Thank you. And welcome to Ranger Energy Services Second Quarter 2024 Results Conference Call. Ranger has issued a press release summarizing operating and financial results for the three months ended June 30, 2024. This press release, together with accompanying presentation materials, are available in the Investor Relations section of our website at www.rangerenergy.com. Today's discussion may contain forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update our forward-looking statements. Further, please note that the non-GAAP financial measures may be disclosed during this call. A full reconciliation of GAAP to non-GAAP measurements are available in our latest quarterly earnings release and conference call presentation. With that, I would like to now turn the conference over to Mr. Stuart Bodden, Ranger's CEO, and Melissa Cougle, Ranger's CFO, for their prepared remarks. Please go ahead.

Thank you. And good morning, everyone. We are pleased to welcome you to our second quarter 2024 earnings call. We are happy to report very strong performance in the second quarter after a challenging start to the year. The Ranger team banded together across service lines and functions to regroup in the second quarter, taking bold action in some areas, exercising patience in others, but ultimately emerging as a stronger and more focused company. Our second quarter results reflect the inherent strength of our production-focused business model, which is able to ride out cycles and maintain consistency despite broader activity and spending declines. The most illustrative example of this was in Ranger's high specification rig business, which reached a new high watermark for revenue with outstanding margins along the topside growth. We continue to have a firmly held belief that most of our business doesn't behave the same way as a traditional oilfield services company. While market conditions have been difficult over the past 12 months, with the US onshore rig count decline by over 20% and frac-ing activity following suit, several of our service lines are showing year-over-year improvement. This improvement is driven by several factors, including a consistent spending profile for production-tied work, a more consolidated and rationalized space for some service lines, along with high growth market backdrop for service lines such as P&A and gas processing. We also feel that we have deepened and strengthened ties to customers who appreciate and value Ranger's differentiated service quality. In light of recent consolidating transactions in the E&P space, Ranger is regularly presented with the question, what does consolidation mean to Ranger? We believe, over the long run, the E&P consolidation trend, while removing and reducing the customer population, has also placed Ranger in an enviable position of being…

Good morning, everyone. And thank you for joining us today to discuss Ranger's second quarter 2024 financial results. As Stuart said earlier, we are pleased and reassured with our results this quarter. Ranger took thoughtful and decisive action after the first quarter, which has been validated by historically strong results in two of our three segments, despite a rig count decline of over 20% since last year's peak. Despite the declines in our Wireline segment, our year-over-year EBITDA performance is comparable on the back of stronger margins this year, which is a very encouraging sign for the health of our business. Revenue for the second quarter was up slightly from the first quarter of 2024 at $138.1 million, but down 15% year-over-year. Improvements in both High Specification Rigs, driven by expansion in rig hours and rig rates, as well as increases in Ancillary segment revenue, were offset by further reductions in wireline completions activity. Net income of $4.7 million or $0.21 per share, rebounded nicely from the first quarter's net loss of $800,000. Cost of services for the quarter was $113.2 million, representing 82% of revenue. This is a significant improvement over the first quarter of the year, which represented 88% of revenue and the prior-year period that was 84% of revenue. The decrease in the cost of services as a percent of revenue was primarily attributable to restructuring activities undertaken to adjust for reduced activity in our wireline completions business, as well as improved pricing in other service lines. We are operating leaner and more in line with market realities, which has a direct positive impact on our bottom line. Adjusted EBITDA for the quarter was $21 million, nearly double the $10.9 million of adjusted EBITDA from the first quarter of this year, and a slight decrease from the…

[Operator Instructions]. Our first question will come from Don Crist with Johnson Rice.

You had a really good rebound from the first quarter and I wanted to kind of dig into customer behavior. Obviously, in your remarks, Stuart, you talked about the consolidation and customers kind of floating towards higher performing companies with better safety records and better maintenance program. But can you talk a little bit more about that and how you're seeing the back half of the year shape up? Is that one of the main driving factors that's helping you gain market share?

