentals added $18.1 million. Total proppant sales volume was slightly up sequentially to 5.3 million tons, while our logistics business delivered approximately 4.9 million tons. Our average sales price for Q4 was approximately $19.85 per ton. For Q1, we expect volumes to be up approximately 10% sequentially, with the average sales price of sand to be approximately $18 per ton.

Blake McCarthy: Q4 2025 revenue of $249.4 million broke down to the following: Proppant sales totaled $105.2 million, logistics contributed $126.1 million, and power rentals added $18.1 million. Total proppant sales volume was slightly up sequentially to 5.3 million tons, while our logistics business delivered approximately 4.9 million tons. Our average sales price for Q4 was approximately $19.85 per ton. For Q1, we expect volumes to be up approximately 10% sequentially, with the average sales price of sand to be approximately $18 per ton.

Speaker #4: Logistics 126.1 million , and power rentals added 18.1 million . Total profit . Sales volume was slightly up sequentially to 5.3 million tons , while logistics business delivered approximately 4.9 million tons .

Speaker #4: Our average sales price for the fourth quarter was approximately $19.85 per ton . For the first quarter , we expect volumes to be up approximately 10% sequentially , with the average sales price of sand to be approximately $18 per ton Q4 cost of sales , excluding DNA , were 187.3 million , consisting of 60.6 million in plant operating costs , 115.2 million of service costs , 7 million in rental costs and 4.5 million in royalties .

Blake McCarthy: Q4 cost of sales, excluding DD&A, were $187.3 million, consisting of $60.6 million in plant operating costs, $115.2 million in service costs, $7 million in rental costs, and $4.5 million in royalties. For Q4, our per ton plant operating costs were approximately $12.28, including royalties, down sequentially from Q3, but still elevated versus our normalized levels. Higher volumes and a reduction in extraneous costs at the plants for Q3 levels drove the lower plant operating costs. For Q1, we expect our OpEx per ton to be approximately in line with the levels in Q4, reflecting the impact of the severe weather in January.

Speaker #4: For the fourth quarter , our per ton plant operating costs were approximately $12.28 , including royalties , down sequentially from the third quarter , but still elevated versus our normalized levels .

Speaker #4: Higher volumes , and a reduction in extraneous costs of the plants from Q3 levels drove the lower plant operating costs for the first quarter .

Speaker #4: We expect our OpEx per ton to be approximately in line with the levels in the fourth quarter, reflecting the impact of the severe weather in January.

Speaker #4: Over the course of 2026, we expect to see improvements in our realized variable costs as the new dredges are commissioned at our Kermit facility. Cash for the quarter was $22.6 million, excluding litigation expenses, which are expected to decline in the first quarter due to our previously announced cost-cutting initiatives.

Blake McCarthy: Over the course of 2026, we expect to see improvements in our realized variable costs as the new dredges are commissioned at our current facility. Cash SG&A for the quarter was $22.6 million. SG&A, excluding litigation expenses, is expected to decline in Q1 due to our previously announced cost-cutting initiatives. Adjusted free cash flow, which we define as adjusted EBITDA less maintenance CapEx, was $22.9 million, or 9% of revenue. Growth CapEx equated to $5.1 million, the majority of which was tied to our power segment, and maintenance CapEx during the quarter was $14.4 million. The elevated maintenance CapEx spend was primarily tied to preparations related to the dredging and wet plant operations at Kermit ahead of the Twinkle dredge deliveries.

Speaker #4: Adjusted free cash flow , which we define as adjusted EBITDA , less maintenance CapEx , was 22.9 million , or 9% of revenue growth .

Speaker #4: CapEx equated to 5.1 million . The majority of which was tied to our power segment and maintenance CapEx during the quarter was 14.4 million .

Speaker #4: The elevated maintenance CapEx spend was primarily tied to preparations related to the dredging and wet plant operations at Kermit . Ahead of the dredge deliveries .

Speaker #4: We expect cash , capital spending in 2026 to be approximately 55 million , down significantly year over year and heavily weighted to the first half .

Blake McCarthy: We expect cash capital spending in 2026 to be approximately $55 million, down significantly year-over-year and heavily weighted to the first half. Maintenance CapEx of approximately $45 million is planned, with approximately $10 million dedicated to growth, evenly split between sand and logistics and power. Additionally, we expect to make progress payments on the 240 megawatts of power assets we have on order as they begin to be delivered over the course of the second half of the year. These payments will be financed from our recently announced lease facility with Eldridge and are expected to total approximately $190 million over the course of the second half of the year.

Speaker #4: Maintenance CapEx of approximately 45 million is planned with approximately 10 million dedicated to growth evenly split between sand and logistics and power Additionally , we expect to make progress payments on the 240MW of power assets we have on order as they begin to be delivered over the course of the second half of the year .

Speaker #4: These payments will be financed from our recently announced lease facility with Eldridge and are expected to total approximately $190 million over the course of the second half of the year.

Speaker #4: Net interest expense is expected to be approximately 16.5 million per quarter in the first and second quarters , rising to approximately 20.5 million in the third quarter and 22 million in the fourth quarter .

Blake McCarthy: Net interest expense is expected to be approximately $16.5 million per quarter in Q1 and Q2, rising to approximately $20.5 million in Q3 and $22 million in Q4. As John also touched on in his remarks, our plants have begun the year quite busy. With WTI prices hovering around 60, oil prices will dictate if we continue to keep this pace up. We have a clear line of sight on strong volumes for the first half of this year, but many of our customers are taking a wait-and-see approach with respect to their second half completion schedules. Our recent market share gains are a testament to Atlas's efforts to position ourselves as the reliable partner of choice to the best operators in the Permian Basin.

Speaker #4: As John also touched on in his remarks, our plans have begun the year quite busy with WTI prices hovering around $60. Oil prices will dictate if we continue to keep this pace up.

Speaker #4: We have a clear line of sight on strong volumes for the first half of this year , but many of our customers are taking a wait and see approach with respect to their second half completion schedules .

Speaker #4: Our recent market share gains are a testament to Atlas's efforts to position ourselves as the reliable partner of choice to the best operators in the Permian Basin.

Speaker #4: For the first quarter , while volumes are expected to be up sequentially , the expected decline in sales price per ton , combined with the loss of revenue due to the winter storm , will be a headwind to margins Additionally , our logistics business was burdened by load bonuses to ensure driver availability .

Blake McCarthy: For Q1, while volumes are expected to be up sequentially, the expected decline in sales price per ton, combined with the lost days of revenue due to the winter storm, will be a headwind to margins. Additionally, our logistics business was burdened by load bonuses to ensure driver availability around the turn of the calendar, which will mute logistics margins improvement until later in the quarter. We are seeing a return to more normal cost structure as the quarter progresses, which, combined with a growing delivery schedule, will yield an improved margin structure through the quarter. Additionally, the power business is expected to generate a greater contribution sequentially. We expect EBITDA to be approximately flat with Q4 levels, with the company exiting the quarter at a higher run rate in March versus January.

Speaker #4: Around the turn of the calendar , which will mute logistics margins improvement until later in the quarter . However , we are seeing a return to more normal cost structure as the quarter progresses , which , combined with with a growing delivery schedule , will yield improved margin structure through the quarter Additionally , the power business is expected to generate a greater contribution sequentially Thus , we expect EBITDA to be approximately flat with Q4 levels , with the company exiting the quarter at a higher run rate in March versus January .

Speaker #4: I will now hand the call over to our executive Chairman , Bud Brigham , for some closing remarks . Before we turn the call over for some Q&A .

Blake McCarthy: I will now hand the call over to our Executive Chairman, Bud Brigham, for some closing remarks before we turn the call over for some Q&A.

Speaker #5: Thanks , Blake While we're navigating another cyclical trough in oil prices , the future for Atlas has never been brighter . Just as we were ideally positioned for the post-Covid Permian recovery , which substantially expanded our cash flows .

Bud Brigham: Thanks, Blake. While we're navigating another cyclical trough in oil prices, the future for Atlas has never been brighter. Just as we were ideally positioned for the post-COVID Permian recovery, which substantially expanded our cash flows, we're primed for the inevitable rebound in oil and gas activity today. In addition, as I stated on our last call, we're going hybrid. Today, Atlas is laying the groundwork for transformative long-term growth through behind-the-meter power contracts. These 5 to 15-year agreements are expected to deliver robust revenue visibility, paired with predictable costs, including fixed and stable expenses for SG&A, maintenance, and interest, complementing our powerful but more volatile oil and gas revenue streams. Our proven expertise in large-scale infrastructure, amplified by the Moser acquisition, uniquely equips us to power the surge in AI, robotics, and manufacturing.

Speaker #5: We're primed for the inevitable rebound in oil and gas activity today , but in addition , as I stated on our last call , we're going .

Speaker #5: Hybrid today . Atlas is laying the groundwork for transformative long term growth through behind the meter power contracts These 5 to 15 year agreements are expected to deliver robust revenue visibility , paired with predictable costs , including fixed and stable expenses for energy and a maintenance and interest complementing our powerful but more volatile oil and gas revenue streams .

Bud Brigham: Our proven expertise in large-scale infrastructure, amplified by the Moser acquisition, uniquely equips us to power the surge in AI, robotics, and manufacturing. We see these initial permanent power projects as a strategic springboard, drawing in more customers and building a portfolio of assets that generate steady, recurring cash flows. As discussed by John, demand for behind-the-meter power is accelerating rapidly, fueled by rising costs and potential grid shortfalls that are pushing commercial, industrial, and data center users towards swift commitments for bridge and permanent solutions. We're witnessing a seismic shift in power sourcing. To borrow from our partners at Bloom Energy, on-site power has evolved from a last resort to a business necessity. US power demand is growing at its fastest rate in decades.

Speaker #5: Our proven expertise in large scale infrastructure , amplified by the Moser acquisition , uniquely equips us to power the surge in AI , robotics and manufacturing .

Speaker #5: We see these initial permanent power projects as a strategic springboard , drawing in more customers and building a portfolio of assets that generate steady , recurring cash flows .

Bud Brigham: We see these initial permanent power projects as a strategic springboard, drawing in more customers and building a portfolio of assets that generate steady, recurring cash flows. As discussed by John, demand for behind-the-meter power is accelerating rapidly, fueled by rising costs and potential grid shortfalls that are pushing commercial, industrial, and data center users towards swift commitments for bridge and permanent solutions. We're witnessing a seismic shift in power sourcing. To borrow from our partners at Bloom Energy, on-site power has evolved from a last resort to a business necessity. US power demand is growing at its fastest rate in decades. Let me emphasize, the Atlas investment story is more exciting than ever. Chronic underinvestment in e- exploration spending, coupled with shale's maturation and steep decline rates, sets the stage for what I believe will be a prolonged upcycle.

