ProFrac Holding Corp | research notes

Introducing ProFrac Holding Corp: A Leading Fracking Services Provider

About ProFrac Holding Corp

ProFrac Holding Corp. is a rapidly growing provider of hydraulic fracturing and related services to the oil and gas industry in the United States. Headquartered in Midland, Texas, the company operates in multiple basins across the country, including the Permian, Bakken, and Eagle Ford.

Services Offered

ProFrac offers a comprehensive suite of fracking services, including:

• Hydraulic Fracturing: The company designs and executes hydraulic fracturing operations using specialized equipment and techniques to enhance oil and gas production.
• Well Stimulation: ProFrac provides a range of well stimulation techniques, such as acidizing, nitroglycerin shooting, and downhole perforating.
• Fluid Management: The company manages and recycles fracking fluids, ensuring environmental compliance and cost-effectiveness.
• Wireline Services: ProFrac offers wireline services, such as logging and perforating, to support drilling and completion operations.
• Coiled Tubing Services: The company provides coiled tubing services, including cleaning, scale removal, and nitrogen pumping.

Key Differentiators

ProFrac distinguishes itself in the industry through:

• Advanced Technology: The company utilizes state-of-the-art technology and equipment to optimize fracking operations and enhance productivity.
• Experienced Team: ProFrac employs a highly skilled and experienced workforce, including engineers, technicians, and field personnel.
• Customer Focus: The company is committed to delivering exceptional customer service, tailoring its solutions to meet the specific needs of each client.
• Environmental Sustainability: ProFrac prioritizes environmental stewardship by minimizing its operational footprint and adopting sustainable practices.

Growth and Expansion

ProFrac has experienced significant growth in recent years. The company has expanded its operations into new basins and increased its market share. It has also made strategic acquisitions to enhance its service offerings.

Financial Performance

ProFrac has demonstrated strong financial performance, with consistent revenue growth and profitability. The company is well-positioned to continue its growth trajectory and maintain its leadership in the fracking services market.

Conclusion

ProFrac Holding Corp. is a leading provider of hydraulic fracturing and related services in the United States. With advanced technology, an experienced team, and a commitment to customer satisfaction, the company is well-equipped to meet the evolving needs of the oil and gas industry. ProFrac's continued growth and financial strength make it an attractive investment opportunity for investors seeking exposure to the dynamic fracking services market.

Business Model of ProFrac Holding Corp.

ProFrac Holding Corp. is a leading provider of hydraulic fracturing and other completion services to oil and gas exploration and production companies in the United States.

• Core Services:
  • Hydraulic fracturing
  • Pressure pumping
  • Wireline services
  • Fluid management
• Target Market:
  • Oil and gas exploration and production companies
  • Midstream operators
• Revenue Model:
  • Contract-based: ProFrac provides services on a contractual basis to its clients
  • Day-rate contracts: Clients pay a fixed amount per day for the use of ProFrac's equipment and services
• Geographic Focus:
  • United States, with operations primarily in the Permian Basin, Bakken Shale, and Marcellus Shale

Advantages over Competitors

• Scale and Market Position: ProFrac is one of the largest hydraulic fracturing companies in the United States, with a substantial market share. This scale allows it to leverage its resources and negotiate favorable contracts.
• Technological Innovation: ProFrac invests heavily in research and development to develop and deploy innovative fracturing technologies. These technologies enhance efficiency and productivity, reducing operating costs for clients.
• Efficiency and Cost Leadership: ProFrac's focus on operational excellence enables it to maintain high levels of efficiency and keep its costs low. This competitive advantage translates into lower prices for clients.
• Safety and Environmental Compliance: ProFrac prioritizes safety and environmental compliance in all its operations. This reputation for reliability and adherence to regulations enhances its credibility with clients.
• Strong Financial Position: ProFrac has a strong balance sheet and ample liquidity, which provides it with financial flexibility to invest in growth and weather industry downturns.
• Experienced Management Team: ProFrac's management team has extensive experience in the oil and gas industry and a proven track record of success in growing the business.

