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Edited Transcript of QES.N earnings conference call or presentation 7-Nov-18 3:00pm GMT

Q3 2018 Quintana Energy Services Inc Earnings Call

Nov 20, 2018 (Thomson StreetEvents) -- Edited Transcript of Quintana Energy Services Inc earnings conference call or presentation Wednesday, November 7, 2018 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Keefer M. Lehner

Quintana Energy Services Inc. - Executive VP & CFO

* Ken Dennard

Dennard Lascar Associates, LLC - Co-Founder, CEO and Managing Partner

* Rogers Daniel Herndon

Quintana Energy Services Inc. - CEO, President & Director

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Conference Call Participants

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* Andrew P. Stevenson

Stephens Inc., Research Division - Research Associate

* George Michael O'Leary

Tudor, Pickering, Holt & Co. Securities, Inc., Research Division - Executive Director of Oil Service Research

* Harris Newell Pollans

BofA Merrill Lynch, Research Division - Research Associate

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Presentation

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Operator [1]

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Greetings, and welcome to the Quintana Energy Services Third Quarter Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ken Dennard. Thank you, Mr. Dennard, you may begin.

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Ken Dennard, Dennard Lascar Associates, LLC - Co-Founder, CEO and Managing Partner [2]

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Thank you, operator, and good morning, everyone. We appreciate you joining us for the Quintana Energy Services conference call and webcast to review third quarter 2018 results.

With me today are Rogers Herndon, QES's President and Chief Executive Officer; and Keefer Lehner, Chief Financial Officer and Executive Vice President. Following my remarks, management will provide a high-level commentary on the financial details of the third quarter and outlook before opening the call for Q&A.

Before I turn the call over I have a few housekeeping details to run through. There will be a replay of today's call, it will be available via webcast on the company's website and that's quintanaenergyservices.com. There will also be a recorded replay available and that's until November 14. And more information on how to access the replay features were included in yesterday's earnings release.

Please note that information reported on this call speaks only as of today, November 7, 2018, and therefore, you are advised that time-sensitive information may no longer be accurate as of time of any replay listening or transcript reading.

In addition, the comments made by management during this conference call may contain forward-looking statements within the meaning of the United States Federal Securities Laws. These forward-looking statements reflect the current views of QES' management. However, various risks, uncertainties and contingencies could cause actual results, performance or achievements to differ materially from those expressed in the statements made by management.

The listener or reader is encouraged to read the annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K to understand certain of those risks, uncertainties and contingencies.

The comments today may also include certain non-GAAP financial measures, additional details and reconciliation to the most directly comparable GAAP financial measures were included in the quarterly press release, which can be found on the QES website.

And now with that behind me, I would like to turn the call over to QES's President and CEO, Mr. Rogers Herndon.

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Rogers Daniel Herndon, Quintana Energy Services Inc. - CEO, President & Director [3]

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Thank you, Ken, and good morning, everyone. Thank you for joining us today for QES's Third Quarter 2018 Conference Call. Yesterday, we reported third quarter 2018 consolidated revenue and adjusted EBITDA of $150.9 million and $12.9 million, respectively. The softness during the quarter in our Pressure Pumping division was the primary driver for the sequential drop in EBITDA and margin levels. While completions oriented results were generally disappointing, our Directional Drilling group continues to show significant improvement. I will provide more color for each segment and offer some preliminary thoughts for balance of the year and 2019, before turning the call over to Keefer to discuss our financial results in more detail.

In Pressure Pumping, we staffed 4 high-pressure spreads for the quarter. Total stages pumped came in at 908 for the quarter, which would imply demand for no more than 3 active spreads. Throughout the quarter, we worked through shifting competitive dynamics and customer schedules. We elected to maintain staffing levels in the near-term in order to be prepared for a more active calendar in the fourth quarter. We believe this was the right decision, as we've experienced recent improvements in our activity levels. I would emphasize that while margins and overall EBITDA contribution from Pressure Pumping was light in Q3, it did not come at the expense of working our equipment at unfavorable economics. It came from managing a sporadic calendar and electing to maintain the crews as we work towards a more constructive environment.

In contrast, we're very pleased with the continued improvement and performance in our Directional Drilling segment. QES continued to add market share, improve margins and modestly increase pricing, while overall rig count was generally flat. Active job days increased by 19% sequentially in the third quarter. The number of follow-me rigs increased by 11 and QES market share improved to 7.8%.

