Eddie Kim

Eddie Kim asked about the primary end markets for Liberty Energy's power generation equipment, specifically if the majority of the incremental 2 GW by 2029 would be for data center operators, and inquired if expectations for pricing and payback periods (5-6 years) for longer-term opportunities had changed.

Answer

CEO Ron Gusek confirmed that data centers now represent the largest percentage of LPI's projects, shifting from earlier expectations of primarily CNI and oilfield electrification, though those opportunities are still pursued. He reiterated that expectations for a 5-6 year payback and high-teens unlevered returns remain unchanged.

Eddie Kim with Barclays inquired about expectations for pricing and payback periods (5-6 year payback, high teens unlevered returns) for longer-term power generation opportunities.

Answer

CEO Ron Gusek confirmed no changes to these expectations, stating that a 5-6 year payback and high teens unlevered returns are still considered very reasonable.

Eddie Kim asked for clarification on the 600 MW incremental capacity, specifically how much is secured/ordered versus in advanced discussions, and Liberty's confidence in delivering 1 GW by end of 2027 given OEM sell-outs. He also requested an update on the Oklo equity stake and collaboration.

Answer

CFO Michael Stock expressed high confidence in delivering the 1 GW by end of 2027 due to unique OEM relationships, confirming that the vast majority of the incremental 600 MW is ordered (referring to 'landed' capacity). Regarding Oklo, he referred to company filings for equity stake details, noted some monetization for power generation deposits, and highlighted that long-term power contracts with hyperscalers will likely include small modular nuclear. He mentioned hoping to see electrons from Oklo's national lab generator by early 2028.

Eddie Kim from Barclays asked for the rationale behind reducing fleet count and redeploying assets to simul-frac operations, questioning if it was driven by customers halting activity or by unsustainable pricing pressure. He also asked about the earliest potential revenue from the OCLO alliance.

Answer

CEO Ron Gusek attributed the fleet reduction to a combination of smaller operators pausing activity and 'unconstructive' pricing from competitors, which led Liberty to choose not to participate in certain work and instead reallocate resources to long-term partners. CFO Michael Stock projected that significant revenue from large data center projects, including those under the OCLO alliance, would likely begin in 2027, with nuclear-generated revenue following in the early 2030s.

Eddie Kim from Barclays asked about the differences between the new 400 MW of power equipment and the existing deployed units, and questioned the implied capital cost per megawatt for future deliveries.

Answer

CEO Ron Gusek clarified that the new equipment will be more stationary and skid-mounted, unlike the mobile units for frac, and will include larger-scale engines. He explained that the all-in capital cost is approximately $1.3 million to $1.4 million per megawatt, which includes not just the generator but also the entire balance of plant (transformers, infrastructure, etc.), making it a fair estimate. CFO Michael Stock confirmed all 400 MW are already scheduled with manufacturers.

Eddie Kim from Barclays requested a deeper breakdown of the full-year CapEx guidance, specifically the portion allocated to reactivation-related CapEx versus maintenance, and whether reactivation-related OpEx would be a similar amount.

Answer

CFO Kevin Vann clarified that the $230 million-$250 million CapEx includes all rig reactivation costs, but an exact per-rig number is difficult due to variability. He stated that there is more CapEx than OpEx related to reactivations, with most OpEx impacts expected to clear in Q1 and Q2 fiscal 2026.

Eddie Kim from Barclays sought a deeper breakdown of the full-year CapEx guidance, specifically asking for the amount of reactivation-related CapEx within the $230 million-$250 million maintenance and reactivation capital. He also questioned if reactivation-related OpEx would be a similar amount to the CapEx.

Answer

CFO Kevin Vann clarified that the $230 million-$250 million CapEx includes all rig reactivation costs, but an exact number per rig is difficult due to variability. He stated that there is more CapEx than OpEx hitting operating costs, with most margin impacts expected to clear in fiscal Q1, potentially bleeding into Q2. He reiterated that Q4 international margins were a low point, with expected improvement.

Eddie Kim from Barclays questioned the drivers behind H&P's relative outperformance in its Lower 48 rig count guidance and inquired about the activity dynamics between oil and gas basins.

