ProPetro's Q2 2025: Contradictions in Fleet Adjustments, Efficiency Gains, and Market Outlook

Completions Activity and Market Conditions:
- ProPetro operates approximately 70 frac fleets in the Permian Basin, down from an initial 90 to 100 at the start of the year.
- The company chose to idle certain fleets to preserve them for more favorable market conditions, reflecting market uncertainty driven by tariffs, rising OPEC+ production, and weakened price discipline at the lower end of the market.
- ProPetro's strategy is to maintain its position in the market through disciplined investments in next-generation technology and efficiency, aiming to capitalize on future market recovery.

ForCE Electric Fleet and Demand:
- Approximately 75% of ProPetro's fleet is next-generation, including Tier IV DGB dual-fuel and FORCE electric fleets, with more than 50% of active hydraulic horsepower under long-term contracts.
- The strong demand for FORCE electric fleets is supported by successful contracts and commercial leverage, which is expected to offer lower risk for future earnings.
- ProPetro plans to accelerate the transition from Tier 2 diesel equipment to FORCE electric equipment due to its high demand and commercial leverage.

PROPWR Power Generation and Contracts:
- ProPetro has 220 megawatts of PROPWR equipment on order, with deliveries expected by mid-year 2026.
- The initial contract for 80 megawatts was executed with a Permian-focused E&P operator for a distributed microgrid installation, marking a significant milestone.
- The company expects to secure long-term agreements for all 220 megawatts by the end of 2025, indicating strong demand and potential for future expansion in the power generation segment.

Capital Allocation and Financial Performance:
- ProPetro generated $54 million in net cash provided by operating activities and a net loss of $7 million for Q2 2025.
- The company maintained strong cash generation in its legacy completions business despite market challenges, with free cash flow for Completions being $26 million.
- ProPetro's financial strategy remains focused on disciplined capital allocation, investing for growth while maintaining a strong balance sheet and prioritizing shareholder returns.