Speaker #5: As discussed by John . Demand for Behind the meter power is accelerating rapidly , fueled by rising costs and potential grid shortfalls that are pushing commercial and and data center users towards swift commitments for bridge and permanent solutions We're witnessing a seismic shift in power sourcing to borrow from our partners at Bloom Energy , on site power has evolved from a last resort to a business necessity .

Speaker #5: US power demand is growing at its fastest rate in decades. Let me emphasize the Atlas investment story is more exciting than ever.

Bud Brigham: Let me emphasize, the Atlas investment story is more exciting than ever. Chronic underinvestment in e- exploration spending, coupled with shale's maturation and steep decline rates, sets the stage for what I believe will be a prolonged upcycle. While most US shale basins struggle with inventory depletion, the Permian, where Atlas leads in proppant production and logistics, will be key to meeting rising oil demand. Even at today's cyclical lows in sand and logistics pricing, our low-cost model shines through, thanks to the Dune Express and efficient mining operations. When activity rebounds, and it's a question of when, not if, we anticipate stronger utilization, pricing, and margins, sparking a sharp profitability upturn.

Speaker #5: Chronic underinvestment in exploration spending , coupled with Shell's maturation and steep decline rates , sets the stage for what I believe will be a prolonged upcycle .

Speaker #5: While most US shale basins struggle with inventory depletion , the Permian , where Atlas leads in profit production and logistics will be key to meeting rising oil demand even at today's cyclical lows in sand and logistics pricing are low cost model shines through thanks to the Dune Express and efficient mining operations When activity rebounds and it's a question of when , not if , we anticipate stronger utilization , pricing and margins , sparking a sharp profitability upturn by investing ahead of this oil upcycle .

Bud Brigham: While most US shale basins struggle with inventory depletion, the Permian, where Atlas leads in proppant production and logistics, will be key to meeting rising oil demand. Even at today's cyclical lows in sand and logistics pricing, our low-cost model shines through, thanks to the Dune Express and efficient mining operations. When activity rebounds, and it's a question of when, not if, we anticipate stronger utilization, pricing, and margins, sparking a sharp profitability upturn. By investing ahead of this oil upcycle, while we are also launching our high-potential power business, Atlas offers investors dual catalysts for substantial growth. I'm deeply grateful to our exceptional team, the true innovators fueling our advancements. Their dedication has me more optimistic than ever about Atlas's future. Thank you for joining our Q4 and year-end conference call. I'll now hand it over to the operator for Q&A.

Bud Brigham: By investing ahead of this oil upcycle, while we are also launching our high-potential power business, Atlas offers investors dual catalysts for substantial growth. I'm deeply grateful to our exceptional team, the true innovators fueling our advancements. Their dedication has me more optimistic than ever about Atlas's future. Thank you for joining our Q4 and year-end conference call. I'll now hand it over to the operator for Q&A.

Speaker #5: While we are also launching our high potential power business , Atlas offers investors dual catalysts for substantial growth . I'm deeply grateful to our exceptional team , the true innovators fueling our advancements .

Speaker #5: Their dedication has me more optimistic than ever about Atlas future . Thank you for joining our fourth quarter and year end conference call .

Speaker #5: I'll now hand it over to the operator for Q&A.

Speaker #1: Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad.

Operator: Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Again, that's star one to register a question at this time. Our first question is coming from Jim Wilson of Raymond James. Please go ahead.

Speaker #1: At this time . A confirmation tone will indicate that your line is in the question queue . You may press star two . If you would like to remove your question from the queue for participants using speaker equipment , it may be necessary to pick up the handset before pressing the star key's again .

Speaker #1: That's star one to register a question at this time Our first question is coming from Jim Rollison of Raymond James . Please go ahead .

Speaker #6: Hey, good morning everyone. John, you talked a bit about the power side. Obviously, a quarter ago you ordered the 240 MW.

Jim Wilson: Hey, good morning, everyone. John, you talked a bit about the power side. Obviously, a quarter ago, you ordered the 240 megawatts. I'm pretty sure you mentioned then you had line of sight on customer opportunities there. You've since secured financing, which I presume doesn't happen without similar line of sight. Maybe just an update on kind of what's taken a little while on getting that contracted, and, you know, do you have good line of sight on where that equipment's actually going at this point, since we're less than a year out from its deployment?

Jim Rollyson: Hey, good morning, everyone. John, you talked a bit about the power side. Obviously, a quarter ago, you ordered the 240 megawatts. I'm pretty sure you mentioned then you had line of sight on customer opportunities there. You've since secured financing, which I presume doesn't happen without similar line of sight. Maybe just an update on kind of what's taken a little while on getting that contracted, and, you know, do you have good line of sight on where that equipment's actually going at this point, since we're less than a year out from its deployment?

Speaker #6: I'm pretty sure you mentioned . Then you had line of sight on customer opportunities there . You've since secured financing , which I presume doesn't happen .

Speaker #6: Without similar line of sight . So maybe just an update on kind of what's taken a little while on getting that contracted . And do you have good line of sight on where that equipment is actually going at this point , since we're less than a year out from from its deployment

Speaker #3: Yeah , great . Great question Jim . Thanks for thanks for asking . Yeah , we do have strong visibility into the customers that are expected to take substantial majority of this equipment package , which is on track for delivery .

John Turner: Yeah, great question, Jim. Thanks for asking. Yeah, we do have strong visibility into the customers that are expected to take, you know, the substantial majority of this equipment package, which is on track for delivery. I think deliveries, they begin in late 2026. You know, these are high-quality, creditworthy counterparties that are across diversified markets and have indicated meaningful follow-on requirements beyond their initial commitment, providing for clear pathways for additional equipment orders and sustained growth into the future. You know, our strategies still remain solely focused on behind the meter power solutions, but we're not pursuing grid interconnected or utility scale opportunities. Instead, we are delivering reliable on-site power directly to customers facing grid constraints.

Speaker #3: I think deliveries they began at the in late 2026 or you know , these are high quality creditworthy counterparties that are across diversified markets and have indicated meaningful follow on requirements beyond their initial commitment , providing for a clear pathways for additional equipment orders and and sustained growth into the future .

Speaker #3: You know , our our strategy still remain or remain solely focused on behind the meter power solutions . And we're not pursuing grid interconnected or utility scale opportunities , said .

Speaker #3: We are delivering reliable on site power directly to customers facing grid constraints . In many cases , these engagements begin with bridge power to address immediate needs , which generate significant near-term cash flow and accelerates our path to full development .

John Turner: You know, in many cases, these engagements begin with bridge power to address immediate needs, which generates significant near-term cash flow and accelerates our path to full development. You know, these bridge arrangements quickly transition into long-term, behind-the-meter agreements that we primarily are working on as customers recognize the prolonged grid timelines and value of our integrated approach. You know, yes, the answer to that is yes, we do have clear line of sight on who those customers are and, you know, expect to be, you know, reporting on that here shortly.

Speaker #3: These bridge arrangements quickly transitioned into long term behind the meter agreements that we primarily are working on as customers recognize a prolonged grid timelines and value of our integrated approach .

Speaker #3: So , you know , yes , the answer to that is yes , we do have clear line of sight onto those customers .

Speaker #3: Are , you know , expect to be , you know , reporting on that here shortly

Speaker #6: Appreciate that . And maybe as a follow up , this kind of related here is I've watched this market evolve in different players kind of approach this in different ways .

Jim Wilson: Appreciate that. Maybe as a follow-up, that's kind of related here, is I've watched this market evolve and different players kind of approach this in different ways. It seems like there's two strategies I've seen, one being guys that are just providing power equipment, basically, on a rental basis, and then the second being guys that are providing the entire solution, all the, you know, balance of plants, et cetera. I'm kind of curious if you could elaborate on kind of which strategy fits yours and how you see the return opportunity there.

Jim Rollyson: Appreciate that. Maybe as a follow-up, that's kind of related here, is I've watched this market evolve and different players kind of approach this in different ways. It seems like there's two strategies I've seen, one being guys that are just providing power equipment, basically, on a rental basis, and then the second being guys that are providing the entire solution, all the, you know, balance of plants, et cetera. I'm kind of curious if you could elaborate on kind of which strategy fits yours and how you see the return opportunity there.

Speaker #6: It seems like there's two strategies I've seen one being guys that are just providing power equipment . Basically on a rental basis , and then the second being guys that are providing the entire solution , all the , you know , balance of plant , etc.

Speaker #6: I'm kind of curious if you could elaborate on which strategy fits yours, and how you see the return opportunity there.

Speaker #3: Yeah . Go ahead . I'm going to let Blake . Blake answer .

John Turner: Yeah, go ahead. I'm going to let Blake want to answer.

Speaker #4: That . We got Tim Ondrak , our leader of power business . Who can obviously talk more intelligently about it as well . But it's a really good question .

Blake McCarthy: Yeah, we have Tim Ondrak, our leader of the power business, who could obviously talk more intelligently about it as well. Yeah, it's a really good question, Jim. Like, you know, there's obviously the equipment, and that's what I think most people in the market have a, you know, much clearer line of sight of, okay, it costs X, and, you know, therefore, you rent for Y, and you have return. When you get into these behind-the-meter solutions, right? Depending on the function, like, the function of the facility, there's different requirements for the balance of plant, different future mount equipment that you need.

Speaker #4: Jim . Like , you know , there's there's obviously the equipment and that's what I think most people in the market have a much clearer line of sight .

Speaker #4: Okay . It cost X and you know , they're therefore you rent for Y and you have return . But when you get into these behind the meter solutions right .

Speaker #4: Depending on the function like the function of the facility , there's different balance of plant , different equipment that , that you need .

Speaker #4: And so that can change that . You dollar per megawatt provided both on the front end . And then what . Therefore what you have to charge , you know , our strategy has been like , let's get in .

Blake McCarthy: That can change that, you know, $ per megawatt provided, both on the front end and then what therefore, what you have to charge. You know, our strategy has been like, let's get in really early with some of these customers that we know they're making big investments in facilities, and, you know, they're facing, the grid has indicated to them, like, Hey, you're not getting on for what you require. Really get to understand what they're trying to accomplish within their activities. You know, do a lot of front-end engineering to really meet their needs. That can have a pretty broad range in terms of, you know, what, like, 1, what our facility costs, and 2, that what we have to charge them.

