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Nine Energy Service, Inc. (NINE) Q2 2018 Earnings Conference Call Transcript

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Nine Energy Service, Inc. (NYSE: NINE)
Q2 2018 Earnings Conference Call
Aug. 13, 2018, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the Nine Energy Service, Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Ms. Heather Schmidt, Director of Investor Relations. Thank you. You may begin.

Heather Schmidt -- Director of Investor Relations

Thank you. Good morning everyone and welcome to the Nine Energy Service earnings conference call to discuss our results for the second quarter of 2018. With me today are Ann Fox, President and Chief Executive Officer; and Clinton Roeder, Chief Financial Officer. We appreciate your participation.

Some of our comments today may include forward-looking statements reflecting Nine's views about future events. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations.

We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. Our comments today also include non-GAAP financial measures, additional details and a reconciliation to the most directly comparable GAAP financial measures are also included in our second quarter press release and can be found in the Investor Relations section of our website.

I will now turn the call over to Ann Fox.

Ann Fox -- President and Chief Executive Officer

Thanks, Heather. Good morning, everyone. Thank you for joining us today to discuss our second quarter results for 2018. We had another strong quarter of growth exceeding the midpoint of management's revenue guidance by approximately 8%, and the midpoint of adjusted EBITDA guidance by approximately 9%. This was once again due in large part to a strong financial and operational performance in Completion Solutions.

Company revenue for the quarter was $205.5 million, an approximate 18% increase over Q1 and adjusted EBITDA was $30.6 million, an increase of approximately 27% over Q1. Incremental adjusted EBITDA margins for the company were approximately 21% and incremental adjusted gross profit margins in our Completion Solutions segment were approximately 19%.

This puts our year-to-date revenue growth at approximately 33% and adjusted EBITDA growth at approximately 64% over Q4, 2017.

Throughout the first half of the year, we have seen activity and price increase across all of our Completion Solutions service lines as well as a significant increase in our stages completed within completion tools. This is a consequence of both the current trends we are seeing in completions with longer laterals, more stages, and multi-well pad development that has directly benefited Nine, as well as our team's ability to execute at the field level.

This growth has come through activity and market share gains, especially within cementing and wireline with number of jobs completed for cementing increasing approximately 32% year-to-date and number of stages completed for wireline increasing approximately 39% year-to-date. We have also seen strong pricing traction in wireline, increasing approximately 16% year-to-date and continued penetration for our completion tools with number of stages completed increasing approximately 66% year-to-date.

I want to acknowledge Nine's incredible operations and sales team who have enabled these results in the field and have worked in concert with our customers to provide customized solutions that drive efficiencies and faster cycle times.

ROIC for the second quarter was 8%, up 500 basis points over Q1 ROIC of 3%, and currently sits at approximately 6% for the first six months of 2018. We remain on track to hit our full year 2018 target of 8%. I will discuss takeaway capacity concerns with Q3 guidance, but I also want to address another significant bottleneck within oilfield services which is labor.

During Q2, we increased our headcount by approximately 7% which mirrored Q1. And since the end of 2017, we have added over 250 incremental employees and increased our headcount by approximately 14%. Additionally, we estimate approximately 10% to 15% in wage inflation costs have been implemented for our non-corporate employees across the company in the first half of 2018.

This is on top of approximately 16% wage inflation for the entire company in 2017. We anticipate the majority of 2018 wage inflation has been realized during the first half of the year and clearly accounts for a great deal of additional costs, especially with onboarding, training costs, and benefits. These new employees have come on now to allow us to increase utilization within our existing equipment and prepare and train for the deployment of growth CapEx during the second half of 2018.

At Nine, we think about navigating labor constraints in many ways. First, we uniquely benefit from our industry trends, and continue to see internal efficiencies increase with our average stages per employee per month in Q2 averaging approximately 14.7 stages, an increase of approximately 40% over 2017, and an increase of 160% over 2014.

We anticipate this trend continuing as more operators transition to manufacturing mode on their multi-well pads. We also put a conservative 2018 CapEx program in place to avoid compromising service quality for our customers and impeding Nine's reputation.

We believe strongly the quality of the crew is essential to maintaining trust with our customers and we will not chase jobs or put equipment to work without the properly trained people. We are confident we will be able to staff our new units with quality employees and put them to work with the plan we have in place.

