Liberty Oilfield Services Inc

NYSE:LBRT

Earnings Call Analysis

Liberty's Record EBITDA and Operational Outlook

Liberty had a standout year in 2023, achieving its highest adjusted EBITDA ever at $1.2 billion, a 41% increase from the previous year, and raising revenue by 14% to $4.7 billion. This result is due to strategic technology investments and efficient operations. Despite a decrease in fourth-quarter revenue, the company continued to set new efficiency records. Maintaining robust cash flows, Liberty returned $241 million to shareholders through buybacks and dividends, ending the year with a modest net debt of $103 million. Looking ahead, Liberty expects a year of stable EBITDA with modest activity growth and plans to target cash capital expenditures of $500-550 million, focusing on technologies and fleet upgrades.

Strong Financial Results and Strategic Achievements in 2023

Liberty reported a remarkable year with a significant expansion in EBITDA by 41%, reaching $1.2 billion, which was the highest in the company's history and greatly outpaced the previous year’s levels. This growth underscores Liberty's strategic evolution and investment in technologies and assets, which notably included the transformative OneStim acquisition and software development initiatives. The company's return on capital employed (ROCE) soared to 40%, and they managed to return $241 million to shareholders via share buybacks and dividends, all the while prudently reinvesting in the business for future growth.

Revenue Growth Amidst Market Challenges

Despite a dynamic market environment, Liberty increased its annual revenue to $4.7 billion, a 14% rise from the prior year. However, the fourth quarter of 2023 saw a downtick with a 12% revenue decrease, attributed to market headwinds and normal budget exhaustion. This period also marked the achievement of new records in pumping efficiency, which demonstrates the company’s continuous efforts to optimize operations in challenging conditions.

Fourth Quarter Performance and Fiscal Outlook

The fourth quarter net income after tax stood at $92 million, a decline from $153 million in the previous year. The diluted net income per share followed the same trend, landing at $0.54. The period's adjusted EBITDA also saw a decrease to $253 million. In anticipation, the company estimates a tax expense for 2024 to be around 24% of pre-tax income.

Capital Allocation and Balance Sheet Strength

Liberty finished the year with a strong balance sheet, boasting $37 million in cash and bringing net debt down by $72 million to $103 million. The full year witnessed the company channeling cash flows into investments for growth, a substantial $203 million in share buybacks, and $38 million in cash dividends. Liquidity stood strong at $314 million, and the company highlighted its ability to manage a robust return of capital program alongside committing to substantial internal investments, which are aimed at enhancing Liberty’s competitive edge. The dividend was raised by 40% and the share repurchase authorization was upped by 50% to $750 million, with $422 million remaining, signaling confidence in ongoing shareholder value creation.

Steady Start to 2024 with Long-term Investment Focus

The company is bracing for a cautious start to the new year, with expectations of flattish revenue and adjusted EBITDA for the first quarter, and a similarly steady performance anticipated throughout 2024. Despite uncertainties and a reduction in rig count, Liberty forecasts a modest increase in activities in the following quarters and strives to maintain year-over-year adjusted EBITDA stability. Cash capital expenditures are projected to be between $500 million and $550 million, approximately 45% of adjusted EBITDA, which will support ongoing investments in technology and expansion, particularly in the natural gas fuel sector, forecasted to be the predominant fuel source by year's end.

Earnings Call Transcript 2023-Q4

[Operator]

Welcome to the Liberty Energy earnings conference call .[Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Anjali Voria, Strategic Finance and Investor Relations lead. Please go ahead.

[Anjali Voria, executive]

Thank you, and. Good morning, and welcome to the Liberty Energy Fourth Quarter and Full Year 2023 Earnings Call. Joining us on the call are Chris Wright, Chief Executive Officer; Ron Gutek, President; and Michael Stock, Chief Financial Officer. Before we begin, I would like to remind all participants that some of our comments today may include forward-looking statements reflecting the company's views about future prospects, revenues, expenses or profits. These matters involve risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. These statements reflect the company's beliefs based on current conditions that are subject to certain risks and uncertainties that are detailed in our earnings release and other public filings. Our comments today also include non-GAAP financial and operational measures. These non-GAAP measures, including EBITDA, adjusted EBITDA, adjusted pretax return on capital employed and cash return on capital invested are not a substitute for GAAP measures and may not be comparable to similar measures of other companies. A reconciliation of net income to EBITDA and adjusted EBITDA and the calculations of adjusted pretax return on capital employed and cash return on capital invested as discussed on this call are included in our press release available on our Investor Relations website. I would now like to turn the call over to Chris.