Speaker #4: Really early with some of these customers that we know that are making big investments in facilities . And , you know , they're facing , you know , they've been the grid has indicated them like , hey , you're not getting on for what you require , really get to understand what they're trying to accomplish within their within their , their activities .

Speaker #4: And , you know , do a lot of front end , front end engineering to really meet their needs . And that can that can have a pretty broad range in terms of , you know , what ?

Speaker #4: Like one what our facility costs and two , that what we have to charge them because we're always going to be targeting , you know , a strong unlevered return on our capital deployed .

Blake McCarthy: We're always going to be targeting, you know, a strong unlevered return on our capital deployed. Obviously, when it comes to return on equity, with the leverage you use on these, it gets pretty attractive. You know, thinking about, like, these first ones, there's going to be a pretty broad range, and that's why we're excited to share the economics on things. We'll be very transparent about that as we consummate deals.

Speaker #4: And obviously when it comes to return on equity , with the leverage you use on these , that gets pretty , pretty attractive .

Speaker #4: So , you know , thinking about like these , these first ones , there's going to be a pretty broad range . And that's why we're excited to share the economics on things .

Speaker #4: And we'll be very transparent about that as as we consummate deals .

Speaker #3: And I also think that it is it is the reason why it's taken a little longer to sign another comment on why it's taken so long to sign these agreements .

Tim Ondrak: I also think that it is the reason why it's taken a little longer to sign. Another comment about why it's taken so long to sign these agreements is that, you know, these just aren't generator rental agreements. These are actually, you know, you have to go in and do planning, engineering, you know, you have to do, you have to line up all the, you know, the equipment. There's a lot of different things that you have to do on that front. I think that's why it's taken longer than signing a generator rental agreement.

Speaker #3: Is that , you know , these just aren't generator rental agreements . These are actually , you know , you have to go in and do planning , engineering .

Speaker #3: You know , you have to do you have to line up all the equipment you have to do . There's a lot of different things that you have to do on that front .

Speaker #3: So I think that's why it's taking longer than time to generate . But it .

Blake McCarthy: It also makes those facilities much stickier.

Speaker #4: Also makes those facilities much stickier because it's fit for purpose . Yeah . And I think just to to kind of close out , I think , you know , our , our strategy is bridge to permanent .

Tim Ondrak: Exactly.

Blake McCarthy: because it's fit for purpose.

Tim Ondrak: Yeah, I think, you know, just to kind of close out, I think, you know, our strategy is bridge to permanent. When we look at the thesis that really drives that, you know, we view power as a structural need. You know, depending on the utility region and where, you know, folks are building out their facilities, those delays can be, you know, 2028 all the way up to, I think we've heard 2034 from some people. You know, when a customer looks at what their power need is, you know, as they start their facilities, it can be substantially less than their growth intentions.

Speaker #4: And when we look at the thesis that that really drives that , you know , we view power as a structural need . And so , you know , depending on the , the utility region and where , you know , folks are building out their facilities , those delays can be , you know , 20 , 28 all the way up to , I think we've heard 2034 from some , some people .

Speaker #4: And so , you know , when a customer looks at what their power need is , you know , as they as they start their facilities , it can be substantially less than , than their growth intentions .

Speaker #4: And so the model that that we have to execute on that is to provide mobile power generation into a permanent facility that meets that long term need .

Tim Ondrak: The model that we have to execute on that is to provide mobile power generation into a permanent facility that meets that long-term need and gets the customer to a place where they don't need to worry about a utility timeline, and they can worry about operating their business.

Speaker #4: And gets the customer to a place where they don't need to worry about a utility timeline , and they can worry about operating their business

Speaker #6: Makes perfect sense , guys . Appreciate the color . I'll see you next week .

John Daniel: Makes perfect sense, guys. Appreciate the color. See you next week.

Speaker #7: Thanks , Jim .

Blake McCarthy: Thanks, Jim.

Speaker #1: Thank you. The next question is coming from Derek Podhaizer of Piper Sandler. Please go ahead.

Operator: Thank you. The next question is coming from Derek Podhaizer of Piper Sandler. Please go ahead.

Speaker #4: Hey , good morning guys . Want to keep going on the economics question . So obviously there's some numbers out there . We talk about , you know , plus or -$300,000 for megawatt per year of EBITDA .

Derek Podhaizer: Hey, good morning, guys. Maybe want to keep going on the economics question. Obviously, there's some numbers out there. We talk about, you know, ±$300,000 per megawatt per year of EBITDA. You know, kind of compare that to your current financing costs. Maybe just help us understand, you know, when you talk about the recips, building the facility, the balance of plan included in there, you know, how should we think about the economics and the earnings of these potential projects that you're working on? Just maybe a little bit of help around that as far as some of the numbers that we're hearing out in the market.

Speaker #4: You know , kind of compare that to your current financing costs . Maybe just help us understand when you talk about the reserves building the facility , the balance of plant included in there , how should we think about the economics and the earnings of these potential projects that you're working on , just maybe a little bit of help around that ?

Speaker #4: As far as some of the numbers that we're hearing out in the market .

Speaker #3: Yeah , I'll start off . And Blake , Blake can can he can he can follow up . I mean , economics obviously , like we said earlier , depend on a number of factors .

Tim Ondrak: Yeah, I'll start off, Blake, you know, Blake can he can follow up. I mean, economics, obviously, like we said earlier, depend on a number of factors. If you talk about, you know, balance of plant, facility development, you know, those are common in our turnkey behind-the-meter solutions. Obviously, balance that with the initial contract term. You know, what we focused on, you know, longer-term contract structure for stability. You know, our goal is attractive internal rates of return, well above our cost of capital on the initial term, with upside from extensions and expansions. Do you want to add to that?

John Turner: Yeah, I'll start off, Blake, you know, Blake can he can follow up. I mean, economics, obviously, like we said earlier, depend on a number of factors. If you talk about, you know, balance of plant, facility development, you know, those are common in our turnkey behind-the-meter solutions. Obviously, balance that with the initial contract term. You know, what we focused on, you know, longer-term contract structure for stability. You know, our goal is attractive internal rates of return, well above our cost of capital on the initial term, with upside from extensions and expansions. Do you want to add to that?

Speaker #3: If you talk about balance of plant facility development , you know , those are common in our turnkey behind the meter solutions . And then obviously balance that with the initial contract term .

Speaker #3: You know what we focused on longer term contract structure for stability . You know our goal is is attractive internal rates of return well above our cost of capital on the initial term with upside from extensions and expansions .

Speaker #3: You want to add to that ?

Speaker #7: Yeah . Derrick , kudos to you . I'm really glad you asked this question . So , you know , I think it's a great question because I know people want to have some type of metric to plug into their estimates .

Blake McCarthy: Yeah. Derek, kudos to you. I'm really glad you asked this question. You know, I think it's a great question because I know people want to have some type of metric to plug in their estimates. John's comment on IRR is probably the best way to backdoor to that. For these projects, you know, we're targeting unlevered IRR in the high teens, which we find very attractive considering the contracted nature of these cash flows. When you layer on any type of leverage on top of those cash flows, the returns on equity, as I mentioned, get very attractive. Plus, you know, I, from a long-term perspective, you know, I think that, people talk about that, you know, $300 per megawatt.

Speaker #7: John's comment on IRR is probably the best way to get back to that. So for these projects, you know, we're targeting unlevered IRR in the high teens, which we find very attractive considering the contract and nature of these cash flows.

Speaker #7: So when you layer on any type of leverage on top of those cash flows , the returns on equity , as I mentioned , get very attractive .

Speaker #7: Thus , like , you know , from a long term perspective , you know , I think that that , you know , people talk about that like $300 per megawatt .

Speaker #7: That's probably a good proxy for just equipment alone. But it's a little too simple when it comes to, like, when you're actually doing these bespoke power facilities.

Blake McCarthy: That's probably a good proxy for just equipment alone, but it's a little too simple when it comes to, like, you're actually doing these bespoke power facilities. I think that, you know, using that IRR and, you know, hey, we, you know, disclose kind of the, obviously, the magnitude of our facility has been disclosed. I think that's a good way to kind of backdoor into getting there. You should be able to use that in the cost of equipment. You get a decent proxy for cash flows that we expect off these projects.

Speaker #7: So I think that using that IRR and , you know , hey , we disclose kind of the , the obviously the magnitude of our facility has been disclosed .

Speaker #7: I think that's a good way to kind of backdoor into getting there . You should be able to use that in the cost of equipment .

Speaker #7: You get to a decent proxy for cash flows that we expect on these projects

Derek Podhaizer: Got it. Okay, great. That's super helpful. Just my follow-up as far as question around lead times for your additional equipment. You talked about going, you know, 400 to 500 megawatts of deployed capacity. Is this going to be a continuation of the 240 megawatts, those larger 4-megawatt recips that you recently ordered? If so, how should we think about when you'd be able to get those deliveries and the lead times around that? Really beyond the potential of 500 megawatts, maybe line of sight of the future orders beyond the 500?

Speaker #4: Okay , great . That's super helpful . And then just my follow up , as far as question around lead times for your additional equipment , you talked about going , 400 to 500MW of deployed capacity .

Speaker #4: Is this going to be a continuation of the 240MW those larger four megawatt recipes that you recently ordered ? And if so , how should we think about when you'd be able to get those deliveries in the lead times around that and then really beyond the potential of 500MW , maybe line of sight on the future orders beyond the 500 .

Speaker #3: Yeah . I mean , I thanks , Eric . I'll take that question . If anybody but Tim , if you want to chime in on this , I mean , you know , our relationships with the key OEMs and our differentiated track record of execution on large scale infrastructure projects continued .

Company Representative: Yeah, I mean, thanks, Derek. I'll take that question if anybody, but Tim, if you want to chime in on this. I mean, you know, our relationships with the key OEMs and our differentiated track record of execution on large-scale infrastructure projects, those continue to be major advantages, you know, which enabled us to initially secure the 240 MW at the, you know, four-megawatt reciprocating units that are going to be delivered for later in 2026. Also gave us and also enable us to maintain a solid line of sight and, you know, to additional equipment for high-quality opportunities and, you know, more than 2-gigawatt pipeline that we're talking about.

