04/03/2021

Liberty Oilfield Services Inc. (LBRT) Q4 2020 Earnings Call Transcript

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Liberty Oilfield Services Inc. (NYSE:LBRT)
Q4 2020 Earnings Call
Feb 5, 2021, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Liberty Oilfield Services Fourth Quarter and Year-End 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note that this event is being recorded.

Some of our comments today may include forward-looking statements reflecting the Company’s view about future prospects, revenues, expenses, or profits. These matters involve risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. These statements reflect the Company’s beliefs based on current conditions that are subject to certain risks and uncertainties that are detailed in the Company’s earnings release, and other public filings.

Our comments today also include non-GAAP financial and operational measures. These non-GAAP measures including EBITDA, adjusted EBITDA and pre-tax return on capital employed are not a substitute for GAAP measures, and may not be comparable to similar measures of other companies. A reconciliation of net income to EBITDA and adjusted EBITDA and the calculation of pre-tax return on capital employed, as discussed on this call are presented in the Company’s earnings release, which is available on its website.

I would now like to turn the conference over to Liberty’s CEO, Chris Wright. Please go ahead.

Chris WrightChief Executive Officer

Thanks, Tom. Good morning, everyone, and thank you for joining us today to discuss our fourth quarter and full-year 2020 operational and financial results. Wow, what a year for the world and our industry. I’m so proud of our team here at Liberty, weathering the storm of COVID impact with tenacity and strength, and ending the year with determination and resolve in building a better company. We successfully navigated these challenges with the unprecedented sacrifice and commitment of the Liberty family.

We enter 2021 with excitement as Liberty will celebrate our 10th birthday as a company. While we are very proud of what we have achieved in our first 10 years, we’re even more excited about what the amazing group of people that make up Liberty are going to achieve in the next 10 years.

2020 marked a transformative year in our short history. We started the year in a frac market that was already struggling with pricing due to an oversupply of equipment and reduced completion spending. We then rolled into the storm of worldwide COVID infections that led to a brief 25% drop in oil consumption by April of 2020, and oil dropping into the $20 a barrel range. Liberty reacted quickly and changed our cost structure to meet the new market reality. We worked with our E&P partners to plan a way through the crisis to make sure that we reached the other side with the strength to take advantage of an inevitable rebound. Indeed, by our signing a deal with Schlumberger to acquire their OneStim North America frac, completions wireline and Texas sand businesses in the summer of 2020, we are in a stronger position to capitalize on the nascent industry recovery.

We’ve brought back frac fleets to work as our core customer partners restarted completions, and we ramped back up to 15.8 average active frac fleets in the fourth quarter. Most importantly, these fleets performed with the sterling safety record and we set a Companywide operational efficiency records in Q4. This ramp up represents a 68% increase from the third quarter, and up from a low of 4.6 average active frac fleets in the second quarter.

Revenue for the full year 2020 was $966 million, down from pre-COVID affected numbers in 2019 of roughly $2 billion. Adjusted EBITDA for the full year was $58 million, driven by a relatively strong first quarter. Our fourth quarter revenue was $258 million, a 75% increase over the third quarter, driven by increased fleet count, and the high efficiencies mentioned. Our fourth quarter adjusted EBITDA was $7 million, a $6 million improvement from the third quarter as frac activity continued to increase following an abrupt halt in completions activity in the oily basins during the second quarter.

As we discussed in our April earnings call, our plan was to manage the balance sheet to cash neutrality during the historic COVID downturn. At the end — at year-end, our cash and cash equivalents were $68 million, over $10 million higher than at the end of the first quarter of 2020. We were excited to end the year closing on the acquisition of Schlumberger’s North American pressure pumping business on December 31. We have laid the foundation for a new era of Liberty’s leadership in technology and sustainability in the oil and gas industry. Our greatly expanded technology portfolio, breadth of operations, dedicated team and historic Liberty focus position us to achieve even greater innovation and efficiency.

We’ve had five weeks of engagement with our new team members as part of the Liberty family and the enthusiasm is contagious. Both our legacy Liberty team members and new colleagues are already working together with a renewed level of excitement and dedication to delivering superior service quality and results in the field for our customers. We are excited to now have significant natural gas exposure as that activity is driven by a separate market with different cycles.

US natural gas demand dropped only about 2% in 2020, far less than oil demand. The global LNG market is strong right now with prospects for 5%-plus growth in the coming years. It is notable that even during a time of major transition, our new team members were able to drive strong fourth quarter sequential revenue growth of about 25% at legacy OneStim, a strong result.

As we look ahead to 2021, we were exited by the opportunities ahead of us. We are still in the early innings of a recovery. Bu the clouds of COVID have begun to part, and the global economy is on the mend. The rollout of COVID vaccines, fiscal and monetary stimulus policies around the world, and pent-up demand for goods and services reinforce a global economy that is on an upward trajectory. This provides the backdrop for continued improvement in energy demand, while controlled OPEC plus production, coupled with discipline among US shale companies, is supporting oil and gas prices. This is reflected in a rising rig count throughout the fourth quarter.

The number of total marketable frac fleets has declined significantly as the pandemic accelerated the pace of rationalization and cannibalization of frac equipment. As customer demand is shifting toward next-generation technologies, that support their emissions and efficiency goals, attrition of older equipment is expected to continue. Liberty’s focus on reducing environmental impact, since our inception, we’ve continued investment in technology through cycles has allowed us to remain front in center with our customers in supporting this move by the industry. And moreover, deepening our partnerships during these challenging times.

Operators are currently navigating through a time of industry consolidation, a changing political climate and a commitment to keeping oil and gas production flat. Continued shrinkage of marketable frac fleets across the industry is a necessary part of moving the market toward balance. The current pricing dynamic remains challenging, but Liberty is having many productive discussions with our customers to phase in modest price improvements throughout the year. Liberty was proactive in working with our customers as oil prices collapsed, and that partnership works both ways. We believe the frac market will experience flat to slightly rising demand for frac services in 2021 based on current visibility into customer plans.

Public operator demand is expected to be relatively level loaded, whereas private operator demand is more likely to be a bit back loaded. Against this backdrop, we enter 2021 with 30 fully staffed frac fleets working across all major basins except the Northeast. Liberty expects to maintain approximately 30 active frac fleets in the first quarter of 2021 with the potential of adding more fleets later in the year only if the economics improve. Increased efficiencies that lower our cost of delivery, coupled with a gradual modest rise in frac pricing, are the factors that can drive improved fleet profitability. We like our new mix of customers, including larger public and private operators with great assets, balance sheets, and most importantly, great people. It will take the right partnership and the right economics to add new fleets to the mix.

