Joshua Jayne

Josh Jayne from Daniel Energy Partners asked for Tidewater's multi-year outlook for West Africa in light of driller optimism for 2026-2027. He also inquired about the rationale behind the specific $500 million size of the new share repurchase program.

Answer

EVP & COO Piers Middleton conveyed a very positive long-term outlook for Africa, anticipating a significant ramp-up in 2026 as projects enter the vessel-intensive development phase, despite a potential near-term pause. President & CEO Quintin Kneen explained the $500 million buyback figure was based on the company's ability to execute it over approximately a year, considering current cash, excess liquidity from the new revolver, and strong quarterly free cash flow generation.

Josh Jayne of Daniel Energy Partners asked about the state of the debt markets for the OSV sector and its implications for newbuild financing. He also inquired about the company's long-term capital return philosophy.

Answer

Executive West Gotcher described the corporate debt markets as constructive for Tidewater but noted that financing for newbuilds remains limited for the broader industry due to past losses. President & CEO Quintin Kneen stated that while there's no set target for capital returns, the aggressive 2024 share repurchases indicate their approach, with a priority on first establishing an optimal long-term capital structure.

Josh Jayne asked about the feasibility of Archrock spending significantly higher growth CapEx (e.g., $400M-$500M) in future years, considering current supply chain constraints like 60-week engine lead times. He also inquired about the timeline for the NGCSI fleet's pricing to align with Archrock's existing fleet after the acquisition.

Answer

President and CEO Brad Childers stated that a CapEx level of $400M-$500M is foreseeable and could be achieved within the existing supply chain, noting that Archrock was at $350M last year (including acquired CapEx budgets). Regarding the NGCSI fleet, Mr. Childers explained that while initial pricing was lower, the units still offered excellent gross margins. He expects to work with the customer base to raise prices over time, treating these units like any other in the installed base, especially since many were with existing key customers.

Josh Jayne asked if Archrock foresees a scenario in the next few years where the market could support significantly higher growth CapEx (e.g., $400-$500 million), and if such levels are feasible given current supply chain constraints like 60-week engine lead times. He also inquired about the timeline for the NGCSI fleet's pricing to mirror the rest of Archrock's fleet, given its full-quarter impact on Q3 metrics.

Answer

Brad Childers (President and CEO) stated that a CapEx level of $400-$500 million is foreseeable and could be achieved within the existing supply chain, noting that the gap from the current $350 million (inclusive of inherited CapEx) to $400 million is manageable. Regarding the NGCSI fleet, Childers explained that while it initially had lower average pricing, it still offered excellent gross margins. He expects to work with the customer base to raise rates over time, treating these units like any other in the installed base, especially since a majority were with an existing key customer. The separation of these units' pricing will become harder to track as they integrate.

Josh Jayne asked management to elaborate on the perceived 'dislocation' between Archrock's share price and its future expectations, and whether this has made them more aggressive with capital returns. He also inquired about the future trend for how long equipment stays on location.

Answer

President & CEO D. Bradley Childers affirmed their confidence in the business's future, stating the market is undervaluing their shares, which makes them look to use both dividends and price-sensitive buybacks. CFO Doug Aron added that their industry-low leverage provides the flexibility to be opportunistic. Mr. Childers also expects the average time equipment stays on location, currently over six years, to extend further as the fleet mix shifts toward more large horsepower, long-term infrastructure assets.

Josh Jayne of Daniel Energy Partners asked management to expand on their view of a 'dislocation' between Archrock's share price and its future expectations, and whether this might lead to more aggressive buybacks. He also inquired about the future evolution of the trend for equipment staying on location longer.

Answer

President & CEO D. Bradley Childers reiterated strong confidence in the business's stable, long-term growth, which he believes the market is undervaluing, making buybacks an attractive tool. SVP & CFO Doug Aron added that the company's industry-low leverage provides the flexibility to be opportunistic. Regarding equipment tenure, Childers stated he expects the average time on location, currently over six years, to continue extending as the fleet mix shifts further toward large, long-term infrastructure horsepower.

Josh Jayne from Daniel Energy Partners asked management to expand on the perceived 'dislocation' between Archrock's share price and its future expectations, and whether this would lead to more aggressive buybacks. He also asked about the future trend for equipment time on location.

Answer

President & CEO D. Bradley Childers reiterated strong confidence in the business's stable, long-term growth, which he believes is undervalued by the market, making buybacks an attractive tool. SVP & CFO Doug Aron added that the company's industry-low leverage provides the flexibility to be opportunistic. Childers also projected that the average time equipment stays on location, currently over six years, will likely continue to extend as more large, long-life horsepower is added to the fleet.

