Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) Q3 2023 Earnings Call Transcript

Stephen Gengaro: Okay. All right. Good. And we can sort of trend from there. And then just the follow-up, when we think about — and this kind of gets funky and Yvonne did a good job, I think, of breaking this out for us. But when you think about — you strip out ancillary services, underlying pricing trends for the well site storage systems and AutoBlend, should we think about them as being pretty stable into next year?

Kyle Ramachandran: Yes. I mean, we’re just kicking off sort of next year discussions with customers. So we look forward to talking about that probably next quarter. But as we mentioned in the prepared remarks, we are deploying significant OpEx and CapEx into the systems to bring them up to the next level of standard. So I think that message is resonating with customers. But obviously, those discussions are very fluid.

Stephen Gengaro: Great. I think that is all for me. Thank you.

Operator: Our next question will come from John Daniel with Daniel Energy Partners. You may now go ahead.

John Daniel: Thank you, good morning. Just one for me. Bill, you touched briefly on R&D in response to Luke’s question. Are there any interesting ideas or concepts that you guys are kicking around today? And if so, how quickly could you bring one of those to market?

William Zartler: There are always interesting ideas. The question is whether that’s commercial or not, John. And we tend to wait until we’re really ready to talk about them. Especially with the situation we’ll have the balance sheet in and the cash situation and our team and our own manufacturing, we can respond very quickly with opportunities that work. I think the top fill is a great example of that being going from two of them a year, 1.5 years ago to having 35 — 33 working last quarter and that’s moving up. So I think we can go quickly if we find something that makes sense.

Yvonne Fletcher: Maybe a different way to look at it, John, is, if you look at the CapEx guidance, the $15 million to $20 million maintenance CapEx for us typically $10 million to $15 million a year. So that is the real CapEx in the budget for next year.

John Daniel: Okay. And as you have ideas that come to fruition, how often are those ideas being brought to you by a customer saying, we’ve got a problem, help us fix it, versus you guys identify? I’m just trying to get a sense for what — how much customers bring to you in terms of opportunities.

William Zartler: It probably is mixed. I’d say it’s probably 1/4 to 1/3 — 1/4 to 1/2 may be coming from customers. The other quarter comes from our pretty experienced engineering and R&D team. And I know we’re working on a couple of problems now that were customers’ ideas.

John Daniel: Okay, thank you. I appreciate your time.

Operator: [Operator Instructions] Our next question will come from Don Crist with Johnson Rice. You may now go ahead.

Donald Crist: Good morning, guys. I wanted to kind of follow up on the demand. As you have deployed more kind of top fill systems, it feels like your demand is stabilized and is getting more stabilized as people move towards more belly dump systems. Can you just talk about kind of customer pull through and kind of your base loaded demand now? It feels like it’s not really moving around with the rig count the way that it used to in the past. Can you just expand on that a little bit?