As we ended the third quarter, our number of rigs on revenue was over 80. The fourth quarter has started on a strong note, as we continue to create value for our customers through our performance, reliability and consistency in the field. This is achieved through a combination of our seasoned drillers and MWD engineers as well as our support teams in Willis and in the districts as we work with the customer on the planning and design of each well and deliver the highest quality equipment to location.

The market remained strong for high-performance drilling and we believe there's room for margin expansion through pricing and continued internal efficiency gains. As we prepare for 2019 with our customers, the general and consistent feedback points to planned rig adds in the New Year, some of which are very material. While we will be well positioned to add to our job count, we are as focused on improving margins as we are growing market share. This is an exciting time for QES Directional, and I want to say thank you to our customers for their trust and confidence and to our employees for their continued dedication required to deliver this differentiated level of equipment and service.

In Pressure Control, revenue and EBITDA levels were down as we managed through weather-related issues and softening completions activity. Revenue and EBITDA were also impacted by less well-controlled revenue in the third quarter, which is episodic and unanticipated, as we all know. We are still seeing strong demand for our large diameter coiled units. We were disappointed by the delayed delivery of both our new build 2 and 5/8 inch unit and our upgraded large diameter unit. We are currently in the process of completing inspections and taking delivery of both of these units. With the delivery of these units, we will have 10 units, 2 and 3/8 inch or greater. We expect these units to contribute to improving revenues and margins in Q4 and into 2019.

In Wireline, we were also impacted by weather and decreased utilization as completions activity softened. We've spent considerable time reviewing our performance and are in the process of making some material changes to reposition and narrow the focus of our core service offerings. Throughout the recovery, we've maintained our offerings broadly across conventional and unconventional activities. We can always reassess, but we are streamlining our operations and focus towards delivering the performance and utilization in the unconventional markets required to return our Wireline division to acceptable levels of profitability and returns. We expect the steps we are taking now will begin to deliver results by the end of the year.

Before I hand it over to Keefer to walk through the results in more detail, I would like to highlight that we were able to reduce our net debt position to just under $12 million as of the end of the third quarter.

This is important as we position for 2019 and assess opportunities to grow the platform organically and through consolidation.

I will offer more on that and some thoughts on 2019 in my closing remarks. Now, I will turn it over to Keefer.

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Keefer M. Lehner, Quintana Energy Services Inc. - Executive VP & CFO [4]

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Thanks, Rogers. Let's start things off with Directional Drilling. Our Directional Drilling segment results were up significantly compared to the second quarter of 2018. In the third quarter of 2018, our Directional Drilling segment posted revenues of $50.9 million, which was up 17% sequentially and up 32% from the third quarter of 2017. Compared to Q2 of 2018, we increased utilization by 18%, while price was up marginally. Rig days increased 19% sequentially, and increased 31% compared to the same period in 2017. For the third quarter of 2018, we had a total of 4,874 rig days and a monthly average of 77 rigs on revenue, of which 64 were follow-me rigs.

Adjusted EBITDA for the third quarter was $6.5 million, which was up 23% from the second quarter of 2018. Adjusted EBITDA margins for our directional business increased 65 basis points sequentially to 12.7% in the third quarter. We captured market share in all operating regions in Q3 with outsized gains in Appalachia and the Mid-Con. During the third quarter, we successfully drilled 400 wells for 46 customers across 30 different target formations. While the overall horizontal rig count remained largely flat during Q3, we were able to increase market share to 7.8% and exited the quarter on over 80 rigs in September. As we stated previously, we feel that top tier E&P operators are emphasizing the use of premium Directional Drilling providers, along with high-spec rigs in order to deliver improved efficiencies and returns. This trend bodes extremely well for QES' directional business, as we have a long successful operating history with many of the premier E&P operators. We also continue to focus on driving margin improvements via pricing, supply chain optimization and efficiency gains. We believe these measures, along with our continuing deployment of additional kits, will ideally position the segment during the coming quarter and into 2019.

Now moving to Pressure Control. Our Pressure Control segment generated total revenues of $31.1 for the third quarter of 2018, which was down 2.6% sequentially, but up 38% year-over-year. The sequential decline in revenue was driven largely by decreased well control activity and weather-driven scheduling issues. We experienced increases in pricing for our 2 largest service lines, coiled tubing and snubbing and demand for large diameter coil remains robust. Given the postponed delivery of the 2 large diameter units that Rogers mentioned earlier, their revenue and EBITDA contribution will begin later in the fourth quarter.