Joshua Jayne of Daniel Energy Partners asked for an update on lead times for new compression equipment and inquired about the potential risk of future tariffs impacting equipment costs.

Answer

President and CEO Brad Childers stated that lead times are currently in a normal range of 42-44 weeks. Regarding tariffs, he noted it's difficult to predict but mentioned that Archrock and its key vendors source most materials domestically, mitigating immediate impact. He concluded the risk is being monitored but is not considered material at this time.

Josh Jayne asked for more details on Noble's cost rationalization efforts, inquiring if they are structural or temporary measures in anticipation of a trough in H1 next year.

Answer

President and CEO Robert Eifler emphasized the importance of cost management in down markets, referencing the Diamond Offshore Drilling transaction synergies (exceeding $100 million) and ongoing incremental cost savings as activity slows in the first half of next year.

Josh Jayne inquired about Noble Corporation's cost rationalization efforts, asking if they are structural or temporary measures in anticipation of a market trough, and sought more details on the company's actions.

Answer

President and CEO Robert Eifler highlighted the significant synergies achieved from the Diamond Offshore Drilling transaction, exceeding the initial $100 million target. He noted that while no new incremental cost savings target has been set, the company is realizing incremental savings as activity slows in the first half of next year, indicating ongoing cost management efforts.

Joshua Jayne asked how the expected regional mix in 2026, particularly stronger Middle East activity and softer Asia-Pacific, might influence Expro's overall margin expansion beyond the Drive25 initiative. Jayne also inquired about the scalability and market acceleration timeline for Expro's remote clamp installation system, following its successful deployments in Q4 of last year and Q2 of 2025.

Answer

CEO Mike Jardon confirmed that geographic mix significantly impacts margins, with growth in high-margin regions like the Middle East moving the needle. He also noted that new technology rollouts and expanded customer wallet share generally come with higher, more accretive margins, and mentioned potential positive activity from non-Pemex operations in Mexico in 2026. Jardon explained that the remote clamp installation system robotically installs clamps on completions, increasing speed and eliminating HSE risks by removing personnel from the red zone. He expects continued uptake from customers, particularly in the North Sea, with more installations in 2026 and a ramp-up into 2027.

Joshua Jayne from Daniel Energy Partners probed deeper into the drivers of Expro's 2026 margin expansion, specifically asking how the regional mix, such as a higher contribution from the Middle East compared to a softer Asia-Pacific, could influence margins beyond the Drive25 initiative. Jayne also inquired about the scalability and anticipated timeline for market acceleration of the remote clamp installation system, following its successful deployments.

Answer

CEO Mike Jardon confirmed that regional mix, particularly growth in high-margin areas like the Middle East, and the rollout of new, accretive technologies, would significantly impact margin expansion. He noted that non-PEMEX operations in Mexico would also be a positive factor in 2026. Regarding the remote clamp installation system, CEO Mike Jardon highlighted its benefits in increasing completion speed and eliminating HSE risks by removing personnel from the 'red zone.' He expects more installations in 2026 and a significant ramp-up in 2027, driven by strong operator satisfaction, especially in the North Sea.

Josh Jayne from Daniel Energy Partners asked for an assessment of the customer base's sense of urgency given recent commodity price volatility. He also asked new CFO Sergio Maiworm to expand on his financial philosophy, particularly regarding free cash flow conversion and maximizing shareholder value.

Answer

CEO Michael Jardon characterized customer sentiment as convicted in executing existing long-cycle deepwater projects but cautious on committing to new, short-cycle activity due to market uncertainty. CFO Sergio Maiworm stated his focus is on increasing free cash flow conversion by attacking all avenues: expanding margins, improving capital deployment efficiency, and fine-tuning strategic objectives, including accretive M&A, to help a 'fantastic organization' become even better.

Josh Jayne of Daniel Energy Partners asked for an assessment of the customer base's sense of urgency given recent commodity price volatility. He also invited the new CFO to expand on his financial philosophy, particularly regarding free cash flow conversion and maximizing shareholder value.

Answer

CEO Michael Jardon described customer sentiment as convicted in executing existing deepwater projects but more cautious on initiating new, short-cycle activities due to market uncertainty. CFO Sergio Maiworm stated his primary focus is on increasing free cash flow conversion by expanding EBITDA margins, improving capital deployment efficiency, and optimizing processes. He emphasized his goal is to help a great company become even better by finding accretive growth opportunities and fine-tuning strategic objectives.

