Greetings, and welcome to the U.S. Well Services First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Josh Shapiro, Vice President, IR. Thank you, you may begin.

Thank you, operator, and good morning, everyone. We appreciate you joining U.S. for the U.S. Well Services conference call and webcast to review the first quarter 2021 results. Joining U.S. on the call this morning are Joel Broussard, Chief Executive Officer; and Kyle O'Neill, Chief Financial Officer. Following their prepared remarks, the call will be opened up for Q&A. Earlier this morning, U.S. Well Services released its first quarter 2021 earnings. The earnings release can be found on the company's website at www.uswellservices.com. The Company also intends to file its Form 10-K with the SEC this afternoon. Please note that the information reported on this call speaks only as of today, May 17, 2021, and therefore, time-sensitive information may no longer be accurate as of the time of any replay listening or transcript reading. In addition, the comments made by Management during this conference call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of U.S. Well Services' Management. However, various risks, uncertainties and contingencies could cause our actual results, performance or achievements to differ materially from those expressed in the statements made by management. The listener is encouraged to review today's earnings release and the company's filings with the SEC to understand those risks, uncertainties and contingencies. Also, during today's call, we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release. And now I would like to turn the call over to U.S. Well Services' CEO, Mr. Joel Broussard.

Thanks, Josh and good morning, everyone. The U.S. Well Services' team delivered another strong quarter with significant growth in both revenue and adjusted EBITDA. During the quarter, our operations were impacted by the freeze in Texas resulting in a loss week of 70% of our active fleet. Despite the windstorm and other challenges we faced redeploying fleets, the USWS team did an incredible job. I'm proud of the way this team continues to execute for our customers. Kyle will dive into the specifics of our first quarter financial results. But before he does, I would like to offer a bit of perspective on the current pressure pumping market dynamic. At this time last year, the outlook for the oil and gas industry was bleak. Demand for crude was oil devastated as the Global Economy shutdown and response to COVID-19, which took WTI prices below zero before selling in the high twenties and low thirties prevailed. There appear to be limited prospects for improvement in commodity prices. And the number of active U.S. frac fleets dropped below 50. The market backdrop for the upstream oil and gas sector has improved a great deal since that time. WTI crude oil prices have stabilized above $60 per barrel, thanks to a combination of demand growth and a restrained response from global oil producers. First quarter results posted by the U S shale producers demonstrated that the industry is able to earn returns and generate free cash-flow at these commodity prices. While hydraulic fracking activity in the number of active fleets across the industry has rebounded with commodity prices frac service pricing has yet to recover. Today we estimate that there are around 200 active fleets working in the U.S. Many of which are working at prices that we believe are unsustainable. Because the…

Thanks, Joel and good morning everyone. Before I dive into the first quarter financial results, like to comment on the recent SEC statement regarding the accounting and reporting for SPAC related warrants. In mid-April, the SEC released a statement informing companies with warrants issued by SPACs, may require to be reclassified as liabilities measured at fair value at the end of each reporting period. The statement has changed the industry accepted practice of accounting for warrants’ equity. As a result, we and many other companies formed through business combinations with SPACs, have restated our financial statements to correct the classification of warrants as a liability. The restatement has no impact on our operations, revenue, operating income or other key non-GAAP financial metrics such as adjusted EBITDA. With that. I'll now turn to the review of our first quarter. U.S. Well Services averaged 10 active fleets during the quarter with a utilization rate of 88% resulting in 8.8 fully utilized fleets. As Joel noted the winter storm in February caused a work shutdown for seven of our fleets for an average of seven days. If not for this work stoppage, we would have averaged 9.3 fully utilized fleets for the quarter. We generated $76 million of revenue for the first quarter of 2021 up 59% from $48 million in the fourth quarter of 2020. The sequential increase in revenue was driven by the uptick in our active fleet count and was offset by an estimated $5 million to $5.50 million of revenue lost due to the work shutdown during the winter storm. While servicing equipment revenue was up 54% sequentially pricing on a per pump hour basis declined 5% sequentially due to the redeployment of conventional fleets at market pricing. As Joel mentioned earlier, we have initiated discussions with our customers…

Thanks Kyle. Although this market environment remains challenging U.S. Well services is excited for what lies ahead. We believe we possess the technology, team and track record to deliver for our shareholders and customers as the market for frack services continues to evolve. Operator, please open the call up for Q&A

Thank you. We will now be conducting a question and answer session. [Operator Instructions] Our first question comes from the line of Ian MacPherson from Simmons. You may proceed with your question.

