RPC, Inc. (NYSE:RES) Q4 2022 Earnings Call Transcript

Jim Landers: And Stephen, one last thing. We have been in a period of under-investment for a very long time, probably since 2015. At this time, the market for–the drilling rigs and the completion demand has pretty much soaked up the available frac spreads, and back to Mike’s comment, it is going to take a while to catch up with that. People do seem to be being disciplined at this point – that’s always subject to change in our industry, but there is a level of discipline that we haven’t seen before. Nobody’s stood up in the canoe yet, so we’re–we believe that we’ve got a good runway here.

Stephen Gengaro: Great, that’s very helpful. Thank you. The other two quick ones, you mentioned the delivery of the new Tier 4 DGB, and then I think you said you were going to take an existing fleet out and refurbish it. Is that fair? Will that go to work, or does it just depend on timing and demand, and has there been any trouble getting the necessary parts to refurb the asset?

Ben Palmer: The refurb–yes, we’ll refurb it so that it can come back to work. When the brand new fleet comes in around the same time, we’ll take down one of our older fleets that we’ll spend some money and upgrade it, and once it’s upgraded, we expect that will be–there are other fleets that need to be either refurbed or otherwise dealt with, so as we indicated, we’re expecting still to have 10 horizontal fleets working–more or less 10 horizontal fleets working throughout 2023, with the gives and the takes of ones going down for refurb and that sort of thing. Supply chain, still we’ve been managing through that. We have some good vendor relationships and it’s always a challenge, but we think we’re in pretty good shape with that.

We won’t know, obviously, until it’s completed. We are concerned, but we’ll stay on top of it and make sure that it gets turned around in a time frame that we’re planning on. But we’re working through that and we’re confident that our schedule and our plan will allow us, as I said, to continue to operate around 10 horizontal fleets throughout the year.

Stephen Gengaro: Thank you, and then just one other quick one. Jim, do you mind just running through the segment breakdown by–the revenue by product line?

Jim Landers: Absolutely, thanks for the question so I didn’t have to do it in closing comments. For the fourth quarter, the percentages I’m about to give are the percentages of each of our largest service lines as a percentage of total or consolidated RPC revenue. The largest service line–the largest revenue for the fourth quarter was pressure pumping at 56.9%. The second largest was down hole tools at 20.8%. Number three was coiled tubing at 8.4% of consolidated revenues. Our nitrogen service line was 2.3% of consolidated revenues–I’m sorry, I got out of order there. Rental tools, which is in our support services segment, was 3.6% of consolidated revenues. Let’s see – I mentioned nitrogen. Snubbing was 1.6% of consolidated revenues for the fourth quarter.

Stephen Gengaro: Great. Thanks for the details, gentlemen.

Jim Landers: Thank you Stephen.

Operator: We’ll go next to Don Crist at Johnson Rice.

Don Crist: Morning gentlemen.

Jim Landers: Hey Don.

Don Crist: We’ve seen a little bit of moderation in the gas rig count. I just wonder if that is affecting pressure pumping at all, and to take that a step further, we’ve heard that there’s a little bit of weakness in the gas plays but the assets are finding a home in the oil plays. Can you broadly just talk about your pressure pumping calendar and is there any shifting between the plays as of late?