Good morning, ladies and gentlemen. Welcome to the Trican Well Service first quarter 2022 earnings results conference call and webcast. As a reminder, this conference call is being recorded. I would now like to turn the meeting over to Mr. Brad Fedora, President and Chief Executive Officer of Trican Well Service Ltd. Please go ahead, Mr. Fedora. Thank you very much. Good morning, ladies and gentlemen. I'd like to thank you for attending the Trican conference call. A brief outline on how we intend to conduct the call is, first, Scott Matson, our Chief Financial Officer, will give an overview of the quarterly results. Then I will address issues pertaining to current operating conditions and near-term outlook. Daniel Lopushinsky will talk about logistics and new technologies, and then we will open up the call for questions. Several members of our team are here with us today, and we will be available to answer any questions that may arise. I'll now turn the call over to Scott. Thanks, Brad. Just before we begin, I'd like to remind everyone that this call may contain forward-looking statements and other information based on current expectations or results for the company. Certain material factors or assumptions that were applied in drawing conclusions or making projections are reflected in the forward-looking information section of our first quarter 2022 MD&A. A number of business risks and uncertainties could cause actual results to differ materially from these forward-looking statements and our financial outlook. Please refer to our 2021 annual information form and the business risks section of our MD&A for the year ended December 31, 2021 for a more complete description of business risks and uncertainties facing Trican. These documents are available on our website and on SEDAR. During this call, we'll refer to several common industry terms, and we'll use certain non-GAAP measures, which are more fully described in our 2021 annual MD&A and in our first quarter 2022 MD&A. Our quarterly results were released after close of market last night and again are available both on SEDAR and our website. With that, I'll move to our results for the quarter. Most of my comments will draw comparisons to the first quarter of last year, and I'll provide some commentary with respect to our results on a sequential basis compared to Q4 of 2021 as well. The quarter started off a bit slower than we'd expected due to some extremely cold weather experienced coming out of the holiday break, but then ramped up fairly steadily after that. Activity levels across our service lines were pretty significantly improved versus last year, following continued strong commodity pricing and a generally more constructive industry environment to start the year. These factors led to an average Western Canadian rig count of just over 200 for the quarter, moving up meaningfully from Q4 2021 levels and quite a bit stronger than the Q1 levels of last year. Revenue for the quarter was CAD 219 million, an increase of 48% compared to our results from Q1 of 2021. From an activity perspective, our overall job count year-over-year was up about 13%, and total proppant pumped, which is a decent measure of well intensity and activity, was up 12% year-over-year. The other major factor influencing our revenue for the quarter was a generally stronger pricing environment as compared to this time last year. However, as you can tell from our relatively flat margin percentages year-over-year, we gained very little on the profitability side as sharp and continuing inflationary pressures absorbed virtually all of the uplift. Fracturing operations were busier sequentially from Q4 of 2021 and significantly busier as compared to the same period of last year. We were very pleased to deploy our first Tier Four Dynamic Gas Blending frac spread coming into the year. The feedback on its operating performance has been very positive, and we're seeing increasing demand for the most advanced equipment in the basin. This brought our fracturing crew count to seven for the quarter, with utilization of approximately 85%. Our operations continue to be focused on pad-based programs, which help minimize both downtime and travel time between jobs and helps our overall efficiencies. Fracturing margins remained effectively stable year-over-year compared to last year, as inflationary pressures experienced coming out of the year-end and through the first quarter served to offset most of the pricing improvements that we realized. Our cementing service line benefited from increased rig count, which provided steady utilization through much of January and February before slowing in mid-March going into spring breakup. Coiled tubing operating days increased 17% sequentially, driven by first call work with our core customers and our ongoing efforts to grow that portion of our business. Adjusted EBITDA came in at CAD 38.9 million, a significant improvement over the CAD 27.3 million we generated in Q1 of 2021. I would note that our adjusted EBITDA figure includes expenditures related to fluid end replacements, which totaled CAD 1.6 million in the quarter and were expensed in the period. I would also note there was no contribution this quarter from the Canada Emergency Wage Subsidy and Canada Emergency Rent Subsidy programs that were in place throughout 2021, which contributed CAD 5.5 million to the first quarter of 2021. It's also important to note that our adjusted EBITDA calculation does not add back the effects of cash-settled stock-based compensation amounts. To more effectively isolate these amounts and more clearly show the results of our operations, we've added the additional non-GAAP measure of adjusted EBITDAS to our ongoing disclosures. We recognized CAD 3.0 million in expense related to cash-settled stock-based compensation expense in the quarter, which reflects the rapid rise in our share price since the year-end. Adjusting for these amounts, Trican generated CAD 42.0 million in EBITDAS for the quarter, compared to the CAD 27.3 million generated in the same period