Overall, we’re off to a strong start to the New Year. We are working hard to seamlessly transition our business into one, thanks to the considerable efforts of our integration team. We are now a few weeks in and the complementary customer partnerships, technologies and business acumen across our teams has been an incredible value add. In the first few weeks of the year, we’ve had folks across all disciplines notably, operations, sales and engineering teams come together in our Denver offices, forming new relationships and finding new ways to collaborate and improve. It’s been incredible. We now have new, highly complementary business lines to leverage greater control of the value chain, the capacity to move technology forward at a faster pace, our new DG frac e-fleet on the horizon and much more.

The industry transitions take time. But we believe, we’re at the beginning of a new era in the industry, well positioned with the right tools in hand. As we shared last quarter, it is the perseverance and enthusiasm of the team that sets the stage for Liberty to execute in 2021.

I will now pass the call over to Michael to discuss our detailed financial performance, and then Ron will give a short update on the integration progress for operations and technology.

Michael StockChief Financial Officer

Good morning. We’re pleased to finish the year on a positive note, despite the immense challenges the team faced in 2020, and disciplined approach to managing the business is very effective. Frac activity improved meaningfully in the fourth quarter, and we were aiming for more fleet to work faster than expected. The legacy OneStim business also saw significant improvement, despite the inevitable disruption caused by the transition. We are so proud of persistence and dedication exhibited by the Legacy and new team members during the quarter. And we’re excited to write the next chapter of our story as one united team. As we look forward, we believe, we now have the right operations footprint in place for 2021. We currently plan on running approximately 30 deployed [Phonetic] fleets in the first quarter and maintaining those fleets during the year with some normal seasonal variation of the US and Canadian markets, impacting utilization in various quarters. I will first talk further about our 2021 outlook shortly.

For the full year 2020, revenue declined 51% to $966 million, from $2 billion in 2019. Net loss totaled $161 million or $1.36 per fully diluted share. Full year adjusted EBITDA was $58 million, compared to an adjusted EBITDA of $291 million in 2019. Adjusted annualized EBITDA per fleet was $4.4 million, compared to $12.8 million in the prior year. And our adjusted EBITDA reconciliation now excludes stock-based compensations will closely correlate to other industry reporting.

Our focus in 2020 on managing capital expenditures was successful. We were happy to hit our targets of positive cash flow on frac fleet operations during the last nine months of the year, that was severely impacted by the pandemic. We were pleased to be able to reduce our full year capital expenditures, while continuing to invest in Tier 4 DGB equipment, as digiFrac easily engineering and prototypes and dual fuel upgrades all technology, there is an high demand and investments in line with our philosophy of managing the business by focusing on superior long-term returns, while maintaining balance sheet strength.

For the fourth quarter 2020, revenue increased 75% to $258 million from $147 million in the third quarter. The increase in revenue was primarily driven by 68% increase in active fleets and improved utilization, as customers restored completions activity faster than expected. Net loss after-tax decreased to $48 million in the fourth quarter, compared $49 million in the third quarter. Fully diluted net loss per share was $0.41 in the fourth quarter, equivalent to the third quarter of 2020. Results in the quarter were negatively affected by the $11.1 million of non-recurring expenses, including transaction and other non-recurring costs of $9.4 million, and fleet start-up costs of $1.7 million.

Fourth quarter adjusted EBITDA, which excludes non-cash stock compensation expense increased to $7.1 million from $1.4 million during the third quarter. Improvements in adjusted EBITDA was increase — was driven by increased activity in utilization, driving higher absorption of fixed costs.

General with administrative expenses totaled $20.1 million for the quarter, including non-cash stock-based compensation expense of $3.5 million. Net interest expense and associated fees totaled $3.6 million, equivalent to the prior quarter.

We ended the year with a cash balance of $69 million, and net debt position of $37 million. At year-end, we had no borrowings drawn on the ABL credit facility. Total liquidity, including $114 million of availability under the credit facility was $183 million. As we laid out in our first quarter earnings call, we targeted managing the business to cash flow neutrality through the end of the year, and we’re pleased to be able to beat this projection.

Given the considerable change in the Liberty and the oilfield services market over the last year, I’d like to provide a preliminary view about 2021 outlook. I remind everyone, this is based on current macroeconomic conditions. And there is significant uncertainty in the global economic outlook. As Chris pointed out, we are still in the early innings of post-COVID recovery. In the US, we expect a continuation of current frac activity levels through the first half, followed by a potential gradual improvement in industry activity in the second half of the year led by private operators if the macroeconomic conditions are supportive.

In Canada, we’re anticipating normal seasonality, the strongest fiscal lift followed by a seasonal decline in Q2, improvement in Q3 and a seasonal slowdown in Q4. We are planning to round approximately 30 average frac fleets during the first quarter. And we will evaluate changes to fleet deployments based on market conditions. We will add crews in the future only with a meaningful improvement in fleet economics.

As Chris described, increasingly positive dialog with customers suggest frac market could see some modest price inflation as the year progresses. We believe there is a recognition among operators. So we worked hand in hand with them to lower pricing during the 2020 energy crisis to ensure continuity of operations. The pricing at this level was unsustainable outside of the period of crisis management. We have had productive conversations with the number of clients and have plans in place to face the modest price inflation during the year.

With the OneStim acquisition, we have grown significantly, adding more frac fleets to wireline business and sand mines to the mix. But we expect that general and administrative expenses in 2021 will only increase by high-single-digits from 2019 levels. We have increased our operating platform and we’ll gain significant fixed cost leverage. At this quarter, we’ll include approximately $10 million of non-recurring SG&A costs related to the transition services provided by Schlumberger. Transition cost and services from Schlumberger will not continue after the first quarter.

Capital expenditures are targeted in the $145 million to $175 million range for the year. And depreciation and amortization is estimated at approximately $240 million for the full year. Capital expenditures at the midpoint of the range include maintenance capital of approximately $3.5 million to the fleet, partially offset by the early stages of capex synergies, time to equipment slated for maintenance support. Annualized savings of approximately $1 million per fleet are expected to begin to appear in the second half of the year after our initial period of evaluation of the support equipment. We’re also including approximately $60 million in technology investments, including digiFrac, fuel upgrades and Tier 4 upgrades. Lastly, approximately $10 million relates to the libertization and the modernization of average fleets.