Thanks. Good morning, Joel. Kyle, how are you?

Great. How are you?

Good thanks. So, I wanted to get your view on how margins should improve coming out. You had the Q1 weather impacts and you've scaled up to basically doubling your footprint from where you were a year ago ahead of the full benefit, or really much benefit at all with pricing, which is now coming to you over the course of this year progressively. So when you think about those tailwinds how much EBITDA leverage do you have on a per fleet basis going from now until the end of the year, do you think? And you, you can airbrush that answer as much as you care to, but I'd like to get a sense for you know, how we begin to harvest EBITDA and cash flow from the footprint that you've recovered now? Kyle O’Neill: Ian as we all know, we're looking at our peers and others that as to CapEx everybody's still negative. So pricing does have to come up on the electric - on the diesel fleets, however, on our electric fleets we're satisfied with the margins and they're dragging our diesel fleets up, simply because of the cost savings to the client. We're seeing a little softening in the market and we feel that there's around 200 fleets working, not 220 and some of these fleets are going to the spot market, but we're, we're either going to we're having difficult conversations with our clients now on the diesel equipment and we have of course we have lesser than they have with some of our peers, but the conversations are happening and margins have to come up on our diesel equipment or we won't work them.

Got it. And then Kyle, do you have any perspective on how free cash flow could unfold over the balance of the year? I know you had some working capital going against you in the first quarter. I'm interested in that particular component as well as just the total picture for cash generation and liquidity balances towards the end of the year. Yeah, Kyle O’Neill: That's it that's exactly right. We did have kind of a working capital build in Q1 as we redeployed some of those fleets. So you know, kind of in a normalized operating environment we would expect to see that cash flow profile and continue to improve throughout the year.

Our next question comes from the line of Stephen Gengaro from Stifel. You may proceed with your question.

Thanks. Good morning, gentlemen. A couple things. So one is on the conventional side, I think your maintenance CapEx for fleet is like $5.50 million-ish per, per year. A, is that right? And B, does that suggest you won't deploy fleets on the conventional front unless they are generating some number higher than that?

Correct. Yeah, that's about right. That's, you're exactly right. We won't deploy unless we can, more than cover our maintenance CapEx. It's got to be cash flow accretive.

Okay. And on the, on the e-fleet side, can you just remind us sort of the where you stand from a contractual perspective? Just so I have the sort of most updated data.

Currently we have 5 electric fleets working. We expect all of those to work through the end of the year, except maybe our original one which we built in 2014. It has worked as of now through October.

Okay. And two other quick ones. One is you mentioned, I think on the last call for about $50 million in CapEx, you could, deploy 2 incremental e-fleets based on equipment you have in the yards, et cetera. Is that A, is that still about the right number or, B, where do you stand on that thought process?

Actually, that number is as coming down. We think that we could upgrade the two original fleets we built with just [pumps] (ph) for around $30 million. 30 to 35.

Okay. Great. And then just as a final one, and this follows up on Ian's question you're in the quarter, you mentioned $5 to $5.50 million of revenue impact. Your adjusted EBITDA was about $11.50. Can you give us a sense for what the EBITDA impact or even the per fleet EBITDA impact was? And then additionally is where's the moment - like I'm going to, I guess what I'm thinking about is can EBITDA per fleet get to double digits this year or no because of the dilutive effect of conventional assets?

Kyle can you take that one? Kyle O’Neill: Sure. Yeah, I think getting to double digits across the entire fleet this year will be challenging largely because of the current market for diesel equipment.

And an EBITDA impact from the quarter, do you have any sense for what it was on that? Is it just sort of in the 2 to 3 million range or is it...? Kyle O’Neill: I think it's, I mean I think it's probably closer to $1 million to $1.5 million EBITDA impact.

Next question comes from the line of John Daniel with Daniel Energy Partners. You may proceed with your question.

Hey guys. Joel, thank you for the color. I just want to follow up a little bit on your comment about activity and just what I'm going to refer to as a smidgening of softening. Do you think that's a reflection of front end loaded customer budgets to faster reactivations amongst your frac [brethren] (ph)? Just a little bit more color would be helpful.