of 2021. On a consolidated basis, we generated positive earnings of CAD 13.3 million in the quarter or CAD 0.05 a share, and we are again very pleased to show positive earnings in the quarter. The second metric that we added to our ongoing disclosure is free cash flow, which we more fully outline in our Q1 2022 MD&A. Effectively, our definition of free cash flow is the DAS less non-discretionary cash-based expenditures, such things like interest, cash taxes, cash-settled stock-based comp, and maintenance capital expenditures. Trican generated free cash flow of CAD 30.4 million during the quarter, as compared to about CAD 22 million in Q1 of 2021. Stronger operational performance partially offset by budgeted higher maintenance capital expenditures in the quarter. Capital expenditures for the quarter totaled CAD 21.1 million, split between maintenance capital of CAD 9.2 million and our upgrade capital of CAD 11.9 million, dedicated mainly to our ongoing capital refurbishment program, upgrading a portion of our conventionally powered diesel pumper fleet with Tier Four DGB engines. Balance sheet remains in excellent shape as we exit the quarter, with positive non-cash working capital of about CAD 111 million and no long-term bank debt. Finally, with respect to our NCIB program, we maintained active during the quarter and repurchased and canceled approximately 2.8 million shares at an average price of CAD 3.22 per share. We continue to view share repurchases as a good long-term investment opportunity for a portion of our capital in the context of returning capital to our shareholders. With that, I'll turn the call back to Brad, and we'll move from there. Okay. Thanks, Scott. I'll try to keep my comments as brief as possible because most of the outlook and the commentary that we're gonna talk about today is quite consistent with our last conference call, which was just a few weeks or, you know, two months ago, I guess. Really nothing has changed. I think our view on this year and next year continues to improve. Q1 activity significantly increased across all of our business lines when you compare it to Q4, and that's a result of commodity prices. We've got $100 oil, $7 gas for the first time since, I think, the late 2000s. You know, our customers' wells are paying out in a matter of months. That's, you know, we're very pleased to see that, you know, they're making money and they're viewing their plays as great investments, especially in the context of what's happening around North America. We had an average of over 200 rigs running for the quarter. All things considered, you know, generally the oilfield activity is pretty good. I mean, we did have a slow start to the quarter just because everybody, I think, paused at Christmas, and then by the time wells get drilled, and then we get onto the completion side, you know, where we fit in, you know, that takes a few weeks, and that's to be expected. There's always. Also, you know, we had some really bad cold weather that affects field activity and rail, but that's always to be expected. I can't remember a Q1 where we haven't had some type of weather event, and so we build that into our budgets, and certainly nothing that should be surprising there. You know, the other thing I guess that is different this time around is we did have, you know, ongoing COVID interruptions in the field where we would have various field crews shut down for a day or two, and we would have to scramble to get people to work days off, et cetera, but nothing that we didn't sort of, you know, manage our way through. I think thankfully, that seems to have almost disappeared, and I think we're getting back to normal with respect to COVID in Western Canada. You know, we averaged just over 200 rigs. We peaked at 234 rigs. We actually didn't get the completions activity that you would expect with that type of rig count, and a lot of that activity has spilled into Q2. As a result, you know, we should have a fairly decent Q2, but we didn't see the tightening in the system that would correspond to the rig count. I think we'll talk about this in a second here, but I think we're gonna see that for the second half of the year. So far in Q2, you know, we're sitting at 90 rigs, which is a lot better than the 60 we had last year. You know, we're almost halfway through breakup, and so we should start to see activity start to build momentum for the second half of Q2. You know, things, the snow is gone. It's starting to dry up, our customers are pretty anxious to get back to work. A majority of our business remains in BC and the Alberta Montney and Deep Basin. Nothing's gonna change there. You know, as you know, we have $105 oil, we are seeing oil plays, southeast Saskatchewan and southeast and southwest Saskatchewan and southeast Alberta. You know, they are very active, and we expect that they will be active. Now with these gas prices, you know, we're starting to see plans unfold for CBM wells, which is shallow gas drilling. It's coil-based. They use nitrogen instead of water. It's something that, you know, we're all very familiar with, and we think Trican has an advantage in that play. We were active throughout the winter, and we expect that might even get more active in the next few years. In the quarter, we ran sort of 6, 7 crews, depending on the week. Eighteen cement crews and 7 coil crews, nothing's really changed there. We did add that seventh crew in Q1. Staffing continues to be an issue. You know, our issue is getting people to stay in the industry, and that's a priority. Obviously, if we want to expand, if we see our customers' activities expand, and we wanna be able to keep up with them, obviously, we need to not only attract people, but we need to be able to retain them. We're still losing people out of the oil and gas, oil field, and we're losing them to other industries as their wages increase and, you know, they look for better work-life balance. You know, we're gonna continue to try to get creative and address those issues going forward. Certainly, the labor issue is