Denver-based Liberty Oilfield Services Inc., one of the largest completions experts in North America, is gearing up for increasing activity as exploration customers expand, according to CEO Chris Wright.
The hydraulic fracturing (fracking) expert issued its first quarter results on Thursday, with Wright helming the conference call. Quarterly revenue jumped 16% sequentially – a strong signal that the onshore shift by exploration and production (E&P) companies has begun, he told analysts.
“We entered 2022 with the right people, asset base and strategy to execute in a tightening frack market,” he said. “This quarter demonstrated the benefits of our vertical integration strategy, as we successfully navigated an operationally challenging environment.”
Liberty in early 2021 completed its takeover of Schlumberger Ltd.’s OneStim, the massive U.S. and Canada onshore completions business, in exchange for 37% equity.
Last fall Liberty bolted on more services with the takeover of Proppant Express Investments LLC (PropX), which provides last-mile delivery solutions, including sand, to E&Ps across North America. Last year it also bought two sand mines in the Permian Basin.
The expansions build on a long-held strategy to build environmentally friendly digital equipment, centered around its proprietary digiFrac electric fleet.
“We enhanced our technological advantages through the acquisition of PropX with wet sand handling and industry leading last-mile proppant delivery solutions,” Wright said of the acquisitions. “Together with our ongoing development of digiFrac electric fleets, these advancements provide customers with differential frack services. The integration of our acquisitions in 2021 came at a short-term financial cost, but these actions are already paying significant dividends in 2022.”
Still, continuing global constraints have stunted some growth. “Restrained global investment” by E&Ps came face to face with more uncertainty following Russia’s invasion of Ukraine.
Tightening Frack Capacity
“North American oil and gas are critical in the coming years,” Wright said. “Tight oil and natural gas markets, coupled with geopolitical tensions in many key oil and gas producing regions, have all eyes on North American supply.”
Meanwhile, available frack capacity “is nearing full utilization as demand has increased and supply is limited due to continued equipment attrition, labor shortages, supply chain constraints and very low investment in recent years.” Operational challenges today include “labor shortages, sand supply tightness and logistics bottlenecks.”
CEO Jeff Miller of Halliburton Co., the No. 1 completions provider in North America, had similar observations during the recent 1Q2022 conference call.
In other news, Liberty is rebranding as Liberty Energy, Wright said. “Energy enables everything we do, and our passion is to energize the world. Our many technical innovations and investment in vertical integration sets us up nicely to continue creating additional value for our customers and Liberty.”
Net loss totaled $5 million (minus 3 cents/share) in 1Q2022, compared with year-ago losses of nearly $39 million (minus 21 cents). Revenue increased to $793 million from $552 million.
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