Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) Q3 2023 Earnings Call Transcript

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William Zartler: If I think I understand your question right, I mean, we do have customers that have adopted the top fill and are very happy and that will be a continued part of their program for at least the future we can see. Most of those customers were existing Solaris customers, but several were not that have decided that this is the better long-term solution with the combination of our silos and the top fill unit. So I think the market is in — we’ve seen stable by most of the majors, with some that are a little lower and some are slowly increasing, but you’ve had some pretty decent swings in the private operators and the spot activity levels have been fairly volatile in the market over the last year. And so I think that’s driving maybe some of the swings that are less predictable.

Donald Crist: Well, yes, I guess the genesis of my question was, it feels like in past quarters you were much more influenced by rig count and frac crew counts, but it feels like you’re a lot less impacted these days given your increased offering.

William Zartler: Yes, I think we are penetrating with more revenue and margin per frac fleet. Number followed is probably pretty close to the market within some band.

Donald Crist: Okay, I appreciate the color, thanks.

William Zartler: Thanks, Don.

Operator: Our next question will be a follow-up from Stephen Gengaro with Stifel. You may now go ahead.

Stephen Gengaro: Thanks. Just a quick one. When you think about consolidation among the E&Ps and what we’ve seen recently, anything specifically or in general that impacts your share opportunities?

Kyle Ramachandran: Yes. I think just one quick comment here, and I’m sure Bill will have a view. As there’s continued consolidation, you’re entering into a more sophisticated buying decision, if you will, with the larger operators. And many of them looking for sort of nationwide service providers. I think what we’ve done, particularly over the last 12 months, is expanded our footprint. Rockies has been an area where we’ve grown significantly in the last year. So through consolidation, I think we continue to be seen as a Lower-48 service provider. We’re not a regional-based provider for a small sort of operation. So I think that, in some ways, plays for a favorite. But obviously, one of the things we’ve seen in different M&A context, there’s always puts and takes.

And sometimes referred to as cat people and dog people, people like different technologies, and so you have opportunities to win in those consolidation events and sometimes it comes at a bit of risk or loss. So it’s somewhat difficult to handicap in every situation. But on balance, I think we are established as a very well a mature service provider that can grow with the larger operators.

Stephen Gengaro: Got it. Great. That’s good color. Thank you gentlemen.

Kyle Ramachandran: Thanks.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Bill Zartler for any closing remarks.

William Zartler: Thanks, Anthony. I’d like to conclude our call by thanking all of our employees, our customers and suppliers for their continued support of Solaris. Our team has done a tremendous work in helping our customers realize the benefits of safer, lower cost, reliable automated solutions we provide. We remain constructive on the long-term commodity and North American outlook and are confident that we will continue to deliver on our earnings growth and cash strategy. Thank you. Stay safe.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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