...Good morning, everyone. Welcome back to Sidoti's Summer Virtual Investor Conference. I'm Steve Ferazani, an Analyst at Sidoti. Before we kick off the next presentation, I'd just like to remind everyone, if you'd like to ask questions, we should have about 5 or 10 minutes or so at the end of the presentation. Press that Q&A button, type in your questions, we'll get to as many as we can after what I think will be an informative half hour. We're joined by Ranger Energy Services. The ticker is RNGR. We have CEO Stuart Bodden and CFO Melissa Cougle with us, and I don't wanna take up too much time, so let me turn it over to you, Stuart and Melissa. Great. Thanks, Steve. Appreciate it. Thanks, everybody, for logging in or listening in, appreciate it. As Steve said, I'm Stuart Bodden, CEO of Ranger Energy Services. Melissa Cougle, Ranger Energy Services CFO. So we're excited to be here. Got a lot of great things to tell you about the company. We're excited about how things are playing out for us this year, so let's dive in. If you're not familiar with Ranger Energy Services, as Steve said, our ticker is RNGR. We are a publicly traded well service company focused on onshore U.S. We are the largest well service provider in the United States. Really, our kind of bread and butter is that we maintain and provide maintenance services for existing wells in the Lower 48. Our focus is in Permian, Eagle Ford, a little bit in the Midcon, the DJ, and the Bakken. So we're not in California or the Northeast, but kind of right up through the big oily basins of the U.S. Our market cap is about $275 million, trailing twelve months EBITDA about $74 million. And last year in 2023, we did $84 million of EBITDA and well over $600 million in revenue. Our service lines are really broken down into kind of three big areas. One is high-spec rigs. Those are well service rigs. Again, we're not drilling new wells, we're maintaining existing wells. Our wireline services, which is a little over a third of our revenue, and ancillary, which includes a small coil tubing business, a rental and fishing business, and also a plugging and abandonment business, and some infield gas processing. If I think about Ranger, I think, you know, kind of some of the messages we would love to leave you with are, one, we're productive, we're well, or we are focused on production. So we say we're a production-focused well service company. That means we're much more exposed to the OpEx cycle versus the CapEx cycle for our customers. We have a very high conversion rate from EBITDA to cash flow, which we're very proud of, and we've used that cash to maintain what we would say is a fortress balance sheet, so we've got a great balance sheet, and also through dividends and share repurchases, return a lot of our cash flow generation back to shareholders. As I mentioned earlier, you know, really wanna, you know, focus one of our... You know, want to make sure that you're kind of aware that, that we're very focused on the production cycle. If you think about a life cycle of a well, obviously, you drill a new well, that's when you make original hole. You then complete that well, that's when fracking happens, and then you maintain that through the life of the well, and then finally, you plug and abandon that well, or you decommission that well. As you can kinda see, we don't have any exposure on the drilling side, through a couple of our service lines. Maybe a third or so of our revenue is associated to completions, but the bulk of what we do is really focused on production, and the decommissioning market. You can see on the production, a well, typically what happens after you drill and complete a well, in the first kind of 6-9 months, you typically have to go back into that well and put it on artificial lift, right? So it won't produce on its own, and typically you need a well service rig to go do that. Then through the life of the well, every, you know, kind of year or 2, you need to go back in and maintain it, just like you maintain your car. You might need to replace tubing, you might need to do a clean-out, you might need to... We're starting to see a few refracs. So you might, you know, again, you typically need to go back in and maintain that well, and that's really our bread and butter, which is a lot more resilient through the cycle. To try to put some numbers on that statement for you, what we've done here is index spending since 2010 through kind of 2023, and looking at how much has been, and this is really overall spend in the oil and gas space, on production, completion, or drilling. And what you see is that kind of through the cycle, there is some volatility, as you can see, but production spending tends to be the volatility tends to be muted, and you can see that overall production spending is growing. The way that we talk about it is, as long as we are drilling, the industry is drilling more new wells than are being plugged and abandoned, which is what's happening, then our, you know, our total addressable market continues to grow. I