NexTier Oilfield Solutions (NYSE:NEX) Q2 2020 Earnings Conference Call - Final Transcript

Aug 04, 2020 • 08:30 am ET

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NexTier Oilfield Solutions (NYSE:NEX) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] Our first question today is from Sean Meakim of J.P. Morgan. Please go ahead.

Analyst
Sean Meakim

Thank you. Hey, good morning.

Executive
Robert Drummond

Good morning, Sean.

Analyst
Sean Meakim

Well, thanks for all the commentary. So you noted there at the end, you expect revenue down quarter-over-quarter, it sounds like pricing is a factor there. Can you just talk about maybe how many fleets you averaged in July, expectations for the balance of the quarter? I mean just trying to get a sense of the range of outcomes in terms of volumes versus the impact of pricing?

Executive
Robert Drummond

Sure, Sean. Good question. Look at the end of the day, the reason that we are guiding a little bit revenue down in Q3 is that, pricing has certainly been a factor as we've migrated from a really ramped up Q1, where we were really clicking to where the markets at today, but also the mix of oil and gas basin is evolving as well, activity in the oil basin is starting to pick up a little bit more. There is more white space we see in the calendars as operators begin to pick up fleets to maybe attack the dub [Phonetic] count or it's just not as routine as it was when we were all home, and in 2019 or maybe early Q1 of this year.

So that's kind of the scenario. And trajectory was, when we were ramping down at the end of Q1 and into Q2, we were coming off of a reset of price that it rolled in from 2019 into 2020, and we saw the trajectory of Q2 April being the highest month and everybody can see that in June, probably beginning of June was the low point where frac fleet count in the U.S. probably got as low as 50. And then we see that market now beginning to work its way back up as these -- as the operators come in now with many -- in most cases, renegotiated pricing that occurred in the middle of the bottom of the worst downturn in history of U.S. land probably.

So that's the dynamic that is present. As for this guiding about how many fleets we got working it, we're going to stick with our guidance that no matter kind of where the rig count, our thinking of that, that we're going to be in that 8% to 12% market share range, and it doesn't behoove us really too much to talk exactly about where our rig count or frac fleet count is from a competitive perspective when the market is small as it is right now. But the thing that we would say is that, we are getting to look at everything and that we're being very patient about how we're going to price into that environment. It just doesn't make sense to price into a cash flow negative environment. And I would say the spot market in the U.S. could be said to be that in many cases.

Analyst
Sean Meakim

Got it.