Midland, Texas-based oilfield services company ProPetro said Sept. 29 it is bringing forward a $74 million commitment of anticipated 2022 capital spending to ensure timely execution of the company's 2022 equipment conversion plans.
The company has ordered 50 Tier IV Dynamic Gas Blending pumping unit conversions for approximately $74 million, which will be used to convert existing Tier II diesel units to lower emissions Tier IV DGB dual-gas engines with deliveries beginning in December 2021 and continuing through the first half of 2022.
ProPetro believes the current supply chain stress will continue to extend delivery times for critical oilfield equipment through 2022 while the risk of inflation threatens to further increase costs. Moreover, these upgrades will further support ongoing maintenance schedules for existing equipment.
Approximately $30 million of the $74 million will be paid in 2021 with the remainder paid as deliveries continue during the first half of 2022. The company now expects full year 2021 incurred capital expenditures to be between $145 million and $160 million. As of September 28, 2021, ProPetro’s total available liquidity which is inclusive of cash and available capacity under the Company’s revolving line of credit remains in excess of $130 million.
"Due to ongoing supply chain constraints for critical equipment, combined with recovering pricing for our services, including for our Tier II diesel equipment, we believe now is the optimal time to act on these orders," said Sam Sledge, CEO of ProPetro. “The commitment to these conversions highlights our pledge to provide top-tier efficiency and reliability for hydraulic fracturing services in the Permian Basin, while delivering ESG-friendly solutions to our customers."
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