Derek Podhaizer

Derek Podhaizer asked for details on the FlexRobotics opportunity, including the capital required to retrofit an active rig, the number of rigs expected to be upgraded, whether it will be customer-funded, expected paybacks, and its potential impact on earnings.

Answer

SVP of U.S. Land Operations Mike Lennox highlighted the long-term significance of FlexRobotics, noting successful deployment on a Permian rig for a super major, exceeding P50 performance levels. President Trey Adams added that investments in FlexRobotics would be made with appropriate returns, leveraging creative commercial constructs, and emphasized the system's benefits for safety and performance.

Derek Podhaizer inquired about the strategic opportunity presented by FlexRobotics, seeking details on capital requirements for retrofitting, the potential number of rigs to be upgraded, customer funding models, expected paybacks, and the technology's anticipated impact on earnings in the near to medium term.

Answer

SVP of U.S. Land Operations Mike Lennox stated that FlexRobotics holds significant long-term potential, already demonstrating superior performance (P40 vs. P50 average) on a super major rig in the Permian Basin after 10 wells. President Trey Adams added that H&P intends to make these investments with appropriate returns, leveraging creative commercial constructs, and focusing on enhanced safety and operational performance. He noted strong customer interest despite being in early deployment stages.

Derek Podhaizer of Piper Sandler Companies asked for color on the factors that would lead to the high or low end of the North America rig count guidance and questioned which rig types would fulfill incremental activity in Saudi Arabia.

Answer

SVP Trey Adams explained the rig count range is sensitive to commodity price shifts that could affect private E&P activity. CEO John Lindsay clarified that future incremental activity in Saudi Arabia, particularly in gas-focused areas like Jafura, is expected to utilize the legacy KCA fleet rather than H&P's FlexRigs.

Derek Podhaizer asked about Patterson-UTI's international expansion strategy, specifically the deployment of idle rigs to Argentina, and potential opportunities in other regions like the UAE. He also sought an outlook for completion services in Q2 and Q3, including expectations for utilization and pricing trends after the Q1 winter weather impact.

Answer

Andy Hendricks, President and CEO, explained that Argentina's rig specifications are similar to the U.S., enabling capital-efficient transfers. Growing Vaca Muerta activity will draw rigs from the U.S., reducing domestic supply. He noted Q4 activity exceeded expectations and Q1 was relatively steady despite weather. Mr. Hendricks anticipates the oil market will remain stable if commodity prices stay in the $50-$60 range, leading to a relatively steady market outlook for the year.

Derek Podhaizer from Piper Sandler asked about Patterson-UTI's international expansion opportunities, specifically regarding sending idle rigs to Argentina's Vaca Muerta field and potential ventures like the Turnwell JV in the UAE. He also sought an outlook for completion services activity and pricing in Q2 and Q3 2026, considering the Q1 weather impact.

Answer

Andy Hendricks, President and CEO, explained that Argentina's rig specifications are similar to the U.S., making it capital-efficient to deploy idle rigs there. He anticipates continued growth in Vaca Muerta, drawing rigs from the U.S. For completion services, Mr. Hendricks noted Q1 was relatively steady despite weather, and if oil prices remain in the upper $50s-$60s, the market will likely stay stable, with Q1 revenue potentially shifting to Q2.

Derek Podhaizer requested an update on EcoCell technology, its potential opportunities outside of oil and gas, and within the CurrentPower subsidiary. He also asked about the required OpEx or CapEx for reactivating sidelined drilling rigs and its implications for future margin expansion, especially with E&Ps seeking more technology and capacity.

Answer

Andy Hendricks, President and CEO, stated that EcoCell, designed for hazardous drilling environments and variable loads, could have applications in production but less so for large industrial/data center power (200 MW+), which are more EPC projects. He emphasized focusing on strong free cash flow opportunities and noted the specialized nature of EcoCell's software for drilling rig surges. Mr. Hendricks noted that reactivating a rig historically costs several million dollars in capital. He expects larger day rates for rigs with added technology and structural upgrades (e.g., 1 million-pound capacity for deeper, longer laterals in Western Haynesville and Delaware) and will evaluate these on a project-by-project basis for high returns.

Derek Podhaizer (Piper Sandler Companies) requested an update on EcoCell, exploring its potential opportunities outside of oil and gas, particularly within the CurrentPower subsidiary. He also asked about the required OpEx and CapEx for reactivating sidelined drilling rigs and the implications for future margin expansion, especially as E&Ps demand more technology.

Answer

President and CEO Andy Hendricks explained that EcoCell is designed for hazardous drilling environments and variable loads, making its application in industrial or data center settings (which often involve large-scale EPC projects) less straightforward and potentially less profitable for Patterson-UTI. Regarding rig reactivation, Mr. Hendricks stated that historically, reactivating a rig costs several million dollars in capital. He noted that E&Ps are requesting more technology and capacity (e.g., for deeper, longer laterals), which drives larger day rates and higher returns on structural upgrades and technology additions.

