ProPetro Holding Corp. Q3 FY25 Results

ProPetro delivered another resilient quarter, driven by our industrialized operating model and focus on capital-light assets. Notwithstanding market headwinds, our completions business continues to generate reliable free cash flow, supported by disciplined strategy execution, operational excellence, and effective cost management. The broader energy markets, including the completions market in the Permian Basin, continue to face challenges. That said, ProPetro is successfully navigating these dynamics by controlling what we can control — our everyday business decisions. Our strategic investments, particularly in expanding PROPWR and our FORCE® electric fleet transition, have strengthened the Company’s foundation and reinforced our ability to withstand market turbulence. Our strategic actions have put ProPetro in a position of strength in the Permian. Led and operated by an experienced team, with a strong balance sheet and first-class customers, our company is well positioned to capitalize on opportunities and drive free cash flow growth and value creation over time. We believe ProPetro’s strengths will enable us to continue to outperform. PROPWR made significant progress over the past several months, including the deployment of our first assets in the field, where we have observed excellent operational efficiency and reliability. Furthermore, as announced earlier this week, we secured a long-term contract to commit approximately 60 megawatts to support a hyperscaler’s data center in the Midwest region of the United States, marking our entry into the data center power market. This builds on our previously announced inaugural contract last quarter, which committed 80 megawatts over a 10-year term to a distributed oilfield microgrid installation. Additionally, during the quarter, we signed another in-field power contract to support production operations for a Permian E&P customer. We are also in advanced negotiations and deployment planning for a long-term 70 megawatt agreement with a large Permian E&P operator that is expected to include asset deployments before year-end and will support a turnkey distributed microgrid installation. In total, we now have over 150 megawatts contracted, with expectations to reach at least 220 megawatts contracted by the end of the year. While we are pleased with both our current contracts and those nearing completion, we are even more optimistic about future growth. Given the accelerating demand for power, our active commercial pipeline, and the expansion and extension opportunities available with our existing customers, we believe we are poised to deepen existing relationships, expand our reach to new partners and drive substantial long-term growth. To support our expanding commercial pipeline, we’ve placed orders for an additional 140 megawatts of equipment, bringing our total delivered or on-order capacity to 360 megawatts. We expect all units to be delivered by early 2027, with contracts expected to be in place ahead of delivery. Thanks to our strong relationships with supply chain partners, we are well positioned to order additional capacity and anticipate 750 megawatts delivered by year-end 2028. Notably, we have also included additional 5-year growth guidance for PROPWR in our updated investor presentation deck. We currently estimate that the total cost of this equipment, including the balance of plant, will average approximately $1.1 million per megawatt. To help fund this growth, we have executed a letter of intent for a $350 million leasing facility with an investment-grade partner experienced in power generation financing. In today’s challenging completions market, access to external capital is critical for scaling our power business. We will utilize this facility judiciously, drawing funds only as necessary to accelerate or expand projects. With long-term take-or-pay contracts, durable assets, and robust expected returns, we believe PROPWR is well positioned to leverage debt effectively in a disciplined as needed manner to pursue its growth objectives. This is still just the beginning for PROPWR. Our momentum in securing customer commitments continues, and we are actively negotiating additional long-term contracts. The demand for reliable, low- emission power solutions is accelerating, and we believe we are well-positioned to capture this opportunity. Looking ahead, we intend to grow in our oilfield power projects, while also seeking to further expand in the data center arena given the significant build out underway in that sector. We see clear potential not just to grow, but to multiply our installed capacity, with expectations of one gigawatt or greater by 2030. We believe there is significant opportunity in market cycles like this as smaller and less disciplined competitors at the bottom end of the market, that have not invested in next-generation technology, are unable to sustain adequate returns. We intend to capitalize on this environment and emerge on the other side of the cycle healthier and stronger than before. As we look to the final quarter of the year and ahead to 2026, we will continue to execute on our strategy that has allowed us to proactively respond to changing market conditions in a nimble manner. Despite the headwinds facing the industry, we remain confident in our differentiated strategy and the future of ProPetro. We firmly believe our company is uniquely positioned to succeed because we have a business that sustains through cycles, backed by a strong balance sheet and durable customer relationships, and we have an emerging and exciting platform in PROPWR. With approximately 70% of our active frac horsepower on long-term contracts, and continued demand for our next-generation fleets and reliable power infrastructure, ProPetro will continue to capitalize on opportunities to deliver value for our customers and stakeholders.

ProPetro delivered durable third quarter financial results despite a decrease in overall activity levels across the Permian Basin. ProPetro maintains a strong cash and liquidity position, currently supported by the sustainable free cash flow generated by our completions business. This financial strength enables us to remain flexible and responsive to evolving market dynamics and the growth needs of our PROPWR business. While our completions business has demonstrated resilience, market conditions still remain challenging and it has not generated the level of free cash flow we anticipated earlier this year, making access to external capital essential for the meaningful expansion of our power generation business. To support this growth, we have secured a letter of intent for a $350 million lease financing facility, with closing expected before the end of the year. This facility is designed to maximize our financial flexibility, enabling us to draw funds as needed to accelerate or scale PROPWR projects. We intend to exhibit discipline in how we utilize this facility, ensuring we preserve a healthy balance sheet while supporting our continued growth.