Good morning, and welcome to the CSI Compressco LP's Third Quarter 2022 Earnings Conference Call. The speakers for today's call are John Jackson, Chief Executive Officer of CSI Compressco LP, and Jon Byers, Chief Financial Officer of CSI Compressco LP. Robert Price, Chief Operating Officer, is also in attendance. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing Star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then one on a touch-tone phone. To withdraw your question, please press Star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Byers. Please go ahead. Thank you. Good morning, and thank you for joining CSI Compressco's Third Quarter 2022 Results conference call. I'd like to remind you that this conference call may contain statements that are or may be deemed to be forward-looking. These statements are based on certain assumptions and analyses made by CSI Compressco and are based on a number of factors. These statements are subject to a number of risks and uncertainties, many of which are beyond the control of the partnership. You're cautioned that such statements are not guarantees of future performance and that actual results may differ materially from those projected in the forward-looking statements. In addition, in the course of the call, we may refer to EBITDA, gross margins, Adjusted EBITDA, free cash flow, distributable cash flow, distribution coverage ratio, leverage ratio, utilization, or other non-GAAP. Please refer to this morning's press release or to our public website for reconciliations of non-GAAP financial measures to the nearest GAAP measures. These reconciliations are not a substitute for financial information prepared in accordance with GAAP and should be considered within the context of our complete financial results for the period. In addition to our press release announcement that went out earlier this morning and is posted on our website, our Form 10-Q will be filed later today. Please note that the information provided on this call speaks only to management's views as of today, November third, and may no longer be accurate at the time of replay. With that, I will now turn it over to John Jackson. Good morning, and thank you for joining our call today. We're pleased to see this quarter's financial results to begin to reflect some of the improvement that's been occurring in compression space the last few quarters. Our contract services and aftermarket service businesses all continue to show strong activity. The revenue positives up to this point have been largely offset by inflation and the effect of foreign currency amidst the strengthening dollar worldwide. This quarter, we have seen the core business outpace the inflation costs for the first time in a few quarters. This is not to say we have recouped the entire effect of cost increases in this cycle, but we are making progress and pushing some productivity improvement now through EBITDA. As it relates to our fleet or contract services business, utilization continued to improve quarter-over-quarter for the sixth straight quarter. Price increases on the existing deployed fleet have begun to close the gap of the effects of inflation. This has translated into increasing fleet revenue quarter over quarter for seven consecutive quarters. Our cost picture, however, remains challenging as people remain in short supply. Parts costs continue to rise and fluids costs, such as lube oil, remain at elevated levels, even with the recent crude oil declines from their summer highs. As a result, we expect cost pressures to continue into the fourth quarter and early 2023. We believe we can mitigate the effect of the cost increases through pricing and cost management efforts. In addition to the further pricing, price increases on our fleet, we have several idle units that are contracted for redeployment over the fourth quarter of 2022 and into 2023. The aftermarket services and parts business or AMS business has performed well this year with increasing revenues and improving margins. We have a strong pipeline of AMS activity, both in current contracted work, outstanding bids, and current customer-requested proposals. This pipeline provides us visibility through the first quarter of 2023. Based on what we've seen this year, we would expect the activity levels in the AMS business to stay elevated through 2023. The primary constraint on growing the AMS business is finding incremental qualified people to execute quality work. Our overall industry is short of people, and this affects our contract services business as well as our AMS business. Our incremental capital spending for the remainder of this year and the first half of 2023 will be spent deploying the idle fleet units, converting additional units from natural gas-driven engines to electric motor drive units, and deploying new build units as they are completed. As we mentioned in our press release, if our customers do not return a significant amount of horsepower to us over the next couple of quarters, we will be nearing full utilization of the U.S. reciprocating fleet. We will continue to grow our large horsepower fleet in 2023, as we currently have some new build units on order that are contracted for deployment in the second half of 2023. While electric motor drive units remain interesting to customers and we continue to see bidding opportunities, the pace of deployment remains a question mark as customers work through the dynamics of installing significant amounts of electric motor drive units. This includes acquiring long lead items, attempting to determine the overall capacity of the local grid that's available, with many different groups planning on accessing the current available excess capacity, and