Derek Podhaizer of Piper Sandler Companies asked for more detail on the steady Q3 completions outlook, seeking to understand the puts and takes between gas versus oil basins and spot versus dedicated work. He also inquired about the strategy for scaling the company's digital and technology portfolio, including the potential for M&A.

Answer

President & CEO William Hendricks explained that Q3 completions activity is steady across basins without significant shifts, attributing the stability to strong customer relationships and the high utilization of their technology-advanced Emerald fleets. Regarding technology, he highlighted the ongoing rollout of the Cortex automation platform for drilling and the Vertex automated frac system, which are designed to improve competitiveness and add revenue streams, rather than focusing on M&A.

Derek Podhaizer of Piper Sandler requested more details on Weatherford's first-quarter 2026 guidance, which implies an 11% sequential top-line decline and a 200 basis point margin contraction, asking for an elaboration on the contributing factors.

Answer

Executive Vice President and CFO Anuj Dhruv attributed the Q4 to Q1 sequential decline to typical seasonality, customer orders being pulled from Q1 into Q4 (specifically in Brazil and the Gulf of Americas), and a slight impact from weather in Texas. He also noted that year-over-year comparisons (Q1 2025 vs. Q1 2026) are affected by the full contribution of the Argentina divestiture in Q1 2025 and a slight impact from tariffs in Q1 2026. Mr. Dhruv emphasized that normalizing for the divestiture shows a generally flat top line year-over-year, with expectations for a sequential ramp-up in the second half of 2026.

Derek Podhaizer from Piper Sandler sought further clarification on Weatherford's Q1 2026 guidance, specifically the implied top-line decline and margin contraction, and the various factors contributing to this pronounced seasonality.

Answer

Anuj Dhruv, Executive Vice President and CFO, attributed the Q4 to Q1 decline to typical seasonality, orders pulled into Q4 (Brazil, Gulf of Americas), and slight weather impact in Texas. He noted that year-over-year Q1 comparisons are affected by the Argentina divestiture (full contribution in Q1 2025) and tariff impacts in Q1 2026. Dhruv emphasized that normalizing for the divestiture shows generally flat top-line year-over-year, with an expected sequential ramp-up in the second half of 2026.

Derek Podhaizer asked about the interplay of Weatherford's cost controls and optimization efforts with its previously guided 25-75 basis points margin expansion in a flat-to-up environment, requesting specific impactful examples.

Answer

Anuj Dhruv, Executive Vice President and CFO, outlined cyclical cost actions, including a 2,000 headcount reduction and $145 million in annualized personnel expense savings. He also detailed structural initiatives such as leveraging shared services, automation, generative AI, and continuous detailed review of expenses like T&E, logistics, and IT, all aimed at supporting margin improvements.

Derek Podhaizer asked about the interplay of cost controls and organization optimization with the previously guided 25-75 basis points margin expansion, seeking specific impactful examples.

Answer

Anuj Dhruv, EVP and CFO, discussed cyclical and structural aspects of cost control. Cyclically, 2,000 headcount reductions and $145 million in annualized personnel expense savings helped hold margins. Structurally, continuous improvement involves evaluating organizational structure, shared services, insourcing/outsourcing, and leveraging technology/AI to reduce costs across T&E, logistics, IT, and supplies, all supporting margin improvements.

Derek Podhaizer requested an expansion on Weatherford's balance sheet strategy, specifically concerning future debt reduction and potential refinancing activities given the company's high liquidity.

Answer

EVP & CFO Anuj Dhruv detailed the strategy, confirming the company will continue opportunistic debt reduction toward its long-term goal of a 1x gross leverage ratio. He noted that a refinancing of the 2030 notes is attractive, with key objectives being to reduce the overall tower size, manage maturities, lower interest expense, and revise covenants.

Derek Podhaizer of Piper Sandler asked for a quantification of the potential impact from trade tariffs on the business and inquired whether digital technology spending would be insulated from cuts during a market downturn.

Answer

President and CEO Girish Saligram explained it is difficult to quantify the tariff impact yet, but noted the Production & Intervention segment would see the most pronounced effect. He stated the most tangible near-term impact is uncertainty leading to reduced activity. On digital, Saligram believes spending on solutions that deliver clear value, like production optimization, could actually increase.

Derek Podhaizer from Piper Sandler inquired about the drivers behind the margin improvement in North America despite a declining market and the outlook for those margins. He also asked for more detail on the expected recovery shape for the Europe, Sub-Sahara Africa, and Russia region after Q1.

