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ProPetro Holding Corp. First Quarter 2019 Results

Share Print Bookmark    |    Tuesday,May 07,2019

ProPetro Holding Corp. announced financial and operational results for the first quarter of 2019.

First Quarter 2019 Highlights

• Total revenue for the quarter was $546.2 million, as compared to $425.4 million for the fourth quarter of 2018.
• Net income was $69.8 million, or $0.67 per diluted share, an increase of 35% from $51.8 million, or $0.59 per diluted share, for the fourth quarter of 2018.
• Adjusted EBITDA⁽¹⁾ for the quarter was $150.3 million, an increase of 34% from $112.4 million for the fourth quarter of 2018.
• Effective utilization for the first quarter was 27.0 fleets.
• Plans to deploy two new-build electrically powered DuraStim® fleets⁽²⁾ in late 2019.

Dale Redman, Chief Executive Officer, commented, “ProPetro’s success in the first quarter is yet another example of our differentiated, customer-centric and performance driven business model. We remain extremely proud of our best-in-class team and the consistent results they produce. I’m also proud to report that we’ve integrated approximately 500 employees from our Pioneer transaction and that they are already adding significant value as members of the ProPetro team. Our team continues to support some of the most effective and efficient operators in the upstream space, and we will remain closely focused on their needs as we execute plans for an exciting 2019.”

First Quarter 2019 Financial Summary

Revenue for the first quarter of 2019 was $546.2 million, an increase of 28% as compared to revenue of $425.4 million for the fourth quarter of 2018. The increase was primarily attributable to the acquisition of 510,000 Hydraulic Horsepower (“HHP”) on December 31, 2018. During the first quarter of 2019, 97.4% of total revenue was associated with pressure pumping services, compared to 97.8% in the fourth quarter.

Costs of services excluding depreciation and amortization for the first quarter of 2019 increased to $381.5 million from $300.4 million during the fourth quarter of 2018 primarily due to increased active fleet size and activity levels. As a percentage of pressure pumping segment revenues, pressure pumping costs of services decreased to 69.7% from 70.3% in the fourth quarter of 2018.

General and administrative expense was $18.5 million as compared to $15.0 million in the fourth quarter of 2018. The increase was primarily attributable to overhead in connection with the added capacity from our transaction with Pioneer Natural Resources (“Pioneer”). General and administrative expense, exclusive of stock-based compensation, deferred IPO bonus and retention expense, was $14.4 million, or 2.6% of revenue, for the first quarter of 2019.

Net income for the first quarter of 2019 totaled $69.8 million, or $0.67 per diluted share, versus $51.8 million, or $0.59 per diluted share, for the fourth quarter of 2018.

Adjusted EBITDA increased approximately 34% to $150.3 million for the first quarter of 2019 from $112.4 million in the previous quarter. Adjusted EBITDA margin for the first quarter of 2019 was 27.5%, as compared to 26.4% for the fourth quarter of 2018.

Operational Highlights and Fleet Expansion

As previously announced, ProPetro expanded its fracturing capacity by 510,000 HHP, representing 8 fleets and related pump down equipment, through its transaction with Pioneer. This transaction increased the Company’s total capacity to 1,415,000 HHP. Effective utilization of the Company’s fracturing assets during the first quarter of 2019 was 27.0 fleets. ProPetro expects effective utilization in the second quarter of 2019 to be approximately 26.0 fleets.

The Company also plans to build and deploy two electrically powered DuraStim (for further information, see “The DuraStim Difference” section later in this release) fleets by the end of 2019. Each of these fleets consists of 36,000 HHP and related power equipment. Both of these fleets will be deployed to existing customers under dedicated agreements.

During the quarter the Company also expanded its cementing operation by deploying one additional unit, bringing total current cementing capacity to 21 units. Also, as previously announced, ProPetro plans to organically expand its cementing operation by 3 additional units this year as well as organically expand its coil tubing capacity by 1 additional unit.

Liquidity and Capital Spending

As of March 31, 2019, total cash was $79.5 million and total debt was $160.0 million. Total liquidity at the end of the first quarter of 2019 was $156.1 million, including cash and $76.6 million of available capacity under the Company’s $300 million revolving credit facility.

Capital expenditures incurred during the first quarter of 2019 were $86.1 million. This reflects spending on ProPetro’s growth initiatives as well as maintenance capital.

Outlook

Mr. Redman concluded, “We remain confident in our ability to produce consistent results driven by our high performing workforce and close partnerships with a blue-chip customer base. The Permian Basin is the premier resource play in North America, and we expect it will remain so for decades to come. We believe we are uniquely positioned for outperformance through 2019 and beyond.”