Permian pure-play oilfield services operator ProPetro Holding Corp. increased its revenue and boosted its hydraulic horsepower (hhp) capacity during the fourth quarter, with an eye on building its business even more in 2018.
Fleet capacity at the end of 2017 was 64% higher than at year-end 2016, reaching 690,000 hhp or 16 fleets, from 420,000 hhp or 10 fleets. It also maintained 100% fleet utilization throughout the year. One newbuild fleet with 45,000 hhp was deployed in the final three months of 2017.
The oilfield services company, which launched an initial public offering last year, provides pressure pumping and complementary fracture (frack) services solely in West Texas and New Mexico.
Last year was ProPetro’s best in its 12-year history, CEO Dale Redman said Monday.
“2017 was clearly the most transformational year in the company’s history from both an operational and financial perspective,” he said. “Driving our results was a continued unwavering focus on exceeding the needs of our customers and working closely with our supply chain partners as we grew our best-in-class fleet without sacrificing safety or performance…”
Active horsepower deployed during the final quarter averaged 677,900 hhp, or 15.7 fleets. An additional 90,000 hhp, or two fleets, began operating in January and February under multi-year dedicated agreements, bringing active horsepower to 780,000 hhp, or 18 fleets.
To support growing demand for the pressure pumping services, ProPetro “plans to further expand its fracturing capacity by an additional 90,000 hhp, or two fleets,” Redman said. Fleets 19 and 20 are expected to be deployed in the second and third quarters, both for new customers and with multi-year agreements.
“In the second quarter of 2018, the company also plans to enhance its legacy fleet by an incremental 35,000 hhp, which will bring average pressure pumping capacity to 45,000 hhp per fleet,” management said.
The combination of the two newbuilds and enhanced existing fleet capabilities “will bring total capacity to 905,000 hhp, or 20 fleets, by the end of the third quarter of 2018.”
ProPetro recently deployed one newbuild coiled tubing unit and one newbuild cementing unit, which brings total coiled tubing capacity to three units and total cementing capacity to 16 units. Based on projected work, the company plans to add two newbuild cementing units later this year.
ProPetro spent $305.3 million for its capital program last year. It expects maintenance capital expenditures to be about 6% of revenue this year, “while growth capital expenditure opportunities will be continuously evaluated.”
The company is estimating 1Q2018 revenue of $372-382 million.
“Supported by frack operations focused solely on the Permian, the outlook for our business in 2018 is outstanding,” Redman said. “Demand for our services is strong and we are continuing to collaborate with our customers to drive wellsite efficiencies. In addition, our supply chain partners have assisted us in avoiding many of the near-term transitory issues in the industry and remain flexible to our needs.
“These factors, combined with our reputation for providing industry-leading execution, provide us the confidence to continue to invest in our business and thereby increase shareholder value.”
Total revenue climbed 11% sequentially in 4Q2017 to $313.7 million on net income of $10.1 million (12 cents/share). Fourth quarter results “were affected by a higher than originally anticipated amount of holiday time off, more vertical completion work than expected, and inclement weather,” said Redman.
Revenue for 2017 increased year/year 125% to almost $982 million, with net income reaching $12.6 million, reversing a 2016 loss of $53.1 million.
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