[Christopher Wright, executive]

Good morning, everyone, and thank you for joining us to discuss our full year and fourth quarter 2023 operational and financial results. Liberty delivered a second consecutive year of record earnings per share. Our portfolio of advanced technology and vertical integration enhanced our superior service quality and drove record-breaking operational efficiencies. We delivered full year adjusted pretax return on capital employed of 40% and cash return on capital employed of 34%, both exceeding the prior year. Revenue was $4.7 billion in 2023. Net income of $556 million increased 39% year-over-year, and our fully diluted earnings per share rose by 49% year-over-year to $3.15. Our EPS grew faster than net income due to reduced share count, showcasing the power of our buyback program. We concluded the year with adjusted EBITDA of $1.2 billion at the high end of our midyear guidance range, and we significantly increased our cash flow. We went public 6 years ago after a record year in 2017. Since then, we have tripled our revenue, quadrupled our EBITDA and more than quadrupled our pretax net income. These financial records were made possible by the simply outstanding operational performance of Team Liberty. Every quarter in 2023 set a new quarterly pumping efficiency record. I couldn't be more proud to be on this team. Strong free cash flow generation supported our leading return of capital program. Since program reinstatement in July 2022, we have distributed $375 million to shareholders through buybacks and cash dividends. We have already retired 12% of the shares outstanding when we announced the program in July 2022, equivalent to 33% of the shares issued for the acquisition of Schlumberger's OneStim business 3 years ago. We also upsized our share repurchase authorization by 50% to $750 million and increased our quarterly dividend by 40% beginning in Q4 2023. Liberty brings together leading pump technology, mobile power generation and CNG fuel supply, a unique value proposition to maximize efficiency, reduce emissions and lower fuel costs. By the end of 2024, we expect 90% of our fleet will be primarily powered by natural gas. The success of our technology transition is buttressed by dependable natural gas fuel supply through Liberty Power innovations. We plan to double LPI's capacity in 2024 to meet rising demand. Liberty is unique in the industry to own the technology and assets for the complete value chain in the move to natural gas and grid-powered frac. Our strong belief is that controlling everything from fuel and logistics to power production and pump technology will drive our competitive advantage further and deliver industry-leading returns. This is a distinctly different approach compared to some frac companies who lease technology and contract power generation and gas supply from other providers. The reason Liberty has been the most successful frac company of the last decade is our ability to innovate faster than the rest of the industry and drive strong returns for both our customers and shareholders. Natural gas is by far the fastest-growing energy source in the world. Consistent with this is the rising demand to power frac fleets with natural gas. 11 years ago, we deployed our first dual-fuel fleet, recognizing the growing importance of natural gas as a lower emission, lower-cost, reliable fuel source. We then set out to design and build our 100% natural gas-powered digi fleets fit for the rigors of the oilfield. This required a novel approach as some operators desire solutions to match their ambitions of developing a microgrid to augment their oilfield operations, while others aim simply to lower emissions and fuel costs. Our efforts culminated in 2 complementary pump technologies that comprise our Digi fleets and satisfy these multifaceted demands with the most innovative and capital-efficient solution. Mobility requirements, coupled with varying power demand based on job design led to our development of DG Power mobile generators that can be scaled up or down, providing the highest thermal efficiency and lowest emissions modular solutions in the industry. Today, there's a lack of natural gas transportation and logistics infrastructure to meet the just-in-time needs of the frac site. We launched in a rapidly growing LPI to solve this challenge and provide a virtual pipeline of natural gas to our fleets and other customer needs. While innovation from pumps to power generation to gas logistics are independently compelling investments. Together, these comprise a complete infrastructure to deliver a service unmatched in the industry. The success of our Digi technologies at LPI in 2023 marked a turning point for Liberty. The demand pull for our Digi fleets continues to gain steam. We now have 4 digi fleets deployed across 2 basins with 2 more being rolled out as we speak. By the end of the year, the combination set of our total fleet composition, dramatically shifting our diesel to gas consumption and driving demand for LPI services. Entering 2024, the fundamental outlook for the frac industry is stable. Service