Good day, and welcome to the ProPetro Holding Corp. F ourth Quarter 2022 Conference Call. Please note this event is being recorded. I would now like to turn the call over to Matt Augustine, Director of Corporate Development and Investor Relations for ProPetro Holding Corp. Please go ahead. Thank you. Good morning. We appreciate your participation in today's call. With me today is Chief Executive Officer, Sam Sledge, Chief Financial Officer, David Schorlemer, and President and Chief Operating Officer, Adam Muñoz. Yesterday afternoon, we released our Earnings Results for the fourth quarter and full year of 2022. Please note that any comments we make on today's call regarding projections or our expectations for future events are forward-looking statements covered by the Private Securities Litigation Reform Act. Forward-looking statements are subject to several risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and risk factors discussed in our filings with the SEC. Also, during today's call, we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release. During today's call, we will discuss January 2023 results. Of note, these results are preliminary and based upon information available to management as of the date hereof. These results are subject to change and may differ materially from our reported results for the three months ended March 31st, 2023. After our pre-prepared remarks, we will hold a question and answer session. With that, I would like to turn the call over to Sam. Thanks, Matt. Good morning, everyone. 2022 was a transformational year for ProPetro, and we are pleased to be off to an even stronger start in 2023. David will speak to our financial results for the fourth quarter and the full year of 2022 in a moment. Before that, I'd like to take a step back and acknowledge some of the key achievements and milestones from our team in 2022. As you know, in November, we closed on our acquisition of Silvert ip Completion Services, a step that positioned ProPetro not just as a leading pressure pumping company, but now as a leading completions-focused oilfield services company. Integration of Silvert ip into ProPetro has been successful, and since closing, we've begun to capitalize on the strategic vision that drove this transaction. With Silvert ip, we've expanded our portfolio to include a best-in-class wireline company that enables us to pursue accretive growth opportunities and positions us to further expand our margins and increase free cash flow generation. As previously announced in December, shortly after the closing of Silvert ip, to meet the increasing demand for next-generation hydraulic fracturing services, we were pleased to announce our first contract for one of our electric fleets, order two additional eFleets under the master lease agreement used for our first two electric fleet orders, and deploy our fifth Tier Four dynamic gas blending or DGB fleet, with our sixth to come online in the coming weeks. We expect that ProPetro will have at least seven Tier 4 DGB fleets and four electric fleets by the end of 2023, making approximately 2/3 of our frac offering natural gas capable. These recent actions significantly advanced our strategy to industrialize our business, we are confident that we are well-positioned to execute on the many value-enhancing opportunities ahead in 2023 and beyond. The fourth quarter was also a significant transition period for ProPetro. As we noted during our third quarter call, we laid the groundwork and prepared a significant portion of our portfolio for repricing and repositioning effort that occurred in early January. This repositioning of fleets has enabled us to pursue opportunities with other customers under accretive terms, we're very excited to renew some prior relationships and expand others. Our operating team's excellence at the well site, along with a very intentional approach by our business development team, has enabled this part of our strategy to be a success. Ahead of the repricing of our fleets in January, we decided to temporarily curtail one of our active fleets in the second half of the fourth quarter to prioritize our overall fleet health in order to position us best to capitalize on the pricing uplift we were able to capture in January. In the fourth quarter, we also experienced an increased amount of seasonality and holiday impact, along with the impacts from the winter storm that occurred throughout the U.S. leading up to the holidays, with the storm ultimately affecting several of our customers focused here in the Permian Basin. At ProPetro, we pride ourselves on a commitment to best-in-class corporate governance, including the board's focus on director refreshment and building a strong bench of outstanding leaders and employees at ProPetro. To that end, recently, we were pleased to welcome Mary Ricciardello to our board of directors and look forward to benefiting from her expertise. The new year also saw the appointment of Jodi Mitchell as ProPetro's new General Counsel and Corporate Secretary. Jodi is an industry veteran and has quickly become an integral member of our core leadership team. Another important element of good governance is enhanced sustainability practices. We are pleased to announce that in 2023, we will be issuing our first-ever sustainability report, which will provide an in-depth look at the work underway to deliver on our commitment to transition our fleet in support of more efficient operations with reduced emissions, while also leading efforts in the community to promote a cleaner and safer environment across the Permian Basin and for our teammates here at ProPetro. Being a Midland-based and Permian