Joshua Jayne inquired about the iTONG advanced tubular solution, asking about the customer's sense of urgency for adoption, the number of systems currently deployed, and the potential growth runway for the technology.

Answer

CEO Mike Jardon highlighted that IOC customers are showing significant interest in iTONG, driven by its HSE benefits of removing personnel from the red zone. He emphasized that Expro is being patient with the rollout to command appropriate pricing that reflects the technology's high value, rather than discounting for faster uptake. The long-term goal is to have the technology on over 75% of the floating rigs where Expro operates.

Josh Jayne asked about the value proposition of Expro's products amid high rig day rates, how the oil price correction has impacted M&A opportunities, and what cost-saving initiatives are planned for 2025 to support margins.

Answer

CEO Michael Jardon affirmed that the value proposition for efficiency-driving technology remains strong. On M&A, he said the focus is on long-term industrial logic, not short-term price moves. He and CFO Quinn Fanning detailed a pre-existing cost initiative, now being accelerated, focused on improving operating leverage through process efficiency and technology, not just headcount cuts.

Josh Jayne with Daniel Energy Partners inquired about the strategic advantages of the Ocean Intervention II's simultaneous autonomous survey operations, the robust market conditions and potential for increased market share in Brazil following a significant Petrobras subsea robotics contract, and the capital allocation strategy and long-term growth trajectory of the AdTech business, including its expected percentage of total business.

Answer

President and CEO Rod Larson highlighted the Ocean Intervention II's efficiency gains, reduced operational footprint, and enhanced data quality through simultaneous operations. He described the Brazilian market as robust with significant opportunities, driven by new projects and a strong interest in advanced technology, positioning Oceaneering for increased market share. For AdTech, Mr. Larson emphasized its low capital intensity, leveraging existing infrastructure, and growing international opportunities. Senior Vice President and CFO Alan Curtis added that the entire management team is focused on accelerating AdTech's growth.

Joshua Jayne inquired about the AdTech business's growth trajectory, its competition for capital, and its projected percentage of Oceaneering's total business over the next three to five years.

Answer

Rod Larson, President and CEO, emphasized AdTech's low capital intensity and ability to leverage existing infrastructure. Alan Curtis, Senior Vice President and CFO, noted the team's focus on accelerating growth, driven by new program awards and international opportunities.

Josh Jayne from Daniel Energy Partners asked for confirmation on improved future visibility in the Offshore Projects Group (OPG) business. He also requested more detail on how the recently passed 'Big Beautiful Bill' could provide further growth for the company's AdTech business lines.

Answer

President and CEO Roderick Larson confirmed that visibility in the OPG segment has improved, largely due to securing significant, long-term international contracts like the one for BP in Mauritania. Larson then detailed the broad positive impact of the new legislation on AdTech, highlighting increased funding for UUVs, the revitalization of space programs like Artemis which benefits their human spaceflight and thermal protection systems work, and accelerated submarine maintenance programs for the Marine Services division.

Josh Jayne from Daniel Energy Partners questioned the improved visibility and longer-term bookings in the OPG business and asked for more detail on how Oceaneering is positioning itself to capitalize on the growth opportunities presented by the recently passed 'Big Beautiful Bill' for its AdTech business.

Answer

President and CEO Roderick Larson confirmed that OPG's visibility has improved due to large, long-term international contracts like the BP Mauritania award. Regarding the new legislation, he detailed significant opportunities across AdTech, including increased funding for UUVs, a revival in space projects like Artemis, and accelerated demand for submarine maintenance and new builds, for which the company is already planning to expand capacity.

Josh Jayne of Daniel Energy Partners questioned the increased visibility in the Offshore Projects Group (OPG) and asked for more detail on the potential growth impact from the recently passed reconciliation bill on the AdTech business lines.

Answer

President and CEO Roderick Larson confirmed that OPG visibility has improved due to booking large, long-term international contracts, such as for BP in Mauritania, which create a stable base of work. Regarding the new legislation, he detailed significant positive impacts across AdTech, including increased funding for UUVs, the revitalization of space programs like Artemis which benefits their human spaceflight and thermal protection systems work, and accelerated submarine maintenance programs that will drive demand for the Marine Services division.

Josh Jayne of Daniel Energy Partners inquired about the increased booking visibility in the Offshore Projects Group (OPG) and requested more detail on the potential growth impact from the recently passed 'Big Beautiful Bill' on the AdTech business lines.