prices remain relatively steady as the supply of marketed fleets was rightsized in response to lower completion activity. Many fleets exited the market, both from accelerated attrition of older equipment and the deliberate idling of underutilized fleets to match customer demand. Operators continue to demand technologies that provide significant emissions reductions and fuel savings. Liberty's Digi Technologies, LPI business, integrated service offering and scale position us as the provider of choice. Against this backdrop, demand for Liberty Services is positioned to rise, albeit slowly from current levels. Engineering and innovation have led to improved shale wells via completion design optimization, factor completion and longer laterals, all helping to offset the gradual decline in average reservoir quality being drilled. The trend toward higher intensity fracs raises demand for horsepower, serving to keep frac assets utilized and drive service company returns. Rains bound oil prices have not meaningfully changed E&P operator plans to deliver flat or at most modest production growth. As North American oil production reaches record levels, more frac activity will be required simply to offset production declines. Near-term natural gas markets are under pressure, but domestic power demand growth and increased LNG exports are expected to lead to a more robust 2025. Long-term demand for reliable, affordable energy continues to rise with increasing global living standards. North American operators have been and are likely to continue to be the largest provider of incremental oil and gas supply globally. These trends should support a durable multiyear cycle ahead for services. Looking to the first quarter, we anticipate flattish sequential revenue and adjusted EBITDA, driven by seasonal trends and a cautious start for E&P activity. This is expected to be followed by a modest increase in our activity in subsequent quarters. For the full year, we expect strong free cash flow generation and continued investment in Digi Technologies and our LPI business. We are confident that our technology transition better positions us to deliver superior services to our customers and durable returns over cycles. Global energy demand continues to rise as the world's 7 billion less energized aspire to attain the energy-rich lifestyles of the Lucky $1 billion. Liberty's growing technical and service quality progress brings us growing business opportunities to help expand the supply of reliable, affordable energy to meet these demands. Our investment in and partnership with Turbo and enhanced geothermal energy company has been going very well. Pioneering the shale revolution ultimately came down to engineering and creating a complex underground plumbing network of hydraulic fractures, dense enough to harvest natural gas and oil from ultra-low permeability rocks. Several of us at Liberty were lucky to be involved at the beginning in solving this technical challenge that unleash the shale revolution. The result has been a transformation of the global energy and geopolitical landscape in ways previously unimagined. Shale technology make natural gas the fastest-growing global source of energy over the last 12 years. The shale revolution also made oil the second fastest-growing source of energy over the same time period. More on this in my closing remarks. Our partnership with Turbo, which began informally several years ago involved the same technical and implementation challenges. To harvest vast quantities of heat from underground rocks also requires a precisely engineered underground network of fractures. Heat conduction through rock is very slow and now it gets to ultra-low permeability, but convective heat transfer from fracture faces can be scaled up to high rates. Hence, the solution is a dense network of underground fractures, which connect cold water injector wells with hot water and steam producer wells. Another new large-scale energy resource is becoming accessible via the innovations from the shale revolution. We are excited about our Turbo partnership and how far this next generation of geothermal will travel in the years ahead. Another application of Liberty shale technology expertise is our partnership with Tamboran to crack the code in Australia's Blu shale gas basin. The geology and geography are different, of course, but the fundamental challenge is the same. We are excited about the upside if our partnership can succeed in bringing huge new gas resources to Australia and the nearby Asian LNG markets. Liberty history has been all about innovation and partnership. Our future will be, earlier this month, we launched the Better in human lives Foundation to address the most urgent challenges of energy access. The foundation strives to increase access to clean cooking fuels by supporting technology development and entrepreneurs in Africa. We are excited by the prospect of uplifting women, children and communities by improving health, safety and quality of life. With that, I'd like to turn the call over to Michael Stock, our CFO, to discuss our financial results and outlook.