Importantly, we had significant flexibility adjusting our capital spending targets depending on the market environment. And we’re planning to be free cash flow positive in 2021, while continuing to invest in the future. As we bring OneStim into the fold, Liberty is laser-focused on building a business for the future when we are a partner of choice for people to run a safe, sustainable and productive operations. It is these efforts that will drive deeper customer partnerships and the superior returns we are known for.

I’ll hand the call over to Ron for a short update on the integration progress of operations and technology.

Ron GusekPresident

We are excited to bring together two premier frac service companies, well positioned to lead a technology-driven structural change in the industry. The change that is necessary from the viewpoint of our customers, suppliers and investors. Our plan of execution is focused on three areas; culture and leadership, technology development and operational excellence. Right now, we’re at the early stages, understanding what we’re calling our Liberty red and Liberty blue teams are doing and why, and how we can leverage the best from each of the organizations.

First, we’ve strengthened our leadership team to execute our vision with the combination of the red and blue heritage folks. These are the folks that will reinforce our culture of agility, idea generation and empowerment and drive collaboration across all our business lines to carry this business forward. Second, Liberty’s history is rooted in the impactful utilization of real data and rigorous analysis. With our larger scale, we are now bolstering our knowledge base, representing a step change for innovation in the industry.

We are creating a new technology leadership group to house all our innovation and engineering. This will accelerate the rate of development of our leading data-driven engineering stimulation tools, leading-edge equipment design and technology development, innovation in ESG and more. It is this collaborative model from start to finish that is key in driving value creation and the differential returns we’ve seen through our company’s history.

We were early movers in deploying dual-fuel capability, doing so in just our second year of business in 2013. We were an early field test partner for Tier 4 DGB and a strong advocate for this technology as a viable option for next-generation fleets to meet reduced emissions initiatives. We continue to see strong demand for this solution as we add this upgrade to much of our existing Tier 4 capacity. To further emissions and operational cost reductions, we are finalizing the testing of our proprietary engine idle reduction system. We expect to begin deployment of this system across our fleets a little later this year.

The next step in our journey down this road are reduced emissions and improved operating performance will be our electric fleeting. With electricity generated, using natural gas reciprocating engines, the digiFrac platform will provide solutions to the challenges identified in many of the current iterations of electric fleets. In 2021, our digiFrac fabrication, field testing and commercialization plans remain on track. We’re working on integrating the fully electric process trailer, a combination blender and hydration unit, completing our power supply design and assembling a power generation system.

In parallel with this effort, we will be completing the development and deployment of a next-generation control system with fully automated pump operation for deployment across all Liberty fleets. As part of this initiative, we will also integrate the pump-down control into the wireline system and ultimately into frac operations, allowing seamless oversight of these two integral operations on location.

Third, from an operational perspective, we now have a much expanded software and technology platform. This will drive value by augmenting planning, execution and equipment diagnostics with digital integration and automation. Our new larger organization takes greater coordination of all elements for managing our assets with the greatest efficiency to where we invest dollars for the right equipment and technology to how to best leverage our vertically integrated asset base and supplier partnerships. Our relentless desire to improve means that all processes are under the microscope.

Along those lines, we have had great success in providing customers with both frac and wireline services, an area we know our legacy Liberty customers will greatly benefit from. By streamlining our frac and wireline crews on-site to save extra minutes off the day, every minute equals efficiency and translates to a lower cost of producing a barrel of oil for our customer and improved profitability for Liberty, the win-win we strive for. It has been an incredible start. Spending time with our red and blue teams across all of our basins. The eagerness and excitement from our teams is humbling. As we move forward, we’ll come back to the Street with the progress we’ve made.

With that, I will hand the call back to Chris for closing remarks before we take your questions.

Chris WrightChief Executive Officer

Thanks, Ron. The future for frac services is leveraging scale for innovation with more data and technology and empowering talented individuals to interpret and apply the analysis of this information to ultimately drive down the cost of producing hydrocarbons in the safest and most responsible way. As we enter our 10th year in operation, we are excited to lead a technology-driven structural change in the industry. We are uniquely focused on extracting significant value from our acquisition by bringing together two of the leading technology-centric service businesses in our industry, supplemented by an ongoing technology partnership between Liberty and Schlumberger. Early response to Liberty’s acquisition of OneStim has been positive as customers are finding value in our technology leadership. Invention and creativity takes center stage in our industry. Liberty remains committed to the next decade of innovation, as we were in our first decade as a company.

We look forward to your questions. I’ll turn it back to the operator for questions now.

Questions and Answers:

Operator

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Chris Voie with Wells Fargo. Please go ahead.

Chris VoieWells Fargo — Analyst

Thanks, good morning.

Chris WrightChief Executive Officer

Good morning.

Chris VoieWells Fargo — Analyst

I guess, first to start off kind of a high-level question, and we’ve heard the refrain no fleets without pricing. I think since, kind of like the middle of last year, in practice, we’ve seen a lot of fleets coming to market at very low pricing thus far. So there are any factors that will be different going forward from this point in time compared to what we saw in the third and fourth quarter for the industry?

Chris WrightChief Executive Officer

Well, Chris, I don’t think you’ve heard that refrain from us. Our goal when the pandemic hit was to work with our partners to keep our relationship strong at to get through the downturn, the oil price disruption together with our partners. So we made adjustments on the down, on the downturn to keep the economics to work for both sides, and then we’ve continued. And then with an agreement to ramp things back up in a schedule, it’s actually been, not much different than what we discussed and learned with our customers in April. To us, things have gone our plan. There has been no change. The key at the start is preserve the relationships, restart safe and efficient operations. And as we mentioned, we had a efficiency records in Q4 likely also for safety. And now, we’ve seen an oil price recovery and now we will see price recovery in our frac services as well. So for us, things have gone as planned on track.

Chris VoieWells Fargo — Analyst

Okay, that’s helpful. Thank you. And then maybe to follow-up on the pricing discussions. Just curious if you can help us quantify how meaningful that might be, and maybe translated into how we should model gross profit per fleet or EBITDA per fleet going forward? Do you see any of these as kind of in the bag thus far? Or is it going to be more of a slog as you get through the first half of the year?

Chris WrightChief Executive Officer

We have a good number of agreed price raises already, not starting tomorrow, but we have start dates or pad dates where these things will come in. And again, it’s just always been a partnership dialog with us. We moved down, we held for a while, and now we’re bringing pricing back up. But there are — we have a good number of agreements already in place. And we expect, over the next few months, to have a good number of additional ones. I’m going to refrain from commenting on magnitudes and movements on gross profit. I don’t know, if Michael wants to add anything to there. But we got to let that this play out as it goes. But we feel pretty good about where we sit right now.