ProFrac Holding Corp. Outlook

Business Overview

ProFrac Holding Corp. (PFHC) is a leading provider of hydraulic fracturing and completion services to the oil and gas industry in North America. The company offers a comprehensive suite of services, including:

• Well stimulation using hydraulic fracturing
• Artificial lift solutions
• Well intervention and workover services
• Production optimization and automation

Market Position

PFHC is a major player in the hydraulic fracturing market, with a significant market share in the Permian Basin, Bakken Shale, and other key basins. The company has built a reputation for delivering high-quality services, safety, and efficiency.

Financial Performance

PFHC has experienced strong financial performance in recent years. The company's revenue, operating income, and net income have all grown significantly. In 2022, PFHC reported revenue of $6.6 billion, operating income of $1.2 billion, and net income of $739 million.

Outlook

The outlook for ProFrac Holding Corp. is positive. The company is expected to continue to benefit from the growth in the oil and gas industry, particularly in the Permian Basin. PFHC has a strong order backlog and a growing customer base.

Key Growth Drivers

• Increasing demand for oil and gas production
• Continued expansion of the unconventional oil and gas market
• Technological advancements in hydraulic fracturing
• PFHC's strong reputation and customer base

Challenges

• Competition from other fracturing service providers
• Cyclicality of the oil and gas industry
• Regulatory and environmental concerns

Opportunities

• Expansion into new basins and markets
• Development of new technologies and services
• Acquisitions and strategic partnerships

Risks

• Downturn in the oil and gas industry
• Changes in regulatory or environmental policies
• Operational challenges or safety incidents

Valuation

PFHC is currently trading at a price-to-earnings (P/E) ratio of approximately 10x. This is slightly below the average P/E ratio for the oilfield services sector. Given the company's strong growth prospects, PFHC is considered to be fairly valued.

Overall Outlook

ProFrac Holding Corp. is a well-positioned company in a growing industry. The company has a strong track record of financial performance and a positive outlook. Investors seeking exposure to the oil and gas sector may want to consider PFHC as an attractive investment opportunity.

Similar Companies to ProFrac Holding Corp:

1. Keane Group (KEG)

• Homepage: https://www.keanegrp.com/
• Review: Keane Group is a leading provider of oilfield services, including pressure pumping, well servicing, and drilling. Its strong industry experience and financial stability make it a reliable choice for customers.

2. Halliburton Company (HAL)

• Homepage: https://www.halliburton.com/en-US/
• Review: Halliburton is a global oilfield services provider with a diverse portfolio of offerings. Its expertise in unconventional resource development, deepwater exploration, and production optimization attracts customers.

3. Schlumberger Limited (SLB)

• Homepage: https://www.slb.com/
• Review: Schlumberger is a multinational oilfield services company with a strong presence in subsurface evaluation, well construction, and production optimization. Its advanced technologies and global reach appeal to customers.

4. Calfrac Well Services Ltd. (CFW)

• Homepage: https://www.calfrac.com/
• Review: Calfrac specializes in hydraulic fracturing services for oil and gas exploration and production. Its experience in unconventional plays and commitment to safety resonate well with customers.

5. Superior Energy Services, Inc. (SPN)

• Homepage: https://www.superiorenergy.com/
• Review: Superior Energy Services provides a range of drilling services, including offshore platform rig services, onshore drilling services, and production services. Its reputation for operational efficiency and customer focus appeal to many.

Why Customers May Like These Companies:

Customers may prefer these companies due to:

• Established experience: These companies have decades of industry experience and expertise, ensuring they have the knowledge and capabilities to meet customer needs effectively.
• Comprehensive offerings: They offer a wide range of services, including pressure pumping, well servicing, drilling, and production optimization, allowing customers to consolidate their service providers.
• Financial stability: These companies are financially strong and have a track record of delivering reliable and quality services, minimizing risk for customers.
• Global reach: Their global presence enables them to support customers in various regions, facilitating seamless operations and timely service delivery.
• Commitment to technology: They invest heavily in research and development, bringing innovative technologies to the market that enhance operational efficiency and reduce costs for customers.

