Heather Schmidt - Director of Investor Relations Ann Fox - President and Chief Executive Officer Clinton Roeder - Chief Financial Officer.

Sean Meakim - JPMorgan James Wicklund - Credit Suisse Jud Bailey - Wells Fargo George O’Leary - Tudor, Pickering Holding Company John Watson - Simmons and Company.

Greetings, and welcome to the Nine Energy Service Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce to your host, Ms.

Heather Schmidt, Director of Investor Relations. Thank you. You may begin..

Thank you. Good morning everyone and welcome to the Nine Energy Service earnings conference call to discuss our results for the second quarter of 2018. With me today are Ann Fox, President and Chief Executive Officer; and Clinton Roeder, Chief Financial Officer. We appreciate your participation.

Some of our comments today may include forward-looking statements reflecting Nine’s views about future events. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations.

We advise listeners to view our earnings release and the risk factors discussed in our filings with the SEC. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Our comments today also include non-GAAP financial measures, additional details and a reconciliation of the most directly comparable GAAP financial measures are also included in our second quarter press release and can be found in the Investor Relations section of our Web site. I will now turn the call over to Ann Fox..

Thanks, Heather. Good morning, everyone. Thank you for joining us today to discuss our second quarter results for 2018. We had another strong quarter of growth, exceeding the midpoint of management’s revenue guidance by approximately 8% and the midpoint of adjusted EBITDA guidance by approximately 9%.

This was once again due in large part to a strong financial and operational performance in Completion Solutions. Company revenue for the quarter was 205.5 million, an approximately 18% increase over Q1 and adjusted EBITDA was 30.6 million, an increase of approximately 27% over Q4 2017.

Incremental adjusted EBITDA margins for the Company were approximately 21% and incremental adjusted gross profit margins in our Completion Solutions segment were approximately 19%. This with our year-to-date revenue growth at approximately 33% and adjusted EBITDA growth at approximately 64% over Q4 2017.

Throughout the first half of the year, we have seen activity and price increase across all of our Completion Solution service lines, as well as a significant increase in our [see this] (Ph) completed within completion tools.

This is a consequence of both the current trends we are seeing completions with longer laterals, more stages and multi well pads development that has directly benefited now as well as our team's ability to execute at the field level.

This growth has come through activity and market share gains, especially within cementing and wireline, with a number of jobs completed for cementing increasing approximately 32% year-to-date and number of stages completed for wireline increasing approximately 39% year-to-date.

We have also seen strong pricing traction in wireline increasing approximately 16% year-to-date and continued penetration for our completion tools, with number of stages completed increasing approximately 66% year-to-date.

I want to acknowledge Nine’s incredible operations in sales team who have enabled these results in the field and have worked in concert with our customers to provide customized solutions that drive efficiencies and faster cycle times. ROIC for the second quarter was 8% up 500 basis points over Q1 ROIC of 3%.

And currently sits at approximately 6% for the first six months of 2018. We remain on-track to hit our full-year 2018 target of 8%. I will discuss takeaway capacity concerns with Q3 guidance. But I also want to address another significant bottleneck within oilfield services which is labor.

During Q2 we increased our headcount by approximately 7%, which nears Q1. And since the end of 2017, we have added over 250 incremental employees and increase our headcount by approximately 14%.

Additionally, we estimate approximately 10% to 15% in wage inflation costs have been implemented for our non-corporate employees across the company in the first half of 2018. This is on top of approximately 16% wage inflation for the entire Company in 2017.

We anticipate the majority of 2018 wage inflation has been realized during the first half of the year and clearly accounts for a great deal of additional costs, especially with on-boarding, training costs and benefits.

These new employees have come on now to allow us to increase utilization within our existing equipment and prepare and train for the deployment of growth CapEx during the second half of 2018. At Nine, we think about navigating labor constraints in many ways.

First, we uniquely benefit from our industry trends and continue to see internal efficiencies increase with our average stages per employee per month in Q2 averaging approximately 14.7 stages an increase of approximately 40% over 2017, and an increase of 160% over 2014.

We anticipate this trend continuing as more operators transition to manufacturing mode on their multi well pads. We also put a conservative 2018 CapEx program in place to avoid compromising service quality for our customers and impeding Nine’s reputation.

We believe strongly the quality of the crew is essential to maintaining trust with our customers and we will not [chase] (Ph) jobs or put equipment to work without the properly trained people. We are confident we will be able to staff our new units with quality employees and put them to work with the plan we have in place.

