4.30.20-Note- Daily Takeaways: Concho, H&P, Ranger and others |

Getting caught up on earnings releases and conference calls…here are a few takeaways…

HP notes 115 rig release notifications since early March 2020.
Expects to exit the current quarter below 70 workings rigs.
HP will receive $45M in early termination revenue in the June quarter.
March quarterly revenue days were 17,273 which using simple math implies roughly 190 rigs .
Fiscal 2020 capex guided to $195M at the midpoint. This compares to $458M spent last year.
The capex guidance is tweaked a bit lower from the last company update.
Incurred a $563M non-cash charge: goodwill impairment, rig write-downs, etc.
95 rigs impacted by the impairment of which 37 have now been decommissioned.
We would assume these are rigs in the U.S. fleet. If correct, that would take the fleet from 299 to 262 rigs.
March quarterly revenue per day = $25,667. Adjusted rig margin per day = $9,762
As a reminder, HP doing what most OFS enterprises are doing as it reduced its dividend.
Balance sheet still commendable. Net debt/cap = 12% with no debt maturities until 2025.

Q1 revenue and adjusted EBITDA flat-to-up q/q
Well service rig revenue. Higher composite pricing (+4% q/q) offset lower rig hours.
Q1 rig hours = 62,400 vs. 64,400 in Q4.
Rev/Hour at $558/hour, a peak.
This is likely rig mix, not assertive pricing increases, but good nonetheless.
Well service adjusted EBITDA margins = 14.3%.
Completion and other services revenue up 5% q/q.
RNGR noted its wireline business hit a new peak in stage count.
Aggressive cost reductions underway. Headcount down 50% since mid-March. Facility consolidation underway. Salary reductions, travel restrictions, etc.
All growth capex eliminated.
Net debt decreased to $43.1M from $45.6M in Q4.
Reminder from our earlier note this month – some E&P’s went to virtual shut down on well service operations.

Decent Q1 in light of the market, but realistic guidance imparted.
SOI sees a potential 75% to 85% sequential decline in activity.
Reducing capex to $10M or less vs. original guidance of $20-$40M (reduction announced in early April).
Right sizing business due to lower activity – consistent with other OFS enterprises.
Company repurchased $26.7M of stock in Q1.
SOI paid its 6th consecutive quarterly dividend. Capital returns to shareholders is impressive.
Cash at 3/31 = $46.0M, but improved to $55.0M at 4/30/20.
The company’s $50M revolver is undrawn.
Q1 revenue totaled $48M with adjusted EBITDA of $18M, ~37% margins = unique to OFS.
Q1 averaged 83 mobile units vs. 88 units in Q4.
Incurred a $48M impairment charge, largely tied to the Kingfisher transload facility.

Noted the expected 3-4 working fleets in Q2 would likely have utilization in the 50-60% range.
Two fleets are in the northeast, one in WTX and one in Utah.
Q2 EBITDA is likely a negative $13M to $15M.
Q1 stages per fleet were 431, a record.
FTSI had more pumping hours per day and more pumping days per month than ever before in Q1.

QEP had previously announced a revision to its capex budget in mid-March.
Original guidance was $545M to $595M. New range is $365M to $405M.
QEP had been running three rigs, but is down to one.
Completion operations have been suspended in the Permian until November 2020.
Refrac operations in the Williston suspended through the end of 2020.
Q1 capex = $179M, thus implying ~$200M of remaining capex.
Mgmt stated on its call that the bulk of the $200M spend would be in Q4.
Under the right circumstances, QEP could pick up a rig and frac crew in November (oil price dependent).
Recent pad witnessed 3,500 lateral feet completed per day per Frac Crew. Up from an average of 3,000 feet in 2019.

We will look at RRC and COG later this evening. Time for a break and hopefully no typos this time.

Again, these are our observations and not stock opinions or recommendations.

4.30.20-Note- Daily Takeaways: Concho, H&P, Ranger and others