Pressure Control adjusted EBITDA in Q3 was $4.4 million and our adjusted EBITDA margin showed a sequential contraction from 17.5% in Q2 to 14.2% in Q3 of 2018. The margin decrease was largely driven by the aforementioned reduction in high-margin well control activity and a handful of operating days lost to weather issues.

Now moving on to Pressure Pumping. Our Pressure Pumping segment revenue posted a sequential decrease due to prevailing market headwinds, driving heightened competition in the frac market. As a result, there was considerable detrimental impact on both utilization and pricing during Q3. With that being said, based on our current frac calendar, we do expect QES Pressure Pumping frac activity to increase during Q4. The Pressure Pumping segment generated total revenues for the quarter of $50.9 million, reflecting a 12% sequential decline and a 27% gain over last year's third quarter. For the third quarter of 2018, Pressure Pumping fracked a total of 908 stages compared to 945 stages in Q2 of 2018 and 636 stages in Q3 of 2017. The decrease in stages compared to Q2 was driven by lower utilization of our 4 spreads. In addition to declines in utilization, our average revenue per stage decreased 11% sequentially, driven by the aforementioned competitive pressures.

Adjusted EBITDA for the third quarter was $5.8 million. Adjusted EBITDA margins for Pressure Pumping were down roughly 4 percentage points sequentially, falling to 11.6%. The decrease in adjusted EBITDA margins was primarily driven by prevailing market dynamics, driving lower pricing and utilization. Additionally, we were burdened with the cost of our largely unutilized 4 spread, which we elected not to lay down in anticipation of an increased workload that has manifested in early Q4.

We ended the quarter with 267,000 total hydraulic horsepower and 244,000 hydraulic horsepower dedicated to our conventional and unconventional frac operations. As Rogers mentioned, we currently have all 4 spreads working in the spot market and this type of work subjects us to a greater degree of volatility relative to short-term changes in pricing.

To counteract these issues, we continue to work with our customers to mitigate scheduling changes and achieve greater uptime in operating efficiencies going forward. While our current frac calendar calls for much improved utilization over Q3 levels, we still expect the current macro market dynamics to persist into Q4 and early 2019.

Lastly, we'll close out the segment discussion with Wireline. The Wireline segment experienced challenges during the third quarter, driving sequential declines in revenues and adjusted EBITDA. Wireline revenue for the third quarter was $18.9 million, which was down 7% sequentially, but up nearly 50% from the third quarter of 2017.

From Q2 to Q3, we experienced a 2% decline in revenue days and a 5% decline in day rate. Wireline adjusted EBITDA for the third quarter of 2018 was a loss of $700,000. Our embedded operating leverage of our business worked against us this quarter as revenues declined and adjusted EBITDA margin fell into negative territory.

As Rogers mentioned, we spent considerable time reviewing our recent results and performance and are in the process of making some material changes to refocus and reposition the service offering. We expect these efforts to begin to translate into improved results by the end of the year.

Now I'll turn to our consolidated results. For the third quarter of 2018, revenues were $150.9 million, representing a 1% sequential decline and a 33% improvement year-over-year. Consolidated G&A expenses were $22.5 million, reflecting a flat sequential comparison and a 21% increase from last year's third quarter. The year-over-year increase in G&A expenses was primarily due to the noncash stock compensation expense of $2.6 million, increased headcount as well as higher admin and service expenses now that we are a publicly traded company.

Consolidated adjusted EBITDA was $12.9 million in the third quarter of 2018. This was down about 28% from $17.9 million in Q2 of 2018, but up 90% from Q3 of 2017. Third quarter interest expense was $574,000, which was up from $433,000 in the second quarter and down from $2.9 million in the same period in 2017. The sequential increase in interest expense was primarily due to increased average borrowings under our revolving credit facility during Q3.

The provision for income taxes in the third quarter of 2018 was $207,000 and related primarily to state margin taxes. Our effective tax rate for Q3 was approximately negative 4%. Going forward, we would expect our cash tax exposure to be comprised primarily of the state-level taxes.