Answer

CEO Girish Saligram attributed the North America margin improvement to three factors: aggressive cost management, pricing discipline backed by technology and service quality, and market share gains in specific products and basins. For the Europe, Sub-Sahara Africa, and Russia region, Saligram projected a significant ramp-up from Q1 to Q2, driven by committed contract starts, followed by a smaller uptick in Q3 before leveling off for the year.

Derek Podhaizer sought additional insight into the updated wireline accounting treatment, specifically why the change occurred now rather than at the time of the acquisition last year, and the nature of the 'change in work type.' He also asked for details on Thru Tubing Solutions' international footprint, technology deployment, and growth prospects, particularly regarding unconventional build-out in the Middle East. Finally, he requested a 'state of the union' on the current spot market for pressure pumping, including competition, stacked fleets, and attrition.

Answer

Mike Schmidt, Chief Financial Officer, explained that wireline cables were previously capitalized but the business changed with increased Simul-frac and trimul-frac activity, leading to a shorter useful life (under a year). The decision to expense was made before year-end within the first accounting window, with no free cash flow impact. Ben Palmer, President and CEO, noted that Thru Tubing Solutions has the largest international presence, primarily in the Middle East (where weakness was experienced), and Canada. He hopes for improvement in the Middle East due to tool performance but is not directly counting on it in forecasts. Regarding pressure pumping, Mr. Palmer stated that no dramatic changes are observed in the spot market, with RPC maintaining discipline on pricing, idling a fleet, and trimming headcount. He hopes for improved returns and acknowledges challenges from mom-and-pop competitors, while focusing on less capital-intensive service lines.

Derek Podhaizer requested further historical context and reasoning behind the updated wireline accounting treatment, specifically why the change occurred in Q4 2025 rather than at the time of the acquisition, citing a change in work type. He also asked for more details on Thru Tubing Solutions' international presence, including specific locations, deployed technology, and growth outlook. Finally, he requested an update on the current state of the pressure pumping spot market, focusing on competition, the impact of stacked fleets and attrition, and potential for fundamental improvement.

Answer

Mike Schmidt (CFO) explained the wireline accounting change was due to increased activity and a shift to work types like Simulfrac, leading to a shorter useful life for cables, with zero free cash flow impact. Ben Palmer (President and CEO) added a parallel to fluid ends accounting. For Thru Tubing Solutions, Mr. Palmer clarified its largest international presence is in the Middle East, which experienced weakness, and noted a pared-back physical presence with tools made available through other groups. On the pressure pumping market, Mr. Palmer stated no dramatic changes are observed yet, but emphasized RPC Inc.'s discipline with pricing, having idled a fleet and trimmed headcount, and expressed hope for improved competitor returns.

Derek Podhaizer with Piper Sandler inquired about potential M&A to support Forte, Tempo, Chorus, and the integrated solution, beyond just power generation assets.

Answer

CFO Michael Stock emphasized Liberty's focus on organic building and partnerships, looking for small bolt-on or tuck-in acquisitions that add technology, increase vertical stack, or enhance technological heft, particularly for key long-lead items that de-risk execution. CEO Ron Gusek reiterated focusing on critical inputs for success, similar to their approach in oilfield services.

Derek Podhaizer asked about Liberty Energy's strategy to defend its market position against emerging oversupply concerns in power generation assets, particularly from repurposed jet engines, and how Liberty's integrated power services infrastructure solution creates a moat. He also inquired about potential M&A to support the build-out of Forte, Tempo, and Chorus.

Answer

CEO Ron Gusek explained that successful power generation for data centers requires more than just supply, highlighting LPI's comprehensive platform including midstream, packaging, power quality systems, and specific technology for complex loads. He stated that abundant supply might even speed up project timelines. CFO Michael Stock added that refurbishing gray market turbines doesn't significantly reduce total cost and that Liberty's organic building approach focuses on partnerships and small, strategic technology additions that increase vertical stack and de-risk execution.

Derek Podhaizer sought clarification on the type of equipment for the incremental 600 MW capacity, specifically the mix of resets and turbines, and the potential for larger resets (10+ MW). He also asked for a Q4 outlook on top-line and decrementals, considering seasonality.

Answer

CEO Ron Gusek confirmed the vast majority of incremental capacity remains gas reciprocating engines due to superior heat rate (45% thermal efficiency), though turbines have a role for density. He explained the portfolio would include Jenbacher units (4.3-4.4 MW packaged) and larger 10-12 MW units deployed in power halls, with different timelines. CFO Michael Stock added that power blocks would range from 2.5 MW to 200 MW power halls, with larger turbine solutions for very large installations and Oklo/Aurora powerhouses post-2030. For Q4, Ron Gusek anticipated typical seasonality.

Derek Podhaizer of Piper Sandler Companies asked for commentary on equipment attrition, specifically the removal of diesel fleets from the market. He also inquired about the total addressable market for the new sand slurry pipe technology.