Additionally, we have a differentiated culture that recognizes and rewards hard work, innovation, and grit. It is imperative that employees are recognized for these characteristics and can benefit in the growth and success of Nine. Because of this, we have and will continue to provide equity awards throughout the organization, down to the field level to ensure alignment and retention within our key employees. We know our employees drive value for Nine and are vital to our growth moving forward.

Lastly, we remain focused on growing our completion technology offering. This is also a part of our approach to having a balanced portfolio of capital intensive businesses like coil and cementing with capital-light businesses including completion tools and wireline. Completion tools requires minimal CapEx and labor and will be an important focus for Nine moving forward.

Our unique strategy has not changed regarding the acquisitions of these technologies, and our next quarter call will include an update on some of our most recent technology field trials.

We were extremely pleased with the continued growth and performance this quarter. I remain confident in the team we have in place and our positioning in the market as a completions company offering cutting-edge technology with reliable and efficient conveyance services.

With that, I would like to turn the call over to Clinton to walk through segment and other detailed financial information as well as provide an update on equipment, timing, and CapEx.

Clinton Roeder -- Senior Vice President, Chief Financial Officer

Thank you, Ann. In our Completion Solutions segment, second quarter 2018 revenue totaled $185.1 million, an increase of approximately 20% compared to first quarter revenue of $154.6 million. Second quarter 2018 adjusted gross profit was $39.1 million, an increase of approximately 18% over Q1.

During the second quarter of 2018, we completed 1,039 cementing jobs, an increase of approximately 11% over the first quarter. The average blended revenue per job increased by approximately 5%. Cementing revenue for the quarter increased by approximately 17%. We expect to receive delivery of one single pump and one double pump spread in Q3 and one single pump and one double pump spread in Q4.

During the second quarter of 2018, we completed 10,129 wireline stages, an increase of approximately 25% versus the first quarter. The average blended revenue per stage was relatively flat. Wireline revenue for the quarter increased by approximately 22%. We received two incremental growth capital wireline units toward the back half of Q2, and we anticipate receiving two incremental wireline units from the back half of the year.

For completion tools, we completed 16,807 stages, an increase of approximately 34% versus the first quarter. Completion tool revenue increased by approximately 49%.

During the second quarter of 2018, our coiled tubing days were increased by approximately 11%. The average blended day rate for Q2 was relatively flat. Coiled tubing utilization during the second quarter was 87%, an increase of approximately 10%. Coiled tubing revenue increased by approximately 8%.

We took delivery on one incremental 2-5/8" unit toward Q2 and expect the conversion of our 2-3/8" unit to be completed in Q3.

In our Production Solutions segment, second quarter 2018 revenue totaled $20.4 million, an increase of approximately 6% compared to first quarter 2018 revenue of $19.2 million. Adjusted gross profit for the second quarter was $2.8 million compared to first quarter adjusted gross profit of $2.4 million, an increase of approximately 18%.

During the second quarter, well services had utilization of 62%, which was flat. Total rig hours for the quarter was 48,144, an increase of approximately 4%. Average revenue per rig hour during the second quarter was $423, an increase of approximately 2%.

During the second quarter of 2018, the company reported net income of $9 million or $0.37 per diluted share compared to net income of $1.7 million or $0.08 per diluted share in the first quarter of 2018. The company reported selling, general and administrative expense of $16.1 million compared to $15.4 million for the first quarter.

This increase was largely due to an increase of stock-based compensation. Depreciation and amortization expense in the second quarter was $15.1 million compared to $15 million in the first quarter.

During the second quarter of 2018, the company's effective tax rate was 6.7%. The effective income tax rate for the quarter was primarily attributable to changes in pre-tax book income and valuation allowance positions as well as tax liability in states where income is expected to exceed available net operating losses.

During the second quarter, the company reported net cash provided by operating activities of $7.9 million compared to $17.3 million in Q1. DSO for the second quarter was 59 days compared to 57 days in Q1, contributing to the accounts receivable build [ph] over Q1. We remain under 60 days for the first half of 2018 and we will be focused on getting this number back down in Q3.

Total capital expenditures were $11.6 million of which approximately 28% was maintenance CapEx. This compared to total capital expenditures of $6.5 million in Q1.