Answer

SVP Michael Lennox attributed the resilient rig count to a strong customer mix and prior investments in rigs capable of drilling complex, long-lateral wells. He confirmed a slight pullback in oil plays has been offset by an uptick in natural gas plays like the Haynesville and Marcellus. CEO John Lindsay added that this aligns with a broader global trend toward natural gas.

Eddie Kim asked for clarification on Noble's H1 2026 earnings and cash flow expectations relative to consensus, and the confidence level in the deepwater utilization recovery by late 2026/early 2027.

Answer

President and CEO Robert Eifler affirmed the directional narrative of lower H1 2026 results due to limited work, but anticipated a dramatic change in H2 2026. He expressed cautious optimism for the deepwater utilization recovery, citing existing contracts, market tightening, and ongoing negotiations, suggesting day rates have bottomed.

Eddie Kim asked for more detail on Noble Corporation's expectations for first half 2026 earnings and cash flow relative to consensus estimates, and sought clarification on the confidence level for the deepwater utilization recovery projected for late 2026/early 2027.

Answer

President and CEO Robert Eifler indicated that the first half of 2026 is expected to have limited upside for improvement due to less available work, with a dramatic change anticipated in the second half. He expressed cautious optimism about the deepwater utilization recovery by late 2026/early 2027, citing a combination of existing contracts, tenders, and customer conversations, suggesting day rates have likely bottomed.

Eddie Kim asked about the outlook for leading-edge day rates for the remainder of the year and whether there is a credible path for rates to return to the mid-to-high $400,000s in late 2026.

Answer

President and CEO Robert Eifler responded that day rates for Tier-1 rigs are holding in the low-to-mid $400,000s. While short-term 'gap filler' work might see lower rates, he doesn't expect a broader market decline given the strong outlook for late 2026. He affirmed there is a path for rates to increase with demand, but stressed that Noble is positioned for strong cash flow even in a flat market.

Eddie Kim asked for the rationale behind retiring the high-spec 7G drillship Meltem and questioned if competitors might follow suit, seeking an estimate on future 7G reactivations.

Answer

President and CEO Robert Eifler explained that the call on stacked capacity has been pushed out by at least 2-3 years, diminishing the rig's option value. He noted the Meltem had never drilled a well and would likely compete against Noble's own active fleet for shorter-term contracts. He believes a significant amount of active supply must be absorbed before stacked rigs are needed, making widespread reactivations unlikely in the near term.

Eddie Kim from Scotiabank questioned Noble's outlook for the first half of 2025, asking about the causes of rig utilization headwinds, or "white space," and the company's confidence in a demand rebound in late 2025 and 2026. He also inquired about the possibility of warm stacking a 7th generation drillship if market conditions do not improve.

Answer

President and CEO Robert Eifler acknowledged the white space in H1 2025, attributing it to a general lack of urgency from customers focused on capital discipline. However, he affirmed confidence in a late 2025/2026 recovery, citing a large volume of tenders, FID-ed projects, and a significant recent increase in customer conversations. Regarding rig stacking, Mr. Eifler stated that while the company will minimize costs on idle rigs, it would not take "dramatic measures" on a 7th generation rig that would render it less marketable.

Eddie Kim from Barclays sought further insight into the anticipated softness in Expro's activity levels during the first half of 2026, questioning if factors beyond Asia-Pacific were contributing to this outlook. Kim also asked for directional guidance on 2026 EBITDA, considering the company's projections for flat to slightly lower revenue alongside continued margin expansion.

Answer

CEO Mike Jardon attributed the H1 2026 softness to early budget preparation stages, customer caution due to commodity pricing and geopolitical events, typical Q1 northern hemisphere winter seasonality, and the historical slow start of NOC customers. He reiterated the focus on operational efficiency and technology rollout. Regarding 2026 EBITDA, CEO Mike Jardon stated that while he would be 'very disappointed' if EBITDA margins didn't expand, the absolute EBITDA number should be 'similar' to 2025, with a strong focus on cash generation.

Eddie Kim sought clarification on the anticipated softness in Expro's activity levels during the first half of 2026, despite an expected increase in the second half, and whether this softness is primarily driven by Asia-Pacific or other factors. Kim also asked for directional guidance on Expro's 2026 EBITDA, considering the expectation of flat to slightly lower activity levels but continued margin expansion.