[Michael Stock, executive]

Good morning, everyone. Liberty delivered outstanding financial results in 2023. We expanded our adjusted EBITDA by 41%, increased our ROCE to 40% and returned $241 million in capital to shareholders while reinvesting in our business for the long term. Over the last 12 years of our company history, Liberty has operated in a series of cycles, including from 2012 to 2015 period, 2017 to 2019 and 22 to date, interrupted by 2 exogenous and unusual downturns, the OPEC war on shale and Coated. In our first 4 years, our average annual adjusted EBITDA was approximately $40 million. By 2017 to 2019 period, we have grown our annual average adjusted EBITDA eightfold, owing to our forward-thinking investment in dual fuel, quietly technology and the opportunistic acquisition of Senegal assets in 2016. Since then, our annual average adjusted EBITDA in the last 2 years is now over $1 billion. over 3x the prior 2017 to 2019 cycle, driven by the transformative OneStim acquisition, vertical integration, software development and the scale that bolsters our efficiencies. As we look forward, our strategy is to invest in Liberty Design next-generation fleet technology and own the infrastructure to control critical areas that drive high efficiencies over the next decade, particularly in areas that are not very well developed, like natural gas fuel supply, versatility of LPI business provides a potential to diversify our revenue base outside of the industry. These investments reinforce sustainable long-term advantages and expand our ability to drive strong free cash flow. The demand for low-emission, highly efficient solutions is on the rise, and there are very few companies that are truly investing in differential technologies, and there is only one that owns the entire value chain and can chart their own destiny, and that is Liberty. For the full year, revenue increased 14% to $4.7 billion from $4.1 billion in '22. Net income totaled $556 million or $3.15 per fully diluted share. Adjusted EBITDA was $1.2 billion, highest in company history and 41% above 2022 levels. Our full year results demonstrate the earnings power we've built over the last 3 years. In the fourth quarter of 2023, revenue was $1.1 billion, a decrease of 12% over prior year, driven by market headwinds and normal budget exhaustion and a full quarter impact of 1 fewer fleet fluid. On a positive note, we achieved new consecutive quarterly pumping efficiency records safely pumping more hours per fleet than ever before in the quarter. Fourth quarter net income after tax was of $92 million compared to $153 million in the prior year. Fully diluted net income this year was $0.54 compared to $0.82 in the fourth quarter of 2020. Fourth quarter adjusted EBITDA was $253 million compared to $295 million in the prior year. G&A expenses totaled $55 million in the fourth quarter and included noncash stock-based compensation of $9 million. G&A was $5 million above the fourth quarter of 2022, but flat on a sequential basis. Net interest expense and associated fees totaled $6 million for the quarter. Fourth quarter tax expense was $27 million, approximately 23% of pretax income. We expect tax expense in 2024 to be approximately 24% of pretax income. Cash taxes were $10 million in the fourth quarter, and we expect 2024 cash taxes to be approximately 80% of our effective book tax rate for the year. We ended the year with a cash balance of $37 million and a net debt of $103 million. Net debt decreased by $72 million from the prior year. In 2023, cash flows were used to fund capital expenditures, $203 million of share buybacks and $38 million of cash dividends. Total liquidity at the end of the year, including availability under the credit facility, was $314 million. Net capital expenditures were $134 million in the fourth quarter and $576 million for the full year, which included investments in digitally LPI gas delivery, wet sand technology, capitalized maintenance spending and other projects. Our 2023 results showcase our ability to deliver robust return of capital program while investing in high-return internal projects to expand our competitive advantage. Since the pandemic, we have meaningfully transformed our business to deliver strong cash flow generation through cycles. We reinstated a return of capital program 1.5 years ago. Since that time, we've now distributed a cumulative $375 million to shareholders through our share buybacks and cash dividends. We continue to strengthen our program. Last quarter, we increased our dividend by 40% to $0.07 a share. And earlier this week, we increased and extended our share repurchase authorization by 50% to $750 million through July 2026. We had $422 million left on this authorization. We continue to differentiate ourselves with an industry-leading return of capital program while investing in high-return opportunities. As Chris shared earlier, we expect a steady start to the year with flattish first quarter revenue and adjusted EBITDA. Luby's earnings show remarkable resilience in the face of reducing rig count in 2023. The last few months of commodity pass volatility has led to a more cautious start from E&P operators. As we look forward, we expect a modest pickup at Liberty specific activity in subsequent quarters. For the full year, we are targeting flattish adjusted EBITDA year-over-year. Our frac service pricing will be relatively flat from the end of the year into the start of 2024 for like-for-like technology. We are targeting cash capital expenditures of approximately $500 million to $550 million or approximately 45% of adjusted EBITDA, inclusive of Digi technologies, dual fuel upgrades at LPI expansion. Including in this number, the delayed CapEx spend is timing of late 2023 equipment deliveries, natural gas fuel technologies. By year-end, the dominant fuel used by athletes will be natural gas, supported by LPI. I will now turn it back to the operator for Q&A, after which Chris will have some closing comments at the end of the call.

[Operator]

Thank you. We will open up the line for questions. [Operator Instructions]. And the first question today comes from Scott Gruber with Citigroup.

[Scott Gruber, analyst]

Curious about the flat year-on-year EBITDA, which is great to hear you guys reiterate that. I guess what I'm wondering about is how to think about your investments translating into incremental EBITDA versus that kind of underlying activity growth. So maybe if you can mention that a bit for us to get to flat EBITDA year-on-year, kind of what type of activity growth do you need in the second half versus the first half or maybe some dimension on incremental EBITDA from LPI and other investments.