both, you know, an issue that we need to work through, but also, you know, it's maybe not such a bad thing 'cause it'll keep the oil field service companies from expanding too quickly. Something that needs to be managed, but I think we're doing a good job of working our way through. We had decent EBITDA for the quarter and of course, you know, we've talked about this previously. I think we need to start talking more about free cash flow than we do EBITDA. The nice thing about free cash flow is it cleanses all the balance sheet inconsistencies between the companies, and addresses the fact that some of this equipment needs significant repairs, and whether you choose to expense or capitalize them, you know, it all gets caught up in free cash flow. I think in general, the market wants to see companies that are generating good free cash flow on their assets. I think Scott talked about that already. We were successful in raising prices. If you look at this versus sort of a year ago, we're up anywhere from 15%-25% in our various service lines, depending on the customer and depending on the situation. Unfortunately, all of our increases were generally offset by cost inflations. Our margins have been frustratingly stable for the last 12 months. I mean, we operated at a margin advantage compared to our competitors for the last sort of 15 months, but we would've thought by now, we would've started to see EBITDA margins in the mid-20s, which is really where we need to be if we wanna have a double-digit return on invested capital. I think we'll get there. You know, it'll just, it'll take more discussions with our customers and, you know, obviously, I think our customers wanna see us have a sustainable business, and so we'll continue to work diligently about, you know, getting some margin capture for us, and not just passing it on to our suppliers. You know, we did see the inflationary pressures early and, you know, in Q4 and Q1, we were able to maintain our margins when, you know, many people were having margin erosion. Not just, you know, the. We owe a lot to our supply chain group on making sure that we were ahead of that and, you know, we're able to model that through the winter. We'll continue to stay diligent on that. You know, the inflationary pressures aren't going away. You know, and I think as everybody knows, when you have $100-$105 oil, there's a huge increase in diesel pricing, and diesel impacts literally the entire supply chain. Nothing gets excluded. It doesn't matter if it's, you know, sand, chemicals, trucking, everything, you know, just even third party services at the bases. I mean, they have to run trucks, so diesel just ripples through the entire supply chain. You know, what was unfortunate is that the frequency of those changes was unprecedented. You know, we expected to see inflation, but we didn't really. We were hoping we wouldn't sort of get price increases from our suppliers sort of on a weekly basis and, you know, the customers find that very frustrating when you talk to them about price increases several times a month. But generally, our customers were understanding. I mean, they're obviously working their own gas business and, you know, they're taking advantages of high commodity prices, but naturally, that does ripple through all of their costs. They did take cost increases to offset our cost increases, and we're gonna work with them again to capture some of that margin for Trican. I think I'm gonna pass this over to Daniel Lopushinsky now. He's gonna talk about supply chain and some Tier Four technology. Thanks, Brad. So from a supply chain perspective, you know, if Q1 proved anything, it was, you know, the supply chain has become a major factor, just with regards to, you know, how we manage our business from a context of, you know, higher activity levels, but also the constant pricing pressures that, you know, Brad kinda noted previously. You know, the entire supply chain was stretched pretty thin, in Q1. If activity increases, which we think it will, at the later part of the year, it will become, you know, that much more important from a managing perspective. You know, we believe that we have, you know, really good logistics and, you know, we welcome a tight market, you know, with respect to this and how we manage suppliers. You know, as we've messaged, you know, we did experience, you know, inflation across the entire supply chain at a significant rate and much higher rates than what, you know, we've ever seen before. You know, diesel obviously, you know, directly correlated with oil prices surged through the early part of the year, you know, exponentially from January, February and March. You know, and as an example, like if you look at sand, you know, by the time sand reaches location, about 70% of the sand cost is transportation, so which diesel is the big impact on that stuff. And we do supply a fair bit of, you know, diesel to our customers. About 60% of our frack fleets are, you know, internally supplied diesel. You know, from a third-party trucking and logistics perspective, you know, trucking was really tight in Q1, with the increase in proppant volumes, you know, larger pads, more work up in the Montney and Deep Basin. The biggest contributing factor to that is there's just less trucks available in the basin, you know. You know, we talked about the workforce tightening up and those sorts of things. Just a generally smaller workforce than what we've had in the past, you know, which, you know, you gotta be nimble when you're managing this from a logistics perspective, you know. The other factor that makes it difficult is we're operating in even more remote areas of the basin. You know, we face significant logistical challenges from that standpoint. You know, with regards to sand, you know, Tier One sand suppliers are basically operating, you know, at capacity. You know, there were some rail challenges early on in the year with respect to the cold weather. The rail companies essentially shut down operations when, you know, the temperature meets certain