Steve Taylor: Yes. I mean it is pretty young. And you got to remember you can phrase what you is the beholder, I guess, it’s beauty, but on this bigger horsepower, especially, well, particularly the 1,500 horse and 2,500 holes, we got 25-year book lives on those. So those are bigger, heavier, longer lived equipment. So when you look at youth, you can look at just five out years, you can look at it relative to the age. But either one, we’ve got a pretty young because of our fleet. I would dare say the youngest, if not one of the youngest. And I know we’ve got a relatively smaller fleet than they are competitors, but we started moving into the 1,500 and 2,500 horse, which is becoming kind of the bulk of our large horsepower fleet four or five years ago.
So at the outside, we’ve used up 20% of life from the oldest big horsepower units. So that’s pretty small. So that’s one of the advantages of the horsepower market just having such a long lived equipment. You can get multiple payouts over its life. So we have a relatively young fleet in that horsepower range.
Tim O’Toole: Okay. Great. And so I’m trying to — it’s a little difficult comparing with the peers because you have a smaller kind of old sleep, but then you actually have a very fresh and you’re able to put capital to work in the younger and bigger horsepower equipment. So I did a little math on just what you actually have rented what you’re I don’t want to — so another question is what does the new horsepower of equipment, what does it cost per horsepower? That’s been going up over the last couple three years pretty significantly. And I’m wondering if you could update me on that.
Steve Taylor: Yes, it has gone up quite a bit. We were looking back at some 4- or 5-year old prices and kind of kind of scares you and makes you along for the old times, right? But generally, today, you probably see — and I’m talking about primarily 1,500 and 2,500 horse, but you’ll get some of the smaller horsepower in this range. You’re into the roughly $1,100 to $1,200 per horsepower.
Tim O’Toole: Okay. Yes, I was using sort of $11.50, and I think that was kind of guesstimating on full year core overage.
Steve Taylor: Yes.
Tim O’Toole: Yes. So I did a little bit of calculated calisthenics, if you will. And you have 400,000 horsepower rentage right now, and your islets obviously bigger than that, but you have some of that older stuff that is still underutilized. When the gas markets come back, perhaps a lot of that stuff goes to work or you can kind of trim the fleet out a little bit. But if I put an 11, a replacement value, which is obviously not strictly speaking, correct. But if I put a replacement value on the $400,000 that you’re renting right now at what current prices pro horsepower would be, let me take the debt out, I come up with a number that is something on the order of $26 a share. Is that dreaming way to heavily? Or are we starting to get close to reality with that kind of a number?
Steve Taylor: Well, we’ve got a tangible book of around $19, $19.5 a share. So that delta between your number and the tangible book is $6 or $7. So what, 25%, 30%, roughly, something like that. I don’t know. It’s hard to say because you got the smaller equipment, you’re down to the 60, 70 horsepower rotary screws and low price and low volume stuff that doesn’t carry as much value on it up into the 2,500 horsepower 4-stage gas lift equipment, which is premium equipment, right? It’s got our technology and emissions technology and operating technology and stuff like that. So you’ve got a pretty wide range. The 1,100 to 1,200 is what is current on the big horsepower. You probably can’t put that on the smaller horsepower we’ve got I don’t know exactly what the right number would be on average, we’d have to look at that.
But to me, 25% difference in your number and our number probably as part of judgement, I mean everybody is going to have a different view of value. So I wouldn’t you use too much down, I’d say you may be a little high, but 19.5% is a real number. So that’s when you got to gauge from.
Tim O’Toole: Well, yes, but that is also a historic number based on a whole lot of the equipment being purchased many years ago at 900 or less per horsepower, right? So just what I’m trying to give you a little bit is if someone wanted to replace your fleet, not to mention kind of your backlog, your customer base, your support equipment and personnel, they have to pay something like my number to get there and get an active rental fleet. But anyway, it’s really just some, again, calculator calisthenics, and I appreciate you walking you through that.