[Michael Stock, executive]

Yes. So Scott, I'll sort of take that one, and Chris can come in as well. As we said, flattish EBITDA is what we're targeting for the year. There's a lot of puts and takes. There's a slow start to the year from the E&P operators, as you can see, and we think that's going to increase for Liberty-specific demand as we go through the year as we know it from our customers. And it relates to some specific basins, if you think of things like the Bakken, which was a strong basin last year, slowed down to the end of the year, as you've seen, is going to kind of kick back up again in Q2. There is sort of some drags on earnings that will come from things like reduction in sand price out of our minds made up by increased numbers out of LPI. So I think you've got a generally softer market for on average for like-for-like technology on average year-over-year. If you think about the diesel price, average diesel prices were down year-over-year for diesel fleet. But we've also been investing in our technology transition, which is offsetting that. There's a lot of puts and takes, and then Chris may want to give some color on where the macro may go up or down from where we are.

[Christopher Wright, executive]

Scott, I think Michael gave a good summary. Look, we kid ourselves a little bit that we know what's going to happen at the end of Q3 or Q4 of this year. That's yet to be determined. But as Michael said, an overall a little bit softer macro this year. Last year started really strong and then sort of declined throughout the year. About 50 less frac fleets were operating at the end of last year that we're 15 months before that. So the industry shrunk a little bit, a little bit of downward pressure on pricing, but I would say the behavior of the industry was outstanding and that people have idled capacity. They couldn't get good pricing and the work with their people idle frac spreads. And that kept pricing, again, down a hair, but pretty flat. And I think we would expect pricing to be flat this year as well. If a macro change in oil prices bumped up $10 or so, yes, you might see a little strong strengthening or firming, but we don't have a crystal ball. So we just kind of look at what you can expect Liberty to outperform the macro market conditions, as Michael said, because of that superior technology and even more important, just better service quality.

[Scott Gruber, analyst]

I appreciate all that color. And then thinking about the digiFrac rollout, you said 2 more fleets underway in terms of entering service. Is it going to be 4 total digiFrac additions this year within the budget? And then maybe if you could also provide some color, just on the demand pool for those units, demand still seems pretty strong, but I just wanted to see what you're hearing from customers? And how far in advance are those units getting contracts? Yes.

[Christopher Wright, executive]

The interest in Digi is just huge. The balance is the hands in the air to get a digital fleet is just massively more than the amount of fleets we're going to build or the rate at which we're going to build fleets, right? That's constrained somewhat by our, what we think is the prudent rate of capital deployment into that but yes, so those dialogues go on for a long time. There are ultimately long-term agreements when those go into place. It's about timing of rolling out those fleets. There's 2 different pump technologies, what's the right mix that's different for different customers. But yes, interest there is tremendous. Yes. Look, the specifics are always bottom up more top down. So I think your numbers for what we're budgeting are probably about we ended the year last year with 4. And at the end of this year, we'll probably have an order a 1/4 of our fleet will be Digi. But again, that's not a top-down thing. That's a bottom-up thing in dialogues with customers. Ron, I don't know if you want to give any color on technology, how that's rolling out and where we're going. But the more we see, the more excited we are.

[Michael Stock, executive]

Todd, I wouldn't add too much to that. Only to say that, as Chris alluded to, we had 4 out, we were hoping to have 6 by the end of this month. We're working on those next 2 right now. We continue to work closely with our third-party packagers to keep that schedule on track to meet our customers' expectations around that. But we're full speed ahead on putting that technology in the hands of the customers who have been long-time partners with us in, first of all, developing that and ultimately getting it deployed to the field. So we're excited to see that continue this year.

[Operator]

Our next question comes from Luke Lemoine with Piper Sandler.

[Luke Lemoine, analyst]

Chris Ron, I know you're not ready to quantify LPI size yet, but can you walk us through what kind of investments you're making in LPI this year? Is this more on the CNG distribution side? Were you adding a fair amount of digi Power mobile generators for non-free as well? And then how should we think about this from a return standpoint?