Answer

CEO Ron Gusek explained that he expects an accelerated attrition rate, potentially in the mid-teens, for older Tier 2 diesel equipment due to the challenging economic environment, which will improve supply/demand dynamics. Regarding the sand slurry system, Gusek stated it has applications across the Permian Basin (Midland and Delaware) and potentially in other wet sand basins like the Haynesville, wherever it makes economic sense over the right distances.

Derek Podhaizer asked about the U.S. land attrition dynamics, including Halliburton's fleet deployment status, the potential for market tightness with a small demand increase, and its implications for Completion and Production (C&P). He also requested a regional breakdown of the Middle East outlook.

Answer

Jeff Miller, Chairman, President, and CEO, confirmed Halliburton has consciously stacked fleets in Q3 and Q4 that could return to work for acceptable returns or be deployed internationally. He observed that the market's shift towards bigger fracs requiring more equipment limits the ability to add fleets, suggesting that even a small demand increase could quickly tighten the market. For the Middle East, he noted generally stable markets, with UAE and Kuwait showing strength, Iraq as a positive story, and a cautious view on the timing of activity increases in Saudi Arabia.

Derek Podhaizer asked about the tangible attrition in the U.S. land market, specifically regarding Halliburton's stacked fleets and the broader market's ability to deploy additional equipment, and what a small increase in demand could mean for C&T tightness and pricing this year. He also requested a regional breakdown of the Middle East outlook, focusing on Saudi Arabia, UAE, Kuwait, Oman, and Iraq.

Answer

Jeff Miller, Chairman, President, and CEO, confirmed Halliburton has consciously stacked fleets in Q3 and Q4 that could return to work for acceptable returns, potentially internationally. He observed that the market's reliance on larger horsepower fleets for simul-frac indicates equipment is being heavily utilized and repaired, making it challenging to add new fleets. Miller believes even a small demand increase would create tightness due to high performance and technology requirements. For the Middle East, Miller sees general stability, with UAE and Kuwait being strong, Iraq showing activity growth, and Saudi Arabia adding rigs but with cautious timing on impact.

Derek Podhaizer requested more details on Halliburton's idling equipment strategy, including the number of fleets idled, those permanently impaired, and those expected to return to work. He also asked about the significance of this accelerated attrition for the market's supply and demand balance in 2026. Additionally, he inquired about Q3 free cash flow being light, working capital headwinds, expectations for Q4, and early indications for 2026 free cash flow given the lower CapEx.

Answer

Jeffrey Miller, Chairman, President, and CEO, explained that Halliburton idles equipment that is not economic, focusing on the principle rather than specific numbers. He highlighted that idled equipment remains idle, not being redeployed to shore up underperforming assets, which is key to attrition and will lead to real tightness in North America pricing with minimal market recovery. Eric Carre, Executive Vice President and CFO, confirmed Halliburton is still targeting $1.7 billion in free cash flow for 2025, with Q3 being lower due to higher revenue, slightly lower collections, and cash charges. He expects Q4 to be strong for collections. For 2026, Mr. Carre noted $400 million less in costs and $400 million lower CapEx, providing $800 million in additional liquidity, but suggested a potentially more conservative approach to cash utilization, such as buybacks, due to macro volatility.

Derek Podhaizer of Piper Sandler Companies asked about the drivers behind the diverging performance in artificial lift, with softness in U.S. Land but strong growth internationally. He also requested updates on the outlook for Mexico and Kuwait.

Answer

Chairman, President & CEO Jeff Miller explained that international lift growth is fueled by introducing Summit's technology to new markets, while U.S. softness is tied to activity levels and tariffs. He clarified that Kuwait remains a solid long-term growth market despite quarterly volatility and that recent Latin America strength was not driven by Mexico, which he still views as a market with 'starts and stops'.

Derek Podhaizer of Piper Sandler Companies asked for color on the bifurcation in the artificial lift business, with softness in the U.S. and growth internationally, and inquired about the impact of tariffs. He also sought updates on the business environment in Mexico and Kuwait.

Answer

Chairman, President & CEO Jeff Miller explained that international artificial lift growth is driven by introducing Summit's technology to new markets, while U.S. softness is tied to activity levels and tariffs. EVP & CFO Eric Carre added that artificial lift is the largest component of their tariff impact. Miller clarified that recent Latin America strength was not driven by Mexico, where he expects continued volatility, and that Kuwait remains a solid long-term growth market despite quarterly fluctuations.

Derek Podhaizer asked for an outlook on U.S. gas basin activity given demand drivers like LNG and AI. He also inquired about Halliburton's strategic positioning for the current deepwater and offshore cycle compared to previous cycles.