then ultimately determining the reliability of that electrical supply. We plan to continue to be a provider of both natural gas engines and electric motor drive units as our customers evolve in their distribution of their compression across various basins. As we think about growth capital for 2023, we plan to provide specific guidance in our year-end call, and we expect it to be reduced from our 2022 levels of growth capital. While our customers have continued to express interest in additional large horsepower for the future, we are building modestly into 2023 as we are positioning CSI Compressco to generate free cash flow and increase liquidity during the year. In summary, we continue to see a strong demand environment for our products and services heading into the fourth quarter of 2022 and the beginning of 2023. Inflation continues to be the major unknown variable. We will remain flexible as we navigate the rapidly changing environment and position ourselves for success. As we conclude this year, we're excited about the future. The natural gas space continues to be critical for reliable energy supply to power, not only the U.S., but much of the world. We're excited to be a part of that effort and look forward to an exciting 2023. I'll now turn the call over to Jon Byers. Thank you, John. For the third quarter of 2022, CSI Compressco reported a utilization increase from 78.9% in Q3 of 2021 to 85.1%. Our reported revenue increased to $94.9 million compared to $77.7 million in the third quarter of 2021. Our contract services revenue was up to $67.5 million from $59.4 million in the third quarter of 2021, a 14% increase. Year-on-year, our AMS revenue was up 66% to $23.2 million compared to $14 million in the third quarter of 2021. Third quarter Adjusted EBITDA was $29.8 million compared to $25.7 million in the third quarter of 2021, a 16% increase. Distributable cash flow was $13.1 million compared to $10.6 million in the third quarter of 2021. We'll pay our third quarter distribution of $0.01 on November fourteenth, with a distribution coverage ratio of 9.3 times. Moving on to the balance sheet. Our total liquidity, cash on hand plus outstanding ABL capacity was $51.3 million on September thirtieth, 2022. As of November first, our total liquidity was $42.7 million, which compares to $32.7 million at year-end. Our net leverage ratio in the third quarter of 2022 is 5.7 times, down from our peak of 6.8 times in Q3 of 2021. We continue to expect a downward trend in our net leverage ratio through the rest of 2022. On October 17, we extended our Spartan ABL from a maturity of January 2024 to October 2025, leaving CSI with no significant credit maturities until 2025. Our capital spending guidance for 2022 remains $55 million-65 million. As John said, this is mainly driven by high return projects, including reconfiguring large horsepower units to meet customer demand, electrification of older large and medium horsepower units, and some large horsepower new builds. Executing on our plan to reduce our overall leverage while growing the business, our net leverage ratio has stepped down from 6.8x a year ago to about 6.3x at year-end 2021, and now we sit at 5.7x. If you annualize our third quarter 2022 EBITDA, we have a net leverage ratio of 5.2x. Most of our debt is fixed rate. This has helped us in a rising interest rate environment, resulting in a minimal impact on our overall interest expense. Our focus in 2022 has been reducing leverage while balancing liquidity and growth. Looking forward to 2023, as John mentioned, we plan to reduce overall growth capital spend relative to this year and emphasize debt reduction and liquidity. Longer term, we remain focused on simplifying our capital and organizational structure and positioning CSI to thrive in all phases of the energy cycle. We'll now open the call to questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Brian DiRubbio with Baird. Please go ahead. Good morning, gentlemen. How are you? Good. Good, Brian. First question for me, you know, as I look at the results, you know, it was nice to see that you were able to deploy more horsepower without any degradation in the margins, given those extra costs. Can you just help us better understand what the current pricing environment is and, you know, how that's helped you to offset that? Sure. I think we've seen over the last year, we've seen a continually increasing cost environment you know, inflation being transitory, not transitory, all these different thoughts from our customer base. The ability to drive price increases second half of last year was there, but at a minor level, let's say 3%-5% perhaps. Then you really moved into Q1, Q2 this year, you saw everything take off with Russia invading Ukraine, parts and supplies getting very tight, parts going up 25%, crude oil going from $80 to $120. Everything really took off on us in latter Q1 into Q2, and that was an immediate cost hit. That's allowed us to really push price increases to our customer because we absorbed the cost increases in the front half of the year. Our price increases that we're getting now, really trying to recoup that cost increase are in the double digits, generally. Every customer is different. Some are more towards the market now as they were just recently put out. Some have been on for two or three-year terms, and they're coming off at much lower rates. The overall effect is that the price increases we're getting now are reflecting the cost environment from the first half of the year. Obviously, prices continue to go up, parts continue to rise. Like I said on my comments, lube oil, which we use a significant amount of lube oil on our units running them each month. You know, if