ProPetro's Frac Fleet Is Sold Out, CEO Says — And He Won't Spend To Add Capacity
CEO Sam Sledge says the company is "turning away opportunities" but will limit capital spending to replacing and refurbishing its fleet.
ProPetro's hydraulic fracturing fleet is essentially sold out, and CEO Sam Sledge said on the company's third-quarter earnings call Wednesday that it has no plans to spend beyond replacement and refurbishment to add more. "We are turning away opportunities today because we do not have the capacity to serve," he said.
No 14th fleet coming
ProPetro, based in Midland, Texas, provides fracking, wireline, cementing and mobile power generation services, mostly to oil and gas producers in the Permian Basin.
Pressed by a Barclays analyst on whether pricing next year could justify new-build horsepower, Sledge said the company has no interest in working more equipment than it does today, or in capital spending above replacing and refurbishing the existing fleet. Asked about reactivating a 14th fleet, he said the company has "old worn out equipment that we don't plan to ever work again."
The company reactivated two fleets this year and runs 13 active fleets, the latest of which deployed in the third quarter earlier than planned. It expects to hold about 13 in the fourth quarter, with holiday slowdowns temporarily hurting utilization and results.
Sledge said much of the turned-away work is spot-market business that its dedicated-fleet model does not prioritize. He said the 2027 calendar is basically full, though not yet "with the right work."
A tight Permian market
Sledge put the active Permian frac fleet count in the mid-70s and said the industry could bring back only a handful more fleets before it would need significant new investment. He does not expect that investment soon, given the free-cash-flow focus across the sector.
More than two-thirds of ProPetro's active horsepower is contracted, with most agreements renewing in the first half of next year. Sledge said maybe half of the electric fleet recontracts going into 2027, and that the company passed on recontracting nearly all of it almost a year ago because it disliked the pricing. Chief Financial Officer Caleb Weatherl said about three electric fleet buyouts are still expected next year, which will begin to remove lease expense from EBITDA.
Rebuilding capacity after the 2024 and 2025 downturn, when the company cut costs and capital spending, has weighed on completions margins, Sledge said. Third-quarter revenue was $355 million, up 16% from the prior quarter, with net income of $13 million against an $8 million loss. Adjusted EBITDA was $60 million, up 33% from the prior quarter.
Power business and 2027 spending
Sledge deferred a question on 2027 completions capital spending to next quarter, saying the company is in budget season.
In power, the company said it expects 250 to 275 megawatts deployed by the end of 2026. About $8 million of third-quarter adjusted EBITDA came from that unit, and contracted capacity is about 510 megawatts after a roughly 230-megawatt agreement with Targa. Power capital spending for 2027 is expected to rise from 2026 levels.
Weatherl said the electric-fleet buyouts planned for next year will start taking that lease expense off EBITDA as each one is completed.
Sources
- ProPetro Reports Financial Results for the Third Quarter of 2026 – Company Announcement - FT.com — Financial Times
- ProPetro Holding (PUMP) Q3 Earnings and Revenues Surpass Estimates — Yahoo Finance
- ProPetro GAAP EPS of $0.09 beats by $0.10, revenue of $355M beats by $33.98M — seekingalpha.com