would also highlight that, if you look at on, you know, on completion spending and exploration drilling, you may have read something about Simul-fracs or Trimul-fracs and drilling efficiencies. All of that's really related to drilling new wells more efficiently, but at the end of the day, having to maintain those wells, we try to be as efficient as we possibly can, but there are just some limits. So, again, you know, we feel like it's a really attractive market. To give you a sense of some of the things that have changed in the high-specification rigs market over the last three, four years, is we did a big acquisition in late 2021. We view ourselves as natural consolidators, and in that, we bought a company called Basic Energy Services, and they had bought another big company as well. And at the back end of that transaction, we're now the largest well service provider in the U.S. You can see the top kind of six players or so have a little over 50% market share. This market is now really starting to act a lot more rationally, as if you think about, like, the land drillers have started to do as well, just given that you have kind of fewer players as well. I'll talk in a bit about industry consolidation on our customer side, and that's a trend that we think is really happening, helping the bigger players and certainly helping Ranger. But again, to give you a sense, we're the largest well service provider, and again, you have a market that is starting to be a lot more consolidated and a lot more rational. To give you a sense here, what we wanted to do is lay out for you kind of in the center part of the page. This is revenue by quarter, and you can see our revenue has been steadily growing. This is in our high-spec rig service line, which is about half of our revenue. I'd also kind of highlight, if you look at the, the, the line that's trending down, that those are—and those aren't well service rigs, but those are drilling rigs. Those are rigs that are drilling new wells. But if you, you know, you read about rig count declines and what's been happening, that's where you can see that. Despite that, you can see that our revenue in our high-spec well service rig business, however, has continued to grow. And again, I think there's two things happening. One is, it's just a lot more resilient, through the cycle, as we talked about earlier. The other thing is, we feel like that we're taking share. Industry consolidation, in the back of that, what we're seeing is a lot of those bigger customers are wanting more established players, players that have, you know, cleaner balance sheets, better safety programs, better training programs, certified equipment, all of those things, and we think that's really benefiting us, and we think that we're starting to take some share as a result of that. So again, you can kinda see, going back from Q1 of 2023 through the most recent quarter, how revenue has grown, and you can see in Q2, we really had, one of our best quarters ever on the EBITDA side. Q1 was a little bit of a hiccup. There's a couple of things there just to highlight. One is that we do have seasonality in our business, and Q1... Q4 and Q1 tend to have some seasonality. The other thing I would highlight, there was a safety incident in Q1. It was not on a Ranger location. It It was not related to Ranger. However, one of our biggest customers shut down their operations across all of North America for a few days, and in the region where they where the accident occurred for several weeks. That ultimately had a pretty big impact for us in Q1. Again, it was not on a Ranger location, but you know, again, just to kinda give you a sense of part of what happened in Q1. Finally, just this is a chart showing our kind of blended day rates over time. That's really the hourly rate for our well service rigs coupled with a lot of the kind of ancillary equipment we put in. There are things like pipe handlers, there are things like accumulators, which are hydraulics, sort of, you know, managing the BOPs, the blowout preventers. So, but, you know, one of the things that we're very proud of is that we continue to be sort of, you know, trying to make sure that we are pushing price and, and getting fair returns for, for our equipment. Again, a lot of what's happening sort of behind the scenes on this is the E&P consolidation has really benefited Ranger, and one of the things that they are wanting is fewer vendors on location. And that's not just well service provider, but that's for all of the other equipment that goes in. So they're asking us to sort of offer more complete packages, and part of what you see is it being reflected in our blend rate. I think I'll take over now. So, we've talked about, Stuart's hit a lot of the highlights, but, you know, it's worth revisiting what we feel like is really compelling when you look at Ranger from a purely financial perspective. One, we've shown an ability to actually consolidate and grow in a market that's been challenged, certainly, at least for the past about a year and a