Now I would like to briefly discuss our balance sheet, cash flow and liquidity position. During the third quarter, operating activities provided cash of $25 million, while investing activities used cash of $9 million. Capital expenditures totaled $11.9 million during the third quarter of 2018 compared to $28.8 million in the second quarter of 2018 and $4.8 million in the third quarter of 2017. Approximately 59% of capital spending during Q3 was growth oriented, while the remainder was tied to the ongoing capitalized maintenance of our existing equipment fleet. Also with the 2 coil tubing units flipping to the right, those expenditures will now appear in Q4. Year-to-date, we've spent $53.1 million on CapEx, and our CapEx forecast for the remainder of the year calls for $18.5 million to $21 million of CapEx, of which $4 million to $5 million is earmarked for the additional large diameter coil tubing capacity.

We ended the third quarter with a total debt balance of $30 million and $22 million of cash on hand, yielding a net debt balance of $11.9 million, when you include capital lease obligations. This compares very favorably with our second quarter net debt balance of $22.8 million. We ended Q3 with $48 million of net availability under our revolving credit facility and total liquidity of $70 million. We expect to draw on the facility during Q4 to help fund growth capital spending for the coiled tubing units as well as the corresponding increase in working capital.

With that, I'll turn the call back over to Rogers, to provide some additional color on our outlook for the remainder of 2018 and early 2019. Rogers?

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Rogers Daniel Herndon, Quintana Energy Services Inc. - CEO, President & Director [5]

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Thanks, Keefer. Before taking questions, I would reiterate that, while the completions market is still soft, we are seeing improvements in the fourth quarter. And as 2019 evolves, we expect fundamentals will improve and allow us to resume revenue and margin growth across all of our segments and realize the benefit of our added fourth Pressure Pumping spread as well as the 2 additional large coil units. The positive momentum we are seeing in our Directional Drilling segment highlights the benefit of QES' diversity across service offerings. We are very interested in opportunities that would add size and scale to our existing services as well as adding to our offerings, building on our diversified model. Our track record in achieving synergies and integrating operations, along with our balance sheet strength, positions QES to be successful in this area. In addition to achieving the day-to-day operational objectives, these are the strategic initiatives that our team is focused on to unlock the value potential for QES shareholders.

With that, we'll now take your questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of George O'Leary with Tudor Pickering Holt & Co.

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George Michael O'Leary, Tudor, Pickering, Holt & Co. Securities, Inc., Research Division - Executive Director of Oil Service Research [2]

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On the Wireline side, the commentary was interesting that you guys may consider moving away from conventional. It sounds like, given the fact that you mentioned the profitability could improve by the end of the fourth quarter, there's a clear plan that's already set in motion there. If you could just walk us through what all that shift entails to that business? And how you go about that from an operational and logistics standpoint?

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Rogers Daniel Herndon, Quintana Energy Services Inc. - CEO, President & Director [3]

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Sure. George, we have generally, I'd say, we've been staffed and felt that there's been an opportunity to see increased activity and demand and ultimately utilization among our -- across our conventional offerings. And look, I just want to say that we do have a couple of locations that do well, that are focused on conventional activity and industrial activity, and that's the focus of those locations. And so we're not -- we don't plan to make significant changes there. Really, the changes will be in the Permian, in South Texas and to some degree in the Mid-Con, really focused on the higher utilization unconventional work, make sure that we're staffed appropriately for that work. When we have excess staffing and those crews aren't fully utilized, we'll -- we have the assets and we'll catch conventional work. But really just getting really focused. And over time, if we see the conventional market justify increased staffing levels then we're prepared to address that. But we've really sort of invested in a market opportunity that hasn't developed for us the way it needs to justify kind of our current approach. But yes, the steps are in place as we speak. And like we said, we should see that start to turnaround by the end of the year.

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George Michael O'Leary, Tudor, Pickering, Holt & Co. Securities, Inc., Research Division - Executive Director of Oil Service Research [4]

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Great. And apologies if I missed it -- I missed the commentary, but indicating that activity is already ramped in the fourth quarter for your Pressure Pumping business, which is good to hear, it's certainly a tough market out there. Just curious, if we think about the profitability of that business quarter-over-quarter, how pricing might impact those higher utilization levels for your fleet and how that might impact the margins? And then just more broadly, last say 2 quarters, it seems like spot prices have been under pressure. Do you feel like we're leveling out on Pressure Pumping pricing or is there still more to come on that front?