As of June 30, 2018, Nine's cash and cash equivalents totaled $70.9 million. With a revolver capacity of $49.3 million, Nine's total liquidity position was $120.2 million on June 30, 2018.

And now, I'll turn it back to Ann to discuss Q3.

Ann Fox -- President and Chief Executive Officer

Thank you, Clinton. As we look ahead to Q3, we anticipate the seventh sequential quarter of growth for both revenue and adjusted EBITDA. We expect total revenue between $208 million and $216 million and consolidated adjusted EBITDA between $34 million and $37 million. The midpoint of this range implies approximately 16% adjusted EBITDA growth quarter-over-quarter and adjusted EBITDA incremental margins of approximately 75%.

Completion Solutions is expected to be the driver of growth for the company through organic market share gains, better Canadian market condition and the addition of capital equipment in cementing and coiled tubing. The company continues to progress and grow as we anticipated.

I would like to address concerns around Permian takeaway capacity. We have not received any indication from our customers of a potential slowdown in activity and with what we know today, do not see any significant impact on our business throughout the remainder of 2018. We understand the situation is dynamic and these circumstances can change. We will continue to monitor and communicate with our customers, but we feel confident that the operators we work for are prepared for takeaway challenges and will remain on track with our current 2018 budget.

We have purposely maintained a broad North American footprint with exposure to every major basin in the US today, as well as selected into service lines driven less by equipment capacity and more by performance and value proposition. We continue to prove sustainable value by increasing efficiencies and helping our customers realize faster cycle times and lowering overall well costs.

As operators continue to concentrate risks and spend with multi-well pads, extended laterals, and more stages, service selection for reliable downhole technology and conveyance providers has become critical for meeting production targets and ensuring safe and efficient operations.

The Permian will remain an extremely important basin for Nine and we are committed to servicing our customers for the long term. We are working closely with them on their long term plans and will not change or shift our strategy out of the Permian for what we will see as a temporary constraint. The Permian is one of the most prolific basins in the world as many of the largest E&Ps have made significant long-term investments in the play and we will continue our relentless focus on gaining market share there.

We continue to look at potential M&A and organic growth opportunities. We remain on track to meet our 2018 ROIC target of 8%. I will continue to reiterate Nine's focus on being good stewards of capital and how seriously we take the partnership with all of our constituents.

Before we open it up for Q&A, I want to welcome Darryl Willis to Nine's Board of Directors. We are honored and excited to bring Darryl's unique perspective as a 25-year veteran within Oil & Gas to Nine. Darryl currently serves as Vice President at Google Cloud and was recently highlighted in a Wall Street Journal for helping forge relationships between Silicon Valley and the energy industry to drive technology and better utilize data. We are confident he will be invaluable to the future growth at Nine both through his leadership abilities and technology expertise.

We will now open up the call to Q&A.

Questions and Answers:

Operator

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Our first question comes from the line of Sean Meakim with JP Morgan. Please proceed with your question.

Sean Christopher Meakim -- JP Morgan -- Analyst

Thanks. Hey, good morning.

Ann Fox -- President and Chief Executive Officer

Good morning, Sean.

Sean Christopher Meakim -- JP Morgan -- Analyst

So Ann, the volume growth has been very impressive. And so I thought maybe we could just spend a little more time digging into the margin progression as we go through the rest of the year. You highlighted in your prepared comments, labor inflation seems to be even more front-end loaded this year. I guess, given all the ancillary cost tied to recruiting and training, so maybe you could just help us think about the puts and takes in the back half of the year around pricing, operating efficiencies, and then perhaps some of these labor costs that you're still concerned about. How we think about that progression on the margin side for the back half of the year?

Ann Fox -- President and Chief Executive Officer

Sure. So I would tell you that we're anticipating good margin progression in Q3 and a lot of that as I said earlier that wage inflation was very front loaded in H1 '18. So where we did not anticipate, Sean, is coming into 2018, we thought we'd taken the majority of that wage inflation in 2017. We certainly didn't anticipate being this aggressive with unemployment already in the US and the 3.9% is certainly one metric, but when you look at unemployment rates among men in the US, it's 3.4%.