John Turner: Yeah, I mean, thanks, Derek. I'll take that question if anybody, but Tim, if you want to chime in on this. I mean, you know, our relationships with the key OEMs and our differentiated track record of execution on large-scale infrastructure projects, those continue to be major advantages, you know, which enabled us to initially secure the 240 MW at the, you know, four-megawatt reciprocating units that are going to be delivered for later in 2026. Also gave us and also enable us to maintain a solid line of sight and, you know, to additional equipment for high-quality opportunities and, you know, more than 2-gigawatt pipeline that we're talking about.

Speaker #3: Those continue to be major advantages , you know , which enabled us to initially secure the 240MW of the , you know , for four megawatt reciprocating units that are going to be delivered for later in 2026 .

Speaker #3: And also gave us an also enable us to maintain a solid line of sight to additional equipment for high quality opportunities and in more , the two gigawatt pipeline that we're talking about , you know , these relationships are built on trust scale in early positioning .

Company Representative: You know, these relationships are built on trust, scale, and early positioning, you know, have given us access to redirected capacity from delayed projects elsewhere in the industry. You know, lead times for additional 4-megawatt recips are now extended into late 2027, which reflects the strong industry-wide demand for behind the meter generation equipment. You know, that said, you know, our recent $375 million lease facility provides flexible, non-dilutive support tailored to our needs, allowing milestone payments during the factory conversion into term finance upon delivery. This has been instrumental in funding our initial 240-megawatt commitment and positions us well for near-term deployments as we move towards our target of 500 megawatts by 2027. You know, with the majority of that under long-term contract.

John Turner: You know, these relationships are built on trust, scale, and early positioning, you know, have given us access to redirected capacity from delayed projects elsewhere in the industry. You know, lead times for additional 4-megawatt recips are now extended into late 2027, which reflects the strong industry-wide demand for behind the meter generation equipment. You know, that said, you know, our recent $375 million lease facility provides flexible, non-dilutive support tailored to our needs, allowing milestone payments during the factory conversion into term finance upon delivery. This has been instrumental in funding our initial 240-megawatt commitment and positions us well for near-term deployments as we move towards our target of 500 megawatts by 2027. You know, with the majority of that under long-term contract.

Speaker #3: You know , have given us access to redirected capacity from delayed projects elsewhere in the industry . So , you know , lead times for additional four megawatt resets are now extending into late 2027 , which reflects the strong industry wide demand for behind the meter generation equipment .

Speaker #3: You know , that said , you know , our recent $375 million lease facility provides flexible non-dilutive support tailored to our needs , allowing milestone payments during the conversion into term finance .

Speaker #3: Upon delivery, you know, that this has been instrumental in funding our initial 240-megawatt commitment and positions us well for near-term deployments as we move towards our target of 500 MW by 2027.

Speaker #3: So , you know , with the majority of that under long term contract , you know , as far as 2020 , beyond 2027 , particularly as we pursue larger , denser , you know , behind the meter opportunities across , you know , diversified end markets , you know , we anticipate needing additional financing , support for equipment orders .

Company Representative: You know, as far as beyond 2027, particularly as we pursue larger, denser, you know, behind-the-meter opportunities across, you know, diversified end markets. You know, we anticipate needing additional financing support for other equipment orders. We've actively evaluated options that align our disciplined capital approach, leveraging our, you know, our proven track record with, you know, financing strong cash flow generation from bridge to permanent transitions. You know, I think that as far as additional equipment packages, I mean, yeah, right now, the package that we've acquired is these 4-megawatt recips. I mean, there could be other potential opportunities out there, and I'll let Tim, you know, comment more on that.

John Turner: You know, as far as beyond 2027, particularly as we pursue larger, denser, you know, behind-the-meter opportunities across, you know, diversified end markets. You know, we anticipate needing additional financing support for other equipment orders. We've actively evaluated options that align our disciplined capital approach, leveraging our, you know, our proven track record with, you know, financing strong cash flow generation from bridge to permanent transitions. You know, I think that as far as additional equipment packages, I mean, yeah, right now, the package that we've acquired is these 4-megawatt recips. I mean, there could be other potential opportunities out there, and I'll let Tim, you know, comment more on that.

Speaker #3: We've actively evaluated options that align our disciplined capital approach, leveraging our proven track record with financing and strong cash flow generation from bridge to permanent transitions.

Speaker #3: You know , I think that as far as additional equipment packages , I mean , yeah , right now this package that we've that we've acquired is these four megawatt recipes .

Speaker #3: I mean , there could be other potential opportunities out there . And I'll let Tim comment more on that . Yeah . So Derek , I think there's you know , there's equipment available .

Tim Ondrak: Derek, I think there's, you know, there's equipment available. I think if you look at global capacity, a lot of it has been backlogged. I think there's been a lot of announcements, you know, publicly to kind of back into what may be left. We really see two pools of equipment that come available. The first pool is, you know, where you have to be in the market, you have to be talking to people and, you know, orders cancel or portions of orders cancel or get delayed, and so there's, you know, equipment that comes to market. I think there's a second where, you know, OEMs are doing the same thing that we're doing, where they're, you know, out building relationships with the groups that are putting these in place.

Speaker #3: Yeah . I think if you look at global capacity , a lot of it has been been backlogged . I think there's been a lot of announcements You know , publicly to kind of back into what may be left .

Speaker #3: So we really see two pools of equipment that come available . The first first pool is , you know , where you have to be in the market .

Speaker #3: You have to be talking to people and , you know , orders cancel or portions of orders cancel or get delayed . And so there's equipment that it comes to market .

Speaker #3: And I think there's a second where , OEMs are doing the same thing that we're doing , where they're , you know , out building relationships with the groups that are putting these in place .

Speaker #3: And I think, as John alluded to, we're in a strong position to take advantage of those relationships. You look at the folks that are on this team and the relationships that they bring.

Tim Ondrak: I think as John alluded to, we're in a strong position to take advantage of those relationships. You know, you look at the folks that are on this team and the relationships that they bring, and then you look at the reputation of Atlas and, you know, being able to manage and develop these substantial projects. I think that gives confidence to OEMs that when they place assets with Atlas, you know, it's going to be a good long-term relationship, and it's going to give all of us a good name. I think that's what we're leaning into, and we've got line of sight into the equipment that we would use to take us to that 500 megawatts.

Speaker #3: And then you look at the the reputation of Atlas and , you know , being able to manage and develop these substantial projects .

Speaker #3: And I think that gives confidence to OEMs that that when they place assets with Atlas , you know , it's going to be a good long term relationship .

Speaker #3: And it's going to give all of us a good name . So I think that's that's what we're leaning into . And and we've got line of sight into the equipment that we would , would use to , to take us to that 500MW .

Speaker #4: Great . Well , appreciate all the color . I'll turn it back

Derek Podhaizer: Great! Well, appreciate all the color. I'll turn it back.

Speaker #1: Thank you . Our next question is coming from Stephen Gengaro of Stifel . Please go ahead .

Operator: Thank you. Our next question is coming from Stephen Gengaro of Stifel. Please go ahead.

Speaker #5: Thanks . Good morning everybody . David , I guess staying on the power theme . You know , one of the things we've we've sort of learned over the last couple of years was there's there's a skill set required to sort of deploy these assets at the site and operate them effectively and efficiently .

Stephen Gengaro: Thanks. Good morning, everybody.

Company Representative: Morning, David.

John Turner: Morning, David.

Stephen Gengaro: I guess staying on the power theme, you know, one of the things we've sort of learned over the last couple of years was that there's a skill set required to sort of deploy these assets at the site, and operate them effectively and efficiently. Can you talk about sort of your internal expertise to execute these behind-the-meter projects?

Speaker #5: Can you talk about sort of your internal expertise to execute these behind the meter projects ?

Speaker #7: Yeah , I'll lead off on that . And then , you know , again , defer to Tim , who's again , much more well spoken on this subject .

Company Representative: Yeah, I'll lead off on that and then, you know, again, defer to Tim, who's much more well spoken on this subject. When you think about the history of Atlas, right, I mean, we've got a lot of experience in building big, complicated facilities, right? You know, we constructed the, you know, the Kermit and the Monahans facilities from where there's just a bunch of dirt out there in West Texas to some of the, you know, more sophisticated sand manufacturing facilities in the industry. You know, you got to remember that we're the guys that thought it was a good idea to build a 42-mile conveyor belt in the middle of the desert.

Blake McCarthy: Yeah, I'll lead off on that and then, you know, again, defer to Tim, who's much more well spoken on this subject. When you think about the history of Atlas, right, I mean, we've got a lot of experience in building big, complicated facilities, right? You know, we constructed the, you know, the Kermit and the Monahans facilities from where there's just a bunch of dirt out there in West Texas to some of the, you know, more sophisticated sand manufacturing facilities in the industry. You know, you got to remember that we're the guys that thought it was a good idea to build a 42-mile conveyor belt in the middle of the desert.

Speaker #7: But when you think about the history of Atlas , right , I mean , we've got a lot of experience in building big , complicated facilities .

Speaker #7: Right ? So , you know , we constructed the the Kermit and the Monahans facilities from when it was just a bunch of dirt out there in West Texas to some of the , you know , more sophisticated sand manufacturing facilities in the industry .

Speaker #7: And then , you know , you've got to remember that we're kind of we're the guys that thought it was a good idea to build a 42 mile conveyor belt in the middle of the desert , which I think a lot of people , you know , rolled their eyes at that concept .

Company Representative: Which I think a lot of people, you know, rolled their eyes at that concept. You know, lo and behold, here we are a year later, and it's, that's moving. I think that, you know, when we had these initial conversations, people are like: Wow, these guys are good at building big, complicated infrastructure projects from the ground up. You combine that with the, you know, the electrical expertise that we brought in-house with the Moser acquisition, and then we, you know, we haven't been sitting on our hands since we did that deal. We've been bringing in quite a bit of talent, some really, really strong people in terms of adding to that roster.

Blake McCarthy: Which I think a lot of people, you know, rolled their eyes at that concept. You know, lo and behold, here we are a year later, and it's, that's moving. I think that, you know, when we had these initial conversations, people are like: Wow, these guys are good at building big, complicated infrastructure projects from the ground up. You combine that with the, you know, the electrical expertise that we brought in-house with the Moser acquisition, and then we, you know, we haven't been sitting on our hands since we did that deal. We've been bringing in quite a bit of talent, some really, really strong people in terms of adding to that roster.