Additionally, we have a differentiated culture that recognizes and rewards hard work, innovation and grit. It is imperative that employees are recognized for these characteristics and can benefit in the growth and success of Nine.

Because of this, we have and will continue to provide equity awards throughout the organization down to the field level to ensure alignment and retention within our key employees. We know our employees drive value for Nine and are vital to our growth moving forward. Lastly, we remain focused on growing our completion technology offering.

This is also a part of our approach to having a balanced portfolio of capital intensive businesses like coil and cementing with capital light businesses, including completion tools ad wireline. Completion tools required minimal CapEx and labor and will be an important focus for Nine moving forward.

Our unique strategy has not changed regarding the acquisitions of these technologies and our next quarter call will include an update on some of our most recent technology field trials. We were extremely pleased with a continued growth and performance this quarter.

I remain confident in the team we have in place and our positioning in the market as a completions company offering cutting edge technology with reliable and efficient conveyance services.

With that, I would like to turn the call over to Clinton to walk through the segment and other detailed financial information as well as provide an update on equipment timing and CapEx..

Thank you Ann. In our Completions Solutions segment, second quarter of 2018 revenue totaled 185.1 million, an increase of approximately 20% compared to the first quarter revenue of a 154.6 million. Second quarter 2018 adjusted gross profit was 39.1 million, an increase of approximately 18% over Q1.

During the second quarter of 2018, we completed 1039 cementing jobs, an increase of approximately 11% over the first quarter. The average blended revenue per job increased by approximately. Cementing revenue for the quarter increased by approximately 17%.

We expect to receive delivery of one single prong and one double pronged strategy in Q3 and one single prong and one double pronged strategy in Q4. During the second quarter of 2018, we completed 10,129 wireline stages, an increase of approximately 25% versus the first quarter. The average blended revenue per stage was relatively flat.

Wireline revenue for the quarter increased by approximately 22%. We received two incremental growth capital wireline units towards the back-half of Q2 and we anticipate receiving two incremental wireline units from the back-half of the year. For completion tools, we completed 16,807 stages, an increase of approximately 34% versus the first quarter.

Completion tool revenue increased by approximately 49%. During the second quarter of 2018, our coil tubing days were increased by approximately 11%. The average blended day rate for Q2 was relatively flat. Coil tubing utilization during the second quarter was 87%, an increase of approximately 10%. Coil tubing revenues increased by approximately 8%.

We took delivery on one incremental 758 unit during Q2 and expect a conversion of our 208 units to be completed in Q3. In our Production Solutions segment, second quarter 2018 revenue totaled 20.4 million, an increase of approximately 6% compared to first quarter 2018 revenue of 19.2 million.

Adjusted gross profit for the second quarter was 2.8 million compared to first quarter adjusted gross profit of 2.4 million, an increase of approximately 18%. During the second quarter, well services had utilization of 62% which was flat. Total rig hours for the quarter was 46,144, an increase of approximately 4%.

Average revenue per rig hour during the second quarter was $42, an increase of about 2%. During the second quarter of 2018, the Company reported net income of 9 million or $0.37 per diluted share compared to net income of 1.7 million or $0.08 per diluted share in the first quarter of 2018.

The Company reported selling, general and administrative expenses of 16.1 million compared to 15.4 million for the first quarter. This increase was largely due to an increase in stock-based compensation and reevaluation. Depreciation and amortization expense in the second quarter was 15.1 million, compared to 15 million in the first quarter.

During the second quarter of 2018, the Company’s effective tax rate was 6.7%. The effective income tax rate for the quarter was primarily attributable to changes in pre-tax book income and valuational allowance positioned as well a tax liability state where income is expected to exceed of the net operating losses.

During the second quarter, the company reported net cash provided by operating activities of 7.9 million compared to 17.3 million in Q1. DSO for the second quarter was 59 days compared to 57 days of Q1, contributing to the accounts receivable build over Q1.

We remain under 60 days for the first half of 2018 and we focused on getting this number back down in Q3. Total capital expenditures were 11.6 million, of which approximately 28% was maintenance CapEx. This compares to total capital expenditure of 6.5 million in Q1.

As of June 30, 2018, Nine’s cash and cash equivalents totaled 70.9 million with our revolver capacity of 49.3 million, Nine’s total liquidity position was 120.2 million on June 30, 2018. I will now turn it back to Ann to discuss Q3..