I think it's both of what you are speaking of, where, when I say slightly softening, we're just seeing some of the people that came out of the gate, wanting more spot fleets than, Hey, we'll take it from the rest of the year. That's what we're seeing. And we’re still seeing pricing in the 6,000 and below pump range, which we all know is a negative cash flow. Once you have a -once you add CapEx in there.

Okay and then the last one from me, just with the cleaner emission fleets, with the rise in diesel prices, how would you characterize inquiries and interest on the part of customers today versus three to four months ago on this technology?

It's been drastic, we've done several test pads with our original fleet. We built [14] (ph) for customers. We made an announcement on one of them, which was [Cowen] (ph), right? There's probably five others that were going to be doing test pads for this year. RFPs are coming out with strictly electric when in the past we saw diesel and electric. So we're excited; I don't think this - I hope diesel prices isn’t going down and the higher diesel prices go up, the more savings on the, we have one customer that we've been working with since 17, I mean, 18, sorry, they're spending $2.4 million a month in diesel. And it's real. And now, as you've seen, we've renewed contracts with EQT and Range, in the past and Shell we've extended contracts, all three of those. So they're seeing the efficiencies, they're seeing the fuel savings and they're seeing the emissions reduction.

Okay. Got it. And I guess the last one for me, Joel, would be if someone came either tomorrow with a contract in hand, that which was accommodating to you, how quickly could you get the next electric fleet deployed?

January one.

Okay. Thank you very much.

Our next question comes from the line of Daniel Burke - Johnson Rice & Company. You may proceed with your question.

Yeah. Good morning guys.

Good morning. What's happening?

Not much, I think I've really got one left, but really and it's on the topic we've danced upon in Q&A but in terms of adding incremental Clean Fleets, I just wanted to better understand it; look like you guys, raised a bit of incremental debt and equity in the first quarter. So what, what do you need, are you willing to make those investments to bring an extra fleet or two to market without that customer commitment or are you already making that investment now in anticipation of that customer demand being there? I'm just not clear on that.

We haven't ordered any fleets yet but and we're negotiating this with different clients for contracts as we speak. Nothing has been solidified.

Okay. All right. Really guys, that's all I was looking for was that piece of clarity, I'll leave with that.

Again.in it, it’s one thing I'll add is that, we've always said for the last several years, since we've been well two years, that we were going to eventually transition from to an all electric company and that still is our goal.

That's good to hear again, guys, you thank you for squeezing me in.

Our next question comes from Stephen Gengaro with Stifel. You may proceed with your question.

Thanks. Kyle, I wanted to follow up on two things. One was, can you give us a range of the difference in EBITDA per fleet, in your -- for your E-fleets versus your conventional fleets currently?

Kyle, you want to take that one? Kyle O’Neill: Yeah, Historically we haven't broken out that the difference approximately twenty years between two fleets. So I think it's something where we look at our whole portfolio but we have put on there that are operating costs and operating and maintenance costs are 40 to 45%, less than a traditional piece of fleet.

okay, thanks Kyle, what I was…

and also CapEx is drastically less than a conventional fleet, maintenance CapEx. Kyle O’Neill: Exactly. I was just going to say it's about the same magnitude.

Okay. Cause what I was getting – what I was trying to get to is when we think about, the 20, 21 and maybe, hopefully 2022 is a different year. Right. But when you have, when you look at, whatever the EBITDA expectations might be for the Company as I, so I would look out the 2021 and 2022, I was just actually just sort of looking at the consensus numbers right now, which am I asking you to blast but let's say the consensus numbers are 50 and 90 in EBITDA in 2021 and 2022,; what does that mean for free cash? Is there a way to think about that? Kyle O’Neill: Yeah. I mean, I think that the guidance we've given before is 5 to $5 million bucks of EBITDA for diesel equipment and $2 million to $3 million for the electric equipment. So you can kind of back and do a maintenance CapEx number and take that out of your EBITDA to get to your free cash flow capacity.

Okay. All right. Thank you guys. Helpful.

Ladies and gentlemen, we have reached the end of today's question and answer session. Thank you for your participation. This concludes today's teleconference You may disconnect your lines at this time and have a wonderful rest of your day.s