Liberty Energy's Q4 2024: Contradictory Insights on Frac Pricing and Mobile Power Returns

These are the key contradictions discussed in Liberty Energy's latest 2024Q4 earnings call, specifically including: Frac Pricing Dynamics, and Returns Opportunities from Mobile Power Generation:



Fleet Transition and Power Generation Expansion:
- Liberty Energy reported a full-year revenue of $4.2 billion, with a significant focus on fleet transition initiatives and expansion of nat gas fueling and delivery capacity.
- The company is anticipating the deployment of 150 megawatts of power generation by the end of 2025, with another 200 megawatts by the end of 2026.
- This expansion is driven by the need to meet growing power demand and the potential for differentiated power services and solutions.

Financial Performance and Returns:
- Liberty's full-year adjusted EBITDA was $922 million, with a return of capital employed of 17%.
- The company's 2024 cash return on capital invested was ```21%``, exceeding the 13-year S&P average.
- The strong financial performance was due to cost optimization through AI-enhanced digital systems and effective capital allocation to high-return projects.

Technological Advancements in Completion Services:
- Liberty achieved a single crew record in completion services with a digiPrime fleet setting 7,143 hours pumped in a year, averaging nearly 600 hours per month.
- This feat was supported by the development of advanced engine technologies and integrated ecosystems of software solutions.
- The technological advancements aim to enhance fuel efficiency and reduce emissions, providing operational and capital efficiency benefits.

Frac Market Dynamics and Outlook:
- Industry-wide lateral footage completed was expected to be approximately flat with 2024, with a slow pace of activity in late 2024.
- There is potential for improved pricing dynamics as older Tier 2 equipment reaches end of life and demand for higher-quality fleets increases.
- Global oil market uncertainties and improving natural gas fundamentals support the company's strategic priorities in completion services.