[Christopher Wright, executive]

Right Luke, this year's focus is really about supporting our Digi and our dual fuel rollout, right? So we are doubling the compression capacity of LPI focused mainly on 2 basins there. The 2 main basins, we're going to be truing up a lot of gas, which is the Permian and the DJ. We'll do some full gas -- a decent amount of fuel gas work over in the Haynesville, and we'll look at other basins as we go forward from there. And then it's going to be the CNG trailers and fuel distribution units that really back that up. So nothing is going to be spent regarding at the moment on plan on mobile power generation outside of the industry or outside the industry. That's something that we're looking at with the Board, and that's going to be we're going to be working on that sort of expansion plan as we go through the year. And that probably becomes more of a next year thought process as far as the investment side of that goes returns, basically, we have a single hurdle for all sort of like growth capital or any sort of any investments really here at Liberty and then kind of other measures to some degree, our 12-year history of what we've done in that sort of 23%, 25% cash return on cash invested. That's the target for everything we do. Obviously, you're starting a new business, you won't hit that in your first year, but that's what the long-term target for all of those all investments that Liberty does are.

[Luke Lemoine, analyst]

Great. And then, you talked about trying to figure out the right complement up to frac versus Digi prime depending on the customer, but these first 4 fleets that are out in the next 2. Can you just update us on how many of these incorporate did you prime?

[Christopher Wright, executive]

So we're DigiPine will be will be 2 of those fleets, 4 of those fleets being Digi frac, the electric technology. And then as we proceed through this year, you're going to see that percentage of Digi Prime climb pretty significantly. That will be given where we're deploying that additional capacity, that will be the primary focus for us just given our partners' expectations there.

[Operator]

Our next question comes from Atidrip Modak with Goldman Sachs.

[Ati Modak, analyst]

You guys touched on this a little bit, but I wanted to ask this from a use of cash decision matrix perspective. So in a flat environment, how do you balance potentially accelerating digiFrac and expand margins and free cash flow conversion faster over the next few years versus a return of capital to shareholders?

[Christopher Wright, executive]

Well, that's the dialogue that makes up our business and really has from the day we started this company. We came out with our first fleet was by a fair margin, the best frac fleet in the Bakken. So how many more do you build, how fast do you build them? What's the right balance there? So I don't know if I got any new or specific color commentary on that. But for us, it's critical for the long run of our business is to make sure we have very strong return on capital investment opportunities. We don't just add business lines or go into other stuff because we can do that. We only want to do things where we're going to have a significant competitive advantage versus other providers in that area, and therefore, very strong returns on capital. But I would say, our philosophy is we will continue to grow our competitive advantage in our business with time. But we will develop a growing regular steady dividend. And when we have compelling opportunities as we've had for the last 18 months and probably have for the foreseeable future to buy back our shares in an accretive fashion, we'll do that as well. Michael, am I missing anything else we should touch on? No, you're right.

[Michael Stock, executive]

I mean, it's a balance between the 2, and it's a focus. It's a focus on long-term growth. When you look at our history, our 12-year history of returns, significantly outperforming internal returns in the S&P 500, right? I mean those are great investments for our long-term shareholders. But we always balance that with the ability to return cash to shareholders at the same time. So we've got a remarkable, I think we're a remarkable investment opportunity for everybody, right? You can get growth and returns of capital from the same company. You don't give one or the other.

[Christopher Wright, executive]

The third leg on that obviously is balance sheet, right? We are in a cyclical industry, but multiples are low and people don't like our industry because it's cyclical. We actually like that it's cyclical, that has allowed us, that has been an advantage for us is to navigate those cycles, always with the balance sheet, always able to take advantage of dislocations and compelling opportunities that come about more often in our industry because we're cyclical. And as you see, as the production base is so much larger in the U.S. that activity just to keep production flat is so much higher and dominates activity today that we're clear we're going into a less cyclical world that we've been in. When the shale revolution started, my god, I mean we had activity swing down by 70%. That's probably inconceivable today, given what it would have on U.S. and therefore, global oil and natural gas production. So the future is probably meaningfully less cyclical than the past. But we didn't view that cyclicality as some terrible thing. That was an opportunity for us. We're still going to have it going forward, but certainly in a more muted fashion.

[Ati Modak, analyst]

Yes, that makes sense. And thanks for all that color. I guess the second question, so you spoke a little bit about the Australia opportunity. Can you touch on the nature of the work there and maybe touch on the upside as well to help understand what the longer-term potential is there? And then are there other regions globally that are of interest to you?