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Rogers Daniel Herndon, Quintana Energy Services Inc. - CEO, President & Director [5]

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Yes, let me, I mean, there is a lot in that question. Let me see what we can offer you here. First, I'd say, for us, the third quarter was very difficult, very challenging, just for a lot of reasons, just the way things lined up with our customers. Like we said, we made the decision to staff the 4 spread. In the short-term, if we had made another decision, if we had either not staffed it and laid it down very efficiently and quickly, or if we have taken some of work at margin levels that we weren't willing to take, our results would have been improved. But instead, we weren't going to take jobs at low to no margins; that could have probably benefited us on the staffing side. We elected not to do that and that's the discipline we will have going forward. What I'd say is that, yes, the decision looks to be the right decision as we sit today, thus far into the fourth quarter and as we look at our calendars. But the market is still difficult. I'd say pricing is -- I'm not sure I'd call it stabilized, because it's not really stable. You've got different players coming in with different motivations on a job-by-job basis. We're looking to lock up more work per time over a specified time or over a specified completions program. And so definitely -- look, if the quarter plays out the way we would hope and expect it to play out, margins would definitely improve. I mean, Keefer, what kind of color do you want to add to that. No, that's it. Hopefully that's helpful.

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Operator [6]

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Our next question comes from the line of Drew Stevenson with Stephens.

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Andrew P. Stevenson, Stephens Inc., Research Division - Research Associate [7]

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So kind of piggybacking on the last question as it relates to Pressure Pumping. That's helpful color that y'all have given so far. I just kind of want to dig in on what the key drivers have been and I guess, the uptick in activity levels that you've been seeing in the quarter-to-date period. Obviously, we've heard the issues coming out of the Permian. So I guess, what's been different in the Mid-Con for y'all, and kind of what do y'all see happening through year-end?

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Rogers Daniel Herndon, Quintana Energy Services Inc. - CEO, President & Director [8]

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Yes. Look, I just want to say that what we're seeing in the Mid-Con, it isn't a result of some rabbit we pulled out of the hat or some big shift in the market dynamics. It's probably more result of how poorly the third quarter played out for us. I don't think the fourth quarter is going to play out in a way that isn't what we would have expected the third quarter to play out. We just had some gaps in our schedule, some challenges with customers and some competitive dynamics. So I don't really have a lot more to say on that, I don't think.

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Andrew P. Stevenson, Stephens Inc., Research Division - Research Associate [9]

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No, I totally understand. That's helpful. Switching gears to Directional Drilling. The quarterly results were clearly impressive there. From y'all's end, what's been working in terms of continuing to take market share and enhance margins? And what are y'all going to keep doing to make sure that, that keeps working through year-end and then into 2019?

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Rogers Daniel Herndon, Quintana Energy Services Inc. - CEO, President & Director [10]

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Yes. Drew, the main thing that we've been doing that we've been consistently doing over time is performing in the field. And so I think like Keefer mentioned that we've added rig count and market share in the Rockies and the Mid-Con, and what I'd say is, we have made meaningful progress there. In order to do that, and those were areas that we specifically targeted. We had opportunities there. You have to earn your way into the new customers. You get 1 rig, you prove your performance, you typically would get another rig and then, once they have a quality -- a comparative performance baseline, then you can get into a quality discussion around pricing. And that's where we are now with several of those customers. The other thing I would just point to is that we offer our overall market share, but I just kind of offer this, that if you look at the top operators in the market today, our market share is higher for those operators. So on the cost side there are continued things that we can do. We continue to invest in our high performance motor fleet. We want to bring rental expenses down across the board. We're looking at automation in our machine shop. All kinds of things with quick payback that we'll continue to do to improve margins and then we're just going to continue to push pricing and we've got high demand offering.

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Andrew P. Stevenson, Stephens Inc., Research Division - Research Associate [11]

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No, that's helpful color and I would say the results are clearly indicative of the great work y'all are doing.

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Operator [12]

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Our next question comes from the line of with Chase Mulvehill with Bank of America Merrill Lynch.