Answer

President and CEO Roderick Larson confirmed that OPG's visibility has improved due to securing large, long-term international contracts, such as with BP in Mauritania. Regarding the new legislation, Mr. Larson detailed significant positive impacts across AdTech, including increased funding for UUVs, a resurgence in space programs like Artemis, and accelerated funding for submarine maintenance and new builds, which may prompt Oceaneering to expand its capacity.

Joshua Jayne asked for more detail on the strong performance and outlook for the Offshore Projects Group (OPG), the supply/demand dynamics in the vessel-class ROV market, and whether M&A opportunities have become more frequent recently.

Answer

President and CEO Roderick Larson attributed the OPG strength to high-margin light well intervention work and long-term infrastructure projects in the Gulf of Mexico and West Africa. Regarding the vessel market, he noted that utilization for the types of vessels Oceaneering targets is strong. On M&A, Larson confirmed they are seeing more opportunities and highlighted the recent GDi acquisition as a strategic fit that creates a 'double bonus' by driving more dive time for their ROVs.

Josh Jayne asked about rising supply chain costs for 2026, identifying areas of pressure and mitigation strategies. He also inquired about pricing discussions for well intervention, the gap between Helix assets and seventh-generation drilling assets, and whether securing backlog is more about stacking programs than price. Lastly, he asked for an overview of the Brazil market and Helix's success there over the next couple of years.

Answer

Owen Kratz, President, CEO, and Director, stated that rising costs are across the board (labor, materials, supply chain, delivery) and mitigation involves working with suppliers, consolidating the supplier base, and seeking margin gains. Erik Staffeldt, Executive VP and CFO, confirmed downward pressure on well intervention rates, similar to drillers, but noted the ability to tier rates. Scotty Sparks, Executive VP and COO, added that backlog in Brazil and for the Q5000 has set rates, and regional plays might see rate pressure. Scotty Sparks described Brazil as the 'most buoyant market' for rigs and Helix, citing long-term Petrobras contracts for Siem Helix 1 & 2 and the Q7000 contract with Shell, expressing confidence in maintaining their position.

Josh Jayne inquired about rising supply chain costs for 2026, specifically where Helix is seeing the most pressure and how these increases are being mitigated. He also asked about pricing discussions for well intervention, comparing Helix's assets to seventh-generation drilling assets, and whether securing backlog is more about stacking programs or price. Finally, he asked for a general overview of the Brazil market and Helix's success there over the next couple of years.

Answer

Owen Kratz, President, CEO, and Director, stated that cost pressures are across the board, including labor, materials, supplies, and delivery, with mitigation efforts focused on working with suppliers, consolidating the supplier base, and seeking margin gains. Erik Staffeldt, Executive VP and CFO, and Scotty Sparks, Executive VP and COO, confirmed downward pressure on well intervention rates, similar to drillers, but noted the ability to tier rates for different work types. Mr. Sparks highlighted existing backlog in Brazil and for the Q5000 at set or better rates. Regarding Brazil, Mr. Sparks described it as the 'most buoyant market' for Helix and rigs, citing long-term Petrobras contracts for Siem Helix 1 and 2, and a good contract for the Q7000 with Shell, expressing confidence in maintaining their market position.

Josh Jayne of Daniel Energy Partners inquired about the pipeline of other large shallow water abandonment opportunities similar to the recent Exxon agreement and asked about the decision timeline for returning to a two-vessel market in the North Sea for 2026.

Answer

VP - Commercial Daniel Stuart indicated that while other opportunities exist, they are generally framework agreements rather than firmly contracted work, with demand expected to increase in 2026. Regarding the North Sea, COO Scotty Sparks stated that the decision to reactivate the Seawell depends on the award of large decommissioning tenders. He expects to know by Q4 2025 whether Helix will return to a two-vessel market in 2026.

Joshua Jayne of Daniel Energy Partners followed up on the contracting outlook for the Q4000 and Q5000 vessels beyond 2025, asking about long-term opportunities. He also questioned the more aggressive share repurchase plan, asking if it represents a strategic shift in capital allocation.

Answer

COO Scotty Sparks confirmed the Q5000 is in a 'very tight position' for the next 2-3 years and that the Q4000 has significant interest for multi-year contracts from several operators upon its return to the Gulf of Mexico. CEO Owen Kratz explained the shift to a more aggressive buyback plan is driven by the company's strong balance sheet and attractive current share price. He framed the 25% of free cash flow target as a minimum, which could increase if suitable M&A opportunities do not materialize.

Joshua Jayne of Daniel Energy Partners asked for details on the Robotics business outlook for 2025, including contract visibility, and inquired about future CapEx levels and the types of growth opportunities Helix would pursue with its strong free cash flow.