Answer

CEO Mike Jardon explained that the outlook is based on early budget discussions and customer sentiment, influenced by commodity pricing and geopolitical uncertainties. He cited typical Q1 seasonality in the northern hemisphere, slow starts from NOC customers, and softness in Asia-Pacific as contributing factors. Jardon indicated that it is fair to assume 2026 EBITDA numbers should be similar to 2025 levels, emphasizing the company's focus on expanding EBITDA margins and improving cash generation.

Eddie Kim from Barclays asked about the potential impact of offshore rig white space on Expro's business in the second half of the year. He also pointed out the sequential revenue decline in the subsea well access segment and asked for more color on the softness and its expected duration.

Answer

CEO Michael Jardon responded that the company's forecast already incorporates rig movements based on detailed, bottoms-up customer engagement, though he noted some customer caution on short-cycle OpEx activity. Regarding the subsea segment, he attributed the Q2 softness to project timing, not a sustained issue, and stated that he expects a particularly strong rebound for that business in the fourth quarter.

Eddie Kim of Barclays asked about the potential impact of offshore rig 'white space' on Expro's business in the second half of the year, noting other service companies have cited it. He also questioned the sequential revenue decline in the subsea well access segment and its outlook.

Answer

CEO Michael Jardon responded that Expro's forecast already incorporates rig scheduling changes, based on detailed, bottoms-up discussions with customers. He noted more caution from customers on short-cycle intervention activity rather than long-term projects. Regarding the subsea segment, Jardon attributed the Q2 revenue dip to project timing, not a sustained trend, and stated he expects a particularly strong Q4 for that business line.

Eddie Kim of Barclays asked for an update on Mexico, inquiring about the operational outlook for Pemex, the confidence level in securing extensions for the five jackups with contracts ending in H1 2025, and the company's M&A strategy following its recent capital raise.

Answer

CCO Bruno Morand addressed the Mexico situation, stating the government's new $13 billion funding facility is a positive development that should enable activity to resume, and noted Borr Drilling is optimistic about securing new multi-year contracts. On M&A, CEO Patrick Schorn explained that while the time is right for consolidation, he could not provide specific details on targets but affirmed Borr's interest in rationalizing the market, similar to the Paragon acquisition.

Eddie Kim of Barclays sought to understand the confidence level in the Q3 volume guidance, which seems strong given market weakness, and asked for early expectations on Q4 seasonality compared to prior years.

Answer

CFO Blake McCarthy expressed confidence in the Q3 guidance for mid-single-digit volume growth, attributing it to strong execution and maintaining a flat crew count while the market has declined. For Q4, he acknowledged the potential for a typical seasonal slowdown, possibly more pronounced this year, but noted it was too early for a definitive forecast, with potential offsets from new customer trials.

Eddie Kim from Barclays inquired about the expected trajectory of leading-edge day rates and the contracting outlook for the Proteus and Concorde drillships in the Gulf of Mexico.

Answer

President and CEO Keelan Adamson and EVP & CFO R. Thaddeus Vayda explained that while current rates reflect some market softness, they anticipate utilization to bottom out in the mid-80% range before recovering. They emphasized a disciplined approach to contracting, focusing on overall economic value rather than chasing long-term deals at a market trough. They expressed confidence that the high-specification Proteus and Concorde rigs would likely be extended in the Gulf of Mexico due to strong customer interest.

Eddie Kim inquired about the expected timing for the announcement of new contracts with 2026 start dates and whether dayrates might face pressure due to an increase in idle rigs.

Answer

EVP & Chief Commercial Officer Roddie Mackenzie stated that numerous long-term contract awards are expected throughout the second half of the year. He acknowledged potential near-term rate pressure for short-term work but expects rates for long-term contracts to remain similar to current levels, supported by a sharp increase in projected rig demand for 2027-2029. President & CEO Keelan Adamson added that the timing of bids and negotiations will create a mixed bag in the near term, but the long-term outlook for fleet utilization is strong.

Eddie Kim inquired about the potential for 7th generation drillship day rates to fall to the $350,000 range due to market whitespace and asked about Transocean's reactivation strategy for its three cold-stacked 7G rigs.