Answer

CEO Jeffrey Miller expressed a positive long-term view on gas markets due to structural demand, noting more recent inbounds from gas operators. On the offshore cycle, Miller stated Halliburton is in a much better technical position than ever before, winning integrated work. He emphasized that the company's value proposition of collaboration and creating asset value for customers provides a significant competitive advantage in the high-stakes deepwater environment.

Derek Podhaizer with Piper Sandler inquired about the potential for extending short-term contract durations into 2026, particularly in light of customer-funded rig upgrades. He also asked about the expected volume of rig upgrades for 2026, the available rig population for upgrades, and the implications for future capital expenditures and free cash flow.

Answer

President and CEO Carey Ford explained that longer-term contract commitments are emerging in specific regions like the Montney and Marcellus, with shorter durations in oil basins. He noted ongoing constructive conversations for 2026 contracts. Regarding rig upgrades, Ford emphasized their high-return nature and strategic advantage, expressing hope for continued demand driven by longer-reach horizontals in the U.S. and pad configurations in Canadian heavy oil, while reiterating capital commitments for debt reduction and shareholder returns.

Derek Podhaizer of Piper Sandler Companies inquired about the U.S. rig activity ramp-up, asking for the split between public and private operators in gas basins and the potential cadence of rig additions. He also asked about the long-term strategy for the oversupplied Canadian double rig market.

Answer

President and CEO Kevin Neveu explained that private operators are currently leading the rig additions in U.S. gas basins, which is typical for a market turn. He stated Precision is targeting an increase to 40-45 active U.S. rigs over time, implying 5-7 more gas rigs over the next several quarters, assuming stable oil prices. Regarding the Canadian double rig segment, Neveu described it as oversupplied and fragmented, noting that while consolidation is needed, Precision is unlikely to be the consolidator due to its existing market share.

Derek Podhaizer requested details on Expro's production solutions opportunities, including the types of services and technologies involved, and the regions best suited for these solutions. Podhaizer also asked for clarification on the magnitude of capital consumption by past production solutions projects and the expected cash generation as these projects transition to operational phases. Finally, Podhaizer sought more granular insight into where Expro expects the most significant impact on margin expansion in 2026, specifically from a regional or product line perspective.

Answer

CEO Mike Jardon described production solutions as enhancing existing infrastructure, such as early pretreatment facilities (e.g., Congo) or gas recompression/reinjection (e.g., Algeria), to reduce flaring. He noted these are smaller, modular projects focused on accelerated monetization of existing assets, with strong presence in the Middle East, West Africa, and South America, primarily brownfield activity. CFO Sergio Maiworm explained that past projects involved significant construction investments, but once online, they become annuities with low operating costs and consistent, predictable cash streams, stacking up to contribute significantly to free cash flow generation. Jardon stated that it's too early for granular 2026 details but projected Gulf of America to be flattish, South America and MENA to show strength, and West Africa to be consistent, noting Asia-Pacific would likely remain softer until Australia's drilling phase picks up.

Derek Podhaizer from Piper Sandler requested clarification on Expro's production solutions business, specifically asking about the types of services, technologies involved, and the most suitable regions for these offerings. Podhaizer also inquired about the expected magnitude of cash generation from these projects, which were previously capital-intensive, and sought insights into which regions or product lines would most significantly contribute to margin expansion in 2026.

Answer

CEO Mike Jardon described production solutions as smaller, modular projects focused on accelerated monetization of existing assets, such as gas pretreatment facilities (e.g., Congo OPT) or gas recompression/reinjection to reduce flaring. He identified the Middle East, West Africa, and South America as key regions, emphasizing brownfield activity. CFO Sergio Maiworm explained that projects moving from construction to operation become annuities, providing consistent, predictable cash streams. CEO Mike Jardon indicated that for 2026, the Gulf of America would likely be consistent, South America and MENA could show strength, West Africa consistent, and Asia-Pacific softer. He noted that the mix of geographic activity and technology rollouts would significantly impact margin expansion.

Derek Podhaizer from Piper Sandler Companies asked for more detail on the moving pieces within the MENA region, given the slight sequential decline in revenue and margins. He also inquired about the future cadence of shareholder returns and the potential for a dividend.

Answer

CEO Michael Jardon clarified that MENA remains Expro's most profitable region and the slight dip was due to project timing, emphasizing the robust outlook for its unconventional gas business in Saudi Arabia and production optimization in Algeria. CFO Sergio Maiworm reiterated the plan to repurchase ~$40 million in stock in 2025, with an acceleration in the second half. He added that while share repurchases are currently the preferred return method, a dividend is an ongoing discussion with the board.

Derek Podhaizer from Piper Sandler Companies asked for more color on the moving pieces within the Middle East and North Africa (MENA) region, given the slight sequential decline in revenue and margins. He also inquired about the future cadence of shareholder returns and the potential for a dividend.

