Good morning, and thank you for joining us for RPC, Inc's 2nd quarter 2023 financial earnings conference call. Today's call will be hosted by Ben Palmer, President and CEO, and Mike Schmit, Chief Financial Officer. Also hosting is Jim Landers, Vice President of Corporate Services. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. I would like to advise everyone that this conference call is being recorded. Jim will get us started by reading the forward-looking disclaimer. Thank you, and good morning. Before we begin our call today, I want to remind you that in order to talk about our company, we're gonna mention a few things that are not historical facts. Some of the statements that will be made on this call could be forward-looking in nature and reflect a number of known and unknown risks. I would like to refer you to our press release issued today, along with our 2022 10-K and other public filings that outline those risks, all of which can be found on RPC's website at rpc.net. In today's earnings release and conference call, we'll be referring to several non-GAAP measures of operating performance. These non-GAAP measures are: adjusted net income, adjusted diluted earnings per share, adjusted operating profit, EBITDA, and Adjusted EBITDA. We're using these non-GAAP measures today because they allow us to compare performance consistently over various periods. RPC is required to use EBITDA to report compliance with financial covenants under our revolving credit facility. Our press release from this morning and our website contain reconciliations of these non-GAAP measures to operating income, net income, and diluted earnings per share, which are the most directly comparable GAAP measures. Please review these disclosures if you're interested in seeing how they are calculated. If you've not received our press release for any reason, please visit our website at rpc.net for a copy. I will now turn the call over to our President and CEO, Ben Palmer. Thanks, Jim, thank you for joining our call this morning. As we announced several weeks ago, RPC acquired Spinnaker, a leading provider of oilfield cementing services in the Permian and Mid-Continent basins. As we begin the integration of Spinnaker into our operations, we continue to be impressed with the quality of Spinnaker's management, employees, and operations. They bring us some additional relationships with customers that should enable us to deepen existing relationships and improve our marketing efforts in other service lines. Spinnaker runs a great business, yet they can benefit from some of our buying power, as well as operating synergies we can provide. Turning to a discussion of RPC's second quarter, business began much like the first quarter, finished, but ended with a very challenging June. Since a large percentage of our hydraulic fracturing is spot or partially dedicated work, we were impacted by some customers deferring planned activity to later in the year. This resulted in lower utilization during June and has carried forward into the first part of the third quarter. We have already seen signs of improvement on our frac calendar later in the year. While our other business lines have seen some recent pockets of weakness, predominantly in gassy basins, they too are expecting activity to improve. Our participation in the entire suite of completion services provides us with a diversity in both number of customers and customer profile that balances the more heavily concentrated exposure of our fracturing business. I would like to point out that RPC has initiated a digital transformation designed to improve the company's operating and cost efficiencies. This extensive and multi-year undertaking aims to change the way we manage maintenance, personnel, and equipment, as well as our back-office functions. We expect this effort will greatly improve our decision-making by providing access to better and more extensive data on a more timely basis. Our CFO, Mike Schmit, will discuss the quarter's financial results, after which I will provide some closing comments. Thanks, Ben. I'll start with the second quarter 2023 sequential financial overview. Second quarter revenues decreased to $415.9 million from $476.7 million in the prior quarter. The decrease in revenues was largely driven by pressure pumping customers postponing or curtailing their drilling and completion activities, as Ben mentioned. This was combined with weaker activity levels in the natural gas-directed basins, impacting many of RPC's other service lines. Cost of revenues during the second quarter also decreased to $265.8 million from $305.3 million in the prior quarter. As a percentage of revenues, cost of revenues in the second quarter was 63.9%, which was relatively the same as the 64% in the prior quarter. Selling, general, and administrative expenses increased to $43.6 million in the second quarter, compared to $42.2 million in the first quarter. This increase included cost of a settlement of a