PUMP - Embedded Expectations Analysis - 2020 08 21
ProPetro Holding Corp. (PUMP:USA) currently trades at a discount to UAFRS-based (Uniform) assets, with a 0.9x Uniform P/B. At these levels, the market has bearish expectations for the firm, and management may be concerned about operational efficiencies, workforce reductions, and capexSpecifically, may lack confidence in their ability to sustain operational efficiencies, balance efficient deliveries and safe services while protecting their capacity utilization, and negotiate lower pricing for expendable items. In addition, they may have concerns about workforce reductions due to deteriorating market conditions, and Pioneer's plans to mitigate any excess fees in the future. Furthermore, they may lack confidence in their ability to reduce capex for the rest of 2020 and improve their total capacity utilization rate. Additionally, they may be overstating the potential of their electric offering deployment and the positive dialogue with their customers regarding demand. Finally, they may lack confidence in their ability to protect their internal collaborative culture, reinvest in equipment, and execute projects with positive returns
ProPetro Holding is a holding company. Through its subsidiary, the company is engaged as an oilfield services company providing hydraulic fracturing and other services to upstream oil and gas companies engaged in the exploration and production of North American unconventional oil and natural gas resources. The company's operations are primarily focused in the Permian Basin. In addition to its core hydraulic fracturing operations, the company provides complementary well completion and production services, including cementing, coiled tubing, flowback services and drilling. The company conducts its business through five segments: hydraulic fracturing (inclusive of acidizing), cementing, coil tubing, flowback and drilling.
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