Speaker #7: And then , lo and behold , here we are a year later , and it's that's , that's that's moving . So I think that , you know , when we had these initial conversations , people are like , wow , these guys are good at building big , complicated infrastructure projects from the ground up .

Speaker #7: And then you combine that with the the electrical expertise that we brought in-house with the Moser acquisition . And then we , you know , we haven't been sitting on our hands since we did that deal .

Speaker #7: We've been bringing in quite a bit of talent , some really , really strong people in terms of of adding to that , that roster .

Speaker #7: And , you know , when you combine those two things , it becomes really powerful . And then you as people learn about Atlas and this thing is that this is a different customer set than we've ever dealt with .

Company Representative: you know, when you combine those two things, it becomes really powerful, and then you as people, you know, learn about Atlas, and this thing has been-

Blake McCarthy: you know, when you combine those two things, it becomes really powerful, and then you as people, you know, learn about Atlas, and this thing has been, this is a different customer set than we've ever dealt with, right? This isn't just, you know, the, you know, 25 E&Ps that we all know and love. It is, you know, this is across the broader economy, there's a lot of education about who is Atlas that we have to do with them. Once they start to see, like, who we are and what we've done, they get a lot of comfort around that. You know, we bring in some of our electrical experts and, you know, they start to wow them with their knowledge. Those commercial discussions progress pretty quickly. I'll turn it over to Tim for actual specifics, though.

Blake McCarthy: This is a different customer set than we've ever dealt with, right? This isn't just, you know, the, you know, 25 E&Ps that we all know and love. It is, you know, this is across the broader economy, there's a lot of education about who is Atlas that we have to do with them. Once they start to see, like, who we are and what we've done, they get a lot of comfort around that. You know, we bring in some of our electrical experts and, you know, they start to wow them with their knowledge. Those commercial discussions progress pretty quickly. I'll turn it over to Tim for actual specifics, though.

Speaker #7: Right ? This isn't just , you know , the , you know , 25 MPs that we all know and love . It is , you know , this is across the broader economy .

Speaker #7: And so there's a lot of education about who is Atlas that we have to deal with them . And once they start to see like who we are and what we've done , they get a lot of comfort around that .

Speaker #7: And then , you know , we bring in some of our electrical experts and , you know , they they start to wow them with their knowledge .

Speaker #7: Those those commercial discussions progressed pretty quickly . I'll turn it over to Tim for actual specifics , though .

Speaker #3: Yeah . So I think Blake , Blake touched on on a couple of things there . I think , you know , first and foremost , when we acquired Moser , you know , we got a team with , you know , a 50 year operating history .

Tim Ondrak: I think Blake, you know, Blake touched on a couple of things there. I think, you know, first and foremost, when we acquired Moser, we got a team with a 50-year operating history, that was a great place to start from a talent perspective. We added to that team, you know, with some outside talent that have helped us substantially in the C&I and the larger megawatt deployments. From a long-term perspective, we've built an operating team with, you know, 20-plus years of experience in operating large engine systems.

Speaker #3: And so , you know , that was a great place to start from , from a talent perspective . We added to that team , you know , with some outside talent that that have helped us substantially in the in the CNI and the larger megawatt deployments .

Speaker #3: And then from a long term perspective , we've built an operating team with , you know , 20 plus years of experience in operating large engine systems .

Speaker #3: And so , you know , we really think combining all of those things , we're able to deliver , you know , at the same level of execution that we've delivered in , in the same and logistics space and , you know , brought that over to the power space

Tim Ondrak: You know, we really think combining all of those things, we're able to deliver, you know, the same level of execution that we've delivered in the same as logistics space and, you know, brought that over to the power space.

Speaker #5: Okay . Now that's helpful . That's good color . Thank you . The other question I had is and you you mentioned , I think , in response to a prior question , the sort of the delays in grid interconnection and , and you also , I think , made a comment about , you know , you sort of think about this as a bridge to permanent power , but it feels to us like that bridge to permanent power is pretty long .

Stephen Gengaro: Okay. No, that's helpful. That's good color. Thank you. The other question I had is, and you mentioned, I think, in response to a prior question, the sort of delays in grid interconnection, and you also, I think, made a comment about, you know, you sort of think about this as a bridge to permanent power, but it feels to us like that bridge to permanent power is pretty long. I was just curious what you're hearing on the utility interconnection side and kind of the queues for larger loads to be delivered, and how that kind of thing impacts your planning and thought process.

Speaker #5: And I was just curious what you're hearing on the utility interconnection side and kind of the cues for for larger loads to be delivered and how that kind of impacts your planning and thought process .

Speaker #3: Yeah . So I think , you know , that's a that's a big question . And I think that's a big question , because when you look at the utility network in the United States , it is incredibly complicated .

Tim Ondrak: Yeah. I think, you know, that's a big question. I think that's a big question because when you look at the utility network in the United States, it is incredibly complicated, right? The rules change, you know, sometimes as you cross the street. When we're talking to folks about their projects, every one of them has a different story with similar themes. The similar theme is that utilities aren't going to get there. They need to look at, you know, what they call a bridge solution. I think when you really understand the challenges that the utilities face, and, you know, you see projects from the utilities push in different districts, you understand that that's gonna affect, you know, really the entire industry.

Speaker #3: Right ? The rules change , you know , sometimes is as you cross the street and so when we when we're talking to folks about their projects , every one of them has a different story with similar themes .

Speaker #3: And the similar theme is that utilities aren't going to get there. And so they need to look at, you know, what they call a bridge solution.

Speaker #3: But I think when you really understand the the challenges that the utilities face and you see , you see projects from the utilities push in different districts , you understand that that's going to going to affect , you know , really the the entire industry .

Speaker #3: And so what we're hearing from utilities , and I think I mentioned this earlier , it's anywhere from 2028 to 2034 for a large load to interconnect .

Tim Ondrak: What we're hearing from utilities, and I think I mentioned this earlier, it's anywhere from 2028 to 2034 for a load to interconnect, and that's kind of across the US. There's some places where you can pull data points that say it's longer, it's shorter. If you take that perspective, what we're really talking about is infrastructure. You can bridge that, and I think we've got a good solution to bridge that. We've got, you know, 200 megawatts plus of bridge equipment in what we acquired from Moser. Again, our thesis is this is a long-term infrastructure play, that bridge system has some disadvantages.

Speaker #3: And that's kind of across the US . And there's some some places where you can pull data points that say it's it's longer , it's shorter .

Speaker #3: But if you take that that perspective , what we're really talking about is infrastructure . And so you can you can bridge that .

Speaker #3: And I think we've got a good solution to bridge that. We've, you know, 200 MW plus of bridge equipment in what we acquired from Moser.

Speaker #3: But our again , our thesis is this is a long term infrastructure play . And so that bridge system has some disadvantages . And the way you solve some of those disadvantages , you know , whether they're fuel efficiency , footprint , whatever is you install a long term system that is designed to sit in place and operate .

Tim Ondrak: The way you solve some of those disadvantages, you know, whether they're fuel efficiency, footprint, whatever, is, you install a long-term system that is designed to sit in place and operate. You know, we talk about, you know, 5 to 10 year contracts, 15-year contracts, but really, these are 30-year facilities if they need to be. We think that structural shift in this market is going to benefit those that take ownership of that and install their own systems today. You know, we think the broader grid really benefits from private capital installing a broad infrastructure, really across the entire United States.

Speaker #3: You know , we talk about 5 to 10 year contracts , 15 year contracts . But really these are 30 year facilities . If they need to be .

Speaker #3: And so we think that that structural shift in this market is going to benefit those that take ownership of that, and install their own systems today.

Speaker #3: And we think the broader grid really benefits from private capital. Installing broad infrastructure really across the entire United States. Yeah.

Blake McCarthy: Yeah, I mean, Stephen, it's such a fluid space too. Like, I feel like every morning there's four or five headlines around that interconnect to getting longer and pushing to the right. You know, I think we're all pretty big believers in that there's going to be more and more pressure on the utilities to, you know, probably, you know, stiff-arm some of these interconnects too, just because we think that affordability is going to become a bigger and bigger buzzword in the political landscape. It's just, it's probably in everybody's best interest for the private sector to solve this problem, as opposed to, you know, leaning on the public utilities to get it done.

Speaker #7: I mean , Stephen , it's such a fluid space too . Like I feel like every morning there's 4 or 5 headlines around that interconnect to getting longer and pushing to the right , you know , and I think we're all pretty big believers in that .

Speaker #7: There's going to be more and more pressure on the utilities to , you know , probably , you know , stiff arm . Some of these interconnects to just because we think that affordability is going to become a bigger , bigger buzzword in political landscape .

Speaker #7: And it's just it's probably it probably in everybody's best interest for the private sector to solve this problem . As opposed to , you know , leaning on the public to public utilities to get it done .

Speaker #3: Yeah . Even if they can get power from the grid , they can't get all of their power from the grid . So , I mean , like Tim said , you know , we we're not only talking to end users , we're talking to the providers .

Tim Ondrak: Yeah, even if they can get power from the grid, they can't get all of their power from the grid. I mean, like Tim said, you know, we're not only talking to end users, we're talking to the providers. You know, this is what we're getting from the providers, is that, you know, we may be able to provide some of the power, but we're not going to be able to provide all the power. They're also being told that in order for us to provide you power, you need to show us that you can provide yourself, you know, supply yourself with a certain amount of power to get that additional power from the grid. Obviously, there's a lot, lot going on, a lot changing here, but that's kind of where it is now.

Speaker #3: And , you know , these are the this is what we're getting from the providers is that , you know , we may be able to provide some of the power , but we're not going to be able to provide all the power .

Speaker #3: And they're also being told that in order for us to provide you power , you need to show us that you can provide yourself , you know , supply yourself with a certain amount of power to get that additional power from the grid .

Speaker #3: So obviously , a lot , lot , lot going on , a lot changing here . But that's kind of where it is now .

Speaker #3: And I think the , you know , the one one last point I'll make on that is , you know , we're we're out and we're talking to people every day .

Stephen Gengaro: I think you know, the one last point I'll make on that is, you know, we're out and we're talking to people every day, and they're looking at big projects. The two things that are most consistent are, one, the utility has moved the goal line on when they're actually going to show up, and two, that they're not going to meet the full request for power.

Blake McCarthy: I think you know, the one last point I'll make on that is, you know, we're out and we're talking to people every day, and they're looking at big projects. The two things that are most consistent are, one, the utility has moved the goal line on when they're actually going to show up, and two, that they're not going to meet the full request for power.