So I think we underestimated the pressure that would put on the wage inflation. We're pretty confident this year we've taken that. I do think as an industry that's going to come in fits and starts if we continue to see pressure on the unemployment number, we're also obviously seeing consumer price index move. So I think we're just generally in an inflationary environment. And again this industry, the last time we saw a boom was used to unemployment rates up over 8%. So this is new for us, and I think we'll see it be lumpy but for this team, we're not anticipating those increases, those similar increases in H2 '18, that's going to help the margin quite a bit.

On the churn side, the hiring, we have added year-to-date 14% of our new employees, but the challenge for Nine which continues to be a challenge is that we've got 60% to 65% churn rate at the short service employee level. So that means that we're spending a lot of money on on-boarding and training that's impeding those financials. That will continue. We have forecasted that to continue. So again, I anticipate a nice margin uplift that you'll see in Q3 and Q4.

The other issue is, we're continuing to step into efficiencies with our customers. The Permian Basin is still in what I would call the second inning of the multi-well pad environment. So if you look at the Northeast, you've got kind of 5 to 6 wellheads on average per pad. We're seeing really more about three in the Permian. And as you know, they were slow to start even in their move from vertical to horizontal. So we see that as a very good forward trend for the company and that will continue to drive margin as well as the stage counts and as lateral length continuing to extend.

So all of that is a really great set up for us for the back half, we've had 66% growth in completion tools year-to-date. We expect good and continued market penetration in completion tools. We've added, about 20% of our customer base is new, just this year after tremendous customer growth last year. So again, when you can save a customer $150,000 to $200,000 per well just because you can drill out 120 plus of your plugs with one drill bit trip, those are all the things that are driving this business.

So we're excited about where we see the margin going in Q3 and I would also say in Q4.

Sean Christopher Meakim -- JP Morgan -- Analyst

Thank you for that feedback. I think that's really helpful. I wanted to maybe drill on a little bit more on that, on the completion tools portion. To some degree that's going to dovetail into the margin story to the extent that your completion tools business which has a stronger margin profile likely picking up, some of the -- some positive mix.

Could you maybe just give us a little bit more detail, like, I'm looking for some granularity on how much of the share gains that you are seeing are being driven by new customers versus greater wallet within your existing customers, and I know it's -- we have to wait another quarter for a proper update on the field trials, but I was curious if there's any teaser you can offer us with respect to the timeline there?

Ann Fox -- President and Chief Executive Officer

Sure. So I am going to punt the back half of that question to Q3 because we've consistently said we'll update on field trials in Q3, but again we've made, I think, great progression on -- as you would call it, increasing the wallet within existing customers. We've been very pleased with that and that's because particularly on the isolation tools, the drill out were just saving so much time and as you know, time is money and like I said on average per well, we're seeing just on the drill out of $150,000 to $200,000 savings.

We saw one of our operators come out and talk about $400,000 of savings per well with completion tool and completion conveyance efficiencies. So again, 20% new customers and also great organic growth within our existing customers. So I'm not sure what other detail you're looking for Sean, I'm happy to provide it if for some reason I didn't answer your question.

Sean Christopher Meakim -- JP Morgan -- Analyst

No, I think you did, I was looking for generally the trend [ph] of new versus existing customers and then specifically which product lines are helping you to drive those shares, (Multiple Speakers) --

Ann Fox -- President and Chief Executive Officer

I will say, year-to-date the trend has been better than we had anticipated and we expect that going forward.

Sean Christopher Meakim -- JP Morgan -- Analyst

Got it. Great. Thank you, Ann.

Operator

Thank you. Our next question comes from the line of James Wicklund with Credit Suisse. Please proceed with your question.

James Wicklund -- Credit Suisse -- Analyst

Good morning, guys.

Ann Fox -- President and Chief Executive Officer

Good morning.

James Wicklund -- Credit Suisse -- Analyst

A little bit along the same lines of the cementing and wireline and coil tubing, you're adding capacity, you got a couple more units do in the couple of those lines through the rest of this year. Activity is not going through the roof, so that would assume you're displacing someone. Are these regional moms and pops that you're gaining market share on or that you're displacing especially in those areas or are these bigger guys who aren't paying attention or can you talk about how, other than the fact that you're just damn good now, how are you and who are you displacing in the field with your gains in market share?