Answer

COO Scott Sparks described the Robotics outlook as having the 'best visibility we've ever had,' especially in trenching, with tenders out to 2028-2030 and work contracted through 2027. CEO Owen Kratz outlined growth opportunities across all segments, including adding trenching and robotics capacity and potentially expanding shallow water services to new regions. He noted a need for more well intervention vessels but remains cautious on asset pricing. CFO Erik Staffeldt confirmed maintenance CapEx should remain in the $70-$80 million annual range, excluding growth projects.

Joshua Jayne asked for more detail on the ERP implementation, including its benefits, timeline, and how it will ultimately impact the business moving forward.

Answer

Anuj Dhruv, EVP and CFO, described a two-to-three-year, full-scale cloud-based ERP implementation, funded within the 3-5% CapEx guidance. He highlighted it as a technological and business transformation to rethink supply chain, inventory, procurement, and internal processes, expecting it to drive further efficiencies and complement margin improvements.

Josh Jayne requested more details on Weatherford's ERP implementation, including its benefits, timeline, and overall impact on the business moving forward.

Answer

Anuj Dhruv, Executive Vice President and CFO, described it as a 2-3 year, full-scale cloud-based ERP implementation, funded within the existing 3-5% CapEx guidance. He emphasized it's a business transformation aimed at rethinking supply chain, inventory, procurement, and internal processes, with significant potential for margin upside.

Josh Jayne asked about the deepwater opportunity for Managed Pressure Drilling (MPD), questioning the pace of customer adoption and the evolution of the technology.

Answer

President and CEO Girish Saligram expressed a bullish outlook on MPD, highlighting its evolution toward a holistic 'managed pressure wells' concept. He noted significant customer interest and quotation activity, but stated that a meaningful revenue uptick from these deepwater projects is not expected until the second half of 2026 and into 2027, as MPD becomes a key differentiator for rig operators.

Joshua Jayne of Daniel Energy Partners questioned the timeline for achieving the stated growth market share goals, asked for details on offshore defense orders, and inquired about the cyclical bottom for the stimulation and intervention business.

Answer

President & CEO Neal Lux projected a 3-5 year timeframe for the market share expansion, noting it leverages existing resources without significant CapEx. He clarified that defense orders include a mix of long-term projects like a submarine rescue system (2-year delivery) and shorter-term ROV system sales. Regarding the stimulation business, Lux explained the bottom is tied to stage counts, not just frac fleet counts, which could bottom sooner. EVP & CFO D. Lyle Williams added that international unconventional development provides growth opportunities for this segment.

Joshua Jayne from Daniel Energy Partners inquired about the expected timeframe to achieve the goal of doubling market share in growth markets. He also asked for more details on offshore defense orders, their lead times, and how close the stimulation and intervention business is to a bottom.

Answer

President and CEO Neal Lux explained that doubling market share is a long-term vision expected over the next three to five years as it involves customer acquisition and geographic expansion. He noted that defense orders include a mix of standard products and longer-term projects like a rescue submarine system delivering over two years. Regarding the stimulation business, Lux stated the bottom is tied more to drilling stages than frac fleet counts, which could bottom sooner. CFO D. Lyle Williams added that international unconventional development in South America and the Middle East is creating new demand for these traditionally US-focused products.

Joshua Jayne from Daniel Energy Partners asked about Seadrill's strategy for Managed Pressure Drilling (MPD) as a competitive advantage. He also inquired about the signs the company is looking for to resume its share buyback program.

Answer

President & CEO Simon Johnson detailed that eight drillships are MPD-equipped and that Seadrill is a thought leader in the space, viewing it as an integrated operational tool. On share buybacks, Mr. Johnson stated the current focus is on cash conservation amid macro uncertainty, though shareholder returns are a top priority. EVP & CFO Grant Creed added that the repricing of legacy Brazil contracts from Q2 2026 will be a key milestone for cash flow generation, which is important for future capital returns.

Joshua Jayne asked about the main internal focus areas for Seadrill in 2025, following the significant strategic initiatives completed in 2024 like asset sales and share buybacks.

Answer

CEO Simon Johnson identified two key priorities for 2025: first, continuously improving safety performance, and second, maintaining a laser-like focus on the cost base. He stressed the importance of being a low-cost, agile, and efficient operator, regardless of the revenue environment.

Joshua Jayne requested more detail on the company's plan to 'optimize operations' in 2025. He also asked about the potential impact of a new U.S. administration on the Gulf of Mexico market.