temperatures. We did see a little bit of tightness in the market from a proppant perspective early on in February, but, you know, we managed to work through those challenges. You know, the biggest increases that we've seen with regards to sand is diesel. You know, fuel surcharges driven by the rail companies and those sorts of things. In Q1, Trican's exposure to Tier One sand was about 60% of the sand we pump was Tier One sand. With regards to, you know, chemicals, we did experience some chemical disruptions, but nothing, you know, too meaningful to our operations. You know, a lot of the base components of our chemistry are derivatives of oil, so, you know, those have similar manufacturing processes as diesel. As diesel costs increase, so does the cost of our products. Those, you know, we continue to see those as we move throughout the year. You know, and a lot of our chemicals come from China and the U.S., so we, you know, we plan for expected delays and increased costs associated with transportation and those sorts of things. We're, you know, we're always looking for substitutions and suppliers that get creative and are proactive with regards to how they're managing their supply chains as well. You know, as we've previously messaged, you know, we are extremely excited that we rolled out you know, our first Tier Four DGB fleet here in Q1. We are extremely happy with how it's been operating. You know, the field performance, particularly diesel displacement, is in line or better than expected. With these engines, we're burning lots of natural gas and displacing diesel at you know, great rates. We will be re-activating a second and third Tier Four fleet in the summer and late Q4. The value proposition for this equipment is significant with respect to fuel savings, the emissions reduction, and when you know, ultimately, we expect to get paid for it. You know, as the gap between diesel prices increase and natural gas is, you know, more or less a consistent cost, you know, it's even more of an excuse for us to get a premium for these fleets. New Tier Four engines, you know, they burn more natural gas than diesel, so the net benefit for the environment, you know, is also on the cost side with natural gas less expensive than diesel. This technology will likely be the standard in the next few years as at least for Trican, you know. We're really excited about this and, you know, we're proud to be the first company in Canada to roll this out. You know, I'll throw the call over to Brad to discuss, you know, Q2 and our second half outlook. Yeah, just so the remainder of the year, we're very positive that we think budgets are just gonna creep up as commodity prices hang in there. We will use that opportunity to put more equipment into the field if we can do so at attractive pricing. We're very focused on return on invested capital and free cash flow, so we will continue to try to maximize that wherever we can. What we found is, you know, breakup now is becoming less of a breakup as people try to level load their activity throughout the year and take advantage of the warmer weather with respect to things like water heating and just a less frenzied oil field. So we do expect to see Q2 be less punitive to our financials than it has been in the past. The basin remains extremely gas-focused, but we are seeing more oil activity as we have oil being sustained at over $100 a barrel. Again, we're gonna use this activity to try to deploy more equipment at profitable rates. Even, you know, coil, which in the past has been one of our worst-performing divisions, is now frankly, one of our best-performing divisions. We've seen that market tighten up. Cement activity will correlate directly with the rig count, and we continue to look to add staff in that department and maintain or grow our market share. We're still very focused on the deep basin with respect to cement and coil, but as activity expands throughout the basin, we expect to expand our geographical market share in those two divisions as well. There's about 30 frac crews running in Canada in aggregate between all the service companies, and that's basically balanced at about 200 drilling rigs. We expect the rig count to exceed 200 for the second half of the year, and as a result, we expect frac pricing to go up as the year goes on. We know that debt repayment and return on capital is still the main focus for our customer base, but at these commodity prices, and they're really only reinvesting about 30% of their cash flow, you know, we do expect that activity will increase as the year goes on, and we'll be there to take advantage of it. Our big bottlenecks at this stage now are our people, and I think we discussed this already, but we have to get very creative on attracting people to this industry. We're gonna have to start expanding our search to all parts of Canada like we have in the past. Now that COVID seems to be petering out, we do expect that people will come back to work in the oil field that had previously worked here that, you know, now live in places throughout eastern Canada and even the far west parts of BC. Hopefully, we can attract them back to the industry, and we can provide our customers with crews and equipment as they increase their budgets. On the technology side, it's not a lot new to report here. Technology has always been a big driver of efficiencies in the oil patch, and we will continue to stay well informed in all technological advances in our industry. We're not married to any technologies. We're very agnostic with respect to that, and we'll continue to review the advantages and the costs of it and deploy it where we think we can get a return on it. You know, I think there's too much talk about technology without talking about the payback of those investments. I can assure you that, you know, we will not deploy technology for technology's sake. We will only do it if it improves our service offering and our returns. You know, I think the next big phase of technology is gonna be the digitization of data and data collection