Basin-focused oilfield services company that serves leading upstream oil and gas operators gives us a unique vantage point into the market and into current trends. To that end, before I turn it over to David, I'd like to take a few moments to discuss the broader oil and gas market and what we are seeing. Despite recent pressure on the price of natural gas, we believe both oil and natural gas remain in structural undersupply, especially globally, and may remain so for the foreseeable future. As it pertains to the recent decline in natural gas prices, being a hundred percent located in the Permian with customers that have large drilling programs and full calendars does insulate us from some of the risks that our peers working in gas-focused basins may face. Furthermore, if demand for frack services temporarily declines in gas-focused basins and a few competitor fleets subsequently move to the Permian, we believe the demand gap is large enough to absorb the new fleets without disruption, especially when considering the bifurcation in service quality and equipment offerings, as small privates and other subscale competitors do not have the next generation capabilities that ProPetro has compiled. Notably, the continued spread between diesel and natural gas price bolsters our fleet transition strategy. Diesel displacement in our customers' completions programs will continue to become more and more valuable for the foreseeable future. As we move forward, we remain acutely focused on taking our business to the next level and executing on our strategic goals to drive meaningful returns. To achieve this, first, we are actively optimizing our operations through a more industrialized approach to our business, which we expect will unlock additional free cash flow generation into the future. Second, we are continuing to transition our fleet in a way that minimizes our overall capital costs while delivering next-generation services that are in high demand from our customers. Third, we're continuing to pursue opportunistic strategic acquisitions that increase our competitiveness and are in the best interest of all of our stakeholders. All of this is being done with the ultimate goal of generating strong returns and value for our shareholders, and we are already beginning to realize a portion of the tremendous value that we are confident this strategy will deliver. I'll now turn it over, but before I do, I'd be remiss if I did not take a moment to thank the ProPetro team for their outstanding work in 2022. Without them, we would not have been able to achieve all that we did during this incredible year, and just as importantly, we would not have been able to lay the groundwork for all that is to come in 2023 and beyond. With that, I'll turn the call over to David to discuss our fourth quarter and full year financial performance. David? Thanks, Sam, and good morning, everyone. Before I dive in, I would also like to echo Sam's thanks for our team members and their continued hard work and dedication to ProPetro. Let's move on to our financial results. Our performance in 2022 showed continued improvement over 2021, with our financial discipline and pricing strategy generating excellent results. Revenue for the full year 2022 was $1.3 billion, a 46% increase year-over-year. Adjusted EBITDA increased 134% year-over-year to $317 million, which was driven by our disciplined commitment to improved pricing, responsive repositioning, and cost management. Equally impressive was our adjusted EBITDA margins that increased 930 basis points to 25%. We were able to achieve this in the midst of significant inflationary pressures, a constrained supply chain, and a dynamic pricing environment. The company also posted a net income of $2 million for 2022, which is a significant turnaround compared to a $54 million net loss in 2021. During the fourth quarter, we generated $349 million of revenue, a 5% increase from the third quarter. The increase is largely attributable to the acquisition of and inclusion of November and December activity of Silvertip. Our effective frack fleet utilization was 14.5 fleets for the fourth quarter, which was in line with our prior guidance of 14-15 fleets. Our guidance for the first quarter is 14.5-15.5 fleets. Cost of services, excluding depreciation and amortization for the fourth quarter, was $243 million versus $224 million in the third quarter, with the increase driven by the Silvertip acquisition, additional strategic supply chain purchases, and cost inflation across all of our service lines. Fourth quarter General and administrative expense was $27 million, compared to $28 million in the third quarter. Adjusted G&A was $22 million and excludes $5 million relating to non-recurring and non-cash items. Depreciation was $34 million in the fourth quarter. The company posted net income of $13 million or $0.12 per diluted share, compared to net income of $10 million or $0.10 per diluted share in the prior quarter. As Sam mentioned, the fourth quarter was a transitional one for ProPetro. Looking back at the full year, we posted strong performance while undergoing a significant recapitalization of our fleet. Moving to 2023, we're off to a great start to the year. We'd like to share some selected preliminary financial results that we are encouraged by so far. Due to the repositioning and repricing efforts we undertook for our businesses in the fourth quarter of 2022, our January performance was extraordinarily strong despite experiencing some weather impacts during the month and operating only 14 active fleets for the majority of that month. Revenues came in at $136 million. We incurred cost of services of $88 million, with