vendor dispute and costs associated with the Spinnaker acquisition, partially offset by a reduction in payroll tax-related costs. In connection with the termination of our pension plan, RPC recorded a non-cash pension settlement charge of $911,000 in the second quarter, compared to a $17.4 million charge in the prior quarter. We do not anticipate any remaining significant charges in the future quarters associated with the pension plan termination. Operating profit during the second quarter decreased by 9.1% to $82.4 million, from $90.7 million in the prior quarter. Adjusted operating profit was $83.3 million in the second quarter, a 22.9% decrease compared to $108 million in the prior quarter. Adjusted EBITDA also decreased by 17.2% to $110.1 million, from $132.9 million in the prior quarter. Our Technical Services segment revenues decreased by 13.7% to $390 million. This segment generated $77 million of operating profit, compared to $103.5 million in the prior quarter. Support Services revenues increased by 4.7% during the second quarter. Operating profit was $7.9 million, compared to $6.6 million in the prior quarter. I'll discuss our current quarter results compared to the same quarter in the prior year. Results increased to $415.9 million from $375.5 million. Adjusted operating profit increased to $83.3 million, from an operating profit of $60.4 million. Adjusted EBITDA increased to $110.1 million, from EBITDA of $80.6 million. These increases were driven by higher customer activity levels and improved pricing, resulting in our adjusted diluted earnings per share, improving to $0.30 compared to $0.22 in the same quarter last year. Our Technical Services segment revenues increased 9.5% to $390 million, and our segment operating profit increased to $77 million from $59.8 million. Our Support Services segment revenues increased 28.7% to $25.8 million, and segment operating profit increased to $7.9 million from $3.3 million. I'll discuss our capital expenditures and horizontal pressure pumping fleet count. Capital expenditures were $39.2 million in the second quarter. This includes new Tier 4 dual-fuel equipment that was placed in the service during the quarter, while a similar amount of older equipment was sent out for refurbishment. We currently estimate full year 2023 capital expenditures to be between $200 million-$250 million, excluding the purchase of Spinnaker. In the latter part of the second quarter, we implemented cost reductions, including a small-scale layoff and other cost control measures. This layoff is not expected to significantly impact our ability to respond to customer needs. We remain staffed to operate 10 horizontal frac fleets. During this period of reduced activity, we intend to closely monitor and manage our cost structure. I'll now turn it back over to Ben for some closing remarks. Thanks, Mike. Although we've encountered a near-term air pocket, we are optimistic for the future if oil prices remain firm. We are already observing encouraging indications from both our frac calendar and our sales teams and other service lines. Both point towards a resurgence of activity as the year progresses. This morning, we announced a regular quarterly cash dividend of $0.04 per share, as we continue to maintain a conservative capitalization and shareholder-friendly capital return practices. During the second quarter, we did not repurchase any RPC stock because of our self-imposed trading blackout, pending the closing of the Spinnaker transaction. We financed this acquisition with cash, which has been building on our balance sheet for several quarters. Notwithstanding the acquisition of Spinnaker, we will continue to assess our capital allocation alternatives, including share repurchases, dividends, capital expenditures, and acquisitions, as methods to maximize our returns on invested capital, as well as reward our shareholders for their investment in RPC. Thanks for joining us this morning, and at this time, we are happy to address any questions. Thank you. At this time, I would like to remind everyone, in order to ask a question, press star, then one on your telephone keypad. We'll go first to John Daniel at Daniel Energy Partners. Good morning, guys. Good morning. Thank you for including me. I'll just start with the activity, if possible. Can you say how many fleets you're running today? Where, you know, based off the calendar, how many fleets you would expect to be running back half of the year? Well, John, this is Ben. Relative to the back half of the year, again, we're fully staffed for. We were able to staff all of our equipment as we have in the last couple of quarters, and we expect to require that later in the year. In the current, you know, I don't want to provide specific guidance, but certainly. That's okay. In terms of where we are right now, we have had a number of customers that have, you know, deferred some of their completion activities till later in the year for various reasons. We've