you were to go back a year ago, lube oil on average was running in the third quarter, let's say seven and a half dollars a gallon, and it's running. Going into fourth quarter, it's running between eleven and a half and twelve and a half. When you use a whole lot of lube oil every month, you know, that's costing us $1 million a month in additional lube oil costs from a year ago. These are the kind of cost pressures that hit us earlier this year that are now, I'd say, flatter. They're not down. They're still rising, but not rising at the rate we saw in the first half of the year. It's a very long-winded answer, but the point is we're six months on a lag to catch up with the significant cost increases we saw, and we're just starting to see that now. We have more price increases to go because our, all of our fleet isn't there yet. Generally, double-digit price increases at the moment. Got it. Maybe that's very helpful. I'm not sure if you wanna answer this, but how much of your current horsepower and service do you think is sort of within, you know, reasonable range of current market prices versus those that still have to reset? I'd say in the last six months, I'm already thinking about Q3 and Q4 and Q1 are kind of what we're already working on those price increases. I would say we still have, you know, maybe 40%, 50% of our fleet's kind of there at the maybe what we might consider market today. We have a lot of it still under term that has to come off. You've gotta look at our fleet in layers, too. You look at the large horsepower. The large horsepower got tight first, and so we were able to raise prices earlier on the large, let's say about 1,500 horsepower and up or 1,200 horsepower and up back in Q1. The smaller end of the fleet had a lot of excess capacity. That excess capacity is gone everywhere just about now from the 100 horsepower and up, 150 horsepower and up, and we're able to raise price on the smaller horsepower now. I'd say from a dollar magnitude, we're probably 50% of the way there. From a fleet magnitude, we probably have a lot more units to touch on pricing just because the smaller end of the fleet has gotten tighter in the last four to five months. There's a lot of work still to do next year. Really, it's really managing the environment we're in. I think the thing that you've seen, I think on commentary on other people's calls, and we didn't really talk about it on our commentary, but in addition to just flat out price increase, we're trying to push term. We wanna have visibility. With that term, we're trying to price protect with price inflators, annual price inflators that are tied in. I think we tried to do that last year and got a lot of pushback, but as we've moved into this year, it's mandatory for us to do it on our sales force. I think anything at 1,000 horsepower and up, because those are getting multi-year deals, that they have price inflators on them so that we don't have to go back and necessarily renegotiate every single unit every single time, even if it's on term. We're trying to do it in a multitude of ways. Price inflators, term, rate, and then layer by layer through the fleet. I'm not answering your question specifically 'cause I don't have that, but I'd say it's around 50%. No, that extra color is extremely useful. Just help us understand, you know, what's the market look like in terms of the ability to get new compression? I know that was an issue a couple of quarters ago, that the lead times are really long. Has that changed at all? Is new compression still, you know, 12-18 months out? Yes. The engines that you would order from Caterpillar today, if you might have a distributor that has a few engines around, but if you're gonna go and get in the back of the line today and say, "I wanna build 50 3608s or 3606s," or whatever the case may be in the large, you're gonna be 52-58 weeks. That's today. Depending on the size of the order, it's gonna move it out further. That's to get the engine. I was recently at a fabricator a couple of months ago, and there's a lot of units completed that have come out of fabrication, don't have an engine yet. I mean, they're waiting on the engine because the timing of the delivery of the engine, while they give you a slot to say, we think in 50 weeks you'll have it may be 55, 58 when it gets done. 'Cause you go back to Caterpillar and they say, "I've got some engines done, but I'm missing two or three components still to get the engine completed to ship it to you." So it's just like a car manufacturer that's sitting here today saying, "I've got cars done on the lot except for three things." So it's all the way back up and so there's not a real clear delivery schedule. Within maybe eight to 10 weeks or so, but that's not really what your producer wants. Producers now are jumping out into 2024, and they're trying to get bids for 2024 deliveries because they know the variability on delivery is quite wide. Great. That's really helpful of you guys. As final question for me, Jon Byers, you know, as we think about 2023 and, you know, your focus on repaying debt, are you gonna attack the ABLs or just given where some of the second liens are trading in the open market today, you know, is it sort of more attractive to pick off those opportunistically? Just love to get your thought process around that. Yeah. You know, I would say, you know, from a pure finance standpoint, it'd be great to be able to attack the first and second liens. There are some limitations we have in our bond indentures that may prevent us from doing that, so we're working through some of that right now. Paying down our ABLs is very easy. You know, generally, we've been here over the last 18 months. Historically, we've