Sean Mitchell

Sean Mitchell asked for an estimate or insights into the growth of simul-frac operations today compared to two years ago, the current industry adoption rate (e.g., 25-30%), and its future potential.

Answer

Founder, Chairman, President, and CEO John Schmitz confirmed that simul-frac is definitely increasing, emphasizing that the company observes a heavy weighted engineered intensity across all complex operations, including simul-frac, trimul-frac, longer laterals, and massive water delivery. He could not provide a specific percentage but highlighted the overall increasing intensity in the space.

Sean Mitchell (Daniel Energy Partners) asked Select Water Solutions for an estimate or color on the growth of Simulfrac adoption in the industry, comparing its current prevalence to two or three years ago, and its potential future trajectory, given the increased sand and water usage in this completion design.

Answer

Founder, Chairman, President, and CEO John Schmitz (Select Water Solutions) stated that while he couldn't provide a specific percentage for Simulfrac adoption, it is definitely increasing. He emphasized that for Select, the more significant trend is the overall engineered intensity and complexity in completions, including Simulfrac, Trimulfrac, and longer laterals, which drives demand for their water and chemistry solutions due to massive water delivery requirements over long periods.

Sean Mitchell asked for color on typical seasonal slowdowns and budget shortfalls in the completion guide, specifically if any fleets have been idled and are known to return to prior customers in H1 2026. He also inquired about the balance between self-directed improvement initiatives and customer-requested/suggested improvements in technology.

Answer

Andy Hendricks, President and CEO, clarified that no fleets have been 'idled per se.' They maintained similar horsepower and pumping hours quarter-on-quarter but shuffled horsepower for more simul frac and trimle frac, making fleet count a less reliable metric. Andy Smith, CFO, added that Q4 seasonality predictions factor in holiday and weather downtime. Mr. Hendricks stated that the balance between self-directed and customer-requested technology improvements is 'kind of an even balance,' with internal engineers also driving innovation, deploying machine learning to improve drilling and completion processes.

Sean Mitchell (Daniel Energy Partners) sought clarification on the typical seasonal slowdown and budget shortfalls in completion services, asking if any fleets were idled with known returns to prior customers in H1 2026. He also inquired about the balance between self-directed improvement initiatives and those requested or suggested by customers.

Answer

President and CEO Andy Hendricks clarified that no fleets were idled; instead, horsepower was shuffled, and some fleets grew for simul-frac and trimul-frac operations, making fleet count a less reliable metric. He stated that Patterson-UTI was working the same horsepower and pumping similar hours quarter-on-quarter. CFO Andy Smith added that Q4 seasonality projections account for holiday and weather downtime. Mr. Hendricks noted that improvement initiatives are an even balance between self-directed efforts by smart engineers and specific requests from customers.

Sean Mitchell inquired about the deployment of natural gas-capable completion fleets between oil and gas basins and asked about potential M&A opportunities for the Drilling Products segment in a softer market.

Answer

CEO William Hendricks stated that the deployment of gas-capable equipment mirrors the company's overall 70/30 oil-to-gas basin split, noting that their CNG logistics make it economical to use this technology in the Permian. CFO C. Smith acknowledged that they are always evaluating M&A opportunities for the Drilling Products platform if the right asset becomes available at the right price. Hendricks added that the Altera acquisition was a strategic move to add a low-CapEx business.

Sean Mitchell of Daniel Energy Partners inquired about a new proppant design partnership in West Texas and sought details on Core Lab's new product and service pipeline for the next 12-18 months, with a focus on the Middle East.

Answer

Chairman, President & CEO Lawrence Bruno clarified that Core Lab's role in the proppant project was diagnostic, using tracers to confirm the effectiveness of a client's new proppant design rather than designing the proppant itself. For new offerings, Bruno highlighted a major initiative in formation damage testing and the recent opening of an unconventional resources laboratory in Dammam, Saudi Arabia, to support regional growth and their partnership with Saudi Aramco.

Sean Mitchell questioned the international outlook, referencing peer guidance reductions in Mexico, and asked for potential trouble spots and more detail on the timing of new client engagements in the Middle East and Africa.

Answer

Executive Lawrence Bruno clarified that Core Lab had already exited the challenging Mexican market, so peer issues there are not applicable. He provided a regional outlook, stating the Middle East remains strong, Africa is a long-term play with some progress expected in H2 2025, and Asia Pacific is mixed with Australia and Indonesia strong but Malaysia soft. He identified Colombia as an inhospitable environment due to political decisions but noted potential rebounds in Ecuador and continued optimism for Brazil.

Sean Mitchell inquired about the nature of revenue from Carbon Capture and Storage (CCS) projects and the long-term market opportunity for Core's new 'Pulverizer' plug and abandonment (P&A) technology.