Chris VoieWells Fargo — Analyst

Great. Thank you very much.

Michael StockChief Financial Officer

On the pricing side, I think that you would — you probably start to see them slowly roll in from Q2 onwards, after that. But this is, again these are sort of like, these were discussions we had as the crisis has headed to Q2 of last year. And as we said, we moved those pricings up with those clients in a planned fashion as we roll through the year. So sort of incremental as we go through the year.

Chris VoieWells Fargo — Analyst

Okay. Great, thank you.

Chris WrightChief Executive Officer

Thanks, Chris.

Operator

The next question comes from Scott Gruber with Citigroup. Please go ahead.

Scott GruberCitigroup — Analyst

Yes, good morning.

Chris WrightChief Executive Officer

Good morning, Scott.

Scott GruberCitigroup — Analyst

I want to say on the pricing question, but ask a question related to incremental crews. Chris, you talked about the anticipated pricing on active crews. Is the magnitude of that price increase efficient to add incremental crews into the market? Or would you want to see something bigger, more of a step change in profitability before adding incremental crews?

Chris WrightChief Executive Officer

Yeah. Scott, I would say yes. It’s something additional to the agreements we have in place now. We have in place now, the kind of partnership things we need to keep our customers generating strong returns and the returns on Liberty’s invested capital to come back as well. So look those have been very constructive dialogs. And as I said, a number of agreements are completed. But yeah, I think to for us to stand up and hire a new people and deploy another crew, that’s a bar higher than what we’re talking about so far.

Scott GruberCitigroup — Analyst

That’s good to hear. And then maybe just a little bit of color on the 1Q EBITDA. Now you have the OneStim fleets in the fold. And now that you’ve closed the deal, how do you think about the timing to Liberty’s those crews and close the margin gap between the two sides of the business?

Chris WrightChief Executive Officer

I’ll let Michael or Ron comment on that.

Michael StockChief Financial Officer

Yeah. So Scott, I mean, I think what you’re going to see is you see a slower ramp-up. I mean, what we’re calling our Liberty Blue crews very efficient. These are nice surprised. We’re getting in the fixed cost leverage. So especially once we get past Q1, I mean, a lot of transitions of noise in costs, as far as do we transition onto our ERP systems and everything else, we get to our true efficiency on the overhead side. So there’s a lot of work going on in the Q1 side for that. So I think you’ll start to really see the drop through to the bottom line from Q2 onwards. And then we will start to see sort of more integration and sort of like efficiency gap — any efficiency gap closing. One of the key things there is maybe not so much pumping on the day when they’re on the site which is that very impressive crews, really a lot of it’s around coordination, scheduling and reducing white space, which is one of the places that Liberty sales operations team have excelled.

Scott GruberCitigroup — Analyst

Is the goal to close the gap in by the end of the year? Is that possible?

Michael StockChief Financial Officer

Correct. Yeah. It will be. I think, yes. And that will — I mean, every customer, every fleet, every soft of — every country, every basin has a little bit of the flavor. But yeah, we would expect by the end of the years ahead — you shouldn’t see a great deal. You shouldn’t see any difference. But whatever crew we’re rolling out, it’s going to be Liberty, and Liberty all time.

Scott GruberCitigroup — Analyst

Good to hear. Appreciate the color. Thank you.

Operator

The next question comes from Stephen Gengaro with Stifel. Please go ahead.

Stephen GengaroStifel — Analyst

Thanks, good morning, everybody. Two things, if you don’t mind. One, just to kind of continue on that topic. I was just — I was trying to understand when you look at the fourth quarter, you mentioned record sand volumes pumps. So I would assume that means pretty high efficiency. Are we looking at a pricing dynamic early in the year that’s very similar to the fourth quarter? And is there any kind of efficiency gains that we could see earlier in the year which would lift that EBITDA per fleet?

Chris WrightChief Executive Officer

Well, we did indeed have record sand throughput on our fleets, record efficiency across the Liberty fleet in Q4. And again, look, we’d love to see more margin then. But we know that’s coming. For us, the key thing is the partnership with customers, deliver safe operations and keep driving efficiency higher. There is always room to get better, but yeah, it was a pretty high bar in Q4. All that Michael talked about, probably incremental improvements and efficiency going into Q1 that’s ambitious, but we’ll probably achieve that, but I think just the fixed cost leverage over a larger platform is also helpful.

Michael, anything you want to add?

Michael StockChief Financial Officer

Yeah. I think so, Stephen, I think what you’ll see is the heritage refleet, pump very efficiently in Q4. We didn’t see that much in that Q4 drop off as we would because we were just starting to ramp up, sort of ramp up completions. So we should see that efficiency probably flatten, I would say, in Q1 as we see a little change over the calendars of the white space. So I would say, you probably won’t see a lot of efficiency gains out of the combined operations in Q1. Right. You will start to see things change as we go through there. One of the things that you see we have to leverage fixed costs. I think what we’re going to be able to do is, as we go through the year into next year, fairly significant leverage down on our end costs and some of those cost per fleet. But we’re looking at there, a lot the technology innovations, the wrong things, sort of running through the model that we’re combining sort of the best parts of what historic once the team have been doing, best parts of what we’ve been doing, I think we’re going to see some pretty significant help there to the bottom line on both — on that side of it. Also the automation that Ron is doing, that I’ll talk about later on because, you’ll see more of that when we show that in May, but really reducing the number of hits on site being at a new automated pump, the reduction in fuel costs with the automatic idle. There’s a lot of efficiencies that are coming. I really, I think you’ll see a great deal of them in Q1 as we go through. We’ve just got — everybody’s running at 9,000 miles an hour at the moment, and you will start to see those fall through as we go through the year.

Stephen GengaroStifel — Analyst

Great. No, that’s helpful. Thank you. And then the other one was on the digiFracs. Can you share with us sort of your thoughts on how the model ultimately works? And what I’m thinking about is, like who owns the turbines? Is it you long-term? And do you think customers will pay for sufficient returns on that capital or you think there’s another ownership structure of turbines down the road?

Chris VoieWells Fargo — Analyst

Ron will take that.