so that we can offer our customers with higher value service. We expect to sort of take a deep dive on this over the next few years. Things like artificial intelligence to reduce maintenance, get more predictive to ensure that we have less breakdowns. You know, that's an area that we're gonna be looking into and things where you can maximize fuel consumptions, whether it's operating it at certain RPMs versus certain pressures. All of that is the potential to reduce costs and provide a more reliable service. We did release our first sustainability report last year, and we'll be releasing our second sustainability report late in Q2, so look for that. Again, I think we've talked about this, but our industry has done so much in the past with respect to ESG initiatives. Frankly, we're thankful to have a forum in which to summarize those and report them. You know, we will continue to be very ESG-focused. We have the balance sheet to provide us the flexibility to look at anything and everything. You know, we've done a great job on reducing emissions, whether it's with Tier Four natural gas engines or idle reduction technologies. You know, getting better at picking certain RPM ranges in which to operate. All of that, I think we've done lots of, and you know, the next phase is to focus on the social and the governance. We will put lots of efforts into those initiatives and we're providing a report here in a few months. Lastly before I wrap up, I wanna remind everybody there's about 1.9 million horsepower operating in Canada or available in Canada, and about 1.3 million of that is operating today. The equipment that is parked and is hopefully will come back into the basin one day, Trican does own about 40% of that. You know, we're operating 7 out of 12 frack crews, so we have substantial upside as activity continues to increase throughout the rest of this year and into next year. We're extremely well-positioned. We have a clean balance sheet, and we're ready and able to make investments where we think we can get sustainable returns. I'll now turn the call back to the operator, and we'll take questions. Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We'll pause for a moment as callers join the queue. Thank you. Our first question comes from Cole Pereira with Stifel. Hi. Good morning. I acknowledge this question is an oversimplification, but as we think about Q3, are you able to provide any goalposts around how much net pricing has increased relative to Q1 across the whole fleet, maybe just on a percentage basis? We would expect at the minimum another 10% over Q1. We've had preliminary discussions with our customers. We would expect that would be the minimum. Got it. Just out of curiosity, how much would pricing be up on a gross basis versus Q3 of last year? Ballpark. Versus Q3 of 2021? Yeah. Just year-over-year Q3 comparison. Oh, 20%. Okay. Gotcha. On the shareholder returns front, so obviously the balance sheet's in great shape. You're continuing to buy back shares. How do you think about a dividend? I mean, I assume it's maybe more of a 2023 consideration, just given a lack of visibility beyond Q3. Yeah, it's a tough time of year to think about dividends. Just obviously the budgets for the second half have not been finalized by all of our customers. As the stock price goes up, you know, its relative attractiveness goes down when you think about the other opportunities. I do. You know, we're very open to dividends. It's obviously a cyclical business, and they may come and go as they have in the past. I do think there's a place for dividends in this industry where the money just cannot be deployed effectively at certain points. I think as we've all learned, we don't wanna overbuild, and there's only so many people available. We don't have any debt to pay off. You know, eventually there's too much cash on the balance sheet and needs to be given back to shareholders. Got it. Just out of curiosity, if you were to order a Tier Four spread today, how long would it be till you could actually get it in the field? A year. Okay. Gotcha. Just quick- Roughly CAD 50 million-CAD 60 million. Okay. If you were to but a brand new Tier Four spread. New build, yeah. Yeah. Got you. Then Scott, just quickly on the working capital front. I mean, should we assume, kind of a modest net investment for the rest of 2022? I mean, we built pretty significantly in Q1. I would expect it to unwind a bunch in Q2, right? We'll slowly build up a little bit as we go to the end of the year. We're probably at the peak coming out of Q1 is I think where we'd be for the year. Okay, perfect. That's helpful. Thanks. I'll turn it back. Our next question comes from the line of Waqar Syed with ATB Capital Markets. Please proceed with your question. All right. Just a couple of questions here. First of all, the two Tier Four upgrades, would those be incremental fleets, based on what you know today? Or would those be replacement for something that's currently active? Good question. We have demand in particular for the Tier Four technologies. We will only add them incrementally if the activity levels continue to increase. If activity levels stay flat, depending on customer conversations, they may be replacement for fleets that are operating today. There's several factors that haven't been worked out yet, and that's the two main ones are industry activity and availability of labor. 10% type price increase that you expect for Q3, would that justify an additional fleet or not? An additional Tier Four fleet? Yeah, that's right. Incremental fleet being added. Well, the Tier Four technology gets deployed at a premium, so it's sort of a separate pricing. Right ...discussion. It's always at a premium to conventional equipment. It's sort of a subsector of the market because it needs a certain customer that is concerned about not just fuel savings, but emissions and is willing to pay for that. Like I say, we need to be able to staff it with good crews. I'm not sure a general price increase is the main driver of our desire to add Tier Four technology. Yeah. As you're making these investments, is the return on that investment locked up? Because you may need, you know, I don't know what, a year, two years to recover that return. Is that locked up with the contract behind it? We don't wanna talk about the particulars of contracts, but certainly we have a direct line of sight on return. In terms of cementing and coil, you know, cementing your 18 active units and coil 7, how do you see that kind of growing in the second half? Again, I mean, I hate to say it, but assuming we can. Cementing, we would expect to just grow directly with the rig count, assuming we can get the labor. 