general and administrative costs of $8 million, exclusive of stock-based compensation and other non-recurring items of approximately $2 million. Doing the math, you can see it was a good month. Of note, in February, our 15th fleet that we had reactivated late last year is now back on a committed calendar. We're expecting a more fulsome contribution of our 15 active fleets going forward. I'd also like to point out that Silvertip posted $20 million of revenue for January, which is the highest monthly total in its history. We are excited about the contribution this business is already making. As we have discussed, we expect that demand for our services will remain robust as we proceed into 2023. Therefore, we believe our performance in January was a strong baseline and expect to build upon that momentum as we progress into the balance of this year. Turning back to 2022 results, our full year 2022 cash CapEx was $320 million, or slightly below the midpoint of our prior guidance, and our incurred CapEx was $365 million, which is slightly above the high end of our prior guidance and included approximately $18 million of strategic purchases of critical inventory items to get ahead of certain supply chain constraints of major components. As we pursue and realize the benefits of our strategy to develop a more capital light asset profile and realize the benefits from our ongoing optimization program, coupled with the ending of our large reinvestment cycle, we anticipate our 2023 cash CapEx to be between $250 million and $300 million, with the majority of the spending in the first half of the year. As of December 31st, 2022, total cash was $89 million, and our borrowings under our ABL credit facility were $30 million. Total liquidity at the end of the fourth quarter of 2022 was $155 million, including cash and $66 million of available capacity under the company's ABL credit facility. We anticipate meaningful positive free cash flow in the second half of 2023, with some working capital investment in a front-loaded CapEx program in the near term. To reiterate, 2022 was a significant investment year in which we recapitalized our fleet while transitioning to over 35% natural gas burning equipment, completed the accretive transaction with Silvertip to accelerate free cash flow and earnings, and enhanced adjusted EBITDA margins by over 930 basis points, all while protecting our liquidity. This was accomplished by maintaining a disciplined pricing and capital allocation framework. 2022 was a transitional year in executing our strategic plan, and we are excited for these opportunities to continue fueling our growth in 2023. With that, I'll turn the call back over to Sam. Thank you, David. As we take stock of where we are today and look ahead to where we are going, I'm proud of the work that we have done to affect a significant transformation since 2019 and the onset of COVID. We have met significant obstacles and challenges head on over the last few years and have continued to compete at the highest level while positioning our company for the long run. We've recently taken significant steps in reducing our maintenance CapEx and increasing our capital and logistical efficiency across our portfolio of assets while ensuring we have less equipment in rotation at the maintenance shop and are therefore more efficient with our asset base. Now our future is stronger than ever, and we are confident in our ability to execute on strategic growth opportunities into this sustained multi-year upcycle. By the end of 2023, as I mentioned earlier, we will have transitioned two-thirds of our fleet to natural gas burning and electric capabilities, offering us a unique competitive advantage and one of the youngest next generation fleets in the country. Moreover, we have a disciplined and intentional approach to capital deployment, which will allow us to strategically pursue M&A opportunities to advance our position as a leading completions-focused service company. At the same time, with a nearly debt-free balance sheet, we are prepared for any broader industry or macroeconomic headwinds and volatility that may arise. While we recognize that the space is consolidated and that E&Ps are not expected to meaningfully grow production in the near term, our business is now built for the long run, and ProPetro will continue to be a major contributor to energy production for the world for the next several decades. We are optimistic that we will begin to see valuation improvement across the OFS space. I once again want to thank our ProPetro teammates for their tremendous performance and for giving the management team the confidence to move forward with executing on our strategy. We continue to build on our strong track record of safety and performance, and I am proud of all that we have accomplished. Let's continue to keep up the great work and deliver for our customers. We'd like to take a moment to talk about how honored we are here at ProPetro to be such a critical part of the American energy system. I was born and raised right here in Midland, Texas, the energy capital of this side of the world. Even as a 3rd-generation oilfield services operator and leader, it has taken me decades to fully appreciate the value this area and the oil and gas industry brings to our country and to our globe. The Permian Basin community, which includes ProPetro, works hard, usually in harsh environments, without complaint. Our safe, clean production here in the Permian exports a dependable commodity that can be consumed locally or abroad. These fossil fuels power our world in our homes, our businesses, and in our schools and hospitals. One would be hard-pressed