Answer

CEO Michael Jardon clarified that MENA remains Expro's most profitable region and the slight quarterly dip was due to project timing, not a fundamental issue. He highlighted robust activity in Saudi unconventional gas and Algerian production optimization. CFO Sergio Maiworm confirmed the plan to repurchase approximately $40 million in stock in 2025, with an accelerated pace in the second half. He added that while share repurchases are currently the preferred method for capital return, the board continuously evaluates all options.

Derek Podhaizer asked about the potential for applying Subsea 2.0's industrialization principles to the SURF (installation) side of the business for continued improvement. He also inquired about the drivers behind the increasing scope of over $1 billion projects on the subsea opportunities list and its future potential.

Answer

Doug Pferdehirt, Chair and CEO, hinted at significant opportunities to further industrialize the full iEPCI scope, expanding beyond the Subsea 2.0 product architecture, but remained discreet on details. He attributed the increase in large projects to the economic attractiveness of offshore reservoirs, TechnipFMC's ability to provide project certainty (reducing cycle time and improving returns), and the overall shift in capital allocation to offshore. He also noted that the proprietary opportunity list for direct awards is growing even faster.

Derek Podhaizer inquired about the potential for Subsea 2.0 to industrialize the SURF (Subsea Umbilicals, Risers, and Flowlines) or installation side of the business, and the drivers behind the increasing number of subsea projects exceeding $1 billion on the opportunities list.

Answer

Chair and CEO Douglas Pferdehirt hinted at a significant, yet undisclosed, opportunity to further industrialize the full iEPCI™ scope. He attributed the growth in large projects to offshore reservoirs offering the best returns, TechnipFMC's certainty in execution, and the increasing share of capital allocation to offshore, noting a recent trend towards gas projects.

Derek Podhaizer of Piper Sandler Companies requested a refresher on the improvements in permit approval timelines and asked for the expected revenue and EBITDA contribution from the recently acquired Blue Mountain power plant, both initially and post-enhancements.

Answer

CFO Assi Ginzburg explained that permitting times in Nevada have dramatically shortened from over a year to as little as two months. For Blue Mountain, he projected approximately $4 million in EBITDA for the second half of 2025, with a 10-15% increase by 2027 after planned upgrades. He also noted significant future upside from a PPA renewal post-2029 and its potential for EGS development.

Derek Podhaizer of Piper Sandler & Co. questioned the sequential margin decline in the Energy Storage segment, the 2025 margin outlook considering potential tariffs, and the progress of the MOU with SLB for geothermal development.

Answer

CFO Assaf Ginzburg attributed the Q4 storage margin fluctuation to the terms of a new tolling agreement and guided to a 15-20% margin for the full year 2025. He noted that while tariffs on Chinese goods would add cost, the impact is mitigated by the significant overall decline in battery prices. CEO Doron Blachar described the SLB partnership as a long-term initiative to co-develop geothermal projects and advance EGS technology.

Derek Podhaizer of Piper Sandler Companies asked for specific details on the Peak Rentals fleet, including megawatt capacity and unit types, and questioned the 2026 CapEx budget required to achieve the guided 20% growth in the Water Infrastructure segment.

Answer

President, CEO & Chairman John Schmitz clarified that Peak's fleet is expanding from smaller, portable diesel units to larger natural gas generators for midstream applications. EVP & CFO Christopher George noted that total fleet size is not disclosed and future scale depends on the outcome of the strategic review. Regarding CapEx, George explained that the 20% growth in 2026 is underwritten by existing contracts, with approximately $75-100 million in capital spending planned for the first half of 2026, but new contracts could increase this figure.

Derek Podhaizer of Piper Sandler Companies requested an expansion on the power business's opportunities outside of oil and gas and asked for tangible evidence of the forecasted supply contraction in the Permian sand market.

Answer

President and CEO John Turner and SVP & President of the Power Business Unit Tim Ondrak highlighted that non-oil and gas opportunities in sectors like manufacturing and technology offer longer-term contracts, enhancing cash flow stability. EVP & President of Sand and Logistics Chris Scholla confirmed supply contraction by noting one major competitor's mine has shut down and widespread layoffs are occurring, estimating at least 20% of the market's stated capacity is effectively offline.

Derek Podhaizer inquired about the basis for the 'flat to up sequentially' guidance, seeking clarity on activity, pricing, and cost trends given the Dune Express ramp-up. He also asked for the company's confidence in achieving its 22 million tons of committed volumes for the year and what would be required to reach the higher 25 million-ton figure amid softer market activity.

Answer

CEO John Turner stated that Atlas does not see near-term market upside, as operators have adopted a 'wait-and-see' attitude. CFO Blake McCarthy added that Q2 guidance is conservative, but logistics margins are improving due to the Dune Express. COO Chris Scholla expressed high confidence in the 22 million tons of allocated volume, noting that 75% is tied to efficient completion methods and over 70% is with large-cap operators, providing stability.