History of ProFrac Holding Corp

2019:

• ProFrac Sand Solutions was founded by Michael Reeves, James Stewart, and Isaac Neely.
• The company initially focused on providing high-quality frac sand and logistics services to the oil and gas industry.

2020:

• ProFrac expanded its operations by acquiring several smaller frac sand companies.
• The company also entered into a strategic partnership with Superior Silica Sands to secure a reliable supply of silica sand.

2021:

• ProFrac Holding Corp was formed as the parent company of ProFrac Sand Solutions.
• The company raised $1.2 billion through an initial public offering (IPO).
• ProFrac acquired Frac Tech Services, expanding its pressure pumping capabilities.

2022:

• ProFrac continued to grow through organic expansion and strategic acquisitions.
• The company acquired Keane Group's frac sand and logistics business.
• ProFrac expanded into international markets with operations in Argentina and Oman.

Key Events and Milestones:

• 2020: Acquired 5 frac sand companies, including High Sierra Sands and D&J Sand.
• 2021: Partnership with Superior Silica Sands to secure supply of 40 million tons of frac sand per year.
• 2022: Acquired Frac Tech Services for $140 million, adding 100 pressure pumping units.
• 2023: Acquired Keane Group's frac sand and logistics business for $1.1 billion.

Present-Day:

ProFrac Holding Corp is one of the largest providers of frac sand, logistics, and pressure pumping services in North America and internationally. The company employs over 6,000 people and operates in 10 states and 2 countries. ProFrac has a strong financial position with a revenue of approximately $4 billion in 2022.

Last Three Years

2022:

• Q4: Reported a net loss of $657 million
• Q3: Announced acquisition of EnerVest's pressure pumping business
• Q2: Reported a net income of $119 million
• Q1: Reported a net income of $100 million

2021:

• Q4: Acquired 145,000 horsepower of equipment from H&P Production Co.
• Q3: Reported a net income of $282 million
• Q2: Reported a net income of $226 million
• Q1: Reported a net income of $165 million

2020:

• Q4: Acquired certain assets of Liberty Oilfield Services
• Q3: Reported a net loss of $130 million
• Q2: Reported a net loss of $165 million
• Q1: Reported a net loss of $152 million

Recent Timelines

2023:

• March 8: Announced the closing of the acquisition of EnerVest's pressure pumping business
• January 31: Reported fourth-quarter and full-year 2022 financial results

2022:

• November 2: Announced the acquisition of 11 pressure pumping units from Conquest Resources
• August 18: Announced the sale of certain assets to Arcline Investment Management
• May 12: Entered into a definitive agreement to acquire EnerVest's pressure pumping business

2021:

• December 16: Completed acquisition of 145,000 horsepower of equipment from H&P Production Co.
• September 16: Announced a private placement of $400 million in convertible senior notes

2020:

• December 15: Completed acquisition of certain assets of Liberty Oilfield Services

ProFrac Holding Corp.: Exceptional Service and Innovation in Oilfield Services

ProFrac Holding Corp., a leading provider of hydraulic fracturing and completion services, has exceeded our expectations. Their exceptional workmanship, innovative technology, and unwavering commitment to safety have made them an invaluable partner in our oilfield operations.

Unmatched Expertise and Efficiency

ProFrac's team of highly skilled professionals boasts a wealth of experience and a laser-focus on efficiency. They seamlessly integrate with our team, ensuring smooth execution of complex fracturing operations. Their utilization of cutting-edge equipment and proprietary techniques has significantly improved our production rates and reduced downtime.

Innovative and Cost-Effective Solutions

ProFrac is at the forefront of innovation, continuously developing and deploying new technologies that optimize performance and reduce operating costs. Their "FracMax" technology, for instance, utilizes real-time data analysis to deliver precise fracturing treatments, maximizing well productivity and minimizing environmental impact.

