Oil States International, Inc. (NYSE:OIS) Q4 2022 Earnings Call Transcript

Cindy Taylor: Another fantastic question and I will say that we have been able, it’s been a lot of effort behind it, but we have been able to increase our headcount in the completion services side of the business, which helps us manage our work better. I am not necessarily have to move people from one geography to the other and alleviate some of the overtime pressures we have had on our workforce in completion services. So I’d say a little more favorable trend in completion services, we are still struggling to hire in our manufacturing facilities in the Downhole side, that’s been part of the challenge we are working on and facing at this point in time. And other than that, I’d say that, we like everybody else had the labor cost increases during 2022, but we don’t expect as necessarily the need to make proportionately the kind of increases that we saw in 2022 to attract and retain the labor that we have.

So I feel like some of the pressure has moderated, but there are still pockets, we still are dealing with very low unemployment levels and just have to work through it.

Sean Mitchell: And then maybe one more, just as we think about some of your larger competitors across the board, obviously you talked about deepwater and international inflecting. In fact, one of the largest probably competitors in the industry said that they feel like you are in the early stages of a resurgence and a meaningful growth in 2023 in deepwater. Is that — I mean, it sounds like, if I am reading the tea leaves on your guide here up 15% most of that, I think, it look sounds like you are leaning towards the offshore and international markets?

Cindy Taylor: Yeah. We are seeing in our own product lines growth across all three year-over-year, but it is weighted more towards Offshore Manufactured Products. And to some degree, our visibility is pretty good on order flow and activity, because its weighted towards production infrastructure, meaning, we know what’s going on in the basins of Guyana, Brazil, a lot of those developments are already well underway. Now, it’s up to us to bid effectively and get our proportionate share of the awards that are there and I think when you talk about more of the enthusiasm, you may be talking about actual drilling, new drilling and new prospects were, i.e., the deepwater drillers getting some improvement in both utilization and in rates, number one. And we just had an absolute dart of exploratory drilling for five decades now in deepwater

Sean Mitchell: Right.

Cindy Taylor: and I think people are recognizing that even some of our politicians recognize that you actually need some crude oil and natural gas to supply the energy needs of the world. And whatever reason we can debate all day long about why activity has slowed as badly as it did, certainly transitional investments and other things took the front and center. And I think Russia-Ukraine crisis and the shortages of energy going into the European continent created a different awareness and a different appreciation of the needs that we have not only in this country but in the world and you are just seeing a resurgence of activity that had been really delayed for a long time, quite frankly. But as it relates to my business, the visibility around these development drilling profiles in kind of that Atlantic Basin area, but particularly Brazil and Guyana are pretty visible at this point on time.

Sean Mitchell: Great. That’s great color. Thanks, Cindy.

Cindy Taylor: Thank you, Sean. Good to — see you next week.

Operator: And the next question in the queue comes from Stephen Gengaro from Stifel. Your line is open, sir.

Stephen Gengaro: Thanks. Just one follow-up. You mentioned, I think, the buyback and I am just curious how do you thinking about utilizing it? Is it opportunistic, is it going to be some kind of programmed system and how are you thinking about that versus other capital allocation opportunities?