Derek Podhaizer from Piper Sandler Companies asked for a breakdown of the 5% sequential growth in rental revenue, its future trajectory, and the competitive landscape for High-Pressure Gas Lift (HPGL) following the Archrock acquisition. He also inquired about the capital needed to integrate the new assets.

Answer

President & CEO Joe Bob Edwards attributed the consistent rental growth to the market adoption of HPGL and VRUs displacing legacy technologies like ESPs, a trend he expects to continue. He stated that FloQo's primary competition is not other HPGL providers but the much larger market for what he termed 'inferior technology.' Edwards also confirmed the integration of the acquired assets would be seamless and highly efficient, requiring only three new hires.

Derek Podhaizer asked for a breakdown of the 5% sequential growth in rental revenue, questioning if it signals accelerated HPGL adoption due to competitors' tariff-related issues. He also inquired about the remaining competitive landscape for HPGL post-acquisition and any capital required for asset integration.

Answer

President, CEO & Director Joe Bob Edwards attributed the consistent rental growth to market adoption of HPGL and VRUs displacing legacy technologies like ESPs, a trend he expects will continue to drive higher margins. He clarified that FloQo's primary competitor is the inferior ESP technology in a large market, not other HPGL providers. He also stated the Archrock asset integration is seamless, requiring minimal capital and only three new hires.

Asked about the drivers of rental revenue growth, the potential future mix of rentals, the competitive landscape for HPGL post-acquisition, and the integration costs for the new assets.

Answer

The company attributed rental growth to the continued market adoption of HPGL and VRU technologies. They expect the rental mix and margins to continue increasing. They see their main competition as legacy technologies like ESPs, not other HPGL providers, and confirmed the acquired assets can be integrated seamlessly with minimal cost.

Derek Podhaizer inquired about the adoption outlook for High-Pressure Gas Lift (HPGL), asking if Flowco is securing new customers or just increasing wallet share, and also asked about the long-term strategy for shareholder returns beyond the initial dividend.

Answer

CEO Joseph Edwards stated that there is increased market chatter and encouraging customer conversations pointing toward broader, programmatic adoption of HPGL, driven by tariffs and favorable well characteristics. Regarding shareholder returns, Edwards emphasized that the primary focus is on growing ROCE. He described the new dividend as a defensible first step and noted that while a share buyback is in the 'tool bag,' the company is cautious due to its limited public float.

Inquired about the HPGL adoption outlook, specifically regarding new customer wins versus wallet share growth, and the company's long-term strategy for shareholder returns like dividends and buybacks.

Answer

Executives reported increased market interest and broader programmatic adoption of HPGL, expecting new customer wins in 2025. On shareholder returns, the focus is on achieving high ROCE through accretive investments, with the new dividend being a sustainable first step and buybacks being a future possibility.

Derek Podhaizer asked how E&P consolidation is impacting the customer base and adoption of High-Pressure Gas Lift (HPGL) technology. He also requested details on the 2025 free cash flow outlook, including the breakdown of growth versus maintenance CapEx.

Answer

CEO Joe Bob Edwards explained that Flowco's strategy for HPGL is to continue pushing its technical limits to gain market share, particularly against ESPs, targeting what they see as a 40% addressable portion of that market. Regarding the free cash flow question, Edwards stated that the company would not provide full-year guidance beyond the expectations laid out during its IPO.

Asked about the impact of E&P consolidation on the high-pressure gas lift (HPGL) customer base and for details on the 2025 free cash flow outlook.

Answer

The company sees continued growth for HPGL by pushing its technical limits and targeting new customers, noting they can penetrate about 40% of the addressable market currently served by ESPs. They declined to provide specific full-year 2025 free cash flow guidance but reiterated that expectations are in line with what was presented during the IPO roadshow.

Derek Podhaizer inquired about Tenaris's exposure to the strengthening U.S. natural gas basins, particularly from private operators, and asked for an assessment of the current OCTG inventory levels on the ground in the U.S.

Answer

President of U.S. Operations, Guillermo Moreno, confirmed Tenaris is seeing an upside from gas activity in Appalachia, driven by traditional private clients. He also noted that high imports in H1 2025 increased U.S. OCTG inventories by about one month of consumption to roughly seven months, with a reduction expected to begin in Q3.

Derek Podhaizer asked if the previously discussed 25% EBITDA margin target for the second half of the year is still achievable given the deteriorated activity outlook. He also questioned if the strong Q1 North America revenue was driven by customers front-loading orders ahead of tariffs.