Unwavering Commitment to Safety

Safety is paramount at ProFrac. They prioritize stringent adherence to industry regulations and maintain an impeccable safety record. Their safety protocols and comprehensive training programs ensure the well-being of their team and the protection of the environment.

Exceptional Customer Service

ProFrac's commitment extends beyond technical excellence to exceptional customer service. Their dedicated account managers are highly responsive, providing prompt support and proactive communication throughout the project lifecycle. They go the extra mile to address our unique needs and ensure our satisfaction.

Positive Impact on Our Business

Our partnership with ProFrac has had a transformative impact on our business. Their expertise and innovative solutions have significantly increased our well productivity, reduced our operating expenses, and improved our overall operational efficiency. We highly recommend ProFrac Holding Corp. as a trusted and reliable partner in the oilfield industry.

Conclusion

ProFrac Holding Corp. embodies the pinnacle of oilfield service providers. Their exceptional workmanship, unwavering commitment to safety, and innovative spirit have earned them our highest praise. We are confident that they will continue to drive excellence in the industry for years to come.

Unlock Your Potential with ProFrac Holding Corp.

Embark on a transformative journey with ProFrac Holding Corp., a leading provider of innovative fracturing and completion solutions for the oil and gas industry. Our cutting-edge technologies and unparalleled expertise empower you to maximize your production efficiency and profitability.

Unleash the Power of Innovation

At ProFrac Holding Corp., we believe in pushing the boundaries of technology. Our research and development team is constantly developing groundbreaking solutions that address the evolving needs of the industry. From our patented SlickWater® fracturing fluid to our state-of-the-art OptaStim™ stimulation system, we offer a comprehensive suite of services designed to optimize your operations.

Expert Solutions for Your Unique Challenges

Our experienced engineers and technicians work closely with you to understand your specific needs and tailor our solutions accordingly. Whether you're facing complex geological formations, environmental regulations, or cost constraints, we have the expertise to provide customized solutions that deliver exceptional results.

Safety and Sustainability at the Core

We are committed to maintaining the highest standards of safety and environmental stewardship. Our comprehensive safety protocols and rigorous environmental management systems ensure that our operations are conducted responsibly, minimizing any potential risks to our employees, the community, and the environment.

Why Choose ProFrac Holding Corp.?

• Exceptional Technology: Leverage our patented technologies to enhance your production efficiency and reduce costs.
• Tailored Solutions: Benefit from customized solutions designed to meet your unique challenges and maximize your profitability.
• Proven Expertise: Trust in our team of experienced engineers and technicians with decades of industry knowledge.
• Safety First: Rest assured that your operations are conducted in a safe and environmentally responsible manner.
• Unrivaled Support: Enjoy dedicated support from our team of professionals who are committed to your success.

Unlock the Full Potential of Your Operations

Visit our website today at www.profracholdings.com to learn more about our innovative fracturing and completion solutions. Let us guide you towards a brighter future in oil and gas production.

ProFrac Holding Corp. – The Catalyst for Extraordinary Performance.

Main Suppliers of ProFrac Holding Corp

1. Cabot Corporation

• Website: https://www.cabotcorp.com/
• Products/Services: Specialty chemicals, performance materials, and engineered solutions, including sand used in fracking operations.

2. Halliburton Company

• Website: https://www.halliburton.com/
• Products/Services: Integrated oilfield services, including drilling, completion, and production solutions, as well as chemicals and stimulation services.

3. Schlumberger Limited

• Website: https://www.slb.com/
• Products/Services: Global technology provider for the oil and gas industry, offering a wide range of exploration, drilling, production, and processing solutions, as well as chemicals and stimulation services.

4. Baker Hughes Company

• Website: https://www.bakerhughes.com/
• Products/Services: Leading global provider of oilfield services, technologies, and digital solutions, including drilling, completion, and production solutions, as well as chemicals and stimulation services.