Thank you, Clinton. As we look ahead to Q3, we anticipate the seventh sequential quarter of growth for both revenue and adjusted EBITDA. We expect total revenue between $208 million and $216 million and consolidated adjusted EBITDA between $34 million and $37 million.

The midpoint of this range implies approximately 16% adjusted EBITDA growth quarter-over-quarter and adjusted EBITDA incremental margins of approximately 75%.

Completion Solutions is expected to be the driver of growth for the Company through organic market share gain, better Canadian market conditions and the addition of capital equipment in cementing and coil tubing. The Company continues to progress and grow as we anticipated. I would like to address concerns around Permian takeaway capacity.

We have not received any indication from our customers over potential slowdown in activity and with what we know today do not see any significant impact on our business throughout the remainder of 2018. We understand the situation is dynamic and these circumstances can change.

We will continue to monitor and communicate with our customers, but we feel confident that the operator that we work for are prepared for takeaway challenges and we will remain on track with their current 2018 budgets. We have purposely maintained our broad North American footprint with exposure to every major basin in the U.S.

today, as well as selected into service lines driven less by equipment capacity, and more by performance and value proposition. We continue to prove sustainable value by increasing efficiencies and helping our customers realize faster cycle times and lowering overall well costs.

As operators continue to concentrate risk and spend with multi well pads, extended laterals and more stages. Service selection for reliable downhill technology and convenience providers has become critical for meeting production targets and ensuring safe and efficient operations.

The Permian will remain an extremely important basin for Nine and we are committed to servicing our customers for the long-term. We are working closely with them on their long-term plan and we will not change or shift our strategy out of the Permian for what we see as a temporary constraint.

The Permian is one of the most prolific basins in the world, as many of the largest E&Ps have made significant long-term investments in the play and we will continue a relentless focus on gaining market share there. We continue to look at potential M&A and organic growth opportunities. We remain on tracks and meet our 2018 ROIC target of 8%.

I will continue to reiterate Nine’s focus on being good stewards of capital and how seriously we take the partnership with all of our constituents. Before we open it up for Q&A, I want to welcome Darryl Willis, to Nine's Board of Directors. We are honored and excited to bring Darryl's unique perspective as a 25 year veteran within oil and gas to Nine.

Darryl currently serves as Vice President at Google Cloud and was recently highlighted in the Wall Street Journal for helping forge relationships between Silicon Valley and the energy industry to drive technology and better utilize data.

We are confident, he will be invaluable to the future growth at Nine both through his leadership abilities and technology expertise. We will now open up the call to Q&A..

Thank you. We will now be conducting a question and answer session. [Operator Instructions] Our first question comes from the line a Sean Meakim with JPMorgan. Please proceed with your question..

Thanks and good morning..

Good morning, Sean..

So Ann, the volume growth has been very impressive and so I thought maybe we could spend a more time digging into the margin progression as we go through the rest of the year, and highlighted in your prepare comments labor inflation seems to be the most front end loaded this year, I guess given all the ancillary costs, tighter recruiting train.

So maybe you could just help us think about the puts and takes in the back half a year around pricing, operating efficiencies and then perhaps some of these labor costs we are still concerned about and how we think about that progression on the margin side for the back half of the year?.

Sure. I would tell you that we are anticipating good margin progression in Q3. And a lot of that, as I said earlier, that wage inflation was very front loaded in H1 2018. So what we did not anticipate Sean, is coming into 2018, we thought we had taken the majority of that wage inflation in 2017.

We certainly didn't anticipate being this aggressive with unemployment already in the U.S. and the 3.9% is certainly one metric. But when you look at unemployment rates among men in the U.S., it's 3.4%. So I think, we underestimated the pressure that would put on the wage inflation. We are pretty confident this year we have taken that.

I do think as an industry that's going to come in fits and starts if we continue to see pressure on that unemployment number, we are also obviously seeing consumer price index move. So I think we are just generally in an inflationary environment. And again this industry, the last time we saw boom with the issue unemployment rates up over 8%.

So this is new for us and I think we will see it be lumpy, but for this team we are not anticipating those increases, those similar increases in H2 2018. That’s going to help the margin quite a bit.

On the churn side, the hiring, we have added year-to-date 14% of our new employees, but the challenge for Nine which continues to be a challenge is that we have got 60% to 65% churn rate at the short service employee level.