18 cement crews turns into 23-25 cement crews, and 7 coil crews probably turns into something like 10, because I think we have to be realistic about how much you know, how much good labor we can add. Both those markets are very, very tight. Really what is constraining our service offering there is labor. Meaning no additional equipment. We have equipment on the sidelines ready to go. It's in great shape. It just needs operators. Right. Okay. In terms of the margins between the different businesses that you run, you know, how would you rank order the current profitability of the three as a percentage of revenues? What's the highest, what's the lowest right now amongst your, you know, main big three business lines? Coil would be the highest, and then cement and fracturing would be pretty, very, very close to each other. Would be tied for second. Great. That's all I have. Thank you, sir. Thank you. Thank you. Once again, if you have a question, please press star then one. The next question is from the line of Andrew Bradford with Raymond James. Please proceed with your questions. Morning, guys. Thanks for taking my call. Just looking back on the first quarter, you said on the call that you had between 6 and 7 crews working depending upon the day or the week. Was it one crew that was sort of up and down through the quarter? Like, or was it the function of the play it was in or the geography, or was it kind of all spread all over your operating area? Yeah. I think unlike the US, you know, what makes up a frac fleet on any given day is pretty fluid in Canada just 'cause the differences and there's significant differences in equipment demands from one play to the next. Even within the same play, if you know, you've got a pump down crew or a plug and perf crew versus a coil crew, you know, you can have different amounts of people and equipment on location. So I wouldn't get too bogged down on, you know, was one crew working half the time? It doesn't really work that way. The people and the equipment get spread around on any given week, and it may result in seven crews, it may result in six or five. As we've discussed before, it's like Lego, this equipment. It all is intermixable and, you know, it goes where it's needed. There's no ring fence around any particular fleet. Okay. No, I appreciate that. You know, sorry, Andrew. Just to finish that up, you know, the horsepower being deployed on any given day may not even change, but the rig count or the fleet count may. You could have 7 crews out one day and with less total horsepower than the following week with 5 fleets out. You know, it's Well, in that. It's a little difficult. In that case, is it maybe more helpful to talk about horsepower demand or horsepower utilization? Yeah. Like, how would you describe that through the quarter? Well, it's pretty consistent with the exception of March, which basically took everything we had. There was a slow ramp-up in January and then a bit of a pause in February when the really nasty weather was here. It ebbed and flowed sort of as it does every year. You know, the last few years, I think it's getting somewhat concerning as to how much work is getting pushed into March by operators, because one of these years you're going to get an early spring, and there's going to be some disappointments. Great. Scott, is it the fact that there was so much work late in March that kind of contributed to the higher than usual receivables on the balance sheet? I think that's probably a fair statement, Andrew. Yeah. Like, I mean, our activity ramped coming out of year-end, but really peaked in March, right? That does drive a pretty significant uptick. Okay. Just wanna jump around to looking forward here into the second quarter. Some of your competitors have been talking about an absence or at least a lack of typical spring discounting. I wonder, like, was that your experience? Is that part of why you say that this maybe this second quarter will also be less punitive than usual? Yes. In fact, we've actually had prices go up Q2. There's been no discounting, and we've continued to pass on inflation. Sand prices, in particular, have taken another step up. Yeah, if anything, pricing is higher today than it was two months ago. Okay. That, that's useful. Thank you. Does that kind of give you a more confident springboard into summer pricing? Yeah Does that play into it at all? For sure it does. One thing that you know, the pricing discussion is never ending, as you can imagine. Certainly everybody in the past has used spring breakup to pause pricing momentum and in fact reverse it. I think the industry, just given the cost pressures this year, has done a good job of not allowing that to happen. I think more so than any breakup I can remember, I feel like we're in a better position to talk about price increases than we have in the past. I think our competitors are viewing it very similarly to us in that there's just no. There's always a bad operator out there, we all know that. This inflation is not going away. You know, our margins have been very frustratingly stable now for 5 quarters in a row. Something has to change, and eventually we have to capture margins. I was gonna ask you about the tenor of this call. In the past, you've been more confident or you sounded more confident about pricing. Today it sort of seems like you're maybe a little bit less confident. You'd like it to come, you're having