Answer

EVP and Chief Commercial Officer Roddie Mackenzie stated that a significant dip in day rates is unlikely, especially for high-spec units, as drillers will remain patient for longer-term contracts. CEO Jeremy Thigpen added that the company continuously evaluates its stacked rigs and will only proceed with a reactivation if the customer funds it with an acceptable return.

Eddie Kim of Morgan Stanley inquired about the day rate trajectory for 2025, asking if leading-edge rates might soften due to competitors' utilization headwinds. He also sought an outlook on how many of the nine remaining sidelined 7th-generation drillships could secure contracts next year.

Answer

CCO Roddie Mackenzie stated that Transocean's premium 1,400-ton class rigs are already achieving rates in the $520k range and he doesn't foresee a significant dip for commodity 7th-gen units, suggesting lower-spec assets may be retired. CFO Thad Vayda added this situation doesn't impact Transocean's fleet, which is mostly on long-term contracts. Regarding sidelined rigs, President & COO Keelan Adamson noted no rush to reactivate them, preferring to target the stronger 2026-2027 market. CEO Jeremy Thigpen estimated only one to three sidelined rigs industry-wide might be contracted in 2025.

Eddie Kim asked about the recent trend in leading-edge drillship dayrates, which appear to have softened into the low $400,000s, and whether further softening is possible. He also questioned the potential timing for reactivating a cold-stacked drillship.

Answer

CCO Matt Lyne stated that as 7th-gen utilization rises toward 90% by the end of 2026, dayrates should follow, but near-term fixtures will likely remain in the current band. CEO Anton Dibowitz reiterated that simple supply-demand economics are at play, with some pressure expected during the 2026 utilization trough. Regarding cold-stacked rigs, Dibowitz said the focus is on contracting the active fleet first, and the company will be patient before reactivating assets.

Eddie Kim questioned the trend in leading-edge drillship dayrates, noting a recent dip to the low $400,000s, and asked about the potential timeline for reactivating one of Valaris's cold-stacked drillships.

Answer

SVP & CCO Matt Lyne and President & CEO Anton Dibowitz affirmed that while some rate pressure exists as utilization troughs in 2026, they expect rates to firm up as 7th-generation rig utilization recovers to over 90%. They highlighted recent fixtures in the $400k range as a sign of market resilience. Regarding cold-stacked rigs, Dibowitz stated the focus remains on contracting the active fleet, and they will be patient before reactivating assets.

Eddie Kim asked about Valaris's full-year 2025 EBITDA guidance, seeking clarity on how much is already contracted versus dependent on new awards. He also inquired about the reactivation timeline for cold-stacked 7th Generation drillships.

Answer

CFO Chris Weber clarified that at the midpoint of the revenue guidance, approximately 94% is already contracted for the year. CEO Anton Dibowitz addressed the cold-stacked rigs, stating the focus is on the active fleet first and that the company will be patient, waiting for the right market conditions before reactivating these high-specification assets, without committing to a specific timeline.

Eddie Kim questioned the outlook for Q4, asking for clarification on "normal seasonal patterns" and the potential for incremental softness. He also asked why ProPetro is confident in securing Pro Power contracts given the challenging market, and if power demand is independent of drilling activity.

Answer

CEO Sam Sledge clarified that the Q4 outlook is conservative, with "seasonality" referring to potential holiday downtime for the guided 10-11 active fleets. He explained that Pro Power's demand is resilient because it serves midstream and production customers, which is disconnected from the volatility of the completions market and is driven by long-term cost savings.

Eddie Kim of Barclays asked if the recent decline in the oil-directed rig count would negatively impact the Completion Services business in Q4, potentially leading to a steeper-than-normal seasonal decline. He also questioned the company's capital allocation priorities between bolt-on acquisitions and organic technology investments.

Answer

President & CEO William Hendricks responded that the rig count decline has disproportionately affected lower-technology rigs and smaller operators, to which PTEN has less exposure. He expects some seasonal softening in Q4 but is not certain it will be a steep decline. On capital allocation, he emphasized a focus on organic technology growth and share repurchases, while also noting the success of the Ultera acquisition and potential for further investment in downhole solutions.