had some impact by some acquisitions, where some of our customers have, you know, reassessing their plans and again, pushing their activity later in the year. We do feel good about, but feel good about the frac calendar later in the year. We've had a lot of discussions and feel that there are reasons for the delays- Sure ...commitments from our customers that they are gonna resume their activity. Fair enough. On this next question, I'm sure you probably will avoid the granularity, which is fine. Broadly speaking, you know, as you talk to people out in the field, you hear of some fairly significant spot market pricing pressures. My question is, just how broad-based are those across the various service lines? If concessions have been made, how quickly can you recover those concessions? Just your thoughts. Let me respond, and then I'll let my other two teammates here, elaborate. The concessions within fracturing has been more significant than the other service lines. There are some service lines who have given little to no concessions. Some have given minor concessions, but as I indicated, fracturing has been more significantly impacted here in the short term. In terms of regaining that, you know, that's very hard to say. You know, with oil prices remaining firm and maybe strengthening, you know perhaps we'll have a similar type of strengthening that we had in the early part of 2022 to mid 2022. I'm hopeful, but we're not counting on it- Right ... but hope that maybe it will firm back up, you know, reasonably quickly as we, as we move into 2024. Okay, thank you. If I could squeeze one final one in? Sure. Yeah, go ahead, Jim. Hey, John, this is Jim. Anytime there's an air pocket or any weakness, there are always gonna be bad actors who are gonna price very aggressively. We've seen a little bit of that very recently. For us, our bias is more towards being idle than reducing pricing. Okay worth it. Fair enough. The last one for me, I'll turn it over. With the Spinnaker acquisition, when you start reporting the revenues, is it going to be your number two, or number three, or number four segment? Can you just throw that out there for us in terms of? Yeah, we'll give that in a second. It will be four- Oh, okay. ...on approach. Okay. Yeah. All right. Thank you. I'll turn it over. Sure. We'll take our next question from Stephen Gengaro at Stifel. Thanks. Good morning. Good morning, Stephen. Maybe to start, just to follow up on John's question, can you give us the segment breakdown, and then maybe slot Spinnaker in there in some manner? Sure, Stephen. Thank you for the question. I'm gonna start with actual second quarter. What I'm about to describe is the% of revenue that our top service lines comprised as a% of total consolidated RPC revenue. Actual. Yes, actual. Number 1 was pressure pumping at 50.5% of revenue. Number 2 was downhole tools, which was our Thru Tubing Solutions service line. That was 24.4% of revenue. Number 3 is coiled tubing at 9.2% of revenue. Number 4 is rental tools, which is in our Support Services segment, but it was 4.4% of consolidated RPC revenue. Number 5 is nitrogen, 3.1% of revenue. Number 6 is snubbing at 1.8% of revenue. Number 7 is cementing at 1.4% of revenue. Now, that does not include Spinnaker because we did not own it during the second quarter. If we had owned Spinnaker during the second quarter, cementing would have been our number four service line at 7.4% of consolidated revenues. Great. That's great color. Thank you. When we think about the business, and I think Jim, you may have just mentioned there's been some bad actors in a downturn. We've seen, at least on the pressure pumping side, a lot of consolidation, a lot of equipment in the hands of the biggest players. It feels like others have indicated that behavior has been generally better than prior cycles. Are you not seeing that, or are you talking about maybe some smaller product lines where there's been some bad actors? I'm just trying to triangulate the commentary. No, we would agree. My comment related to just some anecdotes of small private pressure pumpers pricing very aggressively over the past month or so. Not, you know, I think we share the opinion that everybody else has, that market structure is improving in pressure pumping, and the larger companies are maintaining discipline as again, as we are. Again, we'd rather idle fleets during this time than take pricing concessions. We do believe this air pocket is just that, and is temporary, and we'd rather bring back fleets at current pricing than take concessions and try to fight that back. Great. Thank you. Then just one final on the margin front. The decrementals in the quarter, I think, were around 40% for company-wide. I think that's right. Maybe a touch higher for. Yeah, I think that's about right. How do we think about like I knew there were some headwinds in the quarter from some costs, how do we think about the margin profile and the decrementals going forward? Should