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Harris Newell Pollans, BofA Merrill Lynch, Research Division - Research Associate [13]

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It's actually Harry on for Chase. Just to kind of turn pages here. If you look at 2019 and free cash flow, what sort of color y'all can give on kind of your outlook there? I know it's early right now, but just going forward you generated some nice free cash this quarter, mostly from working capital. But nice to see that. And I think in the last call you mentioned that you'd start to generate some free cash towards the end of this year, how is that kind of shaping up?

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Rogers Daniel Herndon, Quintana Energy Services Inc. - CEO, President & Director [14]

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Let me take the initial crack at this and I'll let Keefer add. Some of the moving pieces that you're trying to get your hands around. First would be growth CapEx. We had a pretty aggressive growth CapEx plan for 2018. We added the 4 spread, we added what ended up being 3 large diameter coil units. Look, I would expect right now our growth CapEx plan will come down from that level, which was roughly around $40 million. And we'll probably take a more measured approach and maybe look to see some growth opportunities in DD, continue to see opportunities in Pressure Control, but probably have some initial plans on the board and then reassess quarter-to-quarter on that. In terms of broader 2019 outlook, that -- we don't provide that outlook. But I just -- I want to provide some context, some base context and maybe you can work with this. And that is, if you look at our trailing 12-month adjusted EBITDA, our trailing 12-month adjusted EBITDA comes in at about $65 million. And then you say, okay, well, let's kind of think about that and look forward. Well, that does not include any contribution from the 4 spread we added in very late June. In fact, if you look at the third quarter, it probably includes a drag from that investment and we would expect that to change going forward. It doesn't include the 2 large coil units that are being delivered basically real time now. And the third unit was delivered in July. So really doesn't include much benefit from those 3 large diameter coil units. DD, we've talked about DD. DD is in much better position coming out of Q2 and Q3 as it relates to that broader trailing 12 months. And then Wireline, really no meaningful contribution from Wireline in '18, and we would expect that to turn around. So look, I don't want to try to predict what '19 holds. But we believe it will be fundamentally constructive. And hopefully, that gives you some framework there.

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Harris Newell Pollans, BofA Merrill Lynch, Research Division - Research Associate [15]

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That's really helpful. Going back to Pressure Pumping. What's kind of your strategy as far as dedicated versus spot fleets. I know it's been kind of a mix in the past and looking out to early '19 and 4Q, what's kind of your conversations with customers there?

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Rogers Daniel Herndon, Quintana Energy Services Inc. - CEO, President & Director [16]

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The conversation is -- we're active in those conversations, that's what I would say. We -- a fair amount of the current work we're doing now is not what I would call dedicated, but it is for a duration. Either a duration of jobs or completions or a duration of time, but not super long tenure, 6 months to maybe less than a year. But yes, we're in conversations around dedicated spread. We see a lot of benefit to both parties under the dedicated model in terms of alignment around efficiencies. And so we are not -- we're not set or aligned or committed to be in a 100% spot. We do think there's potential for meaningful upside in that position. We don't want to give that upside away through entering into a dedicated agreement here at the bottom. And so I just want to be thoughtful. But we wouldn't have any problem seeing our mix go 50-50, somewhere in that range.

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Harris Newell Pollans, BofA Merrill Lynch, Research Division - Research Associate [17]

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Okay, and that's kind of your goal -- your ideal goal is 50-50 or?

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Rogers Daniel Herndon, Quintana Energy Services Inc. - CEO, President & Director [18]

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Look, that would be a spot I think we would be comfortable with. We're not going to force ourselves into a 50-50 spot, if the prices and contractual arrangements don't work.

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Harris Newell Pollans, BofA Merrill Lynch, Research Division - Research Associate [19]

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Okay. One last one on the free cash question. Do you guys have any internal goals as far as free cash flow to get to eventually or metrics that we should be looking at?

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Keefer M. Lehner, Quintana Energy Services Inc. - Executive VP & CFO [20]

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Yes. This is Keefer. I think from an internal perspective, we're certainly always looking to maximize free cash flow. We think that in turn maximizes our flexibility as we evaluate growth, whether it's organic growth or M&A opportunities.

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Operator [21]

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There are no further questions at this time. I would like to turn the call back over to management for any closing remarks.

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Rogers Daniel Herndon, Quintana Energy Services Inc. - CEO, President & Director [22]

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Thank you, operator, and thanks to everybody for again joining us on this call, for your interest in Quintana Energy Services. And we look forward to talking to you again next quarter.

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Operator [23]

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Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines. And have a wonderful day.