half. So, our revenue has been steady, if not growing in our service lines over the past two or so years, despite a declining rig count. And we say that's because of our production focus, right? We do have resiliency, we do have insulation, we have some exposure, but the lion's share of our exposure is actually to that customer OpEx cycle, which we feel like is a far more steady profile, sort of going forward. Our EBITDA and free cash flow conversion is really worth highlighting, particularly within our space. Most of our peer group is far more capital-intensive. They need to maintain their equipment. It's a more maintenance-intensive process 'cause their equipment gets used up quite a bit more. Really, when you're in the drilling and even in the completion space to some degree, there's a lot more pressure and wear and tear on the equipment, as opposed to when you are in the maintenance cycle, the equipment is a significant investment. However, once that investment's made, the maintenance CapEx profile is quite a bit lighter, allowing for a much stronger free cash flow profile. And that really gets us to return on invested capital. We feel like we can be comfortably over... You know, we're kind of in what we would call a down cycle right now. Our average is 9%, and we think it will grow as we catalyze off of additional growth in the future. If we look at, you know, sort of the profile of the company over the past several years, we have a 36% CAGR since 2020.... A lot of that was on these acquisitions, which I'll talk about in a couple of slides. But it really changed the complexion of Ranger, and more than doubled the size of the company, which allowed for a lot more traction, allowed for a lot more earnings capacity, and frankly, a lot more free cash flow conversion. So you could see where we've been from 2022, which was really the first full year after the acquisition, a compounding profile on our EBITDA, and that we were able to hold that last year despite a declining rig count profile. This year, if you set aside and normalize for Q1 and sort of the extraordinary issues we had there, we've felt some decline this year, particularly in our wireline segment, and we've been transparent about that in prior commentary. That said, we think our profile from an overall financial perspective will start to look pretty normalized after we kinda get past the Q1 bump, and, you know, you've seen that in the Q2 period. So I mentioned the acquisitions earlier, and we pulled this slide together 'cause it really does demonstrate our track record, but also our desire to continue to grow, which we frequently hear from investors. "So what's next? What are you going to do?" And I think the messages that we want to leave with our investors is, one, we're an incredibly disciplined team. We did acquisitions in 2017, whenever we first went IPO, very patiently waited until another opportunity presented itself at the end of 2021 on the backside of COVID, and really seized an opportunity to make about a $75 million investment that proved to pay itself off in about a year. And that has continued to generate strong profitability for the company, even through today. We look at a lot of transactions. We remain very keen to continue our acquisition profile and be acquisitive in the future. That being said, we are highly disciplined about making sure the right returns present themselves as we look at those acquisitions. You know, returning capital to shareholders, we feel like is, you know... It takes everything about the investment profile of the company and synthesizes it into how we translate being shareholder-friendly. So because we have a strong free cash flow profile, we are able to actually return capital to shareholders, which we think is something that's really unique. And frankly, when you look across, you know, small and midcap OFS companies, there's not another one that could really speak to what we've spoken to on this slide. Last year, in Q2, we came out with an official sort of capital returns strategy, and what we said was, as soon as we pay down and we have a pristine balance sheet, we're going to implement a dividend. From there, we think we will do share repurchases, 'cause we believe our valuations are incredibly compelling. What we found ourselves in a position of was being able to repurchase a large number of shares in the back half of last year, after our debt was paid down, and frankly, through Q1 of this year. In Q2, we purchased a significant amount of additional shares as well. So we made a commitment to say our shareholders will always get a minimum of 25% of our annual free cash flow. That said, thus far, we've returned over 70% of our cash flow to shareholders, 'cause there's been a really good, compelling investment opportunity to do so. And I think you'll see Ranger continue to be very shareholder-friendly in that regard, and we feel like that's a real differentiation. Because we have a strong balance sheet, we can do both pursue acquisitions and return capital. Finally, you know, this