Superior Energy Services Inc (NYSE:SPN) Q2 2019 Earnings Conference Call Transcript

Jul 24, 2019 • 09:00 am ET

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Superior Energy Services Inc (NYSE:SPN) Q2 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Thank you. We will now begin the question-and-answer session. [Operator instructions] The first question comes from Byron Pope with Tudor Pickering Holt. Please go ahead.

Analyst
Byron Keith Pope

Good morning, guys.

Executive
David Dunlap

Hey, Byron.

Analyst
Byron Keith Pope

I realize the uncertainty out there over the near-term, so appreciate the color in Q3. That's really helpful. This is my question. My one question relates to Drilling Products and Services, and Dave it's encouraging to hear how you characterize some of the international offshore premium pipe tenders starting to convert into orders. Could you just frame how you think about the -- call it the next six to 12 months for the international -- for the U.S. onshore and the U.S. Gulf of Mexico parts of of DD&A, and just in terms of how you feel about the book of work that's building?

Executive
David Dunlap

Yeah. I mean, we deployed additional premium drill pipe assets into the U.S. land market during 2018. We had some that went out in an early 2019. I would say utilization on premium drill pipe in the U.S. land market remains very high. We've not made decisions about additional pipe for 2020, but I won't be surprised if we see some additional opportunities with premium drill pipe in the U.S. land market in 2020. As operators have stretched out their laterals, they are certainly realizing the benefits of going with a premium connection as opposed to more standard drill pipe. And I think what we've put in the market is a premium drill pipe offering that has given our customers an advantage from a -- from a maintenance and repair cost standpoint. So I think there'll continue to be some opportunities in the U.S. land market even with a low rig count or slightly lower rig count from where we are today.

I think that's probably in the U.S. land market what we think about it as being the real -- the real opportunity for expansion beyond where we are today. I think the rest of our U.S. land businesses are kind of in a bit of a steady state in U.S. land. Certainly, if we see completions activity decline during the second half of the year, particularly in Q4, then we'll have some variability around that. But overall, the business is entering kind of a steady state position now. You asked about offshore and Gulf of Mexico. I think Gulf of Mexico, we probably would tell you that we think there's opportunities to see some growth in the Gulf of Mexico. We'll witness it in our own business with completion tools activity in the second half of 2019. But I won't be surprised if we see some uplift and opportunities for all of our Gulf of Mexico businesses in 2020.

Analyst
Byron Keith Pope

Thanks, Dave. Appreciate it.

Operator
Operator

Our next question comes from Marshall Adkins with Raymond James. Please go ahead.

Analyst
James Marshall Adkins

Can you hear me now?

Executive
David Dunlap

Yes.

Analyst
James Marshall Adkins

Perfect. You're guidance on free cash flow suggests a meaningful improvement from what we've seen over the past several years. Could you help