Tetra's Q1 2025: Navigating Contradictions in Oasis Tech, Regulatory Support, and Deepwater Prospects

TETRA Oasis technology commercialization timeline, regulatory support for produced water reuse, deepwater market outlook and project timetables, electrolyte sales ramp-up, and deepwater project timing and market outlook are the key contradictions discussed in TETRA's latest 2025Q1 earnings call.



Record First Quarter Performance:
- TETRA Technologies reported a record first quarter adjusted EBITDA of $32.3 million and adjusted EBITDA margins of 20.5%.
- Growth was driven by strong performance in the Completion Fluids and Products segment and a 41% sequential increase in adjusted EBITDA.

Offshore Deepwater Activity Growth:
- The company saw a 60% increase in offshore deepwater operations, with 24 projects in Q1 2025 compared to 15 in Q1 2024.
- This increase is attributed to the gaining momentum in the deepwater market since the 2021 post-COVID pandemic low point.

Water and Flowback Services Segment Optimizations:
- Despite a 2% sequential decline in revenue, the Water and Flowback Services segment outperformed U.S. frac activity, which declined approximately 10%.
- This was due to cost control actions and a focus on automation, which improved adjusted EBITDA margins despite reduced frac activity levels.

Emerging Growth Initiatives Progress:
- TETRA's desalination of produced water solution, TETRA Oasis TDS, is progressing with commercial pilots and partnerships, such as the one with EOG Resources.
- This initiative is driven by growing demand for produced water reuse due to available pore space restrictions and water resource needs.