Matt Zinn: We evaluate all our CapEx based on improving utilization or lowering cost structure. So improving reliability or lowering the cost of manufacturing. So that’s our key focus is where our demand is and where we can lower cost or improve reliability. So the places that we have growth opportunity are where we’re going to have the most bang for our buck.
Tom Curran: Got it. And then when it comes to utilization, could you tell us, one, where you exited the quarter at utilization-wise. And then two, from there to, let’s say, north of 70%, what do you expect the split to be between internal — feeding that ProFrac expected active fleet ramp? And then third-party sales. Again, in the ramp from where you exited utilization-wise to climbing north of 70% like you’re targeting?
Matt Zinn: Approximately 2/3 of the ramp is external customers and 1/3 of the ramp is internal, just rough numbers. We continue to see strong demand based on our footprint in the Permian with large operators that have drilling programs, completion programs that spread across the basin, and we continue to see strong demand as we’ve reached out to those customers about their operations.
Tom Curran: And at this point, Matt, would you say you’ve got all that demand in hand in whatever different forms it might exist, contracts, dedicated acreage, here mutual interest, whatever the nature of how you’ve secured that demand, you have it and it’s just a question of executing from here on the third-party side?
Matt Zinn: We have a line of sight, and we’re currently negotiating supply agreements as we speak, an assumption on a certain percentage of those being executed goes into that number. And then we’ll execute like we have for years and years.
Operator: Our next question comes from the line of Don Crist with Johnson Rice.
Don Crist: Just one question for me. I remember from past conversations that the utilization of the sand plants was somewhere in the 50-ish percent before you acquired performance. Is that pretty good kind of bogey to start with and kind of where do we think it’s going to go year-over-year as we kind of ramp towards that 65% to 75%?
Ladd Wilks: Yes, our historical utilization of our mines has been around that 50%. And we — as we’ve become more focused on third-party agreements, that’s where the ramp comes from.
Don Crist: Right. So we should expect somewhere in the 50% year-over-year kind of bogey for modeling purposes?
Ladd Wilks: Correct.
Operator: And this concludes our question-and-answer session. I would like to turn the floor back over to management for closing comments.
Matt Wilks: Thank you, operator. The takeaway today is that we are aggressively focused on growing value for all stakeholders. And we have a plan to get it done. We look forward to sharing our successes in the coming quarters as we increase utilization and drive improved results. We look forward to speaking with you again on our next call.
Operator: Ladies and gentlemen, thank you for your participation. This does conclude today’s teleconference. You may disconnect your lines, and have a wonderful day.