Ron GusekPresident

First and foremost, I guess, most important to mention that we are not going to use turbines. We view a turbine as not only challenged from delivering the lowest possible emissions footprint, but also incredibly challenging from a capital standpoint. You’ve certainly heard the numbers around what one of those costs to purchase and ultimately own. We’re headed down a completely different path. We will be powering our electric frac fleet, digiFrac with natural gas recipient. And so think 20-cylinder natural gas engine, they are commonly used in power generation grid now. If you were to hailed to an Apple data center for example and look behind that, what you would find it is a 20-cylinder natural gas genset there. We’re going to do the same thing. We believe we have an opportunity with that to deliver a meaningfully better emissions footprint than current iterations of electric frac fleets and to do so at significantly better capital efficiency than we’ve seen in the past.

Michael StockChief Financial Officer

I can comment on the kind of the ownership model question there, Stephen. I think you’ve probably heard us talk before, it is tough to think of that ownership model being safe right now, right? The reality is, it’s like a grid, where you have a piece of equipment that you own. But you’ve got to get utilization to pay back that equipment. Now we have always raised it like it was the same, like we own the same. We have taken a lot of frac company in the country and we are going to have the ability to own that power generation and keep it running 100% of the time no matter what the customer is looking for.

Because customers have downtime, right? They have issues go wrong with payers. They have changes. You will see acquisitions where people had sort of like short-term slowdowns, etc. Now we can move that equipment around, we’ll use that frac fleet to move. So I can guarantee, we’re sitting on that capital investment that’s continuing, right? So if you were to try to think of people who try to clinch it right here or a stake in the ownership, kind of rental, the only way you can do that is if you’ve got significant other uses for that power, that you have a larger frac fleet, think of [Indecipherable] or some of those rear-powered generation or small power generation and if you’re accessing across a lot of different business lines and maybe a lot of different industries, but that’s the only way. But we can guarantee that continuation of work, which means we can ultimately end up with the lowest cost of ownership for that power generation. So I just don’t think it really make any sense doing it any other way.

Stephen GengaroStifel — Analyst

Okay, great. I appreciate the color, gentleman. Thank you.

Chris WrightChief Executive Officer

Thanks, Stephen.

Operator

The next question comes from Sean Meakim with J.P. Morgan. Please go ahead.

Sean MeakimJPMorgan Chase & Co. — Analyst

Thank you. Good morning.

Chris VoieWells Fargo — Analyst

Good morning, Sean.

Sean MeakimJPMorgan Chase & Co. — Analyst

So Chris, there’s been a lot of talk about old equipment getting cut up. That’s to your benefit of having a young fleet and your contribution now is coming through this OneStim transaction. But across the industry, most of what’s been cut up hasn’t worked in a while. It seems like there is potentially an emerging bifurcation in the active market. Things are pretty sold out as far as e-frac and dual-fuel utilization across the industry. And so in that part of the market, we’re seeing some capacity creep back in, in various ways, maybe some piloting some new e-fleets, upgrading some Tier 4 fleets to dual-fuel. So I’m trying to get a better sense of your perspective around potential bifurcation in the active market between legacy fleets and next-gen fleets? And then on balance, how should we think about lot of nameplate capacities going away, but in the aftermarket, we are still kind of letting some more horsepower creep in. I’d love to hear your thoughts on those two emerging trends?

Chris VoieWells Fargo — Analyst

Yeah, Sean, I would agree that the market is becoming bifurcated through a gradual process that’s been going on for a while. As you know, Liberty was very early on, second year in business building dual-fuel fleets. So we probably had several years, maybe even slightly frustrated. We had a lot of dual-fuel capacity, but it was an effort to get customers to engage and use it. That mentality among customers has changed dramatically that now I think everyone realizes, wow, lower emissions and lower cost, that makes sense.

So there is a little bit of extra logistics that need to be done, and we won’t get into that today. But yeah, so dual-fuel is becoming a more common thing that people want. Tier 4, you know for certainly people at the highest bar want Tier 4 equipment. That’s — you can’t upgrade an old Tier 2 engine to Tier 4. You can upgrade an old Tier 2 engine to Tier 2 dual-fuel, which is a great step in the right direction. But for Tier 4 equipment, it’s got to be Tier 4 horsepower that was built that way. So it’s going that way. And I would say, look, it’s the bigger stronger players that are — that fleets are migrating toward more upgraded fleets. And then there is a lot of legacy horsepower and legacy players out there that are just less active in that space and not doing so much.

So I think as with the transformation to high-spec rigs, it will take some time, but it’s definitely going on. And no one is building old legacy equipment and people are, again, not maintaining all of it. They’ve combined. They had 10 fleets and they put them into seven fleets and there were moving parts. And if they stop investing, maybe they’ll be at six fleets a little bit later. So we see capacity shrinkage around the marketplace.

There is still a huge amount of traditional Tier 2 diesel fuel fleets running. So they’re not gone. They’re just — that equipment base is shrinking and the percent of the market they are is shrinking as well. But I think right-sizing the market takes some time, but the last 12 months have been particularly productive, particularly productive. And I suspect we’ll see quite productive this year as well. We will end this year with meaningfully less deployable capacity for frac fleets just because there won’t be the investment levels to maintain the existing capacity. At the end of this year, we’ll have less available fleets to frac and more fleets fracking. So I think the progression is happening.

Sean MeakimJPMorgan Chase & Co. — Analyst

Yeah, I think that’s fair. I appreciate that context. To touch on capital efficiency for a second. In only about a month of looking under the hood, I imagine you guys have been busy. So you cited in the prepared comments $1 million per fleet of maintenance capital savings from rationalizing the excess horsepower from OneStim. So if we’re running 30 fleets, $30 million a year. Do you have a sense of how many years that could run or what’s kind of an update on the aggregate savings versus the initial shot in the dark that you provided us late in 2020?

Michael StockChief Financial Officer

Yeah, I’d say that’s — Sean, that is — the shot in the dark still at base case at the moment. We’re only just — there’s still a lot of equipment out there. But yeah, I look forward to this bell curve, right? It’s probably going to take most of the first half of this year to sort of come up with the plan, the efficiency plan on how we’re going to do this. Majority of the savings will come next year on the capital side and then some of it will slide into 2023. So thinking about the bell curve there, I’d roughly [Indecipherable] to give here the plan, I sort of feel half of it’s going to come next year, maybe a quarter or the second half of this year or a quarter in 2023. It might drag out a little bit further to 2023. Yeah, we’re still in that general shot in the dark that we had plus or minus $55 million we think it will help us on that.

Sean MeakimJPMorgan Chase & Co. — Analyst

That’s a good framework, Michael, yeah. Thanks guys. I appreciate it.