just really synthesizes a lot of the messages of our, our, our deck. We feel like we have really compelling investment fundamentals, strong free cash flow conversion, and return on invested capital. We are in a very solid market. It's been a challenged and declining market the past year and a half, so it's in a down cycle, and yet our financial profile has been, you know, very strong through that cycle, which is very differentiated from prior cycles. We have complementary service lines, so we're able to offer a much more robust profile. But yet, when you look at our market share, there's plenty of room to continue to grow, which goes back to that acquisition story. We do have, which we didn't necessarily touch on, we have idle asset capacity. So as the cycle returns and there is room for growth in the future, which we feel like will happen with LNG capacity, if not at the end of next year into 2026, we will have rigs that we can actually deploy towards that. We'll have wireline trucks to deploy towards that. We are incredibly committed to our capital return strategy, and have demonstrated that and evidenced it over the past year. And we feel very much like we're in a position to create more value on behalf of our shareholders. So with that- Yeah. I think we have some questions already. Yeah, yeah. Fantastic, so- Do have a few questions already, and we got about 10 minutes remaining. So, as a reminder, when we start asking them, just press the Q&A button on your screen, type in the questions, and we'll get to as many as we can. Couple of questions around acquisitions, probably not surprising. First one is just generally your appetite for additional acquisitions, given the current market conditions. I'll start. As Melissa said, we're looking at lots of opportunities. We feel like that we do need to grow. We feel like we need to be larger to be more relevant. I would emphasize what Melissa said as well, or re-emphasize, we're a very disciplined management team, and we know anything that we do has to be accretive for our shareholders. I think we feel like there's still a bid- ask in the market. It feels like it's closing in some of the companies that we talk to, so we are hopeful that we could do something. But if I think we feel like, you know, up to now, there really has been a bid- ask in the market, and we haven't been able to get anything done. ... When you think about acquisitions, obviously a lot of people are paying attention to the H&P deal- Yep ... because they made a very significant effort to grow internationally for a company that said they didn't need to buy other rigs, but clearly are making an international push. Yeah. You're a smaller company. I can understand international would be, create certain challenges, but is there any appeal to that? We've discussed it. I think right now we're pretty focused on U.S. And we haven't looked at it in a lot of detail. I mean, if you- Yeah ... kinda look into my history and Melissa's history. We've both worked a lot internationally, so I wouldn't say that we're scared of it, but it's not a focus area certainly right now. Yeah, I'll just add to that. You know, when you look at Ranger's service lines, I would tell you the probability is less that there would be a good return to push if we went internationally. And the other comment I would make is, you know, Ranger is very focused, and we feel like our shareholders have spoken around accretion of transactions. And that transaction, although accretive on some measures, we are very focused on making sure we're accretive to our current multiple. Yeah. So what we tell counterparties. And that's what's led to a bid, you know- Yeah ... a bid-ask, discrepancy, if you will. Mm. 'Cause we tell parties, "Look, hey, I may not like my valuation, but it's my valuation, and it's what the broader market has said that I'm worth today. So I can't pay you any more than that. In fact, I really should be discounting you, unless there's a compelling reason to think I'm going to expand my multiple." And so I think that that's relevant in here, but I think, look, we wanna grow a lot. It seems like there's gonna be better opportunities in our backyard here to stay domestic, that are gonna be more return, you know- Yeah ... have stronger return profile than us chasing international growth. Feels like the likely. Right. It's fair. So when I think about capital allocation, you know, the other option is buybacks, which you have used. Yep. Stock has performed fairly well coming back on the rebound to 2Q- Yep ... where it certainly did over the last couple of months. How do you think about buybacks? Do you, you know, are you basing it on a certain valuation metric or how, or is it timing? Yeah, so one is, I think we would say even, we feel like even at these levels, our stock is compelling. But we have, I think, kind of conceptually how we think about it is because of the strength of the balance sheet, you know, during times of particular weakness in the stock, we get pretty aggressive. Yep ... and so I think