Answer

Executive Lawrence Bruno explained that CCS projects are typically front-loaded and not a life-of-field engagement like traditional oilfields. He added that the P&A market for the Pulverizer technology is substantial and in its very early stages, with Core Lab now ready to market the solution globally after successful trials.

Sean Mitchell of Daniel Energy Partners asked for an estimate of the oil price at which Aris's large customers might adjust their activity levels and inquired about the skim oil price assumption used for the Q2 forecast.

Answer

President and CEO Amanda Brock stated that the exact price threshold is the "million-dollar question" but emphasized the resilience of their blue-chip customer base (like Chevron, Conoco, Oxy), who have historically been less reactive to price swings than smaller operators. CFO Stephan Tompsett clarified that for skim oil pricing, the company simply uses the current WTI price strip in its forecast.

Sean Mitchell asked for more detail on the operational improvements that led to the sustainable increase in skim oil recoveries mentioned in the prepared remarks.

Answer

CEO Amanda Brock attributed the improvement to a combination of factors. Primarily, the company dedicated a specialized team in the field to focus exclusively on skim oil recovery, which improved efficiency. She also noted that there has been some increase in the amount of skim oil present in the produced water being processed.

Sean Mitchell of Daniel Energy Partners asked for a quantitative estimate of the potential cost impact from recently announced U.S. tariffs on the company's operations.

Answer

EVP and CFO Lloyd Hajdik stated the impact is primarily within the Downhole Technologies segment, affecting imported perforating gun components. He noted that competitors use similar supply chains and will likely face comparable cost increases, which Oil States expects to pass on to customers through adjusted pricing. President and CEO Cindy Taylor emphasized that this segment is a smaller part of the total company and the overall impact is not as material as it would be for a company more reliant on U.S.-focused imports.

Sean Mitchell asked for the company's outlook for the Gulf of Mexico in 2025 following recent weakness, and requested a summary of opportunities and soft spots across key international markets like Brazil.

Answer

President and CEO Cindy Taylor characterized the 2025 outlook for the Gulf of Mexico as 'very solid,' explaining that the Q3 2024 weakness was a typical seasonal slowdown due to hurricane risk, which causes deferrals of optional work. For international markets, she highlighted Brazil and Guyana as strong, multi-decade opportunities driven by production infrastructure projects. She noted that the company has not seen weakness in any offshore basins, with softness concentrated in U.S. land. CFO Lloyd Hajdik added that third-party data points to Latin America, Asia, and Africa as the largest contributors to future spending.

Sean Mitchell of Daniel Energy Partners asked for an updated outlook on Weatherford's plugging and abandonment (P&A) business, with a specific interest in its performance and prospects.

Answer

President and CEO Girish Saligram described the P&A business as an area with significant future growth prospects, highlighting successes in the U.S. offshore, North Sea, and Continental Europe. He noted the business benefits from project management capabilities and the integration of the Ardyne acquisition, which added efficient cut-and-pull technology, positioning it as a significant future platform.

Sean Mitchell of Daniel Energy Partners questioned the geographic focus of future M&A, asking if more opportunities were expected in the Eastern or Western Hemisphere. He also asked about the company's view on potential risks from international tariffs.

Answer

CEO R. Prejean responded that DTI has active M&A targets in both hemispheres, seeing significant opportunities in the East and accretive tuck-in deals in North America. CFO David Johnson addressed tariffs, stating that their diversified supplier and manufacturing bases are key mitigants. He added that they believe any US-Canada trade issues will be short-term and that current operations are managed under the USMCA agreement, providing flexibility.

Sean Mitchell questioned the outlook for the proppant market, asking about potential consolidation or attrition given flat U.S. activity. He also asked if the trend of higher sand intensity per well, or simul-fracs, was expanding beyond large E&Ps to smaller operators.

Answer

CFO Blake McCarthy noted that while Atlas isn't pursuing dilutive acquisitions, he expects supply attrition to continue as recent weather events exposed the fragility of competitors, leading to more rational pricing. COO Chris Scholla confirmed that the trend of higher-intensity completions is expanding, with smaller independent customers now adopting these technologies for the first time.

Sean Mitchell asked if the company is observing a change in customer demand mix between wet sand and dry sand, particularly as operators adopt simul-frac and other high-intensity completion techniques.

Answer

CEO John Turner and executive Chris Scholla responded that the primary driver of efficiency is not wet versus dry sand, but rather the proximity of the sand source to the well site. They explained that the Dune Express effectively moves their high-quality dry sand mines virtually into the heart of the Delaware Basin, which, like their Encore mines, reduces logistics costs and enables more efficient 24/7 operations.

Sean Mitchell inquired about drilling activity from private E&P companies and whether it could offset potential declines from public operators. He also asked about the industry's ability to source labor for a potential rig count increase in 2026 after a prolonged period of flat activity.