[Christopher Wright, executive]

We get hits a lot, but we've been pitched a lot internationally for 6, 7, 8 years. And one of the things that I that I know you know that define Liberty is these long-term committed partnerships with our customers. And so in the past there's just no way we're going to find all of our fleets have been busy all of the time, except for COVID and maybe going forward in the future. We're at a scale now that we don't have to infect our workforce or do anything disruptive. Today, if demand pulls back and it makes sense to idle fleets, we're very happy to do that. But as we grew and built this business, all of our fleets were busy all of the time. So we weren't going to tell a customer, "Hey, sorry, we're shipping your trucks overseas. Now with the Digi rollout, we've got a new technology that's meaningfully upgrading our fleet, and we're going to have fleets that come out the other end of that, that maybe are not fully at retirement age. And so we are going to that's what's going to happen with Australia. One of our legacy fleets that will come out of service because of a dis fleet rolling in. We're going to send that over to Australia. It's not going to be fully utilized right away. Look, this is exploratory, let's figure it out and see where we can go kind of play. But our capital investment is basically moving over idle equipment. We've got good economics for the frac work we'll do over there. We've taken an ownership stake in Tamboran. So we own a not insignificant chunk of the company with a large acreage position. So if we can make it work, I think we get value through the business, our partner in that. And this is a giant basin. It's a similar gas in place to the Marcellus. So if it works, could there be a significant amount of frac work in Australia? Absolutely. But that will take time. That will take time. So for us, we like it because it's asymmetrical. The downside for us is very small, and the upside could be significant.

[Operator]

Our next question comes from Stephen Gengaro...

[Stephen Gengaro, analyst]

Two for me. What I'd start with is you talked about the date of fracs quite a bit and the strong demand you're seeing. When you're in conversations with customers, are they differentiating between your electric frac fleets and the peers? And maybe also as you're answering that, if you can, when you don't have the availability right now, are they using your DGBs or are they going elsewhere for electric?

[Christopher Wright, executive]

For the most part, look, where our fleets are going, our existing customers, and I would say the top thing they're committed to is the quality of Liberty service and just the way we do business. We've been partners for years through good times, through bad times. Look, the biggest sticky is blue is Liberty. Our people, our way of doing business, the quality of service we deliver. The extra upside or the evolution customers want with time is, hey, can we go to fleet that have lower fuel costs and lower emissions, ultimately even smaller footprint with the higher power density. So, but the interest in those technologies are there, but people choose partners and then work together with those partners to find the path to upgrade technology. It's very rarely, hey, I don't care who it is. I just want an electric frac fleet. I'm sure there is a customer like that, but that's -- that's not a Liberty customer.

[Stephen Gengaro, analyst]

Okay. Great. And then real quickly, Michael, I might have missed the 24 CapEx range. Can you just restate that and maybe give some breakdown of how it falls out between the different pieces?

[Michael Stock, executive]

Yes, we said $500 million to $550 million in cash, probably around about $200 million in capitalized maintenance program. Then, probably the largest portion of the rest of that is going to be in Digi and LPI expansions, and we are doing a decent number of dual fuel upgrades, right? We've got a number of about 100 Tier 4 pumps that are going to get upgraded, which are the MTUs and a number of our Tier 2s that are our younger Tier 2s are going to get upgraded to dual fuel. But that is a smaller number because those at great kits are cheaper. They're not moving from Tier 2 to Tier 4, but we're upgrading Tier 2s to dual fuel. That's the basic breakdown.

[Operator]

Your next question comes from Derek Podhaizer with Barclays.

[Derek Podhaizer, analyst]

You mentioned every quarter in this year or last year was a quarterly pumping record. So this clearly supports the production efficiencies that we've seen from the E&Ps over the course of the year. Can you expand on the different parts that are driving those pumping records? And if these are structural in nature, should we expect to see these continue going forward?

[Christopher Wright, executive]

I mean, look, there's a limit in that there's 24 hours in a day. We had a fleet. I think we announced this, I'm not sure, but yes, we had a fleet that pumped 672 hours in a month. So for that fleet and that performance, there's not a lot, a whole lot of hours remaining to rise to. But yes, look, these are a combination of supply chain. You got to bring sand, chemicals, everything on location. You don't hear about it so much, but disruptions in those, they slow down frac operations. It's one of the reasons Liberty really developed this integrated delivery of stuff that arrived there. It's people, it's equipment, it's our partners. A lot of the efficiency we have, we couldn't have with different partners, forming partnerships with Liberty. It's a lot about how can we work together to get better. Let me turn it over to Ron to give a little more color. But boy, it's from software. It's from humans, it's equipment maintenance.