Speaker #3: They're looking at big projects and the two things that are most consistent are one , the utility has has moved the goal line on when they're actually going to show up .

Speaker #3: And two , that they're not going to meet the full request for power

Speaker #5: Right now , thanks for all the color that's helpful

John Daniel: Great. No, thanks for all the color. That's helpful.

Speaker #1: Thank you . The next question is coming from Doug Becker of Capital One . Please go ahead

Operator: Thank you. The next question is coming from Doug Becker of Capital One. Please go ahead.

Speaker #8: Thank you, John. I think the questions are really appropriately focused on power up to this point, but I did want to touch base on the sand and logistics business.

Doug Becker: Thank you, John. I think the questions are really appropriately focused on power, up until this point. I did want to touch base on the sand and logistics business. First half volumes look very good. Appreciate the lack of visibility around the second half of the year, but any type of range you could provide for production growth for the full year, to kind of give us some goalposts to think about?

Speaker #8: First half volumes look very good. Appreciate the lack of visibility around the second half of the year. But any type of range you could provide for production growth for the full year, to kind of give us some goalposts to think about?

Speaker #9: Yeah, I mean, it's a good question.

Blake McCarthy: Yeah, I mean, it's a good question, and, sorry for being opaque, but, you know, right now, our and I appreciate it on part of our customers, too, is that the outlook is a little opaque. You know, I think that, if you rewind 3 months ago, it seemed like every macro note you were reading was, you know, pointing to oil being, you know, $45 to 50 at this point in the year, and here we are sitting at, you know, $66 WTI. Granted, there's a lot of geopolitical risk premium built into that, but, I don't think any of us think we live in a world where there's not going to be geopolitical risk.

Speaker #7: And sorry for being opaque , but you know , right now and I appreciate it . Part of our customers , too , is that the outlook is a little opaque .

Speaker #7: You know , I think that if you rewind three months ago , it seemed like every macro note you were reading was pointing to oil being , you know , 45 to $50 at this point in the year .

Speaker #7: And here we are sitting at , you , 66 WTI . Granted , there's a lot of geopolitical risk premium built into that , but I don't think any of us think we live in a world where it's not going to be geopolitical risk .

Blake McCarthy: You know, our commercial team did a great job of going out there, and, you know, we told them, Hey, go get the volumes. They went out there, and they did that, and it sets us up for a very strong first half. That being said, you know, there's a lot of our customers were, you know, they're like, Hey, like, we've got our schedule for the first six months of the year, and, you know, we'd like to leave a little bit of optionality on what our plans, our schedule looks like in the second half of the year. You know, I think a lot of that's dependent on the commodity team. Right now, from where we sit, you know, our expectations are for our overall volumes to be up year-over-year.

Speaker #7: So , you know , our commercial team did a great job of going out there . And you know we told them , hey , go , go get the volume .

Speaker #7: And they , they they went out there and they did that . And it sets us up for a very strong first half .

Speaker #7: That being said , you know , there's a lot of our customers were you know , they're like , hey , like we've got our schedule for the first six months of the year .

Speaker #7: And, you know, we'd like to leave a little bit of optionality on what our plans, our schedule, looks like in the second half of the year.

Speaker #7: You know , so I think a lot of that's dependent on the commodity tape right now from where we sit , you know , our expectations are for our overall volumes to be up year over year that , you know , would imply and , you know , that gives us I appreciate that .

Blake McCarthy: That, you know, would imply, and you know, that gives us, I appreciate that that's a pretty big window in terms of second half volumes, because, yeah, we do expect to have pretty significant volumes in the first half of the year. That being said, like, the pricing environment remains pretty challenging, so, you know, that's obviously a headwind, but so that has us, you know, focused on things we can control, which is driving down the variable cost of our production at the plants. We're pretty excited about the dredge commissionings that we've got coming up, you know, later this quarter into Q2. That's gonna drive some significant improvements in our current facility.

Speaker #7: That's a pretty big window in terms of second half volumes because yeah , we do expect to have significant volumes in the first half of the year .

Speaker #7: That being said , like , you know , pricing environment remains pretty challenging . So , you know , that's obviously a headwind .

Speaker #7: But we're so that that has us focused on things we can control , which is driving down the variable cost of our production at the plants .

Speaker #7: We're pretty excited about the dredge commissioning that we've got coming up . You know , later this quarter and into Q2 . That's going to drive some significant improvements in our permit facility .

Speaker #7: And , you know , I think that , you know , really our objective on the logistics side is to just really cement ourselves as the leading standard logistics provider in the Permian and position ourselves so that when the cycle does turn , hey , we're that sticky supplier of quality that , you know , hey , no , nobody wants us not to be delivering sand onto their well site because we make it where their operations doesn't have to think about it .

Blake McCarthy: I think that, you know, really our objective on the sand logistics side is to just really cement ourselves as the leading sand logistics provider in the Permian, and position ourselves so that when the cycle does turn, hey, we're that sticky supplier of quality that, you know, hey, nobody wants us not to be delivering sand onto their well site because, you know, we make it where their operations doesn't have to think about it.

Speaker #8: That's that's fair on the logistics side , you know , highlighted the trucking challenges , but pointed out some upward momentum in trucking rates .

Doug Becker: No, that's fair. On the logistics side, you know, highlighted the trucking challenges, but pointed out some upward momentum in trucking rates. Just any color on the margin outlook in logistics for this year, you know, after a pretty slow start on the margin front with the Dune Express?

Speaker #8: Just any color on the margin outlook and logistics for this year? You know, after a pretty slow start on the margin front with the Gene Express.

Speaker #7: Yeah , that's .

Blake McCarthy: Yeah. Yeah, that's a, that's a good question. You know, and I tried to give a little, you know, transparency on that because, you know, I think it's a question we get a lot. You know, we're positioned to move to improve off the low base we ended 2025 at, started 2026 with. You know, during both late Q4 and early Q1, our logistics business was burdened by a pretty heavy load bonuses that we offer to third-party carriers to ensure that we have the drivers available to meet customer needs during the holiday season. To ensure delivery when, quite frankly, the weather's pretty miserable, and which it certainly was in January.

Speaker #9: A that's a good question . You know , I tried to give a little , you know , transparency .

Speaker #7: On that because , you know , I think it's a question we get a lot you know we're positioned to move to to improve off the low base .

Speaker #7: We ended 2025 and started 2026 with , you know so during both late Q4 and early Q1 , our logistics business was burdened by a pretty heavy load bonuses that we offered a third party carriers to ensure that we have the drivers available to to meet customer needs during the holiday season and to ensure delivery when , quite frankly , the weather , it's pretty miserable .

Speaker #7: And it was just certainly wasn't . January . Additionally , as we mentioned in the prepared remarks , you know , like I said , our our sales team was they were really feeling their oats during the contracting season .

Blake McCarthy: Additionally, as we mentioned in the prepared remarks, you know, like I said, our sales team, they were really feeling their oats during the contracting season, so they've done a great job securing pretty attractive work in what is a really tough market. That includes a good amount of work that's gonna drive incremental Dune Express volumes, which is the biggest driver of creating more margin differential in a weak pricing environment. Yeah, from a numbers perspective, Doug, you know, I think logistics margins in Q1 probably gonna look pretty similar to Q4, with December of last year and January of this year representing low points.

Speaker #7: So they've done a great job securing pretty attractive work . In what is a really tough market . And that that includes a good amount of work that's going to drive incremental express volumes , which is the biggest driver of creating more margin differential in a weak pricing environment .

Speaker #7: You know , so from a numbers perspective , you know , I think the logistics margins in Q1 probably going to look pretty similar to Q4 with December of last year and January of this year representing low points , you know , and then Q2 is currently like , I'm you know , loose projections right now about taking a nice step up into the double digits .

Blake McCarthy: You know, Q2 is currently like, I'm, you know, loose projections right now, but I've taken a nice step up into the double digits, you know, maybe not quite mid-teens, but a nice step up and a huge relative gap to where the rest of the market is.

Speaker #7: You know , maybe not quite mid-teens , but a nice step up and a huge relative gap to where the rest of the market is .

Speaker #8: Got it . Thank you

Doug Becker: Got it. Thank you.

Speaker #1: Thank you . The next question is coming from John Daniel of Daniel Energy Partners . Please go ahead .

Operator: Thank you. The next question is coming from John Daniel of Daniel Energy Partners. Please go ahead.

Speaker #10: Hey guys . Thanks for having me . First question is , can you can you speak to the actual number , the volume of power inquiries coming from the E&P operators for microgrids ?

John Daniel: Hey, guys. Thanks for having me. First question is, can you speak to the actual number or the volume of power inquiries coming from the E&P operators for microgrids? Have you tried or will you try to tie sand volumes to contracts for that power?

Speaker #10: And then, have you tried or will you try to tie sand volumes to contracts for that power?

Speaker #3: John . Yeah . So the volume of increase on microgrids coming from E&P , I think what we're seeing is , is a little bit based , independent , but in , you know , probably our , our two of our three most active basins , I would say about half of the new requests coming in for , well , site generators are in , in some type of microgrid system .

Blake McCarthy: Hi, John. The volume of increase on microgrids coming from E&P, I think what we're seeing is a little bit basin dependent. In, you know, probably our 2 of our 3 most active basins, I would say about half of the new requests coming in for well site generators are in some type of microgrid system. You know, that's typically tying, you know, anywhere, the production from anywhere from 2 to maybe 4 pads together. We expect that, you know, as the year progresses, we will allocate more and more units to those types of systems.

Speaker #3: And that's typically tying , you know , anywhere the production from anywhere from two to maybe four pads together . But we expect that , you know , as , as the year progresses , we will we will allocate more and more units to those types of systems You know , as far as trying the sand volumes to the , to the , to the power , you know , that's obviously a good idea .

John Turner: You know, as far as to tying the sand volumes to the power, you know, that's obviously a good idea. We like to be, you know, we wanna be a broad provider of solutions for our customers. As of now, you know, a lot of the teams that deal with those are separate. You got completion teams that are working versus the production teams, that they're, you know, mostly different in a lot of these organizations. Just from a sales standpoint, we're always working to be a better solutions provider for our customers, that's, I'm not gonna count that out of the question.

Speaker #3: We like to be , you know , we want to be a broad provider of solutions for our customers . As of now , you know , a lot of the the teams that deal with those are separate .