Answer

President and CEO Simon Johnson explained that 'optimizing operations' involves being agile and lean, managing the cost base in real-time by making tough decisions like stacking rigs if work is unavailable, and right-sizing the organization to avoid excess capacity. Regarding U.S. politics, Johnson stated they 'don't really care who's in the White House,' as long-term fundamentals favor offshore oil. EVP and CCO Samir Ali reinforced this, noting that geology and economics, not politics, will drive drilling activity.

Joshua Jayne of Daniel Energy Partners asked for clarification on the drivers behind the low and high ends of the full-year guidance and questioned the company's strategic focus for the next six to nine months, specifically regarding execution versus further M&A.

Answer

CFO Bond Clement identified the outlook for the North American chemistry business as the primary variable in the guidance range. CEO Ryan Ezell addressed strategy, stating that while execution on newly acquired and built assets is a primary focus, the company will continue to selectively look for immediately accretive inorganic opportunities to expand both its chemistry and data analytics businesses.

Joshua Jayne asked for the strategic rationale behind acquiring the specific PWRtek assets at this time and inquired about the company's strategy for building out its team and organization to manage future growth with a larger budget.

Answer

CEO Ryan Ezell explained the acquisition was a natural evolution of a long-term partnership with ProFrac, leveraging Flotek's core data technology to enter the growing grid support market and add stable, high-margin revenue. Regarding organizational growth, Ezell stated that increasing free cash flow will fund higher CapEx for building more revenue-generating assets with quick ROIs. CFO J. Clement added that the transaction's structure provides significant 'dry powder' for investment while allowing for rapid debt paydown, maintaining a clear balance sheet.

Joshua Jayne of Daniel Energy Partners asked if increased gas-directed activity would lead to higher margins in the Chemistry business. He also inquired about the North American outlook regarding customer budgets given oil price volatility and the key drivers behind the strong growth from external customers.

Answer

CEO Ryan Ezell explained that gas-heavy basins often require more advanced, value-add technologies, which typically improves the product mix and leads to better margins. On the North American outlook, he noted that while oil prices face headwinds, a bullish view on natural gas and Flotek's diversification provide insulation. Ezell attributed the strong external customer growth to the success of Flotek's prescriptive and predictive chemistry management, which delivers significant ROI and improved well performance, resonating with capital-disciplined operators.

Joshua Jayne of Daniel Energy Partners questioned the drivers behind the Chemistry segment's 7% growth in a weak market and asked for the outlook on the U.S. land cycle. He also inquired about the conversion of working capital, particularly accounts receivable, to cash in the coming quarters.

Answer

CEO Ryan Ezell attributed the Chemistry segment's strength to sticky transactional business and growth in international markets, which he expects will help Flotek outperform. He anticipates a soft Q4 for the overall market but sees operational intensity increasing in mid-2025. CFO Bond Clement explained that a significant portion of the working capital build is the annually-settled order shortfall penalty receivable from a related party, and that underlying days sales outstanding (DSOs) actually improved by 12% during the quarter.

Joshua Jayne of Daniel Energy Partners asked for an outlook on the Chemical Technologies business into 2026 and whether the company could sustain current margin levels, given recent performance.

Answer

EVP & CFO Christopher George expressed confidence in the segment's resilience, citing market share gains from new product development and operational efficiencies from in-basin manufacturing. He believes margins can be sustained and potentially grow. President, CEO & Chairman John Schmitz added that the chemistry business is increasingly vital for supporting complex, high-volume frac operations by improving water transfer efficiency with products like drag-reducing agents, which adds significant value for customers and carries high margins for Select.

Josh Jayne of Daniel Energy Partners asked for the strategic rationale behind the PropFlo acquisition, the company's view on the wet versus dry sand market, and an assessment of the current operator mindset in the Permian.

Answer

EVP & President of Sand and Logistics Chris Scholla explained that the PropFlo acquisition completes their wellsite value chain, offering customers a system that enables continuous 24/7 pumping. He noted the wet vs. dry sand decision is driven by total delivered cost and doesn't foresee new capital for market expansions. Regarding customer mindset, he senses more stability but noted many operators are still finalizing Q4 and 2026 plans.

Joshua Jayne from Daniel Energy Partners asked about the potential long-term EBITDA margins for the newly acquired ResMetrics business and sought commentary on the current mindset and sense of urgency among U.S. and Canadian customers.

Answer

CEO Ryan Hummer projected long-term operational synergies of $1-2 million from the ResMetrics acquisition by implementing best practices across the combined portfolio, rather than focusing on a specific margin target for the acquired business alone. He described the U.S. customer mindset as 'cautiously optimistic' amid oil price stability but wary of potential OPEC+ supply increases. For Canada, he noted a slower Q3 start after a pull-forward in activity, with weak local gas prices impacting some gas-directed work.