to find any item in our possession that isn't made from or tied directly to an oil and gas product. In the last 15-plus year history of our company, we have not appreciated our far-reaching impact enough. Today, we do. Life experiences have helped us gain perspective as we find ourselves growing families, leading teams, and investing in our communities, all of which sit on a foundation of affordable, clean, and reliable energy. As our respect continues to grow for the work that happens in our sector and the energy it produces, we feel emboldened to help others understand just how vital the Permian Basin and our oil and gas pro-production are to the overall economic health and global security of the United States of America, the greatest republic in the history of the world. We'd like to encourage others in our community and the oil and gas value chain, big and small, to join us in the promotion of what our industry makes possible for everyday life around the world. Fossil fuels have been a cornerstone in the advancement of humanity. Thanks to our industry's long track record of innovation, they will continue to be indispensable. It's because of our crucial contributions that we should be proud, internally and externally, to educate and advocate for our industry. With that, I'd like to open the line up for questions. Operator? 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're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. The first question will be from Derek Podhaizer from Barclays. Please go ahead. Hey, good morning, guys. Good morning. Good morning, Derek. The biggest unknown facing the industry today is how many fleets could be released from the gas basins. We've seen a few E&Ps announce their plans to reduce activity. Could you expand on the undersupply of the oil basins, specifically the Permian? One of your peers described oil basins being 20-25 fleet undersupplied. I mean, what's your view on this number? Do you agree? What indicators do you look at to calculate the undersupplied frac fleet market? Do you have a Permian-specific number that you're thinking about? Just more color around this undersupply argument would be helpful. Sure. Great question, Derek. It's obviously very topical right now with what's happening with natural gas prices. As we stated here earlier today, we do believe that just generally the world is in undersupply of the product that our sub-sector helps produce. Overall, that definitely ripples into things like the frac market, of which we think is still relatively undersupplied right here in the Permian Basin. That said, there's more than one market at play, we believe, here today. That has a lot to do with this equipment transition that you've heard us and some of our peers talk so much about. That's why it's vitally important to have the right tools for the job of today, i.e., things like gas-burning equipment, DGB and electric equipment. Given our transition very heavily into those types of equipment, that remains at the highest demand. That's why I think we have not seen any activity weakness in our own offering, nor have we really seen in that offering systematically in the Permian. To make a comment on the 20 to 25 fleet number, I'm not gonna necessarily endorse that number. We do think that the system is still structurally undersupplied for the right tools, that customers are demanding most highly. Okay. Great. Appreciate that. Second question, I wanna talk about fleet attrition. Just thinking about you guys recapitalizing your fleet, you have the 6th and 7th Tier Four DGB coming out. You have the 4 eFleets coming out. I know we didn't get a specific timing, but you guided the full year fleet utilization be 15-16. Can you give us an update on, are any of these fleets going towards replacing your legacy Tier Two diesel equipment as they age out? Just to be helpful, 'cause I think that's another big topic that investors are trying to wrestle with, how much attrition is gonna leave the market, how many fleets will exit as you bring in these new fleets, and just trying to reconcile your guide to the number of fleets that are coming in. Sure. Great, great question. This is Sam again. I think attrition is a topic that is not understood enough. I know we have talked about it quite a bit in prior quarters, as have many of our peers. Yet we're not sure that the investment community and the E&P community totally understands how hard this conventional equipment is working today and how much it shortens. You know, the operating life of certain assets. That said, if you look at what we've done just in the last 18 months with our DGB program, basically all of that has been replacement of existing horsepower. And that will continue to be the case with DGB. None of that has been net additive. As eFleets come on, it'll be a bit more nuanced, but you'll look for almost all of that to be replacement as well. I think in some of our materials, we guided full year activity to 15-16 fleets. Here we are running 15 today. You know, we'll add two eFleets probably in the third quarter of this year, and you'll look for that to be mostly replacement as well. Obviously, we can't tell you exactly what market opportunities look like in the back half of this year today. We have a pretty good feeling under certain commodity prices, what that might look like. We'll remain nimble there, but really this is a replacement refurbishment transition story. This is not a fleet growth story. Great. Appreciate that, Sam. We'll turn it back. Thanks. Thank you. The next question is from Stephen Gengaro from Stifel. Please go ahead. Thanks. Good morning, guys. Morning. Just to clarify, the four