Ann Fox -- President and Chief Executive Officer

I would say a lot of it is big folks, I think we saw the majority of the micro's mom and pop fall off a while back, and that is just because again in the multi-well pad environment these operators are concentrating risk and the legitimacy of that very large small mom and pop community that existed in '13 and '14 has just gone more by the way side. I mean they're always what I'll call ankle biters, but they are there, everyday willing to do work at a very low cost. The problem is if you know, you can go to embark on a coil job and it's one ticket price that can quickly turn into for an operator $1 million if it goes badly.

So the cost of picking cheap Charlie on the front end is pretty ginormous for these operators. I would say most of our operators have been focused on total cost of ownership versus on a unit cost basis, and so to answer your question, a lot of big folks we're displacing, 70% of our Permian revenue, over 70% of it comes from 6, what I'll call very large E&Ps and the other 30% comes from pretty large public E&Ps.

So we think we're working for the biggest, best, most efficient, they keep us on our toes, they challenge us, we challenge them, and I think collectively we are getting better as we work with them to find out solutions, not just for nonproductive time, but also flat time. So, if you've got 15 minutes of flat time on a wellhead, because you're reheading your cable, how do you get rid of that? How do you reduce that? I mean we're really measuring this stuff in micro increments now, Jim.

So those folks that aren't there and can't do that and can't do it consistently, just don't have a place at the table.

James Wicklund -- Credit Suisse -- Analyst

Excellent. That's very helpful. And my follow-up if I could. You had mentioned that you have a relentless focus on gaining market share in the Permian, and you follow that right away with talking about being good stewards of capital and aiming at 8% ROIC. The concern about gaining market share at the expense of margins has played with couple of companies in this space here of late. How do you balance that relentless focus with the good steward and the ROIC? And I know it's an obvious question, but which one wins?

Ann Fox -- President and Chief Executive Officer

Yes. So obviously with Nine, ROIC is always going to take precedence. We are big believers of the very comprehensive metric, and that will drive the business. When we think about, specifically your question about gaining market share in the Permian relative to price and value, again our value proposition is not driven and our pricing is not driven by capacity constraints or a lack of it.

So it's not just how much of the equipment is at surface, but it's really completion intensity. So whether it's PacWest or Spears, 18% to 32% stage count growth from '17 to '18, those are the type of metrics that we look at, what's happening with the lateral links, what's happening with the stage counts, what's going on downhole, so it's not just the number of completions, but it's really how are we effecting the completions downhole. So that helps us deploy equipment and drive margin on both for our operators as well as ourselves.

So it's not as simple of an argument, it's kind of spot pricing for additional frac capacity. I think also Jim, when you step back on the broader market and you kind of think about 10.8 million barrels a day or so coming out of the US, 31% to 32% of that coming from the Permian, we've got about 1 million barrels coming on by the end of '19, a big chunk of that's going to come from the Permian.

Now obviously, we've got the takeaway constraints that the market seems to be dealing well with as far as accelerating the Sunrise and Cactus II ramp, but this is a critically important basin and the (inaudible) is huge, we were 13% of global spend the last year, we're already going to be estimated to be 18% of that spend this year.

So if we weren't so confident that North American shale is going to be a critical piece of this supply game, then maybe we'd be less bullish on that basin, but it's prolific, it's necessary Nine is not going anywhere, we are going to stay the course out there.

James Wicklund -- Credit Suisse -- Analyst

Ann, thank you very much. Well done. Thank you.

Ann Fox -- President and Chief Executive Officer

You're welcome.

Operator

Thank you. Our next question comes from Jud Bailey with Wells Fargo. Please proceed with your question.

Judson Bailey -- Wells Fargo Securities, LLC -- Analyst

Thanks, good morning.

Ann Fox -- President and Chief Executive Officer

Good morning, Jud.

Judson Bailey -- Wells Fargo Securities, LLC -- Analyst

Hey. A question just to circle back on another, I guess another margin question. Ann, if you could maybe give us some color -- the different product lines maybe within Completion Solutions. Are there any margin trends that are notable in terms of ones that may be performing better than expectations or ones that may be underperforming due to some of the cost inflation you highlighted or other issues, just be curious to get your sense of how to think about the margin trajectory within the various product lines.