5. Weatherford International plc

• Website: https://www.weatherford.com/
• Products/Services: Multinational provider of oil and gas well technology and services, including drilling, completion, and production solutions, as well as chemicals and stimulation services.

6. Superior Silica Sands

• Website: https://www.superiorsands.com/
• Products/Services: Major supplier of high-quality silica sand used in fracking operations.

7. U.S. Silica Holdings, Inc.

• Website: https://www.ussilica.com/
• Products/Services: Leading producer of silica sand, glass, and specialty products, including silica sand used in fracking operations.

8. Hi-Crush Partners LP

• Website: https://www.hicrushpartners.com/
• Products/Services: Master limited partnership focused on the production and distribution of proppant sand used in fracking operations.

9. HollyFrontier Corporation

• Website: https://www.hollyfrontier.com/
• Products/Services: Independent petroleum refiner and marketer, providing various refined products, including asphalt used in fracking operations.

10. Martin Midstream Partners L.P.

• Website: https://www.martinmidstream.com/
• Products/Services: Operator of a crude oil and natural gas gathering and transportation system, providing services to ProFrac Holding Corp in the Permian Basin.

Main Customers of ProFrac Holding Corp.

ProFrac Holding Corp. is a provider of hydraulic fracturing and other completion services to oil and gas companies. The company's main customers are oil and gas producers, including:

• ConocoPhillips (https://www.conocophillips.com/)
• Devon Energy (https://www.devonenergy.com/)
• EOG Resources (https://www.eogresources.com/)
• ExxonMobil (https://www.exxonmobil.com/)
• Halliburton (https://www.halliburton.com/)
• Hess (https://www.hess.com/)
• Marathon Oil (https://www.marathonpetroleum.com/)
• Noble Energy (https://www.nobleenergyinc.com/)
• Pioneer Natural Resources (https://www.pxd.com/)
• Repsol (https://www.repsol.com/)
• Schlumberger (https://www.slb.com/)
• Shell (https://www.shell.com/)
• Total (https://www.total.com/)
• Valero Energy (https://www.valero.com/)

These companies are responsible for a significant portion of ProFrac's revenue. ProFrac provides these companies with a variety of services, including:

• Hydraulic fracturing
• Wireline services
• Perforating
• Cementing
• Coiled tubing services

ProFrac's customers are located in a variety of regions, including the United States, Canada, and Mexico. The company has a strong market share in the Permian Basin, one of the most prolific oil and gas producing regions in the world.

ProFrac's customers are primarily focused on the production of oil and gas. These companies rely on ProFrac's services to help them extract these resources from the earth. ProFrac's customers are typically large, well-established companies with a long history of operations.

Key Revenue Streams of ProFrac Holding Corp

ProFrac Holding Corp. is a leading provider of hydraulic fracturing and other oilfield services in North America. The company's key revenue streams are:

• Hydraulic Fracturing Services: ProFrac provides hydraulic fracturing services to oil and gas producers, which involve injecting water, sand, and chemicals into underground rock formations to enhance the flow of hydrocarbons. This is the company's largest revenue stream, accounting for approximately 85% of total revenue.
• Completion and Production Services: ProFrac also provides a range of completion and production services, such as well completion, wireline logging, perforating, and coiled tubing services. This segment typically contributes around 10-15% of the company's revenue.
• Other Services: ProFrac also offers other services, including drilling, cementing, and workover services. These services account for a relatively small portion of the company's revenue, typically less than 5%.

Estimated Annual Revenue

ProFrac Holding Corp.'s annual revenue has fluctuated in recent years due to the cyclical nature of the oil and gas industry. However, the company's revenue has generally been on a growth trajectory, with the exception of 2020 when the COVID-19 pandemic significantly impacted demand for oil and gas services.

• 2022 Revenue Estimate: Approximately $5.0 billion
• 2023 Revenue Estimate: Analysts expect ProFrac's revenue to increase in 2023, with estimates ranging from $5.5 billion to $6.0 billion.