they be more normal versus historical levels? Should they be outside short term? How do we think about that? Well, you know, these are all very reasonable questions. I would say, too, this has come upon us, you know, pretty suddenly. As I said, it was kind of mid to late June when a lot of this began to unfold. You know, exactly where it's all gonna lay out, we don't know. Again, referring back to the comments about we do have specific customer discussions, and are quite comfortable that we're gonna have better activity in the latter half. Third quarter could be difficult. We're still working on, as we always do, but working on, you know, filling out the white space and preparing for the, you know, the more busy fourth quarter. The decrementals were pretty large. You know, we tend to, when we schedule out, we referred to some of our SG&A costs, that settlement of that vendor's dispute. We didn't schedule that out. You know, that was not an insignificant amount. Even though SG&A was relatively flat on a sequential basis, it would have been down if not for that cost and the cost of the Spinnaker acquisition. We didn't schedule that out for EBITDA purposes. That's just more usually the way we do things. I think that, you know, we don't expect that headwind, something like that, in the third quarter. If that's not there, certainly the decrementals would not be as significant. I'm not answering the question directly, but it. You know, anytime you enjoy nice incrementals when you have a nice revenue bounce. You're impacted by large decrementals when you have a revenue decline. It'll be a challenge, but we're looking forward to getting through this little air pocket and on to a little more stable times. Thanks. I understand there's a lot of moving pieces, but thanks for the color. Yeah. Thank you, Steve. Thanks. We'll take our next question from Don Crist at Johnson Rice. Good morning, gentlemen. I just wanted to ask a quick question about modeling the Spinnaker acquisition. I'll give you two options as to how you want to give it to us. You know, obviously, cementing was 1.4% of revenue in the second quarter. Either how many fleets you had running, cementing fleets you had running in the second quarter, or kind of what the revenue impact would be per fleet of the 18 that you're adding from Spinnaker? Just so where we can model properly for Spinnaker coming in in the second quarter. Yeah. Yeah, we-- This is Mike. We had four running in the quarter, and so that'll increase pretty significantly. Yeah ..after Spinnaker's in there next quarter. Yeah. Our existing cementing business performed reasonably comparable. I think the larger Spinnaker, you know, we disclosed that they have 18 spreads at the time of the purchase. They created a little bit more leverage given their size, but the results were, and revenue was not dissimilar per spread. Yeah. Okay. I'm assuming that the majority of those 18 are running today? Oh, yeah. Yeah. Oh, yeah. Yes, yes. Yeah. Okay. That's all I had. Thank you. Thanks. Yeah, I might point out, with respect to, many of you probably know, the cementing business, we've not yet seen any impact there to any significant degree. Cementing tends to, you know, it tends to be a little less volatile than fracking. That's another benefit of having that little growth opportunity, that we see them remaining pretty strong for the next, you know, several months. We'll go next to Don Dasher at Pinnacle. Hi, good morning. Just following up on the Spinnaker deal. Just working through the math, it looks like that business is perhaps a $90 million-$100 million a year business. Is that fair? That's a good guess. Okay, fair enough. Good calculation. Okay, good. What's the margin profile of that on an EBIT basis? I realize there's cyclicality involved, but, kind of on a go-forward basis, what would a reasonable EBIT margin be for that? Well, EBIT or EBIT, let me talk EBITDA margin. It is, as we've talked about, it's a great business. They were appropriately staffed. I don't want to say thinly staffed, but they were appropriately staffed, we really don't have any opportunities to take any costs out. We think we can bring some operational efficiencies, some leverage some of our procurement, trucking, that kind of activity that we think can provide some level of incremental benefit. I would say that the EBITDA margins for this particular cementing business and our existing business had margins that are similar to what we were experiencing overall within Technical Services, say, in the second quarter. It's pretty good. We like the fact that the CapEx requirements are, you know, quite a bit lower, from a maintenance CapEx perspective. Certainly, if we grow it'll require some CapEx, nothing like fracturing, but from a maintenance CapEx perspective, it has a very nice free cash flow profile. Okay, great. That's helpful. What were the EBITDA margins for Technical Services in the second quarter? Let's see. I've got that. Give