some early discussions. Like, would you say that you're as confident as you've been that these prices, the net pricing increases are coming? Thanks for calling me out. No. Like, I'm very confident, no less or no more confident than we've been in the past on pricing, but we underestimated the inflation. We've had all these price increases, it just didn't result in anything. I'm a little less assertive that, I guess, to highlight price increases because we haven't seen margin expansion, even though we've had the price increases that we talked about. You know, when we do the one-year look back on price increase predictions versus realized price increases, they generally all came true. We achieve more pricing gains than expected in certain situations. You know, you look at cementing, I mean, we had some fairly steep price changes there, but the inflation was just absolutely unrelenting on products. Margins are flat. You know, I'm assuming that's all anybody really cares about at the end of the day is, you know, you can talk about price all you want, but until it results in a margin expansion, it's not really. It's all just hot air. Well, it's good that you're at a minimum keeping up with inflation. On the second quarter, so it's interesting you said pricing is up in the second quarter. Is that net pricing? I'm not saying- No. You're gonna get margin expansion in the second quarter because you know, you have operating leverage issues or challenges. Yeah. That's just sort of kept pace as well? Pretty much. Okay. You know, pretty much. It certainly hasn't. Our net margins certainly have not gone down. They may have inched up slightly, but that more than gets offset with the built up RNM that gets done. Okay. And, and- I just have one more question. Sorry. Yeah. No, I just wanna highlight our bias is to expense RNM, right? I think when you gotta sort of keep that in mind when you're looking at Trican's financials, and this is to all the analysts that are on the line. You know, we expense. When in doubt, it is expensed. Well, definitely appreciated. Okay, last question before I jump back in the queue is you know, you've spoken about how the rig count in the second half should average over 200, and there's 1.3 million of the 1.9 horsepower notionally active today. Do you care to take a stab at what that 1.3 number turns into in the third quarter or fourth quarter this year? At the most, 1.4. There just isn't the people. Okay. That's good for me for now. Thank you very much, guys. Thanks. The next question is from the line of Keith Mackey with RBC Capital Markets. Please just use your question. Hi, good morning, and thanks for taking my questions. Maybe just wanted to go back to the pricing a little bit more, and certainly that was something that I was interested in asking about as well. Has it been the case of just not being able to get enough pricing to grow margins, or has the, you know, inflationary factor sort of caught up with the pricing you did expect to get? It sounds like it's more the inflation versus the market. I guess as we go into the second half, and certainly now, E&P operators are starting to feel the inflation a little bit more themselves. How does your like... Does your strategy change at all as far as what price to ask for in order to get the margins you need to be able to make profitable reinvestments, or how do you now, you know, try to make sure that you can actually get some expanded margin from, you know, from these next round of price increases? Well, I think what we learned is don't underestimate your own suppliers with respect to their intentions of price increases. It's not surprising. You know, the whole value chain, right from us to the sand mine in Wisconsin, has had, you know, 7 incredibly tough years and pricing has. We've let our prices get beaten down to just these ridiculously low levels and where possible, people are trying to recover that. This is gonna be a bit of a long answer, but it's, you know, we're still not actually back to 2018 pricing yet. I would say there's, you know, there's. Some of our suppliers are just in a much better position to increase prices than we were. Some of our suppliers, like trucking, just did a better job of it than we did. What we've learned is, you know, when you think prices are gonna go up X percent, you may wanna factor in two X, because, you know, the whole value chain is trying to fight its way back to being a sustainable business. You know, from a customer's perspective, that's incredibly frustrating to them, right? Because they don't. Obviously, it's not their responsibility to understand how our businesses work. You know, they're seeing major price increases and, you know, they get a price increase, and then, you know, we're in their offices three weeks later talking about another one and, you know, it's hard to make plans. You know, we've tried to sort of pass on price increases as we got them. I think maybe what we need to do now, just, you know, for the benefit of everybody is be a little bit more long-term predictive as to with respect to where prices are going to end up. That will allow our customers to make more accurate plans on AFEs and what a well in September of this year is actually going to cost versus, you know, just incrementally bumping it up every two weeks for the next three months, you know. It's maybe there's gonna be some sticker shock, and there's gonna be some uncomfortable conversations and maybe some fallout from that. I think we owe it to our customers to say, "Hey, look, this is what we think a frack is going to cost three months from now based on our experience as to what's coming our way from a pricing increase perspective from both our suppliers and you know, from the labor, everything." You know, whether it's hotels, the diesel costs, chemical costs, sand, you know, CN Rail, fuel surcharges, all of it has come fast and hard and has not stopped. I think we're gonna get a little bit more predictive in where this is all gonna end up. Got it. Appreciate it. Maybe just to follow up, how