ProPetro Reports Financial Results for the Fourth Quarter and Full Year of 2023

Source: www.gulfoilandgas.com 2/21/2024, Location: North America

ProPetro Holding Corp. ("ProPetro" or "the Company") (NYSE: PUMP) today announced financial and operational results for the fourth quarter and full year of 2023.

Full Year 2023 Results and Highlights

- Revenue was $1.6 billion, a 27% increase over 2022.

- Net income increased significantly to $86 million as compared to $2 million in 2022.

- Adjusted EBITDA(1) was $404 million, a 28% increase over 2022.

- Repurchased and retired 5.8 million shares representing approximately 5.0% of our outstanding common stock since plan inception in May 2023.

- Deployed two FORCESM electric hydraulic fracturing fleets operating under contract and expect two additional FORCESM fleets to be deployed in the first half of 2024.

- The FORCESM electric fleet deployments along with our Tier IV DGB Dual-fuel fleets will represent approximately 65% of our hydraulic fracturing capacity.

- Published our first ProPetro ProEnergy ProPeople Sustainability Report in October.

- Realized continued benefits from our optimization program which supported lower capital expenditures and our capital returns program in 2023 and is expected to support further reduced capital expenditures in 2024.

- Completed another accretive acquisition to expand our cementing services into the Delaware Basin.

Fourth Quarter 2023 Results and Highlights

- Revenue was $348 million compared to $424 million for the prior quarter.

- Net loss of $17 million, or $0.16 per diluted share, compared to net income of $35 million, or $0.31 per diluted share, for the prior quarter.

- Adjusted EBITDA(1) of $64 million compared to $108 million in the prior quarter.

- Effective utilization was 12.9 fleets compared to 15.5 fleets for the prior quarter.

- Completed the acquisition of Par Five Energy Services LLC ("Par Five"), a Permian Basin-focused provider of cementing services in the Delaware Basin.

- Repurchased and retired 1.6 million shares.

Deployed our second FORCESM electric hydraulic fracturing fleet under contract.

(1) Adjusted EBITDA is a Non-GAAP financial measure and is described and reconciled to net income (loss) in the table under “Non-GAAP Financial Measures.”

Sam Sledge, Chief Executive Officer, commented, "The fourth quarter proved to be more challenging than we had originally anticipated, largely due to additional deferred activity late in the quarter. However, despite the white space, which we attribute primarily to seasonality and customer budget exhaustion, we were able to continue to execute on our strategy through the acquisition of Par Five, the deployment of an additional FORCESM electric fleet under contract, and continued capital returns through our share repurchase program. Thanks to the hard work of our team throughout 2023, we improved profitability, executed a disciplined approach to asset deployment, successfully pursued accretive growth, and employed a sustainable capital allocation plan. We have transformed ProPetro into a leading dual-fuel and electric frac provider with a complement of premium completion services, primarily offered in the Permian Basin. We have advanced our strategy to industrialize our business, and are confident that ProPetro is well-positioned to continue to execute on value-creating opportunities in 2024 and beyond.”

David Schorlemer, Chief Financial Officer, commented, “2023 was a remarkable year of progress for the Company. As we have previously noted, over the last two years, we invested over $1 billion to bring state-of-the-art technologies and completion services to ProPetro. These investments in dual-fuel conversions, electric frac technology, and the tremendous progress in our optimization program will lead to a sizeable decrease in capital spending and an improved operating expense profile going forward. We made these investments while repurchasing almost 6 million shares and protecting our liquidity and solid balance sheet. Our strategic execution coupled with the financial and operational discipline at ProPetro is working to create meaningful value for our customers and shareholders."

Fourth Quarter 2023 Financial Summary

Revenue was $348 million, compared to $424 million for the third quarter of 2023. The decrease in revenue is primarily attributable to our decreased hydraulic fracturing utilization caused by higher than expected seasonality, holiday, and customer budget exhaustion impacts.

Cost of services, excluding depreciation and amortization of approximately $62 million, decreased to $261 million from $292 million during the third quarter of 2023.

General and administrative expense of $28 million decreased from $29 million in the third quarter of 2023. General and administrative expense excluding non-recurring and non-cash stock-based compensation of $4 million and other non-recurring expenses of $2 million was $22 million, or 6% of revenue, which is flat compared to the third quarter of 2023.

Net loss totaled $17 million, or $0.16 per diluted share, compared to net income of $35 million, or $0.31 per diluted share, for the third quarter of 2023. Net loss for the fourth quarter of 2023 includes $8 million of true-up depreciation related to changing the useful lives of certain equipment.

Adjusted EBITDA decreased to $64 million from $108 million for the third quarter of 2023. The decrease in Adjusted EBITDA was primarily attributable to our decreased hydraulic fracturing utilization caused by higher than expected seasonality, holiday, and customer budget exhaustion impacts. Moreover, we elected to keep all fleets staffed despite the decreased utilization, in our anticipation of our customers resuming operations in early January 2024.

Liquidity and Capital Spending

As of December 31, 2023, we had cash and cash equivalents of $33 million and borrowings under our ABL Credit Facility were $45 million. Total liquidity at the end of the fourth quarter of 2023 was $134 million, which included cash and cash equivalents and $101 million of available borrowing capacity under our ABL Credit Facility.

Capital expenditures incurred during the fourth quarter of 2023 were $39 million, the majority of which related to maintenance expenditures and support equipment for our FORCESM electric frac fleet offering. Net cash used in investing activities as shown on the statement of cash flows during the fourth quarter of 2023 was $71 million.

Share Repurchases

The Company repurchased and retired 5.8 million shares during 2023. During the fourth quarter of 2023, the Company repurchased and retired 1.6 million shares. Subsequent to year-end through February 16, 2024, the Company repurchased an additional 0.8 million shares, bringing the total repurchases to 6.6 million shares, representing approximately 6% of our outstanding common stock since plan inception in May 2023.

Guidance and Recent Results

ProPetro’s outlook for full year 2024 incurred capital expenditures is expected to be between $200 million and $250 million, a reduction compared to $310 million in 2023. The significant year-over-year reduction is a testament to ProPetro’s strategy of employing capital light assets, such as the FORCESM electric frac fleet, and optimizing our operational and maintenance performance to reduce the capital intensity in our business.

Additionally, based on its current outlook for the first quarter of 2024, ProPetro anticipates frac fleet utilization of 14 to 15 fleets.


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