Ann Fox -- President and Chief Executive Officer

Yes, I would say the one that's most differentiated is certainly completion tools because you just don't have a labor component. So if you think about the fact that we're at 3.9% unemployment diving down to maybe 3.6% according to the Fed next year, that's going to continue to tighten, it will continue to be a bad problem for the industry. So that's why we're focused on increasing the profile of our revenue and shifting more of it toward completion tools. So that one Jud, is going to be very differentiated from a margin perspective because you don't have the labor component with wage inflation beating against it.

The wireline, cementing, coil, all very nice margins, I'm very pleased with that. I would say on the production side, we see that as remaining fairly flat. I would also say with the way that we're developing the Delaware Basin as an industry, we could see workover completions activity coming down in the future and starting to see those wellbores filled up with degradables or dissolvables really reducing the safety factor from frac hits out there.

So that would be the one service line I would see when I look into the future relatively flat from where we are due to the fact that we don't see the 24-hour work picking up in the same pace that we've seen in the past in the industry prior to the evolution of dissolvables.

Judson Bailey -- Wells Fargo Securities, LLC -- Analyst

Okay. All right, thank you for that. My follow-up is, just thinking about kind of looking forward, a big part of the Nine's story as you kind of alluded to earlier, has been good partnerships with top-shelf E&Ps and so you've kind of grown with -- in good partnership with your customers. As -- given that, as you think about next year, I'd be curious to get your thoughts or what kind of conversations you may be having for customers in terms of incremental kind of asset deployments on a longer-term basis? Is there a way you can help us think about what you're seeing from your customer base and what they may be needing from you kind of beyond this year and into the next couple of years?

Ann Fox -- President and Chief Executive Officer

Yes, it's a great question. I think it's early for us to answer that question. We are working with them, we're also obviously working here internally at Nine to cast on that cap spend relative to theirs, and so I think we feel good about 2019's activity, as I said, we're going to push that topline more toward completion tools and you'll continue to see us do that, but we feel very good about where we sit in the market and what our customers are communicating to us, but it's still too early for me to give you a 2019 solid look right now.

Judson Bailey -- Wells Fargo Securities, LLC -- Analyst

Okay, I appreciate that. I'll turn it back. Thanks.

Operator

Thank you. Our next question comes from the line of George O'Leary Tudor with Pickering, Holt & Co. Please proceed with your question.

George O'Leary -- Tudor, Pickering, Holt & Co. -- Analyst

Good morning, Ann, good morning, guys.

Ann Fox -- President and Chief Executive Officer

Good morning.

Clinton Roeder -- Senior Vice President, Chief Financial Officer

Good morning.

George O'Leary -- Tudor, Pickering, Holt & Co. -- Analyst

Curious given one, it's been a big part of the Nine story historically, and two, our understanding that there is a lot of assets up for sale at this point. But just on the M&A front, I wonder how you might characterize that landscape and I guess from some others we've heard, there's a lot up for sale, but it's maybe not all of the best quality, but I'd be curious what your's take on that is --

Ann Fox -- President and Chief Executive Officer

Sure. It's a great question. I think I said on our last call, I'd be disappointed if we didn't do any M&A this year, I'll be disappointed if we don't do any M&A this year. So same comment as last quarter. There's always a lot of stuff up for sale. This team is extremely focused on adding only excellent teams that also have either very defensible positions or technologies that are additives to the '19. So we've got a very, very tight filter. We do think there are some excellent teams out there that we'd be honored to partner with. So we're excited about the M&A landscape, but there is also, as you mentioned earlier a ton of stuff for sale that we think doesn't warrant the premium that's being asked.

George O'Leary -- Tudor, Pickering, Holt & Co. -- Analyst

Great, that's very helpful color. And then there's been a very acute focus by sell-side and buy-side on what's going on in the Permian Basin, you guys have a nice presence across multiple business lines in other areas. I wondered if you could maybe speak to any green shoots you're seeing in basins outside of the Permian Basin, and any potential areas where the growth is maybe less attractive or we may even see some contraction, just talk to me a little bit about non-Permian basins and activity across your business lines.