Answer

President and CEO Kevin Neveu confirmed seeing a return of private capital to the E&P space, viewing it as a positive leading indicator. Regarding a future ramp-up, Neveu expressed confidence that technology-focused drillers like Precision would gain market share in a flat 2025. He does not anticipate labor constraints, citing the success of their post-COVID recruiting programs and the advantage that large-scale drillers have in attracting talent.

Sean Mitchell from Daniel Energy Partners asked about the potential for an activity uptick in the Haynesville basin in the coming year as operators complete DUCs. He also inquired about the outlook for localized sand volumes and pricing in that region.

Answer

CEO Ladd Wilks responded that a Haynesville rebound is difficult to predict, depending heavily on weather and LNG project timelines, but affirmed ProFrac's long-term commitment to the basin. Executive Chairman Matt Wilks reiterated the company's strategy of maintaining a balanced portfolio between liquids and natural gas, highlighting their competitive advantages in high-pressure, high-temperature wells common in the Haynesville.

Sean Mitchell questioned the potential for a Haynesville activity recovery in the coming year as operators complete DUCs, and asked how this might affect localized sand volumes and pricing for ProFrac's large in-basin operation.

Answer

CEO Ladd Wilks responded that the timing of a Haynesville rebound is difficult to predict, depending on factors like weather and LNG project schedules, but affirmed ProFrac's long-term commitment to the basin. Executive Chairman Matt Wilks reiterated the company's strategy to maintain a balanced portfolio between liquids and natural gas, highlighting their historical efficiency and competitive advantages in high-pressure, high-temperature (HPHT) wells common to the region.

Sean Mitchell questioned the potential for an activity uptick in the Haynesville basin next year as operators work through DUCs. He also asked for an outlook on localized sand volumes and pricing in the region a year from now.

Answer

CEO Ladd Wilks stated it is difficult to predict the timing of a Haynesville rebound, as it depends on weather and LNG project timelines, but emphasized ProFrac is committed to the basin for the long term. Executive Chairman Matthew Wilks reinforced this, noting the company's history and competitive advantages in HPHT wells and its strategy to maintain a balanced portfolio between liquids and natural gas plays.

Sean Mitchell asked if finding attractive bolt-on acquisition opportunities is becoming more difficult. He also sought clarification on whether potential future power grid problems are related to generation or transmission.

Answer

President and CEO Christopher Stavros responded that finding bolt-ons is not necessarily harder, but requires patience and a thoughtful, creative approach, and he believes opportunities will continue to be available. Regarding power issues, he stated it's likely "all of the above" (generation and transmission) and characterized it as a growing issue across the entire Lower 48, not just specific to Magnolia's operations.

Sean Mitchell from Daniel Energy Partners asked if the AUD 500 million Australian revenue target includes M&A and inquired about non-energy growth opportunities in North America.

Answer

President and CEO Bradley Dodson confirmed that the AUD 500 million target for the Australian integrated services business by 2027 does not assume any M&A and is based on a pipeline of known organic opportunities. Regarding diversification, Dodson stated that while most near-term opportunities in North America remain resources-related, the company may look outside of resources in the longer term, leveraging its core competency of workforce accommodation and care.

Sean Mitchell of Daniel Energy Partners was called on during the Q&A session but indicated that his question had already been answered by previous exchanges.

Answer

After being introduced by the operator, Sean Mitchell stated that his question had been addressed earlier in the call and withdrew from the queue. CEO Sam Sledge briefly acknowledged him.

Sean Mitchell of Daniel Energy Partners asked about a recent U.S. Department of Defense contract for an autonomous underwater vehicle (AUV), inquiring about the potential defense market size, the vehicle's delivery timeline, and future capital expenditure priorities.

Answer

President and CEO Roderick Larson confirmed the AUV is scheduled for a Q2 2025 delivery. He expressed bullishness on the defense market, citing the military's increasing focus on drones and autonomy, but noted the full market potential is still unknown. Regarding capital expenditures, Larson emphasized a strategic focus on growth investments in next-generation, differentiated technologies that could be disruptive, rather than simply expanding existing capacity.

Sean Mitchell of Daniel Energy Partners asked if the current soft patch in North America makes M&A a more attractive use of capital. He also inquired about MRC Global's outlook for power generation demand, particularly from data centers, and how the company expects to benefit from the associated infrastructure build-out.

Answer

CEO Rob Saltiel responded that while the company continually scans for M&A opportunities, the landscape hasn't changed significantly in recent months. He emphasized that simplifying the capital structure, including addressing the preferred shares, is also a key consideration. On power generation, Saltiel reiterated that the growing demand for electricity, driven by data centers, will necessitate more gas-fired power stations. This, in turn, will drive demand for the gathering, processing, and transportation infrastructure that benefits MRC's business.