It really is, Don. Appreciate the question. I think what we saw coming out of Q1 into Q2 is exactly that. Some of our largest customers not only maintained demand, but also increased it. And we're really seeing that demand and that request for additional rigs and equipment continuing into Q3, which is why in our guidance we said that we think that Q3 will be modestly up over Q2. So we continue to believe that the consolidation trends are really helping us. We referenced last year a big contract that we signed. That contract, we think it's really starting to bear fruit. So, again, I think we're pretty pleased with how it's happening. And it really has been on the back of our largest customers, in particular.

On the Wireline segment, obviously, it has been a challenging market in wireline for not just you, but for everybody in the market. But can you talk about the reorganization? I know you touched on it in your presentation and your press release, what steps you've taken and do you see the margins in that segment kind of rebounding towards that 8% to 10% where you have been historically?

We certainly hope the margins get back up there. We talk about wireline in really three segments, our completion segment, our production segment, and our pump down segment. We really are just given pricing on the completion segment and that's in the segment, Don, that's historically had the highest revenue, not necessarily the highest margins, but the highest revenue. That's where we're really seeing the pricing pressure and just things becoming unsustainable. Part of the restructuring has been really twofold. One is, unfortunately, we've had to do some headcount reductions associated with the completion service line. We've also been reorienting some of those assets. We are, for the most part, able to redirect those assets to the production space and that's in the second part, is doing that both with wireline trucks, equipment, and also some of our pumps for pump down. Again, kind of reorienting them more toward the production space.

If I could sneak in one more, some of your peers in the segment have kind of looked outside of the traditional oilfields for M&A and I'm hearing that M&A bid/ask spreads are narrowing. Any comments just broadly around M&A and if you're looking kind of outside of the historical business lines that you have today?

We have been looking outside and I think been looking at a number of things. That said, Don, we remain convinced that our existing service lines, particularly our flagship service lines, are still ripe for additional consolidation. So that's probably been where most of our focus has been, although I don't want to give the impression that we're not looking at other things. But that's where most of the focus has been. I think the bid/ask, I feel like every time we get the question, we sort of have the same response, which is we think it's narrowing, but it's still not quite there. So we're hopeful. We would love to do a transaction. But again, we're committed to being incredibly disciplined, making sure that any deal is accreted to our shareholders. But I'm hoping that maybe things are starting to break free a little bit. We'll see how the next 12 months shakes out.

I'll call it a good quarter.

[Operator Instructions]. Our next question will come from Jeff Robertson with Water Tower Research.

Stuart, you touched on valuations in the M&A market. I'm just wondering how you think about valuations that you're seeing in the market versus the valuation of Ranger stock and the share repurchase opportunity you have.

Well, I think the question probably really kind of highlights the issues around the bid/ask. We think we're a very compelling investment proposition right now, given our stock price. But we also recognize if we do any deal that it needs to be accreted to our shareholders. I think we think that that's quite important. Again, I think we're looking at things and a lot of the conversations with potential counterparties really starts there, which is you can see where we're trading. Again, we need to be accretive for our shareholders. So if that's a kind of range that you'd be willing to transact on, then let's have deeper conversations. We are having deeper conversations. But, again, sometimes people get into it and it becomes a bridge too far. But, hopefully, it's starting to close a little bit.

Secondly, you touched on consolidation. Are you seeing companies look to narrow their vendor lists that have been consolidating? And is that creating any opportunities for Ranger to do any additional exclusive service type contracts?

We're definitely seeing the trend continue. What I would say is, for the largest customers and the ones that tend to be acquisitive, every conversation with that is associated with a desire on their part to reduce vendors and come with kind of more reputable vendors. So we definitely see that. We see that trend continuing. As regards to kind of other long-term contracts, we're having those conversations. They're kind of earlier days, but we've been – with the one that we were able to sign and we talked about last year, I think both sides feel like that's been really an advantageous contract. So we would certainly like to have more of them.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Stuart Bodden for any closing remarks. Please go ahead.

Great. Thanks, Chuck. Thank you, everyone, for joining. Thank you for your interest in Ranger. Before we do break, I just want to just sort of commend the Ranger team, the broader Ranger team for their hard work and dedication and the strong performance in Q2. So thanks to them. And again, thanks, everybody. I hope you have a nice day.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.