eFleets, two in the third quarter and then the other two when? Probably right at the end of the year, beginning of 2024. Okay. Thank you. The January commentary you gave and kinda building on the full year, it, you know, it suggests that the consensus, which is about $500 million of EBITDA this year, is a pretty reasonable number based on January and what you see in the market. If that's a reasonable starting point and given your CapEx, you mentioned free cash flow in the second half of the year. Should you be free cash flow for the full year as well? It seems that way, but just wanted to get your thoughts around that. Yeah. Yeah. Stephen, this is David. We certainly believe that we will definitely make a big turnaround from last year, which was a recapitalization of our fleet year, to be, you know, significantly free cash flow positive in 2023. Okay, great. That's what I assumed. I just wanted to check. Just the final thing for me is when you think about the current leading-edge pricing dynamic, can you just give us an update on kinda what you're seeing in the market, conversations with customers? Obviously, things still appear very tight, but where does pricing stand? How have the pricing discussions gone recently? Sure. Great question. This is Sam again. We alluded to in our materials and in our prepared remarks that we did see a pretty significant pricing uplift in January. We've been working hard on the pricing front really for probably 5 or 6 quarters now. I've been really pleased with the work that our team has done to continue to march forward to, you know, pricing that helps us more sustainably support our business. That said, going forward, we're trying to be realistic about what the pricing opportunities are. Will there be pricing opportunities? Sure. There may be. Will they be at the speed and the magnitude that you've seen, you know, us and our peers over the last year? Likely no. you know, but that comment I just made is mainly directed at what we're seeing with recent commodity prices, mainly what's happening in the gas market. We remain conservative. That said, I think pricing of our fleet today is in a relatively healthy spot that can, you know, bolster some really meaningful return in free cash flow for us in the future if we continue to execute in the field and in the shop the way we are today and improve on that. I feel really good about where we sit from a pricing perspective. We'll continue to be very tactical to push where we can and to collaborate with our customers where we can. Lastly, there's also a lot of accretion to our numbers and just getting better at what we do, you know, and almost creating economic uplift by just being more efficient internally, and being a lot more intentional about how we spend our money and how we operate our assets. You know, that's the first pillar of our strategy, as we've outlined here the last few quarters, is optimization efforts. We've got a lot of good stuff going on there that we're really excited about that should aid us in creating some more value without having to look outside for things like pricing. Great. Thanks. Just one quick one for David. David, with Silvertip, is the DNA for the first quarter running like $35 million-$36 million now? Is that right? No. It's... We gave the guidance for January at 8. Eight. The preliminary results at eight. DNA or G&A? Oh, you're talking about DNA? Yes. Yeah. Let me pull that up real quick. Yeah, we'll get back to you on that. Okay. Thanks. As a reminder, if you'd like to ask a question, please press star then one. The next question is from Waqar Syed from ATB Capital Markets. Please go ahead. Thanks for taking my question. Sam, this, the fleet movement that was taking on and, you know, customer shift, is that largely be done? The reason I'm asking is there's been some volatility in earnings and some investor concerns about earnings not coming in in line with expectations. Is that variability now over as we look forward, or we still have maybe some noise through May? Yeah, Waqar, great question. This has been a very important part of our story this year, probably different from how ProPetro has operated maybe in the prior 10 years leading up to, say, early 2022. We've probably repositioned over half of our fleet from a customer standpoint in the last, year, maybe a little bit more than a year. Inside of 1 basin, I don't know if it can be overstated how much of a feat that is and to do it without losing the operational excellence that we kind of pride ourselves on. Yes, I would say for the most part, other than, you know, one fleet here and there, the... I would say that that massive repositioning effort is basically over. A big part of the tail end of that repositioning was, you know, the rolling off of part of our contract with Pioneer. We think we have those fleets that have come off some of those contracts in really good places with blue chip customers and that are operating very efficiently at value-added pricing to ProPetro. It should be much more steady from a customer standpoint as it pertains to this year. I can't say that without saying how big of a deal it is what we've accomplished over the last year. Okay. Then, in terms of your total active hydraulic horsepower with this 15 fleet now, could you give us a number? Then as you've guided to 15-16 fleets for the year, is the fleet mix changing whether you're going to be doing more simul-frac or less simul-frac, you know, with that 15-16 fleet guidance from 14 in January? I'll take your last question first. It's basically the same amount of simul-frac, one to two fleets on the simul-frac side. I don't, I don't know for if we are where we can