Chris WrightChief Executive Officer

Thanks, Sean.

Operator

The next question comes from Ian McPherson with Siemens. Please go ahead.

Ian MacPhersonSiemens — Analyst

Thanks. Good morning, team. Michael, does your capex envelope for this year include may be at the high end or otherwise include the completion of the first digiFrac fleet in its totality? Or if you were standing up that fleet in the second half, would that be incremental sort of newbuild capex that could be above and beyond that?

Michael StockChief Financial Officer

It probably does include it, Ian. Yeah, that will be the visibility of the first digiFrac fleet.

Ian MacPhersonSiemens — Analyst

Good. Okay. I understand the reticence with more sort of specific guidance than what you’ve already given. But you said an ambition would be to stay free cash flow positive for this year, and we can certainly work backwards from your capex guidance and we know what interest looks like. Do you have any — could you point us toward anything with respect to cash taxes or working capital, harvest or build for this year that might help us to refine our EBITDA estimates for this year?

Michael StockChief Financial Officer

It’s a pretty little, very little cash taxes, means probably want to move the needle on the cash side of it. And working capital will be a slight build, but not huge, right. This OneStim business came with us, so working capital that we — it was not the deal, the negotiated deal. So that will have slight build. And then, it will depend really on how second half will thrive. If we stay in this kind of flat environment, macroeconomic doesn’t improve, real economics don’t improve, you’ll be a relatively flat working capital in the area. I think we’re going to go — we’ll make some wins on inventory that will offset some of the AR that will increase. If we see some — if we see really pricing improved decently, and we see a little more speedier adoption, you might see a bit of working capital build, but then you will see an earnings built at the same time.

Ian MacPhersonSiemens — Analyst

Right. Understood. Great. My other questions were answered. So I appreciate it. I’ll pass it over.

Ron GusekPresident

Thank you.

Michael StockChief Financial Officer

Thank you.

Operator

The next question comes from James West with Evercore ISI. Please go ahead.

James WestEvercore ISI — Analyst

Hey, good morning, gentlemen.

Chris WrightChief Executive Officer

Good morning, James.

James WestEvercore ISI — Analyst

Chris, with the — with Brent at $60 and WTI in high-50s, something higher than I think most budgets were set for your customers. Is there any talk at all of them kind of investing more this year? I mean, it looks to us like they’ve not invested enough to believe in hold production flat at this rate, but are they starting to what they have announced kind of reinvestment rates of 70% to 80%. So is that a signal that perhaps we could see a little bit better capex than perhaps we thought of a month or two ago?

Chris WrightChief Executive Officer

I don’t think so, James. I have regular dialogs with our customers among the publics, I don’t think we will see any change in plans. I think the message has been received. I think people realize, while we’ve had this awesome shale revolution. And none of the value accrue to the operators. And so, no, I think that, I certainly for this year and I don’t think it fades much in the coming years either. But no, I don’t think we will see any change in the development plans that the publics have laid out, whatever oil prices do unless they weren’t really low, you would see a reining back in. But we’re not going to see new additional capex from the publics. Certainly on the private side, it’s a little bit different. There oil prices in current economics impact decision making. So there is a little more movement in plans for the privates. But even there capital availability is not great, nobody wants to stress the balance sheet. So as cash flow flows up, I think you’ll see a little more capex from the private, something we’re already seeing a bit of that. But not huge. I still think sort of though. I agree with you, current activity levels for the public sort of imply a little bit of a decline in production through the year, but boy, efficiency and some upgrades, I don’t know if I was a betting man, I still suspect the exit rate production this December will be pretty similar to what December production was closing 2020 out. Could be down — if oil prices, yeah, it will be flattish this year. I think that’s — I don’t think we’ll be far off that.

James WestEvercore ISI — Analyst

Okay. Okay, fair enough. And then with respect to the Schlumberger technology portfolio that you now have acquired. Are there certain technologies that stood out to you? I mean, you’ve had a month owning the assets in the IP, which you obviously took a look under the hood as you’re doing diligence. Are there certain technologies in that portfolio that are incremental to what you guys already had and could ramp your own efficiencies even further?

Chris WrightChief Executive Officer

Yeah, James, I think there is, and even just our business processes, yeah, the more we look under the hood, it’s like wow, that’s pretty cool. But we have been cautious in saying too much about them because we’ve got to digest, understand it. We’re planning to do I think Investor Day in May or something where we’ll have a longer presentation. We’ll give a little more color into the technologies across from operations, the business processes to ESG. We’ll give a little more color of feel then yet. Yes. But yes, we have the surprises have been on the positive side, as far as the technologies and the humans. I mean one of the appeals to us of Schlumberger was that low turnover long-tenured, higher caliber professionals in the company, and we haven’t been disappointed. We’re quite enthusiastic about it.

James WestEvercore ISI — Analyst

Okay, great. Thanks, Chris.

Chris WrightChief Executive Officer

Thanks, James. Take care.

Operator

The next question comes from George O’Leary with Tudor, Pickering, Holt. Please go ahead.

George O’LearyTudor, Pickering, Holt — Analyst

Good morning, guys.

Chris WrightChief Executive Officer

Good morning, George.

Michael StockChief Financial Officer

[Indecipherable]

George O’LearyTudor, Pickering, Holt — Analyst

Thank you. Assuming pricing were flat from here, let’s just assume, I know you mentioned there is — it sounds like there are some increases on the come from some of your customers or partners. And then — but assuming pricing were flat from here, and given the 30 fleets that you guys anticipate running in the first quarter just directionally not asking you to quantify magnitude, but would fleet profitability, again excluding pricing increases, excluding any noise associated with OneStim transaction. Would fleet profitability be better quarter-over-quarter in the first quarter from either gross profit or an annualized EBITDA level, just given the increased scale? How would you frame that? We’ve touched on it a little bit, but just looking for any incremental color you could provide.