Speaker #3: You got completion teams that are working versus the production teams that there are mostly different in a lot of these organizations . But from a sales standpoint , we're always working to be a better solutions provider for our customers .

Speaker #3: So that's not going to count that out of the question .

Speaker #10: Okay . All right . That's all I had . Thanks , guys .

Jeff LeBlanc: Okay. All right, that's all I had. Thanks, guys.

John Daniel: Okay. All right, that's all I had. Thanks, guys.

Speaker #7: JD

John Turner: JD.

Speaker #1: Thank you . Our next question is coming from Eddie Kim of Barclays . Please go ahead .

Operator: Thank you. Our next question is coming from Eddie Kim of Barclays. Please go ahead.

Speaker #11: Good morning . Just wanted to circle back to the volumes theme . You mentioned that you are adding sorry your discussions on adding new customers this year and you're taking greater share of the wallet with your existing customers .

David Brown: Hey, good morning. Just wanted to circle back to the volumes theme. You mentioned that you're in discussions on adding new customers this year, and you're taking greater share of the wallet with your existing customers, and it seems like you've been successful with that. Just to be clear, are those wins fully reflected in your Q1 volumes guidance, or do those volumes really start to kick in later in the year?

Eddie Kim [VP: Hey, good morning. Just wanted to circle back to the volumes theme. You mentioned that you're in discussions on adding new customers this year, and you're taking greater share of the wallet with your existing customers, and it seems like you've been successful with that. Just to be clear, are those wins fully reflected in your Q1 volumes guidance, or do those volumes really start to kick in later in the year?

Speaker #11: And it seems like you've been successful with that . Just to be clear , are those wins fully reflected in your first quarter volumes , guidance , or do those volumes really start to kick in later in the year ?

John Turner: I would say, those wins are not necessarily reflective in our Q1 volumes. I mean, Q1 volume is gonna be depressed some because of the weather, but I would expect to see some of those impacts kicking in as we move. You're gonna see some of it in Q1. Then it's gonna kick in Q2 and Q3.

Speaker #3: I would say those those wins are not necessarily reflected in our first quarter volumes . I mean , first quarter volumes are going to be depressed some because of the weather , but I would expect to see some of those impacts kicking in as we move .

Speaker #3: You're going to see some in the first quarter, and then it's going to kick in second and third.

Speaker #7: Yeah , I mean like there's there's always a ramp in customer activity . If January always starts a bit slow and you know we have a steady ramp through the course of the quarter and then that that winter storm in January , obviously it knocked out about four and a half days of of operations out there for everybody .

Blake McCarthy: Yeah, I mean, like, there's always a ramp in customer activity. You know, January always starts a bit slow, and, you know, we have a steady ramp through the course of the quarter. Then that winter storm in January, obviously, you know, it knocked out about four and a half days of operations out there for everybody. So, not fully reflected in those volumes. You know, our expectation is for Q2 volumes to be a step up from Q1.

Speaker #7: And so, not fully reflected in those volumes. You know, we expect our Q2 volumes to be a step up from Q1.

Speaker #11: Got got it . And then just to get to that on that theme , I mean , you mentioned strong volumes in the first half , but customers taken sort of a wait and see approach in the second half .

David Brown: Got it. Got it. Just to get that on that theme, I mean, you mentioned strong volumes in the first half, but customers taking sort of a wait and see approach in the second half. I guess, just based on your conversations, it seems like E&Ps might not really be buying this $65 WTI oil price right now. Are they, you think, still operating as if we're in kind of the mid-$50s environment? I'm just curious, what oil price do you think we'd have to get down to for them to consider a volumes reduction in the second half of the year?

Eddie Kim [VP: Got it. Got it. Just to get that on that theme, I mean, you mentioned strong volumes in the first half, but customers taking sort of a wait and see approach in the second half. I guess, just based on your conversations, it seems like E&Ps might not really be buying this $65 WTI oil price right now. Are they, you think, still operating as if we're in kind of the mid-$50s environment? I'm just curious, what oil price do you think we'd have to get down to for them to consider a volumes reduction in the second half of the year?

Speaker #11: I guess just based on your conversations , it seems like MPs might not really be buying this $65 oil price right now . And are they , you think , still operating as if we're in the mid 50s environment .

Speaker #11: And I mean just curious what oil price do you think we'd have to get down to for them to consider a volumes reduction in the second half of the year ?

Speaker #7: Yeah, I think that their budgets for this year are based around like $50 to $55 oil. And I think today's activity in West Texas is reflective of that commodity strip.

Blake McCarthy: Yeah, I think that their budgets for this year are raised, based around, like, $50 to $55 oil. I think today's activity in West Texas is reflective of that commodity strip. You know, they're not gonna deviate from their, you know, they've just set those CapEx budgets, and they're not gonna deviate from that just on, you know, gyrations of the commodity price. The longer the commodity price, you know, stays up, and people get more comfortable with it, but I'm sure they're not complaining about the incremental cash flows they're ripping off right now.

Speaker #7: And you know, they're not going to deviate from there. They just set those CapEx budgets, and they're not going to deviate from that.

Speaker #7: Just on , you know , gyrations . In the commodity price . But the the longer the commodity price , you know , stays up and people get more comfortable with it .

Speaker #7: But I'm sure they're not complaining about the incremental cash flows they've got . They're ripping off right now .

Speaker #3: I mean , the well the investment cycle is I mean , you know , the decision timeline is pretty short . So they can wait longer with these shale wells to go out and make a decision .

John Turner: I mean, the well, the investment cycle is, I mean, you know, the decision timeline is pretty short, so they can wait longer with these shale wells to go out and make a decision. You know, I think, like Blake said, they're comfortable where they are now. That, if that continues, you'll probably see steady, you know, steady, you know, activity through the end of the year. It just depends on where prices go.

Speaker #3: So , you know , I think , like Blake said , they're comfortable where they are now . And that that continues . And you'll probably see steady steady .

Speaker #3: You know steady . You know activity through the end of the year . But it just depends on where prices go

David Brown: Great. Thank you. I'll turn it back.

Eddie Kim [VP: Great. Thank you. I'll turn it back.

Speaker #11: Thank you . I'll turn it back

Speaker #1: Thank you. The next question is coming from Michael Sciolla of Stephens. Please go ahead.

Operator: Thank you. The next question is coming from Michael Scialla of Stephens. Please go ahead.

Speaker #6: Morning, everybody. You mentioned the last mile storage system. I just wanted to ask about that—does it allow continuous pumping of wet sand?

Michael Scialla: Morning, everybody. You mentioned the last-mile storage system. Just wanted to ask about that, allows continuous pumping of wet sand. You said you're testing the dry sand solution. What needs to happen there for that to be successful, and what could the opportunity be for that system if it works?

Speaker #6: You said you're testing the dry sand solution . What needs to happen there for that to be successful ? And what could the opportunity be for that system ?

Speaker #6: If it works

Speaker #3: Yeah . So , you know , earlier this year or late last year , we launched a system that was designed for , you know , the really well site , you know , increasing the amount of sand that's delivered to the well site , timeliness of that .

John Turner: You know, earlier this year, or late last year, we launched a system that was designed for, you know, with really well site, you know, increasing the amount of sand that's delivered to the well site, timeliness of that. That's gonna increase the efficiencies to enable operators to pump downhole more sand. You know, we've been seeing... We kicked this off on the wet sand side. You know, we have all of those systems deployed right now. We do have a number of our customers that are using them, that want more. You know, as far as the dry sand goes, there's still gonna be some work that we're gonna have to do on that front.

Speaker #3: That's going to increase the efficiencies to enable operators to pump downhole more sand . You know , we've been seeing and we kick this off on the , on the , on the wet sand side , you know , we have all of those systems deployed right now .

Speaker #3: And we do have a number of a number of our customers that are using them that , that , that , that want more .

Speaker #3: You know, as far as the dry sand goes, there's still going to be some work that we're going to have to do on that front.

John Turner: You know, as far as timing goes, it's way to be seen, but there's some testing that we're working on, and we'll be able to comment more about that here later. What we are seeing, the results of that are promising. You know, I think some of the things, well, some of the themes you're gonna see going forward is continuous pumping. A lot of our customers are asking it, or requiring it, because... You're starting to see some significant results from, you know, our delivery of sand to the well site, you know, that enables things like the Dune Express, and, you know, our wet sand offerings.

Speaker #3: And , you know , as far as timing goes , it's it's wait to be seen . But there's there's some testing that we're that we're working on and we'll be able to comment , comment more about that here later .

Speaker #3: But we do what we are seeing the results of that are promising . And I think some of the things that some of the themes you're going to see going forward is continuous pumping .

Speaker #3: A lot of our customers are asking it , requiring it because and you're starting to see some significant results from , you know , our delivery of sand to the well site , you know , that enables things to things like the Dune Express and , you know , our wet sand offerings .

Speaker #3: And then this is just another step in that direction of helping our customers with what their needs are and providing them with solutions that work, that enable them to accomplish their goals.

John Turner: Then this is just another, you know, step in that direction of, you know, helping our customers with their needs and providing them with solutions that work, that enable them to accomplish their goals.

Speaker #7: Yeah . And then the continuous pumping thing is such an important trend in our space . You know , those are our like the completion crews .

Blake McCarthy: Yeah, then the continuous pumping thing is such an important trend in our space. You know, those are the completion crews we're providing sand to, that are on continuous pumping operations, like the amount of sand they pump monthly is, you know, multiples of what you'd see from a traditional zipper crew. The big constraint, right, is it becomes, you know, well site footprint. You know, things like boxes and silos, you know, that's their constraints, right? The pile system, like, going to piles, you know, obviously allows you to put more sand in one spot. What we think our system does is it enables to do piles, but to do it very efficiently and with clean sand, and combine that with the PropFlow technology, it is a key enabler of very, very efficient continuous pumping operations.

Speaker #7: Were providing sand to that are on continuous pumping operations like the amount of sand they pump monthly . You know , multiples of what you'd see from a traditional zipper crew .

Company Representative: The amount of sand they pump monthly is, you know, multiples of what you'd see from a traditional zipper crew. The big constraint, right, is it becomes, you know, well site footprint. You know, things like boxes and silos, you know, that's their constraints, right? The pile system, like, going to piles, you know, obviously allows you to put more sand in one spot. What we think our system does is it enables to do piles, but to do it very efficiently and with clean sand, and combine that with the PropFlow technology, it is a key enabler of very, very efficient continuous pumping operations.

