CSI Compressco LP (NASDAQ:CCLP) Q2 2023 Earnings Call Transcript

We’ve got all kinds of metrics we track internally, whether it’s doing our PMs on time or what kind of operational upsets we have or what’s going on, and we’re seeing a lot of improvement over the last few months, but we’re not at Nirvana yet. We’re not at the promised land. So I say all that to say there’s more to come, but if I was to step on my operating guys and ask them, they’re going to not give me a number. That’s just the way it is, but I believe there’s more to come and I can’t give you a quantification of that, but we’re pressing hard on that.

Selman Akyol: Got it. And then also very nice sequential growth in aftermarket services, and I know you characterize this as longer and stronger for the cycle. So should we continue to expect aftermarket services to continue to increase?

Rob Price: Yes, I believe so.

John Jackson: This is Rob Price.

Rob Price: It’s Rob. Yes, we’re extremely focused on project execution in the service business, chasing appropriately jobs, as John referenced, that fit within our expertise, skill set and really trying to eliminate lesser performing jobs from our run rate. So we have a lot of focus on chasing profitable jobs and executing efficiently.

John Jackson: And I think the backlog, at least what we’re seeing the quote backlog is — continues to be pretty robust, isn’t it?

Rob Price: It does. As John referenced in the contract services space that customers tend not to want to own their units because of lack of manpower trying to identify manpower. So that gives us an opportunity in the units they do own to perform services to those units and perform overhauls and maintenance activities and restaging. So generally, those are a little bit higher margin jobs that we’re chased and focused on and project managing better.

Selman Akyol: Got it. Since you talked a little bit about manpower, I’m just curious, we had heard of sort of bringing people two weeks on, two weeks off. Are you guys seeing anything of that trend, bringing in labor from other parts?

Rob Price: Yes, absolutely. In the basins that are growth that are growing and deploy more horsepower, there’s not a local population to draw from. So the use of rotators for week on, week off, two weeks on, two week off type schedules is absolutely mandatory.

Selman Akyol: Got it. Got it. I know it’s early to be talking about 2024, but I was just kind of curious in terms of the CapEx, should we — and more just directionally down from here, sort of flat? And then just the other question on that is this year, you have sort of $3 million to $4 million related to technology. Should we expect that still to see dollars in ’24 being allocated there as well?

Jon Byers: Yes, that $3 million to $4 million is some technology as well, I guess it could be lumped in there as well with telemetry and some shop move costs consolidation. So I would expect that to come. I think our growth capital will be in the range of where we are for 2023.

Selman Akyol: Got it. All right. That does it for me. Thank you so much.

Operator: Our next question comes from Brian DiRubbio from Baird. Please go ahead.

Brian DiRubbio: Good morning, gentlemen. Few questions for you. Just when we think about the change, responsive change in the size of the fleet in terms of horsepower and the horsepower in service, obviously, you had the sale of the Egyptian business and you said you had some movements of units. Can you quantify maybe or just give us a general idea of what the impact of those two were?