Josh Jayne inquired about customer sentiment amid oil price volatility, the rig count outlook in Saudi Arabia, and the company's forward-looking strategy for its share buyback program given its strong liquidity.

Answer

President & CEO Anton Dibowitz confirmed customers remain confident, as most offshore projects are economic below $50/barrel, and stated the Saudi rig count is stable. On capital returns, both Dibowitz and SVP & CFO Chris Weber reiterated their commitment, stating that while returns may not be linear, strong performance and proceeds from a planned rig sale will increase flexibility for buybacks.

Josh Jayne asked about the current customer mindset amid recent oil price volatility, the rig count outlook in Saudi Arabia, and the company's strategy for share buybacks given its strong liquidity and cash flow.

Answer

CEO Anton Dibowitz stated that customers remain confident, citing the strong economics of offshore projects (many with breakevens below $50/barrel) and are proceeding with plans. He noted the Saudi rig count is stable and Valaris's position is secure with long-term contracts. CFO Chris Weber and CEO Anton Dibowitz reiterated a commitment to capital returns, noting it may not be linear but that strong performance and the upcoming rig sale provide increased flexibility.

Joshua Jayne sought clarification on whether the $70/barrel oil price for project profitability applied to all offshore or just deepwater, and asked if Valaris would use potential 2025 downtime for rig upgrades.

Answer

CEO Anton Dibowitz clarified the metric was for all offshore projects but stressed that many key deepwater developments are highly compelling with breakevens in the $20-$40/barrel range. He confirmed that Valaris would use idle periods during warm stacking and ramp-ups to prudently perform value-enhancing upgrades, such as for MPD systems or EHS-E emissions reduction, to improve rig capability and avoid future downtime.

Joshua Jayne sought clarification on the breakeven economics for offshore projects, specifically asking if the $70/barrel profitability metric applied to all offshore or just deepwater. He also asked if Valaris might use the 2025 period of utilization softness to perform strategic upgrades on idle rigs in anticipation of the 2026 recovery.

Answer

President and CEO Anton Dibowitz confirmed the metric applies to all offshore projects and noted that many large deepwater developments have compelling economics with breakevens in the $20-$40 per barrel range. He affirmed that it is a 'fair assumption' that Valaris would use downtime during a warm stack ramp-up to perform prudent upgrades, such as for MPD systems or emissions reduction, to better position rigs for future contracts.

Joshua Jayne from Daniel Energy Partners asked about TETRA's assumptions for its Water and Flowback business given the uncertainty in U.S. land completions. He also posed a longer-term question about the company's strategy for capital returns to shareholders as its growth projects mature and begin generating significant cash flow.

Answer

President & CEO Brady Murphy explained that while U.S. land activity is declining, TETRA's automated technology and focus on produced water recycling should help maintain revenue and improve margins. SVP & CFO Elijio Serrano added that the segment is supported by stable contracts in Argentina and offshore rig cooling. Regarding capital returns, Serrano stated that the company will address its strategy in detail at its upcoming Investor Day in September.

Joshua Jayne asked about the level of customer urgency for automation in Water & Flowback services and the expected timing for financial contributions from the new TETRA X corrosion inhibitor.

Answer

CEO Brady Murphy reported strong customer acceptance for automation, driven by cost savings and safety benefits, noting that current automated equipment is at maximum utilization. For TETRA X, he explained it will initially be marketed as a premium blend with completion fluids for high-temperature wells, targeting a sizable market, but was not yet ready to quantify its financial impact or its potential as a standalone product.

Joshua Jayne of Daniel Energy Partners asked for more detail on the North American outlook, questioning which regions might be most at risk for a pullback and which might hold up better. He also requested specifics on the growth CapEx program, including what technologies and regions are being targeted.

Answer

CEO Wayne Prejean stated that basin resiliency depends on oil price economics, noting that gas-heavy areas like the Haynesville may be more sustainable. He emphasized that DTI's diverse operational spread allows it to shift resources to the most vibrant basins as needed. Regarding CapEx, management clarified that growth spending is focused on new technologies with high potential, such as their RotoSteer product line, new stabilizer technology, and MechLOK swivels, to secure long-term commercial traction with clients.

Joshua Jayne inquired about Mammoth's sand business, specifically the drivers behind Q1 volume growth and the outlook for pricing. He also asked about potential cost-cutting measures in the pressure pumping segment if activity weakens and how management views the relationship between adjusted EBITDA and CapEx for the year.