us a second here, John. Yeah, that's fine. 25%-30%, and probably, the upper end of that range. Okay, great. Finally, who was the seller of Spinnaker? Catapult was the direct owner. They are not familiar exactly with all the structure, but Natural Gas Partners was the ultimate parent, if you will. I don't know if that's the right way to describe it or not, but Catapult. They were both entities were great to work with. They did a great job creating that company, established in 2014. They've grown it nicely, especially over the last 3 years or so. We're lucky to have them. Glad to have them. Okay, great. Was it an auction process? No. Yes, it was. Yes, it was. It was an auction process. Okay, great. Very good. I appreciate the help. Thank you. Thanks, John. Again, if you would like to ask a question, please press star one. We'll go next to John Daniel at Daniel Energy Partners. You guys are very gracious for putting me back in. Thank you. Absolutely, John. You know, it's early in the morning, gives me something to do. Hey, on the CapEx budget, it looks like you brought it down to $200-$250 from the original guidance, I think, of $250-$300, which would make sense. I fully understand you haven't done your 2024 budget yet, based off what you see today and your expectations, would you envision a spend in 2024 being higher or lower or the same as the current guidance for 2023? Ballpark. John, maybe... You know, we're looking at each other here trying to think that one out. I know it can change, like, 10x from now. Yeah I'm just curious. Yeah, probably similar, because as you know, we're on the schedule of refurbishing frac fleets, and that should continue in 2024. Okay. That's a junk of cat. Yeah, we have a roadmap of pressure pumping fleet, depending upon, you know, the level of usage of it, right? When we expect the pumps to wear completely out or be, require the refurbishment. You know, the swing factor for next year, I think Jim's response, that it should be similar, I think on an overall basis, that's probably true. The swing factor is gonna be if we were to take delivery of a new fleet in 2024. Right. As we sit here right now and think about what we hope is gonna happen later this year and expect into 2024, I would suspect that probably the upper end of the current range may be more appropriate. Right. I think we probably will acquire a new fleet sometime in 2024. Got it. The last one for me is when you think about the frac market, which is where the most, you know, pronounced spot pricing pressures are, and if you look at the competitive landscape, most of the small people that are bringing the prices down are the, you know, two to three fleet type companies, I suspect, some of whom were created with legacy equipment, used equipment coming out of the downturn. It would seem the viability of some of those businesses is gonna get called into question, 'cause, you know, my gut would say that spot pricing doesn't recover quickly, so you got a bit of a knife fight for several quarters here, which then raises the opportunity set for consolidation. Is that something you envision seeing happening, and would you be willing to participate in that? There's certainly a lot of discussion about consolidation in terms of, you know, buying up some of the smaller players. That's typically... We've obviously had, excuse me, lots of opportunities for that over the years- Yeah ... the question always becomes the condition of the equipment, and that's something that, you know, we kind of have heartburn over. Sure. I thought more consolidation would be helpful. Obviously, we know we've got the one big one that was announced, you know, a month or two ago that I think will help, right? That, even the announcement and them beginning to work together to put the two companies together, I think that should be a net beneficial for the frac industry. We would certainly encourage it, and whether we participate, that's hard to know. You know, looking for opportunities and looking for ways to position ourselves such that we can benefit from it. Let me just mention from a pricing perspective that, you know, as we were coming out of the downturn in 2020 and 2021, we were very disciplined about trying to understand how we were pricing our jobs and the type of contribution we were receiving from those jobs before we committed to staff new fleets and began to market new fleets, right? We didn't- Right ... you know, we didn't want to just put the staff fleets out there and do whatever we had to do to get them working. We tried to be very disciplined about the fleets coming back, and that worked very well for us. We have implemented a very similar discipline going the other way, right? If we are not able to generate a minimum level of return, obviously, we have to make judgments about what we think the level of activity is gonna be in the future. And right now, we think it's gonna be sufficient for us to maintain our current staffing level. But