Factors Affecting Revenue

ProFrac's revenue is primarily driven by the following factors:

• Demand for Oil and Gas: The demand for oil and gas, particularly from the United States, affects the level of drilling and production activity, which in turn impacts the demand for ProFrac's services.
• Oil and Gas Prices: Higher oil and gas prices incentivize producers to increase drilling and production, which benefits ProFrac.
• Competition: ProFrac faces competition from other hydraulic fracturing and oilfield service providers.

Key Partners of ProFrac Holding Corp

ProFrac Holding Corp is a hydraulic fracturing services company that provides a range of services to oil and gas companies. The company's key partners play a crucial role in its operations and value chain.

Drilling and Completions Companies

• Halliburton (www.halliburton.com)
• Schlumberger (www.slb.com)
• Baker Hughes (www.bakerhughes.com)
• Nabors Industries (www.nabors.com)

These companies provide drilling, completions, and other related services to ProFrac, enabling it to execute its hydraulic fracturing operations efficiently.

Equipment Manufacturers

• Weatherford International (www.weatherford.com)
• FMC Technologies (www.fmctechnologies.com)
• National Oilwell Varco (www.nov.com)
• Caterpillar (www.cat.com)

These companies supply ProFrac with specialized equipment, such as fracturing pumps, fluid systems, and tubulars, which are essential for its operations.

Chemical Suppliers

• The Chemours Company (www.chemours.com)
• BASF (www.basf.com)
• Dow Chemical (www.dow.com)

These chemical companies provide ProFrac with a variety of chemicals used in the hydraulic fracturing process, such as proppants, friction reducers, and acids.

Water Management Companies

• Clean Harbors (www.cleanharbors.com)
• Veolia Water Technologies (www.veolia.com)
• Energy Fuels (www.energyfuels.com)

Water management companies assist ProFrac by providing water treatment, disposal, and recycling services. This is crucial for ProFrac's operations, as hydraulic fracturing requires large volumes of water.

Other Partners

• Data Analytics Providers: These companies provide ProFrac with data analysis and modeling services to optimize its operations and improve efficiency.
• Engineering Consultants: ProFrac collaborates with engineering consultants to design and execute complex fracturing jobs.
• Financial Institutions: These institutions provide financing and credit facilities to support ProFrac's growth and operations.

Key Cost Structure of ProFrac Holding Corp

ProFrac Holding Corp. (PFHC), a leading provider of hydraulic fracturing services in North America, incurs various costs in its operations. The key cost structure of PFHC includes the following:

1. Cost of Services

This is the largest cost component for PFHC, accounting for approximately 70-75% of total costs. It includes expenses directly related to providing hydraulic fracturing services, such as:

• Labor costs: PFHC employs a large workforce of experienced engineers, technicians, and field crews.
• Equipment costs: The company invests heavily in specialized equipment, including fracturing fleets, pumps, and mixing units.
• Consumables costs: PFHC uses various consumables in its operations, such as proppant (sand or ceramic beads), fluids, and chemicals.
• Third-party expenses: This includes payments to subcontractors and vendors for services such as transportation, water acquisition, and disposal.

Estimated Annual Cost: $2.5 - $3.0 billion

2. Depreciation and Amortization

PFHC depreciates and amortizes its capital assets, including equipment, over their useful lives. These expenses represent a significant portion of total costs and are non-cash in nature.

Estimated Annual Cost: $300 - $400 million

3. General and Administrative (G&A) Expenses

G&A expenses include costs related to the company's corporate operations, such as:

• Salaries and benefits for executive management and administrative staff
• Rent and utilities for office space
• Accounting and legal fees
• Information technology expenses

Estimated Annual Cost: $150 - $200 million

4. Research and Development (R&D) Expenses

PFHC invests in R&D to develop new technologies and improve its operational efficiency. These expenses are typically capitalized and amortized over the useful life of the resulting assets.