if you've, you know, if you kind of go look at what we've done, you know, kind of quarter by quarter, you know, when we have those situations where there's some selling pressure, you've seen us get pretty aggressive. I would only add, look, we look at our own intrinsic value. We have our own DCF on the company. Yeah. We look at where the stock is seeming to have some natural support today? So we look at multiple... Yeah Each quarter, we, you know, Stuart and I kind of sit down and we say, "Look, what's the cash flow profile of the next quarter?" Right? Yeah. You've seen we have been very, very, you know, we've used all of our cash flow so far this year, to be able to do that. We don't feel like we need—we certainly don't wanna borrow to buy back our shares, but we also feel very confident that, you know, we can use our cash flows if the shares are trading at a really compelling value, right? Yeah. As it starts to trade up, we kinda go, "Well, let's see where it goes," 'cause you don't wanna just chase it. So I think we're more tempered whenever it starts to kind of have some natural support and is in an improving profile. But at the same time, you know, I think we would still view it as really compelling today, too. Yeah, that's right. I thought one of the more compelling slides you had was the your quarterly day rates, rig day rates, 'cause this is a very challenging market. The fact that you've had some growth this year, can you point to what's allowed that and what otherwise... And you noted some idle capacity, which would make pricing more challenging. Can you talk a little bit about that, about what we saw on that slide and what's driving it? Yeah. I think it's a few things, Steve. I mean, one is, look, we're very disciplined. As the largest well service provider, we feel like we're the market leader- Yeah ... and part of what we have to do is be, you know, a price leader. And we think that we're worth it because of our service quality, because of our training programs, of our maintenance programs, how we think about downtime over the whole, et cetera. I think the other thing I would say is that the industry consolidation, you know, we announced a big contract kind of late last year, or I guess mid last year. We feel like a lot of that Q2, you could really start to see a lot of that come to fruition. And again, I think that is what you're seeing, is the bigger customers want fewer vendors on location. Yeah. They want more complete packages, and, you know, again, that's just allowed us to put sort of more equipment on location. And you can see it, you know, if you look at our hours, you know, kind of quarter to quarter, been very, very steady. And again, I think that's really on the back of these bigger customers. It's been less. I mean, the one thing to say is, and this is really unique for a lot of OFS providers, if you look at frackers or you look at drillers, they will tell you spot rates are noticeably down. We haven't, so our expanding rates- Yeah ... is less a product of us getting additional price. It is a product of we haven't had to concede on price. So price is holding steady- Yeah ... and us being able to expand- Yeah, that's right. ... in more ancillary, that's sort of adding margin profile on it. So it's expanding the rate naturally from the way we're going to market with the customer of the rig, has more equipment on it, so we're able to bill for more stuff on it, which is, which is allowing for some of that rate expansion. Yep. I think it's more been about holding rates steady as of late, as opposed to grabbing more price, but we're still able- Get more equipment out there. ... to get more profitability- Yeah ... 'cause we're getting more equipment attached to the rig- That's right ... back to the E&P consolidation, and them wanting to work with fewer vendors. So you're getting more, potentially, as your larger customers grow bigger, the ability to get more business, but the larger they get, they still don't wanna pay more. If anything, they wanna pay less, right? Well, that's always what they wanna do. But you're able to hold, and yeah. Right. Yeah. Well, right. And I think to Melissa's point, we're not conceding price- Right ... and they understand that, but it really is, as you put more equipment out there, it's things like pumps, right? Yeah. Well, it doesn't, it doesn't take a lot of manpower, and so we get a lot of pull-through on that, so it really helps us quite a bit. It helps the customer, too, because they are looking for more opportunity to sort of shrink their- Yes ... overall profile. Yeah. So it's more economic, in theory, for them to work with fewer vendors. So it's like if I can streamline, and you can take off this price, but it actually- Yeah ... improves our margin profile. Yeah ... it's kind of a win-win for both. So when they come to us, and they ask for the discount, we say, "There's no discount, but, you know, we might be able to package this up, which is better and more economical for you all the way around," and in fact, actually