Michael StockChief Financial Officer

Hey, George, we get significant fixed cost leverage, right? Our G&A really isn’t going to go up regionally at all, really not that much really. When I think about the G&A hits that we added, this deal, we really and sales, right. We’ve got — seen a lot of fixed cost leverage. We’re going to get a lot of, which is on the G&A front, we’re going to get some of the district fixed overheads there is, because obviously we’re doubling the size of our Permian business, right. And really not adding — you don’t add the same amount of overhead, when it comes to that, which I think is also very, very good. We’ve got to be obviously, Ron’s supply chain team is going to be buying twice amount — twice the amount of stuff that’s going to help with working with suppliers. I think that’s the key thing. But, yes, as we get more and more into these — we soft of dig further and further, into it, we will do actually see that. We’ll also get to a little bit of utilization with the calendar, right over the game, and so you have to be largely in different areas, it means that you always going to have gaps, we’re going to have fleets moving around. And as we work through the year with the integration of these two, these two fleets, which can be larger, you’re going to be able to shuffle the fleets. So you have less white space. So there’s a lot of incremental benefits that come with that. I mean, I think there’s lot of the processes and procedures as we sort of be able to get more efficient as we go. I think getting the wireline businesses is a great complementary business. I think, again, that’s a unique frac part [Phonetic] on the [Indecipherable]. And it’s a significant — probably the largest portion of our third-party downtime. Ron could talk more to that. But we could shave — we could shave minutes off a day, that’s more revenue that you’re going to bring in — you’re going to be able to bring to the table to better understand we have — we pump down. We were still — we’re already the largest probably the largest or second largest buyer of sand in the country by far. Now we have two Texas mines to help us balance some of that as well. So all these things that are going to come together to help even without any pricing or any increase in place. So we would see improvements as we go through the year.

George O’LearyTudor, Pickering, Holt — Analyst

Great. That’s very helpful, Michael. And then just from a tendering perspective, you mentioned in the back half, it seems like some privates may add. At least best we can tell, activity was up in December, activities up month over month in January on the completion side, and you can clearly see drilling rig count continues to grind higher. Clearly some pricing discipline on shale’s part and not activating incremental spreads. But just from a geographic perspective and a tendering perspective, where are you seeing the lion’s share of the shots on goal? Is it Permian activity increases or is it — are you seeing some activity increases potentially in the Haynesville? Where people looking to add as we progress through the year?

Chris WrightChief Executive Officer

The Permian, certainly the biggest pawn. So yeah, there’s probably — that’s certainly the biggest place, you will see extra activity levels. The Haynesville, the upside of the Haynesville, was it never — it didn’t drop nearly as much. So the Haynesville stayed reasonably strong throughout the year. It’s definitely geographically advantage for LNG exports, and as we see those will set a new record this year, beating last year’s record there. But you know, not a huge increase in activity there. It’s also think about shale gas is, we can produce a lot of it. So, no, I don’t think we’re going to see wild swings there. I would say that the flexibility in activity is going to be more in the oil basins — more on the oil basins.

Michael StockChief Financial Officer

[Speech Overlap] Just to add some color there to Chris, comments, if you have one second. Just I think, interesting enough, Liberty is always been sold out, right? So we’ve had basins where customers have approached us over the years and said hey, we’d really like you to bring your efficiency, engineering technology into the technology focus to our basin, to our country, etc. What was done with this OneStim deal. Wright expand that geographic base revenue. We’ve started in the Haynesville, now we’ve got a large regency. We’re doing in the Mid-Con. We have planned on firth operations in the northeast. We have operations in the Canada. So people who’ve been approaching us for years to come and help, do some work with them in Montney and Duvernay in Canada. So now we’ve got a base here that we can sort of like to do with that. Especially once COVID gets over a little bit, we can actually get people across the border.

But you’re going to see some things there, I think, George where you’re going to see some sort of like, potential once pricing comes back, the additional market for us we had to take just by taking the Liberty of what they’re sort of like Liberty special source, that people have wanted, and having access to in different basins.

George O’LearyTudor, Pickering, Holt — Analyst

Thanks, Michael. Thanks, Chris.

Chris WrightChief Executive Officer

Thank you, George.

Operator

The next question comes from Connor Lynagh with Morgan Stanley. Please go ahead.

Connor LynaghMorgan Stanley — Analyst

Yeah, thanks. I appreciate you guys squeezing me, and I’ll keep it brief, since we’re at the top of the hour here. Just at a high-level framework, obviously, you’ve added pressure pumping, but there’s the affiliated businesses, Michael, you’re referencing wireline. There’s the sand mines as well. I would imagine the incremental earnings contribution at today’s pricing is pretty minimal. But could you give us sort of a framework to think about relative to say, 2019 on a per fleet basis, or however you want to frame it? How much can you add to your EBITDA per fleet or your earnings power both from the just having incremental assets working, but then also the efficiency gains that you were talking about? I appreciate it, you might not be able to get super specific on the efficiency side, but would just love any thoughts on how we should think about that?

Michael StockChief Financial Officer

Yeah. Connor, it’s really hard to comment at this point, but just a little bit too early. I think probably by — I probably like to say that for the next earnings call. I think, ideally, we will get some. But I think sort of being able to give those specifics would be better off done sort of once we’ve got a quarter under our belt. We can really see it. Its going to mean that, this is all accounted for under Schlumberger. And a lot of that historical, the cost structure, etc., they’re still sort of becoming clear. So let’s put that off for a little bit. Not too much additional here at the moment, but it will be positive.

Connor LynaghMorgan Stanley — Analyst

All right, fair. Just one last quick question on a related vein then. The efficiency gains that you’re talking about on wireline that being a big portion of downtime. Can you maybe help us think through how much of an uplift? How big of an outage is that on your quote, average pad? And then if you guys were able to get to where you think is reasonable, how significant would that be?

Ron GusekPresident

So, over our past history, of course, we’ve tracked this for — since the beginning of our time. It’s about — it averages today about six minutes per frac stage that we work on across our entire fleet. So, if you start to roll that up, obviously, that varies a little bit by basin in terms of number of stages that we pump. But if you think about it from that standpoint at a high level, that will give you some sense of what kind of time we might be able to add over the course of a year.

Connor LynaghMorgan Stanley — Analyst

All right. Got it. I’ll leave it there. Thank you.

Chris WrightChief Executive Officer

Thanks, Conner.

Operator

The next question comes from John Daniel with Daniel Energy Partners. Please go ahead.

John DanielDaniel Energy Partners — Analyst

Hi, guys. Good morning. I just have really one question to follow on to Sean’s question. But looking for a wild ask guess on your part, Chris. But as you look at your customers, or just call it, the E&P industry, what percent of them actually care about lower emissions? And what percent of them are actually willing to pay for lower emissions?