Speaker #7: And but the big constraint , right . Is it becomes , you know , well , site footprint , you know , things like boxes and silos , you know , they , they , they are that they're constraints .

Speaker #7: Right . And so the pile system going to piles , you know , obviously allows you to put more sand in one spot .

Speaker #7: But what we think our system does is it enables you to do piles, but to do it very efficiently and with clean sand.

Speaker #7: And combine that with the proper flow technology . It is a key enabler of very , very efficient , continuous pumping operations . And it's something that , you know , just continues to to push that tailwind of of the , the sand intensity of each individual completion crew , which we think long term is a , you know , win when people stop planning budgets around $50 oil and maybe get a little bit more comfortable around something like $65 plus see a little bit more incremental activity .

Company Representative: It's something that, you know, just continues to push that tailwind of the sand intensity of each individual completion crew, which we think long term is a, you know, when people stop planning budgets around $50 oil and maybe get a little bit more comfortable around something like $65 plus, see a little bit more incremental activity, we think the market tightens up pretty darn quick.

Blake McCarthy: It's something that, you know, just continues to push that tailwind of the sand intensity of each individual completion crew, which we think long term is a, you know, when people stop planning budgets around $50 oil and maybe get a little bit more comfortable around something like $65 plus, see a little bit more incremental activity, we think the market tightens up pretty darn quick.

Speaker #7: We think the market tightens up pretty darn quick .

Speaker #6: I appreciate that detail. I also wanted to ask about—you mentioned your hybrid power system. I guess what differentiates that, and what does the opportunity for those assets look like?

Michael Scialla: I appreciate that detail. Also wanted to ask about your, you mentioned your hybrid power system. I guess, what differentiates that? What's the opportunity for those assets look like?

Speaker #3: Yeah . So the the .

Blake McCarthy: Yeah. The hybrid power system is, it essentially combines battery technology that we've developed in-house, own the patents on, and that was, you know, funded through a DOD grant that the legacy Moser business obtained in 2018. What that system essentially does is hybridizes with our existing generators, and it controls the operation of those generators so that they run at essentially a peak load, and the battery then distributes power into that system, shuts the generator off. What it does is it lowers the runtime on those generators, which extends our maintenance cycles from, you know, essentially once a month service to, you know, once every 45 days, as much as once every 60 days.

Speaker #7: Hybrid power system is .

Speaker #3: It's essentially combines battery technology that that we've developed in-house , own the patents on . And that was you know , that was funded through a DoD grant that the legacy Mosher business obtained in 2018 .

Speaker #3: And what that system essentially does is Hybridises with our existing generators . And it it controls the operation of those generators so that they they run at essentially a peak load .

Speaker #3: And the battery then distributes power into that system , shuts the generator off . And so what it does . Is it it lowers the runtime on those generators , which extends our maintenance cycles from essentially once , once a month service to , you know , once every 45 days , as much as once every 60 days .

Speaker #3: It lowers the fuel cost for our operators . And it decreases the risk of a shutdown event on the customers location , which , you know , those those are not good for downhole pumps , which is primarily what we do in that business .

Blake McCarthy: It lowers the fuel costs for our operators, and it decreases the risk of a shutdown event on the customer's location, which, you know, those are not good for downhole pumps, which is primarily what we do in that business. You know, we're pretty excited about the potential to deploy that at scale in the legacy Moser business. You know, we think it's differentiated. We've proven it on multiple well sites. I think when you apply that to, you know, the broader industry outside of oil and gas, you know, it's got uses really across every industry where, you know, folks want clean, reliable power, and that battery system provides clean, reliable power that can integrate with whatever systems they're using, whether they're prime power systems or backup systems.

Speaker #3: And so we're pretty excited about the potential to deploy that at scale in the legacy Mosher business . You know , we think it's it's differentiated .

Speaker #3: We've we've proven it on multiple well , sites . But I think when you apply that to , you know , the the broader industry outside of oil and gas , it's got uses really across every industry where , you know , folks want , want clean , reliable power .

Speaker #3: And that battery system provides clean, reliable power that can integrate with whatever systems they're using, whether they're prime power systems or backup systems.

Speaker #6: Great . Thank you guys .

Michael Scialla: Great. Thank you, guys.

Speaker #7: Thank you .

Blake McCarthy: Thank you.

Speaker #1: Thank you . Our final question today is coming from Jeff LeBlanc of TPH . Please go ahead .

Operator: Thank you. Our final question today is coming from Jeff LeBlanc of TPH. Please go ahead.

Speaker #12: Good morning , John and team . Thank you for taking my question .

Jeff LeBlanc: Good morning, John and team. Thank you for taking my question.

Speaker #13: Yes .

Speaker #7: Yeah

Company Representative: Yeah.

John Turner: Yeah.

Speaker #12: I wanted to see if you could provide some color on the expected cost savings over the second half of the year . Once the twinkle dredges come online and are fully operational .

Jeff LeBlanc: I wanted to see if you could provide some color on the expected cost savings over the second half of the year, once the Twinkle dredges come online and are fully operational. Thank you.

Speaker #12: Thank you

Speaker #7: Sir .

Speaker #3: Jeff ,

Company Representative: Sorry, Jeff, he wants to go to the cost savings that we're gonna expect with the second half of the year, once the dredges come on.

Kyle Turlington: Sorry, Jeff, he wants to go to the cost savings that we're gonna expect with the second half of the year, once the dredges come on.

Speaker #7: He .

Speaker #14: Wants to go to the cost savings that we're going to expect in the second half of the year, once the judges come on.

Speaker #14: Oh , yeah . Yeah , I'll cover that . Yeah .

Blake McCarthy: Oh, yeah.

John Turner: Oh, yeah.

Company Representative: Yeah. I'll likely cover that.

Kyle Turlington: Yeah. I'll likely cover that.

Blake McCarthy: Yeah. You know, we haven't had a steady dredge feed at our primary permit facility for going on over 1 year now. That facility is really designed to have a, you know, clean, steady dredge feed. What that's created is just different bottlenecks in the process that has elevated the OpEx per ton coming out of that facility versus... I mean, when that facility is cooking, it is our lowest cost. It's the lowest cost facility in the entire Permian Basin. As those two dredges come on and, you know, like, just to highlight that these are these Twinkle dredges we've had a Twinkle dredge in the fleet, got one in the fleet now, and that is the most consistent producer we've got.

Speaker #3: So , you know , we we haven't had a steady dredge feed at our primary permit facility for the going on over a year now , and that facility is really designed to have a clean , steady dredge feed .

Speaker #3: And so what ? That's created is just different bottlenecks in the process . That is elevated . The opex per ton coming out of that facility versus , when that that facility is cooking , it is our lowest cost .

Speaker #3: It's the lowest cost facility in the entire Permian Basin . So as those two dredges come on and you know , like just highlight that these are these dredges we've had we've had it dredge in the fleet , got one at the fleet now .

Speaker #3: And that is the most consistent producer we've got . So we're very confident in we think that the F-150 of dredges getting those online will significantly enhance the quality of our dredge feed , which has just really positive knock on effects to the entire process .

Blake McCarthy: We're very confident, and we think they're the F-150 of dredges. Getting those online will significantly enhance the quality of our dredge feed, which has just really positive knock-on effects to the entire process. It improves watershed operations, it reduces stress on the dryers, it just makes the whole facility run more efficiently. If you think about that, our overall variable costs, you know, probably have been elevated by about $1 across the complex because of that, those dredge feed issues. That's over the course, you know, over the course of the first half of the year, that will flow on.

Speaker #3: It proves what operations it reduces stress on the dryers . It just makes the whole facility run more efficiently . If you think about that , our overall variable costs , you know , probably have been elevated by about a buck across the complex because of that dredge feed issues .

Speaker #3: And so that's over the course, you know, over the course of the first half of the year, that will flow off.

Speaker #3: And there . So it's again , it's a pretty big circular reference , though , in terms of the overall opex per ton , just because so much of that is based on volume throughput and that's dependent on customer activity in the second half .

Blake McCarthy: It's a pretty big circular reference, though, in terms of the overall OpEx per ton, just because so much of that is based on volume throughput, and that's dependent on customer activity in the second half. If you were to extrapolate first half activity in the second half, you know, you'd see a pretty significant improvement in OpEx per ton as we work through the year.

Speaker #3: But if you were to just extrapolate first half activity , the second half , you know , you'd see a pretty significant improvement in opex per ton .

Speaker #3: As we work through the year .

Speaker #12: Awesome . Thank you for the color . I'll hand the call back to the operator .

Jeff LeBlanc: Awesome. Thank you for the color. I'll hand the call back to the operator.

Speaker #1: Thank you . At this time , I'd like to turn the floor back over to Mr. Turner for closing comments

Operator: Thank you. At this time, I'd like to turn the floor back over to Mr. Turner for closing comments.

Speaker #14: Thank you . Operator . And thank you all for joining us today . And and for all the great questions . We truly appreciate the time you've taken with us to our team .

Company Representative: Thank you, operator, and thank you all for joining us today, and for all the great questions. We truly appreciate the time you've taken with us, to our exceptional team, thank you for all the hard work. To our customers, thank you for your partnership and trust, and our investors, thank you for your committed and continued support, belief in Atlas. We look forward and are excited about reporting our results going for 2026, and our first quarter results here in 2 or 3 months. Thanks, everyone, for joining, and that ends the call. Thank you.

John Turner: Thank you, operator, and thank you all for joining us today, and for all the great questions. We truly appreciate the time you've taken with us, to our exceptional team, thank you for all the hard work. To our customers, thank you for your partnership and trust, and our investors, thank you for your committed and continued support, belief in Atlas. We look forward and are excited about reporting our results going for 2026, and our first quarter results here in 2 or 3 months. Thanks, everyone, for joining, and that ends the call. Thank you.

Speaker #14: Thank you for all the hard work to our customers. Thank you for your partnership and trust, and to our investors.

Speaker #14: Thank you for your committed and continued support and belief in Atlas . We look forward and are excited about reporting our results . Going for 2026 and our first quarter results here in 2 or 3 months .

Speaker #14: Thanks everyone for joining . And that ends the call . Thank you

Speaker #1: Ladies and gentlemen . Thank you for your participation . This concludes today's event . You may disconnect your lines or log off the webcast at this time .

Operator: Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.

Q4 2025 Atlas Energy Solutions Inc Earnings Call

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