bolsters- Yeah ... our profitability, too. Is there room for more ancillary services? Yes. Yeah. There is one of the things, when we, through some of our acquisitions, one of the things that was really beneficial is we picked up a lot of ancillary equipment along with that. Yeah. A lot of that has been refurbed and put out, so there's opportunity. I think we're just trying to balance how we think through the CapEx- And, and- ... requirements for that. You saw us disclose in our last quarterly, we have put our CapEx profile, you know, we're running kind of flattish this year. But we've been able to- Yeah ... put about $8 million of growth CapEx into the budget to support a lot of this stuff, which still keeps- Yeah ... our CapEx profile very minimal, but it's, you know, we've been able to kind of support- Yeah ... some of that growth with just having such a reduced maintenance CapEx profile. Here's a question that pretty much everyone at this conference is getting, so I'll ask it to you as well: Thoughts on the presidential election and how potential outcomes could, could affect you? Yeah, truthfully, I don't think we feel like it matters a lot one way or the other, other. You know, again, I mean, I think when we talk to certainly our biggest customers, you know, it's, and you kinda get into the operations and ask, "Well, how are you guys thinking about your sort of activity, you know, and your budgets for 2025?" And, we're not hearing a lot of, "Well, if the election goes this way, we're gonna, you know, go one direction. If it goes a different way, we're gonna go a different direction." So, Yeah ... I don't think we as a management team necessarily feel like it's gonna matter a lot one way or the other. You have to continue to maintain these wells no matter what. It's the... I mean, I always sort of say that the cheapest barrel out there is a work over barrel. Right ... and that's not gonna change. You know, I'll just back, one of the interesting questions that I see out there about analysts who cover the company are universally neutral. What are their concerns? And look, it's a fair question- Yeah ... but I think it kinda gets to, it's not really an election, but it gets to sort of the market perception. Yeah. And I think- Yeah ... Ranger has really tried, and I think we're making inroads on convincing people on this whole production-focused thesis. But the reality is, when you look at our peer group, we're still in a peer group that is not a production-focused peer group, right? Correct. Yeah. And so our view is- Yeah ... and we have great relationships with our analysts, to be fair, but I think we get bucketed in the same group as frackers- Yeah ... in the same group as drillers, right? And our analysts will say, "Oh, yeah, but you're different," but you're still part of them. And I think that that's partially when you look at their neutrality, they're largely neutral, and most of their- Yeah ... companies are covering in the space, and the ones where they're not neutral are offshore-focused, quite frankly. Yes, yes. Um- Yeah ... and/or hugely technologically differentiated. The rest of us all get a neutral label... because, you know- Yep ... we're in a down cycle right now. And so I mean, I think that that's our perception. We fight it all the time. I think we now have evidence to show we're differentiated. Yeah. We'll keep, you know, sort of- Yeah, beating the drum. ... beating that drum and waving that flag. So we are running a little bit late, but I do wanna close it out with this question: Optimism for 2025, North America Land has been through a challenging couple of years. We have LNG export capacity coming. People are pointing to power demand from data centers. How are you thinking ahead over the next 12- 18 months? Are you optimistic at this point? I think we are optimistic. I'd say, I think right now, when we look at kind of what we can see, I think it feels like really, you know, a relatively, you know, similar year, I think, to 2024, so we're not projecting massive growth. Mm. That said, our biggest customers continue to demand more and more of our services, what I think is a real positive. And what I would say is, kind of Melissa, you know, alluded to it earlier, if LNG demand does take off in the back part of the year, that has a lot of knock-on impacts if the gas markets really tighten. I think kind of across the board, services get pretty tight. So again, I think that's sort of a catalyst. We're kind of waiting to see how that plays out. There's a lot of talk about power gen. I think we're still trying to see how it's ultimately gonna play out in the market- Yeah ... but it does feel like a long-term benefit. It does. Perfect. I guess that'll have to be the final word. Stuart Bodden and Melissa Cougle from Ranger Energy Services, thanks so much for being here. Hopefully everyone found the last hour, half-hour informative and enjoys the remainder of the conference. Stuart, Melissa, thanks so much. Great. Thank you so much. Thanks, Steve. Appreciate it. Thanks, everybody.