make a comment on what active total horsepower is. We still quote the, what is it, 1.3 number in all of our materials. But we're technically under today's operating circumstances, operating basically at full utilization today. Okay. That's great. Then, could you comment on the effective tax rate for the year and what the cash taxes would be? Yeah. This is David. We're not gonna have any cash taxes. We have in excess of $400 million of net operating losses remaining. Okay. Great. That's all for me. Thank you. Just to answer the prior question, from Stephen, DNA we're expecting will be in the $33-$35 range per quarter. Hey, David, one other question. What is the total shares outstanding at the end of the year? $115 million for the quarter was the fully diluted was $116 million. Okay. All right. Thank you very much. Thank you. The next question is from Arun Jayaram from JP Morgan. Please go ahead. Yeah, good morning. Sam, I was wondering if you could give us, you know, perhaps the timeline for, you know, when do you expect the eFleets to be working, you know, in the field as well as, you know, the timing of that of the next, I think it's the sixth Tier Four DGB unit. Sure. We're putting that sixth DGB unit to work today, you know, right now. We've got the seventh coming in April, May timeframe, May, June, possibly. Then you're looking at July, August for E fleets one and two. They should come in pretty close succession in July and August. Okay. For three and four? End of this year, beginning of next year. Yeah. I would expect activity for those to really show up in Q1 of next year. Yeah. Revenue generating anyway in Q1. Okay. Just my follow-up. I know you guys are leasing the eFleets. Can you give us a sense of how much of the capital? Is some of this gonna be accounted for in your CapEx? You know, can you give us a sense of. Yeah. Go ahead. Yeah. There will be about 15% that will be outfitting customer-supplied equipment, and so we'll be doing that this year. That's part of our CapEx guide plan. Okay. Can you give us some goalposts around what the capital lease obligation would be when you finish, you know, all four? You're representing close to $180 million of total lease obligation. The minimum leases, that's over a three-year period once those are initiated or once those are delivered and active. The minimum lease obligations are materially less than that. Okay. Hopefully that gives you a little bit of guidance. Fair enough. Just to understand, are you saying on top of that, there's 50% that's allocated in your CapEx? 15%. 15, okay. Thank you for clarifying on that. That didn't feel right to me. I appreciate it. That's super helpful for our model. Thanks. Yeah. The next question is a follow-up question from Stephen Gengaro from Stifel. Please go ahead. Thanks. Arun actually covered most of this, but just quickly, the CapEx, on a per fleet basis, from a maintenance perspective, can you just could you update us on where that stands and how that may evolve as a larger percentage of your fleet is newer and electric? Sure, Stephen, this is David. You know, we've been guiding up a little bit on that to $9 million-$10 million per fleet on an annualized basis. I think that based on our optimization efforts that Sam mentioned earlier in his comments, you know, we're hoping to see that trend down, particularly as the age of our fleet is well over 50% of it, less than two years old. As we begin to weave in the electric fleets, you know, we're gonna be, we're not gonna be doing the type of maintenance that you would expect on an internal combustion engine that we've had in the past. We expect to see, you know, between 30% and 40% improvement in not only the capital, but also the maintenance costs associated with those assets. I think over time, as the fleet profile begins to transition more to electric, we'll see those things play out, but it's gonna take some time. Yeah, Stephen, this is Sam. Just to pile on top of what David said there. This electric E-Fleet story is very significant for us and I think for others as well that are pursuing this type of equipment. The cost of ownership over a longer period of time is just significantly lower, you know, lower maintenance CapEx and assets that just are gonna last significantly longer, and they're gonna need, you know, less attention, less maintenance, and fewer people to operate them as well. Time will tell, and you will be able to see much more easily after we get those fleets in the field how differentiated that is. We remain really excited about that and do believe that that's probably the long-term future of our business here at ProPetro, probably of the frack sector as a whole, more and more equipment like electric equipment. I guess lastly, when you hear us use the word like, use words like industrialize, to me, that word kind of takes on a twofold meaning. That's kind of a nod to what's happening in the Permian Basin in general, this very, you know, densely operated resource. But secondly, it's a nod to the tools and the equipment that we use on a day in and day out basis. Unfortunately, it's probably taken our subsector a little bit too long to migrate to the right tools for the job of today. We've seen completion intensity kind of outrun the tools that we use to do our job. I'm... You know, as a, as a young leader in this business, I'm really confident about where we're going, ProPetro and as a sector from an equipment standpoint, that we are starting to bring in technologies and tools that are gonna help us industrialize and create more value and more consistent value. Great. Thank you, gentlemen. Thank you. The next question is a follow-up from Derek