So that mean that we are spending a lot of money on on-boarding and training that is impeding those financials? That will continue, we have forecasted that to continue. So again I anticipate a nice margin uplift that you will see in Q3 and Q4. The other issue is, we are continuing to step into efficiencies with our customers.

The Permian basin is still and what I would call the second innings of the multi well pad environment. So if you look at the North east, you have got kind of five to six wells heads on average for pad. We are seeing really more about three in the Permian and as you know they were slow to start even in their move from vertical to horizontal.

So we see that as a very good forward trend for the Company and that will continue to drive margin as well as the stage council of lateral length continuing to expand. So all of that is a really great set up for us, for the back-half we have had 66% growth in completion tools year-to-date.

We expect good and continued market penetration in completion tools. We have added about 20% of our customer base is new just this year after tremendous customer growth last year. So again when you can save a customer 150 to 200,000 per well just because you can drill out 120 plus of your plugs at one drill bit chip.

Those are all the things that are driving this business, so we are excited about where we see the margin going in Q3 and I would also thank you for it..

Thank you for that feedback. I think that’s really helpful. And I wonder to drill in a little bit maybe a little bit more on the completion tools portion. To some degree that’s going to dough tale into the margin story, do you think that your completion tools business which has stronger margin profile is likely picking up some positive mix.

Could you just give us a little bit more detail, I’m looking for some granularity on how much of the share gains that you are seeing are being driven by new customers versus greater wallet within your existing customers.

Then I know we have to wait another quarter for a proper update on the field trials, but I was curious if there is any teaser you can offer us with respect to the timeline there?.

Sure. So I’m going to take the back-half of the that question to Q3, because we have consistently said we will update on field trials in Q3. But again, we have made I think great progression on as you recall it increasing the wallet with an existing customers.

We have been very pleased with that, and that’s because particularly on the isolation tools, the drill out we are just saving so much time and as you know time is money and like I said on average per well we are seeing just on the drill out a 150 to 200,000 savings.

We felt one of our operators come out and talk about $400,000 of savings per well with completion tool and completion conveyance efficiencies. So again 20% new customers and also great organic growth within our existing customers. So I’m not sure what other detail you are looking for Sean.

I’m happy to provided that percentage if I didn’t answer your question..

No, I think you did. I was looking for generally the term new versus existing customers and then specifically which product lines helping you to drive your share….

I will say year-to-date the trend has been better than we have anticipated and we expect that going forward..

Got it, great. Thank you Ann..

Thank you. Our next question comes from the line of James Wicklund with Credit Suisse. Please proceed with your question..

Good morning guys..

Good morning..

Good morning..

A little bit long on this timeline, cementing and wireline and coil proving, your adding capacity you got to cut more units do in a couple of those lines through the rest of this year. Activity is not going through the roof, so that would assume you are displacing someone.

Are these regional moms and pops which are gaining market share on or they displacing especially in those areas or these bigger guys who aren’t paying attention or can you talk about how other than the fact that you are just good in all.

How are you and who are you displacing in the field with your gains in market share?.

I would say a lot of it is big folks, I think we saw the majority of the micro small mom and pops fall off a while back.

And that's just because again, in the multi well pad environment these operators are concentrating risk and the legitimacy of that very large, small mom and pop community that existed in 13 and 14, has just gone more by the wayside.

I mean, they are always what I'll call ankle biters, but they are there every day willing to do work at a very low cost. The problem is, as you know, you can go to embark on a coil job and it's one ticket price that can quickly turn into for an operator $1 million if it goes badly.

So the cost of picking cheap Charlie on the front end is pretty [ginormous] (Ph) cities operators. I would say most of our operators have been focused on total cost of ownership versus on unit cost basis.

And so to answer your question, a lot of big folks for displacing 70% of our Permian revenue, over 70% of it comes from fix, what I will call very large E&Ps and the other 30% comes from pretty large public E&Ps. So we think we are working for the biggest, best, most efficient, they keep us on our toes. They challenge us, we challenge them.

And I think collectively, we are getting better, as we work with them to find out solutions, not just for nonproductive time, but also flat time.

So if you have got 15 minutes of flat time in a wellhead, because you are re-heading your cable, how do you get rid of that? How do you reduce that? I mean, we are really measuring this stuff in micro increments now, Jim. So those folks aren't there and can't do that and can't do it consistently just don't have a place at the table..

Excellent. That's very helpful and my follow-up if I could. You had mentioned that you have a relentless focus on gaining market share in the Permian. And you follow that right away with talking about being good stewards of capital and aiming at 8% ROIC.

