Liberty Oilfield Services Ramps Revenues +16% in 1Q22, Frac Capacity Nearing Full Utilization
Liberty Oilfield Services posted 1Q22 revenues of $793 million, which was a +16% sequential increase. Even with that increase, they posted a small net loss of $5 million. Their balance sheet included $33 million in cash on hand and $212 million in total debt.
The interesting part of Liberty’s earnings came from CEO Chris Wright’s remarks. Mr. Wright commented that “available frac capacity is nearing full utilization and demand has increased, and supply is limited due to continued equipment attrition, labor shortages, supply chain constraints, and very low investment in recent years.”
Although the firm posted its highest quarterly sales since going public, Mr. Wright added that the “profitability of active frac fleets across the industry are still below healthy levels.” Liberty also gave some insight into current & future frac capacity, with Mr. Wright closing out his opening statements with the following details:
“Seven years of underinvestment in oil and gas production capacity was accompanied by an even more dramatic drought in investment in new frac fleet capacity. The brief 2017 to 2019 up cycle was all the about redeploying fleets built earlier in the decade with relatively modest new fleet construction. Much of that older equipment has now been scrapped. The emerging cycle is likely to last longer and be characterized by a much slower and more modest rise in active frac fleets.”
Liberty Oilfield Services
Re: Liberty Oilfield Services
Thank you for this!
Re: Liberty Oilfield Services
This is good news for the oilfield services companies. Liberty is one of the best:
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Texas natural gas, oil industry adds more jobs amid Permian permitting surge. NGI.
Upstream oil and gas employment in Texas gained 4,300 jobs in March, which brought the statewide headcount to 184,700, the Texas Independent Producers and Royalty Owners (TIPRO) reported earlier this month. The trade group noted the sharp jump in Permian Basin drilling permits issued in February. Exploration and production (E&P) companies also have begun to respond to “higher commodity prices and the call to increase domestic production to address global supply shortages.” “The Texas oil and natural gas industry has proven resilient over the years and continued job growth in the upstream sector benefits every American and our environment,” said TXOGA President Todd Staples.
We will be publishing an updated profile on Solaris Oilfield Infrastructure (SOI). As well completions increase, so will SOI's operating cash flow. They have gained market share and the stock should be a double for us by year-end.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group