Ann Fox -- President and Chief Executive Officer

Yes, sure. It's a great question. I mean, I think, when we look across the spectrum, if you look year-to-date, you've kind of had 20% of accounting fees in the Permian, 22% in the Bakken, so it's a nice growth there, the Haynesville 7%, but still we're gaining lots of market share there. The nice one for us has been the Eagle Ford, which is only up 14% year-to-date on rig counts, but lots of operators going after that needs [ph] Brent Crude pricing, so that's been really great for us.

The MidCon and the Niobrara relatively flat, but those are still areas that we are very interested in. I think we've said many times, we are building a sustainable company, OFS as many people know and those invested in it have knife fight, and in order to mitigate the risk of that knife fight, you've got to be diversified geographically as well as relative to service lines. So we're still very interested in some of these other basins, but we've seen some nice uplifts and that's certainly helped us as well.

George O'Leary -- Tudor, Pickering, Holt & Co. -- Analyst

Great, Ann. Thank you very much for the color.

Operator

Thank you. (Operator Instructions) Our next question comes from the line of John Watson with Simmons & Company. Please proceed with your question.

John Watson -- Simmons & Company International -- Analyst

Thank you. Good morning.

Ann Fox -- President and Chief Executive Officer

Good morning, John.

John Watson -- Simmons & Company International -- Analyst

Ann, we've heard about a potential slowdown in activity in Appalachia, I guess this is a follow-up to George's question, but is that something you have seen or are expecting in the back half of the year?

Ann Fox -- President and Chief Executive Officer

That's a great question. This year we've put about 35% new customers up in the Northeast, we're really dominant up there, and there have been a couple of operators who have dropped frac crews. We've navigated that, we've started -- we started looking at that problem, frankly several months ago, and we feel we are successfully through that and it will have no impact on our forecast.

So we're still very confident about where the ramp that we had anticipated early on this year in the back half of the year. So -- and through that, I think you've certainly heard us some large caps come out and talk about that, but again that's going to sting frac more than it will us. You've really got to find the rat trail through these mine fields early, and the team up there has done a fabulous job of that. So, impact [ph] on our forecast remains exactly where we thought it would be.

John Watson -- Simmons & Company International -- Analyst

Okay, perfect. That's very helpful. And then is your return on invested capital highlights here realizing solid returns across a number of different business lines. I wouldn't think all of your competitors have similar returns, but are you seeing increased competition or new entrants for cementing, wireline or coiled tubing given where returns are today?

Ann Fox -- President and Chief Executive Officer

That's a great question. I would say in cementing, we really haven't seen new entrants. I mean not just that it's got a strong capital barrier to entry, it has also got a strong technical barrier to entry. So we've got some good competition out there, but we really haven't seen new entrants there. We've seen, again good coil competition but that was already in place and wireline has a much lower capital barrier to entry, so sometimes you'll see people come in and then they quickly get out when they realize how darn hard it is to execute consistently in that business.

So to answer your question, not a ton of new entrants, my own personal view and this is just a personal view is that the downturn of 2015 and 2016 and 2017, really devastated the credit availability for those new start-ups. So the revolver is that people blinked and got in 2012, 2013 and 2014, that revolver capacity is just not as readily available for new start-up OFS companies.

So that gives all of us that are already firmly planted, a little bit more of an advantage over the start-ups.

John Watson -- Simmons & Company International -- Analyst

Understood, that makes sense. Thanks very much for the answers, Ann. I appreciate it.

Ann Fox -- President and Chief Executive Officer

Thanks, John.

Operator

Thank you. There are no further questions at this time, I would like to turn the call back over to Ms. Fox for any closing remarks.

Ann Fox -- President and Chief Executive Officer

Thank you for your participation in the call today. I want to thank our amazing team of employees, our E&P partners and our investors. Thank you.

Operator

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Duration: 37 minutes

Call participants:

Heather Schmidt -- Director of Investor Relations

Ann Fox -- President and Chief Executive Officer

Clinton Roeder -- Senior Vice President, Chief Financial Officer

Sean Christopher Meakim -- JP Morgan -- Analyst

James Wicklund -- Credit Suisse -- Analyst

Judson Bailey -- Wells Fargo Securities, LLC -- Analyst

George O'Leary -- Tudor, Pickering, Holt & Co. -- Analyst

John Watson -- Simmons & Company International -- Analyst

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