Podhaizer from Barclays. Please go ahead. Hey, I wanted to stick on that industrialization approach. You mentioned in your opening comment, Sam, about that type of approach to generate increased cash flow. Can you give us some examples of what you're talking about exactly? What new strategies are you looking at to unlock increased cash flows to the business? Sure. First thing that comes to mind is just, I think how we've operated traditionally as more of your prototypical growth company, for the past, say, decade, which I think you would find is very commonplace for an oilfield services company like ProPetro over the last couple cycles, it's experienced a significant amount of growth. Through that growth, we've created scale, but we've yet to really operate at scale for a significant period of time. I think that's what we are working on doing today, not just operating as a means to grow and create value by, you know, adding the additional, the marginal set of equipment team, but to create value through how we operate. Being more intentional about standard operating procedures around, you know, the more high dollar components and capital intensive components and spreading kind of that operating culture across our business, that those operating cultures might have been kind of fragmented in the past. You know, when I say large components, it's not, you know, Guys like you, Derek, you know that's things like engines, transmissions, power ends, fluid ends. Right, the main modular components of our asset base today. It's creating consistent, you know, first-in-class practices around pieces of equipment where we can make our maintenance spend lower and more predictable over time. That's what our team is working really hard on right now. Look. It's easy for me to sit here and say that and describe those things. It's really hard to do and execute on. That's, that's why we're so intentionally trying to, trying to approach that with a bit of a different mindset than we have in the past. That should, that should all accrete to the bottom line over time. Appreciate the comments there. Wanted to touch on shareholder returns. You've obviously made significant process in recapitalizing the fleet. You have your CapEx coming down year-over-year. You talked about positive free cash flow generation for the full year, more back-half weighted. You don't really have any leverage at all. Your peers are announcing free cash flow program, sorry, shareholder returns program as a percentage of free cash flow split between buybacks and dividends. Just wanted to get an update on your thinking of shareholder returns, when we may see a program initiated here. What are you looking for? Just some more color around this would be helpful. Yeah. Great question. Just to kind of set the table on that topic, the goal here at ProPetro is to build a very competitive firm that can distribute value. That is the goal. If you look at how we've allocated capital over the past 18 months, it's been a major equipment transition story for us, and that has taken priority over everything. We believe that that was the right thing to do to protect the long-term competitiveness for our company and to put our team in situations to succeed. We're winding down somewhat that transition story, and we're using things like a leasing program with our eFleet offering to try and lighten the capital load so that we can do two things. We can look at tools that can help us distribute that value, you know, through things like dividends and buybacks, and that we can also create a playing field where we, where we can be opportunistic on the M&A front, like we did with Silvertip. I would say that, you know, our, our capital allocation focus is, is beginning to pivot somewhat away from the equipment transition story and towards the, shareholder returns and, you know, strategic transactions territory. All right. One more from me. Just say hypothetically, you see potential delays with the eFleet deployment. Maybe some of the first 2 get pushed into fourth quarter, the next 2 get pushed into 2024. What would you expect would cause that? Would that be supply chain components being delayed, like we've heard from some of your peers? Or potentially the power generation side? Obviously, a lot of eFleets are coming in. You have the mix of grid turbine, natural gas resips. There's not that many third-party solutions out there. Just would like to hear your thoughts around if we were to see some of those deliveries slip, would it be more on the supply chain component side, or would it just be lining up the right power solution to go out with that eFleet? Yeah. I don't know if I want to speculate on that, Derek. We feel pretty good about our value chain partners that are helping us execute on this. I'll just make one brief comment. eFleet power is tight today and will remain tight. Those are definitely some long lead items. I'm not sure I'll say much more than that. No, no, fair enough. Thanks. Yeah. Just to add to that, you know, we did announce our most recent electric contract for the fleet starting in Q3, and we have secured power for that. You know, we're set for our first deployment. Great. That's helpful. Thanks, guys. Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Sam Sledge for any closing remarks. Sure. Thanks. Thanks, everybody, for joining us for today's call. We're really excited here at ProPetro about the prospects of 2023 and in the future in general. We like where we sit, and we're gonna be excited to come back and continue to report on the company's success. Thanks again for joining us, and we'll talk to you soon. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.