Chris WrightChief Executive Officer

That’s a great question. Look, I would say, and one thing I think and John, I know, you know this. But one thing I would say that’s misunderstood about our industry. The industry is dominantly people from rural areas that have lived on the land. I mean, I would say the concern for the environment has always been there in our industry. You’re right, but where are the incentives? Where is the drive for that behavior? And it’s definitely hampered right now in that the marketplace is so tough. E&P companies are hated by investors. And that gets — that definitely does swing a needle on cost above all else. So the bigger players and a few of the, I would say, embraced players are willing to pay for it. But there it’s still a small percent. Everyone else wants it. But in today’s world, they’re more reluctant to make any meaningful trade off for the cost of it. And so that’s — and we’re sort of in the same boat too, right? We want to do — we want to upgrade. I’d love to have all the leading edge fleets. But that’s a lot of money. And so, that’s why I say this, things are trending the right direction. But it’s not an overnight thing. So John, I don’t have an estimate any better than yours. But you make a very good point. Everyone talks the talk. And it’s still a small minority today that’ll pay for it.

John DanielDaniel Energy Partners — Analyst

How would you characterize just the transition, Chris? I mean, we’re eventually going to get there, right? Eventually they’re going to have to pay for it. And it’s the right thing to do. But is there a step change later this year, next year? I mean, just — I know, we have no idea. But just your thoughts?

Chris WrightChief Executive Officer

You know, John, I think it’s so driven by oil prices and returns. And I think that a lot of people say to me, boy, with customers with this discipline on investment, that must be really tough for you guys, they’re spending less. My view on that is exactly the opposite. The fact that oil prices have risen 25%, since people set their budgets, and nobody in the public world, and even in the private world isn’t dramatic, that people don’t want to change their budgets. We think that’s a great thing, right. Because if people invest less, and truly hold back, that’s the thing that moves the needle on oil prices. And you move oil prices to where they are today, and you take efficient operations, we’re going to see strong returns on capital by our customers.

We’re going to see some respect and belief in our industry coming back from those returns. And that enables everything else, everything else. Look, that what’s we’re having right now. First, no one wants higher prices. But we need a sustainable industry, we need partnerships that can keep getting better. And more price to us is necessary for that. A, just to get return on our existing assets. We need a little more price on top of that to invest in new assets. But I actually think, again, and you’ve heard me say, look, we’ve had a rough decade. I think the next several years for industry are actually going to be pretty good. I think it’s supported by commodity prices at base. But I think that’s going to lead to better returns across the value chain. And once you have better returns, the investment, the payment for lower emissions and better operations that follows with it. So yeah, I think we’ll see a very different attitude for paying for lower emissions 12 months from now than we’ve seen in the last 12 months. I could be wrong. That’s my belief, John.

John DanielDaniel Energy Partners — Analyst

Yeah, well, my editorial comment is, the technology seems to be here of making meaningful changes. So hopefully, we’ll see a rapid adoption. And by the way, great video on northwest cost, lift up [Phonetic] the industry.

Chris WrightChief Executive Officer

Thanks, john. I appreciate that.

John DanielDaniel Energy Partners — Analyst

Okay.

Chris WrightChief Executive Officer

Take care.

Operator

The next question comes from Tom Curran with B Riley Securities. Please go ahead.

Tom CurranB Riley Securities — Analyst

Good morning. That’s dedication, guys. Thanks for still taking my question at such a late point in the call. I just had one technology question left. Curious, Chris or Ron, whether you currently provide your customers with any ability to track and monitor in real-time and image, all of the fluids involved in the frac slurry, downhole, some of the words as the frac job is being executed. Do you provide that ability to imaging monitor, the different fluids, subsurface. And if so, is it an ability, you currently have in-house or do you use a third party for that?

Chris WrightChief Executive Officer

You know, Tom, that is an interesting question. And as you probably know, Michael, Ron and I and a number of others at the Liberty team spent the largest piece of our career developing fracture diagnostics, ways to measure how fractures grow, and what they’re doing. We have some of those technologies in-house. Well watch is one we’ve talked about a lot that give us indirect measurements about how far away from well bores fluids are going. We’ve been looking at fracture diagnostic technologies, but it is not a standards — we run frac model, so we obviously in real time are transmitting to our customers from satellite dishes. Our model predictions of where we think fractures are growing, and where the sand is, where the fluid is. So we do it on a predictive basis. We have some big picture far field pressure measurements to infer that. But certainly, there is more that could be done there. And with the right technologies and the right value proposition, yeah, I think you may see more of that from Liberty in the future.

Tom CurranB Riley Securities — Analyst

And just to be clear because you would expect to provide that in-house, and then just as a follow-up. What percentage of your jobs currently would you estimate involve some use of it?

Chris WrightChief Executive Officer

Well, the modeling — essentially all of them. Well watch, the adoption of that is pretty rapid. So that is — that’s ramping up at a good clip. It’s still not have jobs, but that’s ramping up pretty quickly. And then micro seismic that we developed 20 years ago, until we do have some of those on jobs, that’s third party. But it’s a — that’s a small percent.

Tom CurranB Riley Securities — Analyst

Great. Thank you. I’ll let you go before you lose your voice.

Chris WrightChief Executive Officer

Thanks, Tom. Yeah, I don’t want to take — ruin everyone’s Friday mornings, but we appreciate everyone’s interest.

Operator

This concludes our question-and-answer session. I would now like to turn the conference back over to Chris Wright for any closing remarks.

Chris WrightChief Executive Officer

Thanks, everyone, for your time today. I apologize us running over the one hour. We had expanded opening remarks, due to the nature of the transaction we completed with Schlumberger. But thank you all for your time and interest in Liberty and, frankly, for your interest in this industry. Imagine, if COVID had struck a world not energized by oil and gas, we wouldn’t have vaccines now, we wouldn’t have the ability to ramp up PP&E and the communicate and resources all around the world. So, the world got hit a big blow, but thank god, we had an oil and gas energize world to respond quickly, and we look forward to tremendous progress continuing on that this year, and we look forward to talking to you after the first quarter. Have a great day, everyone.

Operator

[Operator Closing Remarks]

Duration: 71 minutes

Call participants:

Chris WrightChief Executive Officer

Michael StockChief Financial Officer

Ron GusekPresident

Chris VoieWells Fargo — Analyst

Scott GruberCitigroup — Analyst

Stephen GengaroStifel — Analyst

Sean MeakimJPMorgan Chase & Co. — Analyst

Ian MacPhersonSiemens — Analyst

James WestEvercore ISI — Analyst

George O’LearyTudor, Pickering, Holt — Analyst

Connor LynaghMorgan Stanley — Analyst

John DanielDaniel Energy Partners — Analyst

Tom CurranB Riley Securities — Analyst

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