Oilfield well completion and production services company NexTier Oilfield Solutions Inc. (NEX:NYSE), yesterday issued an update on its business activities and provided some forward guidance for Q4/21.
NexTier Oilfield Solutions advised that it expects total revenue in Q4/21 of $500-510 million. The company highlighted that these revenue levels represent a 25% increase from Q3/21. The firm added that it estimates that adjusted EBITDA in Q4/21 will be in the range of $75-80 million, including around $18 million from a projected gain from certain asset sales. NexTier noted the asset sales were due to its planned divestment of diesel-powered frac equipment and other non-core assets as it converted its equipment to be fueled by natural gas.
The company indicated that in Q4/21 its on-site production activities grew to an average of 30 deployed and 29 fully utilized fleets, versus 25 deployed and 24 fully utilized fleets in Q3/21.
NexTier's President and CEO Robert Drummond commented, "The strong momentum we experienced when exiting the third quarter continued through year-end…The expected sequential gains resulted from solid growth across the entire NexTier enterprise, enhanced by the inclusion of a full quarter of Alamo contribution versus just one month in Q3/21."
"Market indicators suggest that the pace of market recovery is increasing and frac service supply is rapidly tightening. We're only just beginning to see the financial benefits of our integrated completion service model, which offers our customers higher efficiency and a path to lower costs and emissions," Drummond added.
The company's EVP and CFO Kenny Pucheu stated, "NexTier is beginning to experience the benefits from our countercyclical investment strategy, with the guidance revealing signs of strong, profitable growth as we exited 2021."
Pucheo continued, "As an early adopter of low cost and emission technologies, NexTier is reaching the end of its two-year strategic conversion to a predominately natural gas capable fleet…We enter 2022 with momentum, the industry's largest natural gas capable fleet and a supportive market backdrop."
The company mentioned that that as it advised previously, it expects to operate an average of 32 deployed frac fleets in Q1/22, which include one additional upgraded Tier 4 dual fuel frac fleet compared to the average of 31 fleets during Q4/21.
The firm stated that it is projecting net pricing gains and increased utilization in Q1/22 and indicated that it is on a path to achieving double-digit annualized EBITDA per fleet by the end of that quarter.
CEO Drummond remarked, "We see a constructive demand backdrop for U.S. onshore completion services as we begin 2022…Supply of frac services has tightened considerably over the past year and NexTier is in a great position to recapture a significant portion of the pricing concessions we made to help our customers through COVID."
NexTier Oilfield Solutions is a U.S. land oilfield service firm based in Houston, Tex. The company provides well completion and production services across active basins throughout the U.S. to exploration and production (E&P) customers.
NexTier began the day with a market cap of around $936.4 million with approximately 242.0 million shares outstanding and a short interest of about 2.1%. NEX shares opened 6% higher today at $4.11 (+$0.24, +6.20%) over yesterday's $3.87 closing price. The stock has traded today between $4.11 and $4.98 per share and is currently trading at $4.92 (+$1.05, +27.13%).
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