is inflation, like you say, it hasn't stopped. Is it actually continuing at the same, you know, rate of increase as you've seen, or are things getting more expensive faster or more expensive? Yeah. you know, less fast? Or how would you characterize that? Yeah. I think the rate of change has slowed. Whereas, you know, the rate of change from November to March was shocking. We expected inflation, we just didn't. You know, the slope of that curve was steep. It's flattening out. It's not going to stop, but I think the rate of change and the size of the change from one event to the other is gonna slow. Got it. Okay. Maybe just talk a little bit about the market for Tier Four DGB equipment. It sounds like you've got good confidence about increasing demand for that for that category of equipment. Are you seeing, you know, a greater number of customers looking at potentially contracting some of these new fleets as they become available? Or, you know, has it not really picked up like you might expect? No, it's. You know, we needed a quarter for data collection and getting some actual field performance behind us. Q1 was pivotal in how, you know, we are relaying information and marketing this technology to our customer base. Now that we've got three months of operating data and, you know, some hard data, I would say the interest in the equipment is growing. You know, of course, you know, diesel prices are extremely high and seem very sticky. That is helping our value proposition. The market is, I would say, getting better. A lot of it is just we needed hard operating data. You know, it's easy to say how this is gonna operate in the field in theory, but, you know, we've been through a full quarter now and a tough quarter with respect to cold weather. We've worked out a lot of the kinks, and we're really happy with things. As a result, I would say our customer interest has grown. Got it. I know it's up to 85% substitution. Do you have the numbers for what you're actually able to do? Yeah. When you average the equipment out over, you know, ramping up and ramping down and depending on the lengths of stages, these numbers bounce all around. Something in the mid-seventies is what you would expect over the life cycle of the frac. Got it. Okay. Very helpful. Thanks. That's it for me. Thank you. Thank you. Our next question is a follow-up from the line of Andrew Bradford with Raymond James. Please just proceed with your question. Just keying off Keith's question there. How do most of your customers kind of look at, you know, the availability of the Tier Four spread that has higher costs and, you know, at this point, you know, if they nominate now, they probably get one or some of your service in the fourth quarter versus, you know, a Tier Two dual fuel conversion, which they could probably get sooner and maybe at less pricing? Do they bring this up at all? Yeah. Remember, whether it's Tier Two or Tier Four technology, there's a fairly significant fuel savings. The incremental fuel savings from Tier Four over Tier Two is very significant. The other issue is the methane emissions reductions. Like, one of the problems with Tier Two technology is there's a lot of what we call methane slip, which is, you know, natural gas is going into the engine, but it's not being burned, and it's being released into the environment. As everybody gets very focused on methane slip or methane emissions, you know, that, of course, becomes less palatable to them. Frankly, we, you know, if you look back sort of 5, 10 years when Tier Two technology was being deployed in the field, we frankly didn't focus on the methane slip element of the technology enough. You know, some of our customers are doing emissions, you know, actual live emissions testing, particularly methane. The advantages of Tier Four over Tier Two don't stop at the fuel savings. There's a very, very concerted effort to almost completely reduce or eliminate the methane slip in this new Tier Four technology. If you're only after costs, you know, depending on your well design and the setup to provide natural gas at the well site, you know, it would. You may flip back and forth as to which is better for you. If you're looking at this and you're saying, "Listen, we want great economics, but we also wanna reduce our emissions," then Tier Four is the only answer. Is that methane slip, is that accounted for in greenhouse gas or CO2 equivalent emissions? Yes today? Remember, it's about thirteen times worse than CO2. When you convert it to sort of GHGs, you multiply, you know, methane by. You know, it's thirteen times worse than CO2. I'm probably not saying that very eloquently, but. Cool It's much worse than CO2 alone. Yeah. Yeah, exactly. Okay, so you know, you mentioned, like, is there a discussion at Trican about around opportunities to maybe even further vertically integrate your business to take control of some of these cost items? Like sand comes to mind as a sort of a clichéd sort of avenue that you could pursue but or further pursue. The general answer to that question would be, we look at that, but we have not seen an opportunity that we find attractive yet. The big issue is, do you have the scale to be a sole owner of one of your supply inputs? In most cases, the answer to that is really no. Okay. There's other creative ways of working around this to give you preferential access to supplies and that's why, frankly, you know, we think from a competitive position, we're at our best when the industry is operating, you know, activity is incredibly robust and things get very competitive and there's lots of planning required and, you know, that's when I think that's when we're operating at our best. Thanks for that. That's it for me again. Thanks. Okay, everyone. Thank you very much for joining the call. We're approaching an hour, so we'll sign off now. The management team at Trican is available for questions throughout all day today and tomorrow if any more questions arise. Again, thank you for joining the call. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.