Answer

Chairman and CEO Paolo Rocca conceded that achieving a 25% margin in the second half would be difficult in the current environment, but he expects margins to remain within a 20-25% range. He clarified that strong Q1 performance was not due to front-loading, as the Rig Direct model means invoicing occurs upon pipe usage, precisely tracking activity. The strength was driven by a record season in Canada and resilient operations from U.S. clients.

Derek Podhaizer requested a detailed overview of the North American supply-demand picture, including on-the-ground pipe inventory, distributor health, and the impact of Section 232 quota changes. He also asked about the U.S. rig count outlook and the business dynamics in Saudi Arabia, covering conventional versus unconventional activity.

Answer

Luca Zanotti, President of U.S. Operations, addressed the North American market, stating that imports have decreased, inventories are normalizing to just under 6 months, and the supply-demand balance has improved. He noted demand from majors is disciplined, but smaller and gas-focused operators are adding activity. Gabriel Podskubka, Chief Operating Officer, discussed the Middle East, highlighting resilient gas-related drilling across the region while oil-related activity is more uneven. He also noted a major CCS pipeline award in Saudi Arabia.

Derek Podhaizer asked for a big-picture view on the Permian Basin's frac fleet oversupply and its potential impact, and also inquired about ProPetro's future equipment strategy for its Pro Power division and potential expansion into non-oil and gas markets.

Answer

CEO Sam Sledge explained that the frac market oversupply is concentrated in older diesel equipment, and ProPetro is choosing to idle fleets rather than accept sub-economic pricing, viewing this as a long-term tailwind. For Pro Power, Sledge noted the company is pleased with its current flexible power generation assets and will remain focused on the strong demand from oil and gas customers initially, while exploring non-oil and gas opportunities long-term.

Derek Podhaizer requested more detail on the type of equipment being ordered for PROPWR (turbines vs. reciprocating engines) and asked about the evolution of maintenance CapEx for e-frac fleets after 18 months of operation.

Answer

CEO Sam Sledge specified that the initial PROPWR order was for turbines (5 MW and up) while the most recent order was for reciprocating engines (3 MW and up). Regarding e-frac maintenance, Sledge described the results as 'phenomenal.' CFO David Schorlemer quantified this, stating they are seeing 30% to 50% lower maintenance CapEx intensity compared to conventional fleets due to the simpler design with fewer moving parts.

Derek Podhaizer of Piper Sandler Companies questioned the strategy for scaling the ECO rig fleet, including its total addressable market and geographic applicability. He also asked about the key drivers behind the increase in High Spec Rig hours and sought an update on the Torrent service line's growth.

Answer

CEO Stuart Bodden stated that scaling the ECO rig fleet will be strictly tied to customer demand, not speculative builds, projecting a potential for 20+ rigs in 3-5 years. He confirmed the rigs are basin-agnostic. Bodden attributed the growth in High Spec Rig hours to strong relationships with major players, benefits from industry consolidation, and success with mid-tier customers based on efficiency and safety. He also confirmed the Torrent service line remains on track to double its EBITDA.

Derek Podhaizer asked for details on the 70 megawatts of capacity recently contracted in the energy market and inquired about the timeline for securing contracts for the remaining ~450 megawatts of open capacity.

Answer

CFO & President Kyle Ramachandran explained the new capacity went to a large, existing midstream customer at attractive pricing, though for a shorter duration than typical data center contracts. Regarding the uncontracted fleet, he stated that while it's difficult to predict timing, conversations with multiple parties are advanced and accelerating, driven by regulatory clarity and market demand for their modular power solutions.

Derek Podhaizer from Piper Sandler Companies asked for an expansion on the strategy of 'never missing an opportunity of a downturn,' inquiring about NESR's view on recent industry JVs in the Middle East and whether NESR might pursue a similar structure to scale its business.

Answer

Chairman and CEO Sherif Foda explained that NESR's strategy is to counter-cyclically invest in CapEx and equipment while others are cutting back. He views recent JVs by competitors as moves to buy access to the Middle East, a position NESR already holds. Instead of JVs, NESR will leverage its established infrastructure and relationships to add services and aggressively gain market share, aiming for a top-three position in its operating segments.

Derek Podhaizer inquired about NESR's capacity to handle MENA growth, the outlook for its CapEx cycle, and the potential impact on pricing and margins. He also requested more details on partnerships with North American tech companies and the strategy for deploying U.S. shale technology in the region.

Answer

Stefan Angeli, CFO, stated that for the anticipated 5-10% growth in 2025, CapEx is expected to be around $120 million, similar to 2024, with a projected free cash flow conversion rate of approximately 40% of EBITDA. Sherif Foda, Chairman and CEO, added that NESR operates as an open platform, bringing best-in-class U.S. shale technologies to the MENA region through partnerships. He cited successes with companies like Cactus and Phoenix in the Jafurah project and noted future opportunities in managed pressure drilling and wireline technologies.