RPC Inc. (NYSE:RES) Q2 2018 Earnings Conference Call - Final Transcript

Jul 25, 2018 • 09:00 am ET

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RPC Inc. (NYSE:RES) Q2 2018 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] We will now take our first question from Jim Wicklund of Credit Suisse.

Analyst
Jacob Lundberg

Hey, good morning, guys. This is Jake on for Jim.

Executive
Ben M. Palmer

Hey, Jake.

Executive
Richard A. Hubbell

Hi.

Analyst
Jacob Lundberg

I was wondering could you just talk about current competitive dynamics and pricing in the Permian. You kind of referenced it in the press release, but a little more color would be helpful.

Executive
Ben M. Palmer

This is Ben. In terms of the current environment, clearly lots of people are talking about additional fleets being reactivated. We've taken delivery of some additional equipment. So there clearly is increased competition in the market, and given the nature of the jobs, the larger jobs that we and several of our competitors are interested in winning, and where activity levels can be a little bit lumpy. And they were during the second quarter and I expect they'll continue to be. In terms of pricing, as we indicated, we haven't been able to increase pricing, but a lot of that depends on job mix and trying to get the right balance between what we're able to get from a pricing perspective relative to the utilization we're able to achieve.

So that's an ongoing process for us to try to find a good balance between the two of those. And I would say typically for us in an environment like this where pricing is not moving up, our tendency is to probably -- on the side of not chasing prices down too quickly. And sometimes that may result in us in terms of testing the market. We may miss some opportunities. So I think that's our tendency. We think that's the right long-term decision in this type of market. The wear and tear on the equipment is quite extensive and we want to make sure that we're getting paid as much as we can relative to that wear and tear.

So it's an ongoing process that we go through, and we expect will continue to perform reasonably well, but we do expect there could be some lumpiness in our results. So competition is still there, it always is. It's -- the pressure pumping market in particular is very dynamic, and continues to be dynamic. And so we think it'll shake out. We think that it's still a market and a segment that we're going to continue to compete in aggressively, and looking at our fleet as we indicated making sure we have the right amount and makeup of our fleet is something we continuously look at, and we're looking at very closely now.

Analyst
Jacob Lundberg

Okay. So if I understood correctly it sounds like prices that just moving sideways and you haven't actually seen any negative movement in price?

Executive
Ben M. Palmer

Price is determined in a lot of different ways, right. It's job mix and the type of jobs, but in general I would say, yes, clearly prices are not moving up and it's probably more of a struggle to maintain pricing, but we don't see it collapsing at this point, that for sure.

Analyst
Jacob Lundberg

And