The concern about gaining market share at the expense of margins has played to a couple of companies in this space here of late.

How do you balance that relentless focus with the good steward in ROIC? And I know it's an obvious question, but which one wins?.

Yes, so obviously, with Nine ROIC is always going to take precedence. We are big believers of the very comprehensive metric and that will drive the business.

When we think about specifically your question about gaining market share in the Permian relative to price and value, again, our value proposition is not driven and our pricing is not driven by capacity constraints or lack of it. So it's not that how much of the equipment is at surface, but it's really completion intensity.

So whether it's path west or spheres, 18% to 32% stage count growth from 17 to 18. Those are the type of metrics that we look at. What is happening with a lateral links, what is happening with the stage counts, what is going on down hole. So it's not just the number of completions, but it's really how are we expecting a completions down holes.

So that helps us deploy equipment and drive margin on both for operators as well as ourselves. So it's not as simple of an argument, it’s kind of spot pricing for additional frack capacity.

I think also, Jim, when you step back to the broader market, you kind of think about 10.8 million barrels a day or so coming out of U.S., 31% to 32% of that coming from the Permian. We have got about 1 million barrels coming on by the end of 2019, a big chunk of that's got to come from the Permian.

Now, obviously, we have got the takeaway constraints that the market seems to be dealing well with as far as accelerating the Sunrise and Cactus two ramp, but this is a critically important basin and the [Collin Mann] (Ph) shale is huge. We were 13% of global spend last year. We are already going to be estimated to be 18% of that spend this year.

So if we weren't so confident that North American shale is going to be a critical piece of this supply gain, then maybe we would be less bullish on that basis. But it's prolific. It's necessary Nine is not going anywhere, we are going to stay the course out there..

Ann, thank you very much. Well done. Thank you..

You are welcome..

Thank you. Your next question comes from Jud Bailey with Wells Fargo. Please proceed with your question..

Thanks. Good morning..

Good morning, Jud..

A question just to circle back on I guess another margin question. And if you could maybe give us some color, the different product lines maybe within Completion Solutions.

Are there any margin trends that are notable in terms of ones that may be performing better than expectations or ones that may be underperforming due to some of the cost inflation you highlighted or other issues.

Just curious to get your sense of how to think about the margin trajectory within the various product lines?.

Yes, I would say the one that’s most differentiated is certainly completion tools, we give you just don’t have a labor component. So if you think about the fact that we are at 3.9% unemployment guiding down to maybe 3.6 according to fed next here, that’s going to continue to tighten, it will continue to be bad problem for the industry.

So that’s why we are focused on increasing the profile of our revenue and shifting more of it towards completion tools. So that one - will be very differentiated from a margin perspective because we don’t have the labor component with the wage inflation beating against it. The wireline, cement and coil all very nice margins, very pleased with that.

I would say on the production side, we see that as remaining fairly flat.

I would also say with the way that we are developing the Delaware basin as an industry, we could see work over completions activity coming down in the future and starting to see those wellbores filled up with the degradable they are dissolvables, really reducing the safety factor from frac heads out there.

So and that would be the one service line I would see when I look into the future relatively flat from where we are, due to the fact that we don’t see the 24 hour work picking up in the same place that we have seen in the past in the industry prior to that evolution of dissolvables..

Okay, alright thank you for that. My follow-up is just thinking about kind of looking forward, a big part of the Nine’s story as you kind of alluded to earlier has been good partnerships with top shelf E&Ps and so you have kind of grown with in good partnerships with your customers.

Given that, as you think about next year, I will be curious to get your thoughts or what kind of conversations you may be having if our customers in terms of incremental kind of asset deployments on a longer-term basis.

Is there a way to help us think about what you are seeing from your customer base and what they may be needing from you kind of beyond this year and into the next couple of years..

Yes, it’s a great question. I think it’s early for us to answer that question, we are working with them or also obviously working here internally at Nine that cap spend relative to theirs. So I think we feel good about 2019’s activity. As I said we are going to push that top-line more towards completion tools and you will continue to see us do that.

But we feel very good about where we fit in the market and what our customers are communicating to us. But it’s still too early for me to give a 2019 solid look right now..

Okay. I appreciate that. I will turn it back. Thanks..

Thank you. Our next question comes from the line of George O’Leary with Tudor, Pickering Holding Company. Please proceed with your question..