Answer

Executive Mark Layton explained that strong demand in Western Canada drove Q1 sand volumes and he anticipates a stable pricing environment for the remainder of 2025. Regarding potential weakness, Layton stated that the primary cost levers in pressure pumping are staffing and maintenance, and the team is prepared to adjust spending to align with customer demand.

Josh Jayne from Daniel Energy Partners asked for the current percentage of DNOW's U.S. business tied to upstream activity and what assumptions for rig and completion counts are embedded in the full-year guidance. He also inquired about the M&A landscape and whether market volatility makes it more difficult to complete deals.

Answer

CEO David Cherechinsky estimated that the U.S. business is approximately 70% upstream-levered. He acknowledged potential rig count declines but stated that the revenue impact is uncertain and could be fully offset by price increases from tariffs. Regarding M&A, Cherechinsky noted that while recent oil price volatility might cause some seller caution, DNOW has several active conversations and has not yet seen tangible evidence of sellers pulling back, describing the current M&A activity level as normal.

Josh Jayne requested the 2025 outlook for DNOW's Canadian and international markets and asked about the current M&A environment, including how the company balances acquisition opportunities with its aggressive share repurchase program.

Answer

President and CEO David Cherechinsky projected relatively flat activity for both Canada and international markets in 2025, noting a strategic high-grading in the international business to improve long-term profitability. Executive Brad Wise addressed M&A, stating the opportunity pipeline is steady. He affirmed DNOW's capacity to simultaneously fund organic growth, pursue acquisitions, and execute its share buyback program, as demonstrated in 2024. The company will favor M&A for the right deal but will otherwise prioritize share repurchases.

Josh Jayne asked about the future direction of rig safety technology beyond HaloGuard and inquired about the potential catalysts for increased drilling activity in the U.S. Gulf of Mexico.

Answer

President and COO Keelan Adamson explained that future technology development will focus on assisting crews with critical decision-making and preventing harm during major accident hazard activities. CEO Jeremy Thigpen noted that while a favorable political administration would be positive for the Gulf of Mexico, any resulting increase in demand would take time to materialize due to long project cycles.

Joshua Jayne from Daniel Energy Partners asked for a more detailed geographic breakdown of the expected mid-single-digit international growth and requested specifics on the Q1 2025 weather impacts.

Answer

Executive Lawrence Bruno identified the Middle East, the South Atlantic margin, Australia, Indonesia, and Norway as key growth areas for 2025, while noting the company has exited operations in Mexico. He also quantified the Q1 weather impact, stating that facility closures in Texas and Louisiana for 2-3 days resulted in an estimated $1 million revenue loss.

Inquired about the drivers behind the expected growth in the Industrial Product Solutions (IPS) segment, the company's future strategy for shareholder returns, and the outlook for the Canadian market.

Answer

The IPS growth is based on new business being pursued, primarily in glass sand. Shareholder returns will be opportunistic, balancing special dividends and buybacks based on free cash flow generation. The company is very optimistic about the Canadian market, citing the Blair facility's logistical advantages and the expected increase in natural gas production to support new LNG facilities.

Joshua Jayne asked for details on the potential growth of the Industrial Product Solutions (IPS) business, the strategy behind shareholder returns like the special dividend, and the company's outlook for the Canadian market.

Answer

CEO Charles Young clarified that the IPS growth to 10% of volumes is based on new contracts being pursued, particularly with glass and foundry customers. CFO Lee Beckelman addressed shareholder returns, stating that consistent free cash flow and a strong capital structure allow for opportunistic dividends or buybacks. Regarding Canada, both executives expressed optimism, highlighting the Blair facility's logistical advantages and the strong natural gas demand expected from new LNG projects.

Joshua Jayne from Daniel Energy Partners inquired about Smart Sand's sales volume in the Canadian market and its future potential, the total annual demand for Northern White sand in Canada, differences in sand grades sold to Canada versus the Marcellus, and the company's maximum production capacity at its Oakdale facility based on current staffing and yields.

Answer

Chief Financial Officer Lee Beckelman stated that Canada currently represents about 10% of sales volume, with the total Canadian market estimated at 8-10 million tons annually and poised for growth. Chief Operating Officer William Young explained that the Blair mine's coarser sand is well-suited for Canadian demand, creating a balanced product mix. Regarding capacity, executives explained that the company's integrated asset base allows for significant volume increases with only modest incremental staffing, with Lee Beckelman noting they could reach over 7 million tons with a 5-10% staff increase.