Saurabh Pant: Okay. I got it. And just a quick clarification. I think Lance, you mentioned I think you said $9 million in shortfall cost payable to Flotek. Should we expect that to continue in the second quarter and in the foreseeable future just given the volume expectations that you have right now?
Lance Turner: So we’re working to expand our chemical profile with our customers and get back to where we need to be. And so we expect to reduce it, but it takes a little bit of time as we ramp that up.
Saurabh Pant: Okay. Perfect. And then just one last one for me. I think this was Matt, you said in your prepared remarks that you expect to have all fleets deployed by I think you said later in ’24 or you said by the end of ’24, but just a quick clarification on that. Is that a comment on your deployed electric fleets? Because I think you have a couple of electric fleets that were partially completed. Are you talking about those as well?
Matt Wilks: Yes. We’re talking about those as well. So when we look at the remainder of this year and the recent success that — we said the most efficient fleet we had in West Texas was in the city limits of Midland where there’s a great deal of sensitivity towards noise. And it’s quite there in front of everybody’s offices. So it was on full display for the industry. And so I think what we’re seeing from that is a great deal of excitement and really showcasing for the overall market to what these things are capable of that you should expect the same efficiencies from the e-fleet with fuel savings and that there’s not really any compromises. These are as good or better than a conditional fleet and they’ll deliver the results that you need that skill settings and a quieter profile so that you can work in these sensitive areas where people are trying to sleep and live.
So, we’re very excited about that. We’re seeing a lot of inbounds and expect to have every e-pump that we have in an active status working for customers.
Ladd Wilks: Yes. And I’ll just add to that when we’re talking about fleet growth, it will not come from pricing reductions. It’s going to come from the differentiated offerings that we have like whether it’s e-fleet, hybrid fleets or duel fuels. It’s not going to come from slugging it out of pricing over conventional diesel fleets. That’s going to come from these offerings that the market wants.
Matt Wilks: Yes, essentially creating value and offering value to our customers where our customers see savings, but it comes from the value proposition that we bring.
Saurabh Pant: Right. No that’s very helpful. Always good to see demand pull versus just a pricing-based supply push. So fantastic. Okay. Matt, Ladd and Lance, thank you. I’ll turn it back.
Operator: Thank you. Our next question comes from the line of Don Crist with Johnson Rice. Please proceed with your question.
Don Crist: Good morning guys. I wanted to ask a more macro question. Given the horsepower requirements of today to pump 20-plus hours, a traditional fleet is no longer 45,000 or 50,000 horsepower. And Matt I’m curious just your opinion as to that. If that premise is through where you’re needing 500-plus thousand horsepower just to service and pump those amount of hours per day, where we are from a macro perspective? Are we pretty balanced in the fleet today just given those extra horsepower requirements?
Matt Wilks: Yes. So I mean it really depends what spacing you’re in. I think the higher pressure puts a – higher requirement on your fleet, where you need more redundancy and because this is about managing around equipment failures. And when they fail how do we solve for that. So there’s not an interruption in the service quality at all. And so typically you would see anywhere to pump 100 barrels a minute you really only need 14 pumps but one of your pumps is going to fail while you’re pumping. So you should probably have 18 in line and then two on stand by and then four in the maintenance rotation. So that’s on typical zipper work. And you should be able to pump 21, 22 hours a day doing that with that configuration. But when you get into higher pressure you’re going to need a little bit more redundancy or when you see simul fracs.
Some of these simul fracs are 180 barrels a minute, if you’ve got both sides running. And so that puts a higher requirement on the number of pumps. The number of pumps you have in line has more to do with how many barrels in a you’re pumping. And then the pressure has to do with how much redundancy you need to keep that number of pumps pumping. So I think you’ll hear – you probably see a pretty wide scale of how much horsepower is required. Some people have higher failure rates. But when you take care of your equipment and you have maintenance, redundancy, incredible cycle times. We run our business like – our maintenance team like it’s pit road. If you can get your cycle times down really quick and see a pit stop in two seconds. We love looking at the Indica in the ’90s it took almost 10 seconds for a pit stop to get a full set of tires and fuel.
But nowadays they’re under two seconds in some instances. So that’s what we focus on. We want to get the highest utilization out of our assets. We want the tightest cycle times in maintenance and consistently deliver the best performance without cutting corners or putting ourselves in a bind. Under no circumstance do we want to see rates fall below, the design, design rate for our customers. It’s not just pump time, it’s service quality and delivering the customer the spec that they require.
Don Crist: I appreciate that. And just from a macro perspective, given the excess horsepower that’s required to swap pumps out for valves and seats replacement, et cetera, do you think we’re fairly balanced today? And I expect in the terms of if we get a 15 or 20 fleet uplift in demand from gas basins, could we see a significant tightening across the industry in a matter of a couple of fleets going back to work? Or is there enough slack horsepower in the industry today to where we can absorb an uplift of a few fleets but not maybe 15 or 20?
Ladd Wilks: I definitely think that’s fair. It’s pretty nasty out there if you don’t have scale and if you don’t have the vertical integration that we do. I think our vertical integration allows us to absorb costs, dilute costs on a per compounder basis. It also means that we don’t have to cut corners or defer maintenance CapEx or anything like that. And I think this is the type of environment where you’ll see that with various players across the space where they’re deferring maintenance and potentially seeing a higher level of attrition than the historical norm. You add to that a bounce back in gas prices, and you could see a tightening of the market that goes beyond — a bit beyond the available horsepower. And with that, you do also see more simul fracs.