Good morning guys..

Good morning..

Good morning..

Curious given what it’s been a big part of the Nine’s story historically and two, our understanding if there is a lot of assets up for sale at this point.

On the M&A front, I wonder how you may characterize that landscape and I guess from some others who have heard there is a lot up for sale but its maybe not all of best quality, but I will be curious what your else take on that is?.

Sure, no it’s a great question. I think I said on the last call, I would be disappointed if we didn’t do any M&A this year. I will be disappointed if we don’t do any M&A this year.

So same comment as last quarter, there is always a lot of stuff up for sale, this team is extremely focused on adding only excellent teams that also have either a very defensible position or technologies that are additives to the 2019.

So we have got a very, very tight filter, we do think there is an excellent teams out there that we would be honored to partner with. So we are excited about the M&A landscape, but there is also as you mentioned earlier a ton of stuff for sale that we think doesn’t warrant the premium that’s being asked..

Great, that’s very helpful color and then you know there has been a very acute focus by sell side and buy side on what is going on in the Permian basin. You guys have a nice presence across some multiple business lines in other areas.

I wonder if you could maybe speak to any green sheets you are seeing in basins outside the Permian basin and any potential areas where the growth is maybe less attractive where we may even see some good traction. Just talk to me a little bit about non-Permian basin the next of the….

Yes, certainly it’s a great question. I mean I think when we live across the spectrum, if you look year-to-date you have kind of had 20% accounting increase in the Permian, 22% in the Bakken it’s a nice growth there. The Haynesville 7% but still we are gaining lots of market share their.

The nice one for us is in the Eagle Ford, which is only up 14% year-to-date on rig counts, but lots of operators going after that nice Brent crude pricing. So that's been really great for us. The MidCon and the [Niagara] (Ph) relatively flat, but those are still, areas that we are very interested in.

I think we have said many times we are building a sustainable company OSS, as many people know and they have invested in, it’s a nicely site. And in order to mitigate the risk of that nice site, you have got to be diversified geographically as well as relative to service lines. So we are still very interested in some of these other basins.

But we have seen some nice uplift and that has certainly helped us as well..

Great and thank you very much for the color..

Thank you. [Operator Instructions] Our next question comes from the line of John Watson with Simmons and Company. Please proceed with your question..

Thank you. Good morning..

Good morning, John..

Ann, we have heard about a potential slow down in activity in Appalachia.

I guess this is a follow-up to George's question, but is that something you have seen or expecting in the back half of the year?.

That's a great question. This year, we have put about 35% new customers up in the Northeast, we are really dominant up there. And there have been a couple operators that have dropped frack crews. We have navigated that, we started looking at that problem frankly several months ago.

And we feel we are successfully through that and it will have no impact on our forecast. So we are still very confident about where the ramp that we had anticipated early on this year in the back half of the of the year. So through that, I think you certainly heard some large caps come out and talk about that.

But again that's going to sting frack more than it will us. You have really got to find a rat trails through these minefields early and the team up there has done a fabulous job of that. So, impacts and our forecasts are means exactly where we thought it would be..

Okay perfect. That's very helpful. And then as your return on invested capital highlights you are realizing solid returns across a number of different business lines.

I wouldn't think all of your competitors have similar returns, but are you seeing increased competition or new entrance for cementing, wireline or coil tubing given where returns are today?.

That's a great question, I would say in cementing, we really haven't seen new entrants. I mean not just it's got a strong capital there, entry has also got strong technical barrier to entry. So we have got some good competition out there, but we really haven't seen a new entrant there.

We have seen, again, good coil competition, but that was already in place. And wireline has a much lower capital barrier to entry, so sometimes you will see people come in, and then they quickly get out when they realize how darn hard it is to execute consistently in that business.

So to answer your question, not a ton of new entrants, my own personal view and this is just a personal view is that the downturn of 2015 and 2016 and 2017 really devastated the credit availability for those new startups.

So the revolvers that people blinked and got in 12, 13 and 14 that revolver capacity is just not as readily available for new startup OSS companies. So that gives all of us that are already firmly planted a little bit more of a advantage over the startups..

Understood that make sense. Thanks very much for the answers Ann, I appreciate it..

Thanks John..

Thank you. There are no further questions at this time. I would like to turn the call back over to Ms. Fox for any closing remarks..

Thank you for your participation in the call today. I want to thank our amazing team of employees are E&P partners and our investors. Thank you..

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day..