drawn on our CSI ABL to make our annual interest payments and then paid that down over the following months. You know, I expect we will be, you know, hopefully drawing on that less as we build liquidity. The Spartan ABL, which is very, you know, we've got ballpark $52 million drawn on that now. You know, our goal is to continue to pay that down as well. Really, from an interest rate standpoint now, you know, now that the underlying indices, vis-à-vis is increased, there's really not a significant interest rate differential between buying in first and second lien versus ABL, other than the fact that the first and second lien are trading in the mid-80s. Got it. Nope. That's helpful all around. Thanks so much. Appreciate the call. Yep, you bet. You bet. Again, if you have a question, please press star then one. Our next question will come from Selman Akyol with Stifel. Please go ahead. Thank you. Good morning. Morning. Taking a look at your CapEx and your 2023 commentary around it, you intend for it to be lower. Have you guys completed your capital expenditures related to technology? Or should we, an other way of just asking, is there gonna be some of that next year? It's gonna be fairly minimal. We've pretty much finished our ERP implementation. We have, you know, I think we have about $1 million-$1.5 million left to actually pay, although some of that's already incurred. I would say we are winding down the technology budget. Got it. It seems like, just listening, most of your torque in terms of repricing it may be coming from those units that are out there on sorta two to three-year contracts. I'm just curious as to how much of your fleet is on sort of with two to three years left. You know, am I thinking about that correctly, that those are the ones with the greatest price increases? All right. Sorry. I guess, are you asking about contracts coming up on term, or I mean, basically, are you saying that of the units that we have that are two or three years? Yes. Are they candidates for price increase? Yeah, go ahead. Of the units that you have, right, some of them are coming up, and they're coming off two or three-year contracts. Those are going to reprice, and I presume they're going to reprice significantly higher. I'm just trying to understand how much of your fleet might be subject or exposed to that. Well, I'd say right now we have about 60% of our fleet has some term remaining on it. Okay? We've got about 40% of our fleet that's on month- to- month. When you look at the smaller end of the fleet, let's call the smaller end 800 horsepower and down, just to keep it simple. Those are generally gonna be one-year deals or less, and they're always gonna be able to be repriced within a fairly short duration. The larger end of the fleet, we have currently about 15% of our fleet has more than one year left on its term as of today. Those units that do come off that are coming off, yes, we are getting significant price increases. I'll just to give you an example of. I'll take you to the cost side and not the revenue side, 'cause that's different for each producer. A 1,875-horsepower unit two years ago when we walked in the door, we were being deployed here, those cost maybe $1.8 million. Excuse me, $1.4 million to build them. I was thinking about a larger one. $1.4 million to build them. Today, they're $2.1 million. They were up 50%. When you think about the cost of building a new one today and what that's pricing at to get the, let's just call it the same economics, you're gonna have to move your price a lot on the existing fleet to get it into market, or you have the ability to move that in the market, and it's, they're in very high demand. That, that'll give you a sense of some of these units can move quite a bit. You might move it. Just simply, you might have a unit that was running at $30,000, maybe get $40, 42, 43 for it now as an example of something that might move that's been out for a couple years. You've got to go back one year ago and think about what was being deployed one year ago. We weren't getting necessarily two and three -year terms for some of these units. We were getting on the mid-size units, 1,000, 1,500. You're getting one-year terms a year ago, maybe 15 months ago. Those are gonna come off term too, and the market's moved quite a bit on those also. I think the 1,000 horsepower and up, you still have a lot of torque across that entire fleet spectrum that's gonna come up to reprice again this year. Last year we weren't able to get inflators on the fleet contractually. This year, we're also able to take, let's say, the 1,000-1,500 horsepower. Last year, we were getting one-year terms. We're getting two to three -year terms now, and we're able to get inflators in those. I think we'll see that continue to move up in 2023. Got it. I appreciate that. Last one for me. In your comments, you referenced trying to simplify your structure as being one of your goals on a go-forward basis, and I'm curious as to what were you exactly referring to, is that the capital structure of the company? It's definitely the capital structure of the company. You know, we've been talking about that since Spartan acquired CSI. Organizationally, we're also considering, you know, does it make sense to convert from the MLP structure? Thank you very much. This concludes our question and answer session. I would like to turn the conference back over to John Jackson for any closing remarks. I appreciate everyone joining this quarter. We look forward to talking to you on our year-end call and how we finish the year and how 2023 is opening up. We're excited about the future, and thanks for joining us. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.