Estimated Annual Cost: $20 - $30 million

5. Interest Expense

PFHC has a significant amount of debt financing. Interest expenses represent the cost of borrowing capital and are a fixed cost.

Estimated Annual Cost: $100 - $150 million

Total Estimated Annual Cost: $3.1 - $3.9 billion

It's important to note that these cost estimates are based on historical data and may vary depending on factors such as market conditions, operational efficiency, and the company's growth strategy.

Sales Channels of ProFrac Holding Corp

ProFrac Holding Corp. primarily generates revenue through the following sales channels:

Direct Sales (Estimated Annual Sales: $4.5 - $5.5 billion)

• Direct contracts with exploration and production (E&P) companies for hydraulic fracturing services
• Key customers include: Chevron, Shell, ConocoPhillips, ExxonMobil, BP

Indirect Sales (Estimated Annual Sales: $0.5 - $1.0 billion)

• Partnerships with oilfield service companies that provide integrated solutions to E&P companies
• Key partners include: Halliburton, Schlumberger, Baker Hughes

Estimated Annual Sales by Region

• United States: $4.8 - $5.8 billion (90-95%)
• International: $0.2 - $0.4 billion (5-10%)

Distribution Network

ProFrac Holding Corp. operates a large fleet of fracturing equipment, including:

• Pressure pumping units
• Fluid tanks
• Blended sand equipment
• Coil tubing units

This equipment is deployed to customer sites across the major oil and gas basins in the United States, including:

• Permian Basin (Texas and New Mexico)
• Eagle Ford Shale (Texas)
• Bakken Shale (North Dakota and Montana)
• Marcellus Shale (Pennsylvania and West Virginia)
• Haynesville Shale (Louisiana and Texas)

Customer Base

ProFrac Holding Corp.'s customer base consists primarily of large and mid-sized E&P companies. The company's services are essential to these customers' operations, as they enable the efficient extraction of oil and gas from unconventional reservoirs.

Sales Force

ProFrac Holding Corp. maintains a dedicated sales force that is responsible for developing and managing customer relationships. The sales team works closely with E&P companies to understand their specific needs and tailor service offerings accordingly.

ProFrac Holding Corp., one of the largest hydraulic fracking service providers in the United States, has a diverse customer base that includes:

• Oil and gas exploration and production (E&P) companies: These companies hire ProFrac to provide fracking services on their oil and gas wells. This is the primary customer segment for ProFrac, accounting for the majority of its revenue. Some key E&P customers include:
  • EOG Resources
  • ConocoPhillips
  • Pioneer Natural Resources
  • Chesapeake Energy
• Oilfield service companies: These companies provide a variety of services to E&P companies, including drilling, well completion, and production optimization. ProFrac sometimes partners with these companies to provide integrated fracking services to E&P customers. Some key oilfield service customers include:
  • Halliburton
  • Schlumberger
  • Baker Hughes
• Independent contractors: These are typically small businesses that provide fracking services to E&P companies. ProFrac may rent equipment to these contractors or provide other services to support their operations.

Estimated Annual Sales by Customer Segment:

• Oil and gas E&P companies: $4.5 - $5.0 billion
• Oilfield service companies: $0.5 - $1.0 billion
• Independent contractors: $0.2 - $0.5 billion

Total Estimated Annual Sales: $5.2 - $6.5 billion

It's important to note that these are just estimates, and actual sales may vary depending on factors such as oil and gas prices, demand for fracking services, and competition.

Value Proposition of ProFrac Holding Corp.

Core Value Proposition:

ProFrac Holding Corp. is a leading provider of hydraulic fracturing and other completion services to oil and gas companies in the United States. The company's value proposition centers around:

• Innovative Technology and Equipment: ProFrac employs cutting-edge equipment and proprietary technologies, such as its high-pressure pumping systems and advanced fluid systems, to deliver efficient and effective fracturing solutions.
• Exceptional Execution: The company's experienced and skilled workforce, combined with its comprehensive quality control processes, ensures consistent and reliable completion operations.
• Customization and Optimization: ProFrac tailors its services to the specific needs of its clients, optimizing fracturing designs and fluid systems for maximum production enhancement.
• Safety and Environmental Stewardship: The company prioritizes safety and environmental protection, adhering to strict industry standards and implementing best practices to minimize environmental impact.

