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US Well Services Transitions In Q2

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US Well Services, the Houston-based provider of hydraulic fracturing services and a market leader in electric fracture stimulation, has announced its second quarter financial report as it exits the diesel frac services market to focus on its electric fleet.

“The second quarter of 2021 marked a turning point for US Well Services as we began our transition towards becoming a fully-electric frac services company,” commented CEO Joel Broussard. “I am proud of this organization’s exceptional performance as we made tremendous progress on multiple strategic initiatives. During the quarter we finalized the design of our new 6,000 HHP Nyx Clean Fleet pump, resolved outstanding litigation, began implementing a plan to reduce term loan borrowings and raised funds to grow our electric fleet.”

Revenue for the second quarter of 2021 increased by 3% to $78.8m versus $76.3m in the first quarter of 2021. The increase in revenue was driven primarily by higher sales of sand and sand transport services. US Well Services averaged 9.3 active fleets during the quarter, as compared to 10.0 for the first quarter of 2021.

Utilization of the company’s active fleets averaged 85% during the second quarter, resulting in a fully utilized equivalent of 7.9 fleets. This compares to 88% utilization and a fully utilized equivalent of 8.8 fleets for the first quarter of 2021.

In Q2, net loss attributable to the company decreased sequentially to $17.7m from $20.6m in the first quarter of 2021. Adjusted pretax earnings increased to $36.9m from $11.5m in the first quarter of 2021.

The company exited the second quarter with seven active frac fleets, which includes all five of its Clean Fleets. Three fleets were working in the Appalachian Basin, one fleet was in the Eagle Ford and three fleets were in the Permian Basin. The company expects to average five to six active fleets in the third quarter as it continues to phase out diesel fleet operations.

Industry activity levels continued to improve throughout the second quarter, as E&P companies responded to rising commodity prices by reactivating completion crews. Although the company was encouraged by the uptick in activity, pricing for diesel frac services has yet to recover to pre-pandemic levels.

The combination of sustained, depressed pricing for legacy diesel fleets combined with a tight labor market, inflationary headwinds across the supply chain and the widening bifurcation in demand for next-generation and conventional diesel fleets led US Well Services to announce its exit from the diesel frac services business to focus solely on the premium, electric market segment.

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