if we see, based on the pricing opportunities, that the pricing opportunities are too low, we do not have a problem, you know, stacking some fleets. At this point, we have not done that. Sure. We're not working our fleets at any whatever price, right? We are remaining disciplined, but we will stack fleets if we foresee that there's not enough opportunity to keep those fleets busy at a certain level of pricing. Makes sense. We're going to remain during that process- The benefit-. -just like we did the upside. Yeah, that's the benefit of having no debt and enough cash. Some people don't have that. Correct. Okay, guys. Thank you. Thank you, John. Thanks, John. We'll take our next question from Derek Podhaizer at Barclays. Hey, I was wondering if you can give us some examples that give you confidence that activity will recover as the year progresses. Is it just conversations with your customers, or are you seeing fleets or rigs actually being committed on the calendar? A good question. It's more firm than that. We've had specific conversations with customers, you know, giving us reasons why they've delayed, and what their plans are to start back up. Certainly, you know, we've had conversations about that, right? You know, a customer's not gonna tell you three months out that, "Hey, you know, three months out from now, I'm not gonna work. I have work scheduled, and I'm gonna tell you in advance." They're not gonna do that. We've had conversations. We're comfortable. Things could change. If oil prices don't remain firm, they will reassess their plans, but at this point, if they remain firm, we're comfortable that things will recover nicely for us. Got it. No, that's helpful color. For your mix of fleets between diesel and dual fuel, how has that changed heading into 2024? By the end of the year, I know you're refurbing. By the end of 2024 versus the start of 2023, I'd assume your fleet has increased towards that next-gen dual fuel away from diesel. Would this mix shift lend itself to put more of your fleet on the dedicated market versus spot as we move into 2024? Good question. We are on a spectrum, of, increasing our DGB and Tier 4 fleet. It has not changed significantly at this point. It is a little bit more, ESG friendly than it was at the beginning of the year. We're gonna continue that process in accordance with our roadmap. We're not gonna get ahead of ourselves, right? We're looking at our returns. We're looking at the age and condition of the equipment. We don't wanna race to get there. We'll get there when the economics tell us to get there. Our experience with many of our customers are that the fuel substitution, is somewhat important, not as important as many people talk about, at least for our customers. At this point, we think that will change. We think it will become more in demand. We like our customer mix. We actually, the way we analyze our market, we actually think we call it partially dedicated customers, people who are running, you know, you know, four to five or more rigs. They're maybe not running 10 or 15 or 20, but they have a reasonable amount of activity. I think that group is a little less impressed with or less influenced by the fuel substitution. We have some pretty fuel-efficient equipment that they tend to like. They like the efficiency as much as they like the ESG benefits. I think that has served us well and will continue to serve that market. We will continue along that pathway, that we will have more ESG-friendly equipment as we approach mid 2024 and the end of 2024. Got it. Okay, that's helpful. Then just last, Jimmy, I know you mentioned that you expect to acquire a new fleet in 2024. Would that be a new build Tier 4 DGB, or would that be your entry into e-frac? Good question. This is Ben. I would expect next year, at this point, it would be another DGB. e-frac, for us, we're certainly evaluating that market, staying close to that market, as I said to, you know, our customers, you know, the fuel substitution is not of great importance to them, and I would say the e-fleets are even less important. It's something we will eventually get into, once we're convinced that there's proven technology and that we have sufficient customer demand for it, we'll make that commitment. At this point, we're still in a wait-and-see mode. Great. Appreciate all the color. I'll turn it back. Thank you. Thanks, Derek. Just a final reminder, if you would like to ask a question, press star one. We'll pause just a moment. We have no further questions at this time. I would like to turn the conference back over to Jim Landers. Thank you. Thanks to everybody who called in to listen. Thanks for the questions. We enjoyed the conversation. Hope everybody has a good day. We'll see you soon. This concludes today's conference call. I would like to remind everyone that there will be a replay on www.rpc.net within two hours following the completion of this call. Thank you for your participation. You may now disconnect.