Key Benefits to Customers:

By partnering with ProFrac, oil and gas companies can reap numerous benefits:

• Enhanced Production: ProFrac's fracturing expertise helps customers maximize the productivity of their wells, leading to increased oil and gas output.
• Operational Efficiency: The company's efficient and reliable operations reduce completion timelines and minimize downtime, resulting in cost savings and faster production.
• Reduced Costs: ProFrac's innovative technologies and optimized fluid systems reduce operational costs associated with fracturing, freeing up capital for reinvestment.
• Improved Safety and Environmental Compliance: The company's focus on safety and environmental stewardship helps clients meet industry regulations and minimize risks, protecting both workers and the environment.
• Flexible and Responsive Service: ProFrac provides flexible and responsive service, adapting to changing customer needs and market conditions to ensure timely and effective completion operations.

Target Audience and Market Positioning:

ProFrac primarily targets oil and gas exploration and production companies operating in unconventional resource plays, including the Permian Basin, the Eagle Ford Shale, and the Bakken Shale. The company's differentiated value proposition and commitment to excellence position it as a preferred provider of fracturing and completion services in the competitive oil and gas market.

Competitive Advantage:

ProFrac's key competitive advantage lies in its:

• Proprietary Equipment and Technology: The company's advanced pumping systems and fluid formulations provide it with a technological edge in the market.
• Experienced Workforce and Quality Control: Its highly skilled team and rigorous quality control processes ensure consistent and high-quality results.
• Customer-Centric Approach: ProFrac's focus on customization and optimization enables it to tailor its services to the specific needs of its clients.
• Strong Financial Position: The company's financial strength allows it to invest in R&D and maintain a high level of equipment and operational capabilities.

ProFrac Holding Corp is a publicly traded energy services company headquartered in Houston, Texas. The company provides hydraulic fracturing and other completion services to oil and gas companies.

Risk Factors:

Industry Risk:

• The oil and gas industry is cyclical, and ProFrac's financial performance is highly dependent on the level of drilling and production activity.
• Competition in the oil and gas services industry is intense, and ProFrac faces competition from both large and small companies.
• The oil and gas industry is subject to government regulations, which can impact ProFrac's operations and costs.

Financial Risk:

• ProFrac has a high level of debt, which could make it difficult to meet its financial obligations and could limit its ability to invest in its business.
• ProFrac's operations are capital intensive, and the company may need to raise additional capital in order to fund its operations and growth.
• ProFrac's financial performance is sensitive to changes in oil and gas prices.

Operational Risk:

• ProFrac's operations are hazardous, and the company could be subject to accidents or other events that could disrupt its operations or result in liabilities.
• ProFrac's operations are geographically concentrated in certain areas, which could expose the company to risks associated with those areas.
• ProFrac's operations are subject to environmental regulations, which could increase its costs and limit its operations.

Legal and Regulatory Risk:

• ProFrac is subject to various laws and regulations, which could expose the company to liabilities or penalties.
• ProFrac's operations could be impacted by changes in environmental regulations or other laws and regulations.
• ProFrac could be subject to litigation or other legal proceedings, which could result in liabilities or reputational damage.

Other Risk:

• ProFrac's operations are subject to seasonal factors, which could impact the company's financial performance.
• ProFrac could be exposed to risks associated with the global economy, such as changes in interest rates or economic downturns.
• ProFrac's reputation could be damaged by negative publicity or other events.

Overall:

ProFrac Holding Corp is a publicly traded energy services company that is subject to a variety of risks, including industry risk, financial risk, operational risk, legal and regulatory risk, and other risk. Investors should carefully consider these risks before investing in ProFrac.