U.S. Well Services, Inc. reported first quarter 2021 financial and operational results.
First Quarter 2021 Highlights
Each of Adjusted EBITDA and Adjusted EBITDA margin is a Non-GAAP financial measure. Please read “Non-GAAP Financial Measures.”
Adjusted EBITDA per fully-utilized fleet equivalent is defined as Adjusted EBITDA divided by the product of average active fleets during the quarter and the utilization rate for active fleets during the quarter.
“U.S. Well Services delivered another strong quarter, redeploying four fleets to meet the growing demand for our services,” commented Joel Broussard, U.S. Well Services’ President and CEO. “Our operations in Texas were impacted by the severe winter storm in February that resulted in an average of seven days of lost work for seven of our active fleets. In spite of these challenges, our team performed exceptionally, delivering best-in-class service for our customers.”
“Hydraulic fracturing activity accelerated throughout the first quarter, which resulted in a significant number of fleet reactivations across the industry. In the current market, demand remains highest for fleets using next-generation, low-emission technology. U.S. Well Services’ proprietary Clean Fleet® technology offers best-in-class fuel cost and greenhouse gas emissions reductions, and as such, continues to experience elevated demand.”
As anticipated, the first quarter of 2021 saw a sharp uptick in activity across the industry as E&P producers responded to higher crude oil prices. U.S. Well Services expects E&P operators to demonstrate capital discipline going forward, which may limit demand for incremental fracturing fleets in the near term.
While the active fleet count in the U.S. recovered along with the broader oil and gas market, pricing for conventional diesel-powered frac services has lagged. This segment of the market remains oversupplied and faces unsustainable pricing levels. U.S. Well Services has been actively working with its customers to begin implementing price increases during the second quarter of 2021. The Company is committed to operating with discipline and will only maintain fleets that are priced to meet return and cash flow objectives.
First Quarter 2021 Financial Summary
Revenue for the first quarter of 2021 increased 59% to $76.3 million versus $48.1 million in the fourth quarter of 2020, driven by an increase in activity levels. This increase was partially offset by an estimated $5.0 – $5.5 million of lost revenue due to work stoppages for seven of our active fleets impacted by the winter storms in Texas during the month of February. U.S. Well Services averaged 10.0 active fleets during the quarter, as compared to 5.7 for the fourth quarter of 2020. Utilization of the Company’s active fleets averaged 88% during the first quarter, resulting in a fully-utilized equivalent of 8.8 fleets. This compares to 93% utilization and a fully-utilized equivalent of 5.3 fleets for the fourth quarter of 2020. Absent the work stoppages for the winter storm, our utilization would have been 93%, resulting in 9.3 fully-utilized fleets.
Costs of services, excluding depreciation and amortization, for the first quarter of 2021 increased to $62.6 million from $42.5 million during the fourth quarter of 2020, driven by higher labor, repair and maintenance costs resulting from the increase in activity.
Selling, general and administrative expense (“SG&A”) declined to $7.4 million in the first quarter of 2021 from $13.3 million in the fourth quarter of 2020. Excluding stock-based compensation and non-cash charges for doubtful collections of accounts receivables, SG&A in the first quarter of 2021 was $5.9 million compared to $5.6 million in the fourth quarter of 2020. This sequential increase was primarily attributable to an increase in personnel costs.
Net loss attributable to the Company decreased sequentially to $20.6 million in the first quarter of 2021 from $29.9 million in the fourth quarter of 2020. Adjusted EBITDA increased to $11.5 million in the first quarter of 2021 from $1.8 million in the fourth quarter of 2020. Annualized Adjusted EBITDA per fully-utilized fleet was $5.2 million and Adjusted EBITDA margin was 15%.(1)
U.S. Well Services exited the first quarter with eleven active frac fleets, which includes all five of our Clean Fleets®. Three fleets were working in the Appalachian Basin, two fleets were in the Eagle Ford and six fleets were in the Permian Basin. The Company expects to maintain between nine and ten active fleets during the second quarter of 2021.
During the first quarter of 2021, U.S. Well Services completed 4,537 frac stages, or approximately 516 stages per fully-utilized fleet, compared to 3,168 frac stages and 598 stages per fully-utilized fleet during the fourth quarter of 2020. Pumping hours per day decreased approximately 2% sequentially. The Company pumped for 8,327 hours during 689 frac days, as compared to 5,121 hours during 416 frac days in the fourth quarter of 2020. The Company’s stages per fully-utilized fleet, frac days and total pumping hours were all adversely impacted by the severe winter storm in Texas.
U.S. Well Services continues to be a market leader in electric fracturing, with 20,891 electric fracturing stages completed since the deployment of our first Clean Fleet® in 2014. The Company continued to expand its intellectual property portfolio during the first quarter, and currently has 42 patents, with 190 patents pending.
Balance Sheet and Capital Spending
As of March 31, 2021, total liquidity was $32.3 million, consisting of $18.2 million of cash on the Company’s balance sheet and $14.1 million of availability under the Company’s asset-backed revolving credit facility, and net debt was $307.3 million.
Maintenance capital expenditures, on an accrual basis, were $9.6 million for the quarter.
Conference Call Information
The Company will host a conference call at 10:00 am Central / 11:00 am Eastern Time on Monday, May 17, 2021 to discuss financial and operating results for the first quarter of 2021 and recent developments. This call will also be webcast and an investor presentation will be available on U.S. Well Services’ website at https://ir.uswellservices.com/news-events/ir-calendar. To access the conference call, please dial 201-389-0872 and ask for the U.S. Well Services call at least 10 minutes prior to the start time or listen to the call live over the Internet by logging on to the Company’s website from the link above. A telephonic replay of the conference call will be available through May 24, 2021 and may be accessed by calling 201-612-7415 using passcode 13719825. A webcast archive will also be available at the link above shortly after the call and will be accessible for approximately 90 days.
About U.S. Well Services, Inc.
U.S. Well Services, Inc. is a leading provider of hydraulic fracturing services and a market leader in electric fracture stimulation. The Company’s patented electric frac technology provides one of the first fully electric, mobile well stimulation systems powered by locally supplied natural gas including field gas sourced directly from the wellhead. The Company’s electric frac technology dramatically decreases emissions and sound pollution while generating exceptional operational efficiencies including significant customer fuel cost savings versus conventional diesel fleets. For more information visit: www.uswellservices.com.