[Michael Stock, executive]

Yes. The only other thing I was going to add on there was the development around the software side of things. We've done and made a pretty significant investment over the last year, 2 years on artificial intelligence, our ability to understand our equipment to predict failure in advance of it happening and to be far more proactive about the maintenance of the equipment. And so I think if you look at that in terms of how it translates to performance of the assets out in the field, we have come a long, long ways on that. You'll continue to see some improvement on that on the Digi side, I think. But as Chris alluded to, we just don't have a lot of room left to move there. But as our equipment continues to get more sophisticated, more advanced and we continue to drive out time between major maintenance intervals and even longer uptime for things like pump components, we continue to keep out those incremental minutes on location.

[Christopher Wright, executive]

I'll add one other thing. So we took over a wireline business 3 years ago. We've changed humans there. We changed procedures. That took us time. We got into the wireline business. If you looked at the kimberlite surveys every year, Kimberlite has done the survey, Liberty is ranked as the top frac company since they began the survey. We worked at the start to top wireline company. In fact, we may have been more stud the other way. But more recently, and today, we are the number 1 ranked wireline company. So one of the things we look at is when we have a Liberty wireline truck with a Liberty frac fleet, you have left downtime. So of course, that's the majority of our fleets now, those are paired but not all of them. So there's still room for improvement for us. But obviously, the low-hanging fruit gets picked first. And now it's about continued optimization but less upside there.

[Derek Podhaizer, analyst]

Got it. That's all helpful. My follow-up, so you talked about the accelerated attrition to the equipment from the market over the past years. Can we get a sense like what the current market equipment mix is. I mean I think this is probably underappreciated by the Street. Would you say those 50 to 60 frac spreads there move or all Tier 2 diesel? It appears the market was high-graded rather quickly over the past year to me, this provides structural support to profitability. I mean just could you just expand on your thoughts around that? Just how should we think about the overall equipment mix of the market today?

[Christopher Wright, executive]

Yes. So I think as we've talked about a little bit, there is sort of a bulge at the moment. You think about 10% attrition every year, right, sort of an annual 10-year life cycle with fleet. I mean that's a rough number. But there's a bulge of equipment that was built in that sort of 2013, 2014, nothing much, nothing was built in 2015, in 2016. Some stuff was built in '17, '18, sort of into beginning part of '19, nothing was built through Covert. So if you look upon that, if you think about the distribution, right, there is a bit of a bulge of equipment in that sort of 8- to 12-year old age group, and that's all Tier 2 diesel, right? So I think what we're going to see is you can see some accelerated sort of number of fleets leaving the market over time because of that fact, right? So I think that's what's happening. And then as you say, people are high-grading fleets as we go through the year.

[Derek Podhaizer, analyst]

Got it. I mean just quick follow that $50 to $60, how much you think could come back or how much they get guideline permanently?

[Christopher Wright, executive]

We're not sure. Roughly half maybe.

[Operator]

[Operator Instructions] Our next question comes from Marc Bianchi TD Cowen.

[Marc Bianchi, analyst]

Just first off, to clarify, Michael, you mentioned the maintenance CapEx number. That was included in the $500 million to $550 million. Just wanted to clarify that if it's all right.

[Michael Stock, executive]

That is correct.

[Marc Bianchi, analyst]

Great. In terms of the flat EBITDA for the year, so you guys mentioned 50 fleets have come off out of the market. It's over 100 rigs have come off. How much of that needs to come back for you to achieve the flat EBITDA that you're talking about?

[Michael Stock, executive]

We're not baking in a meaningful amount of that to come back. I suspect a little will. We have our own sort of Liberty frac fleet count across all basins, all players. Look, there's going to be more active frac fleets in Q2 than there was in Q1. It gets harder when you look out further that Q2 level most likely continues on. But I think that depends what commodity prices did, who is running the fleet, what kind of acreage is getting drilled. So we're not baking in a big macro rebound at all. We don't foresee that. We don't bet on that. We're basically saying it's more self-improvement. We're making our own business more efficient, more desirable to our partners. And so yes, we're not baking in a macro, the macro to go back. We can make more money in a weaker environment, each successive year. Yes.

[Marc Bianchi, analyst]

Okay. And if we take the first quarter implied if you're going to be flat, call it, $250 million of EBITDA, you need to be averaging like $320 million per quarter in the remaining 3 quarters. It probably not how you guys see that playing out, it would grow throughout the year. But is the right way to think about it at this point that it's just a straight line of growth? Or is it really fourth quarter weighted? Or any way you can just describe what the shape of that looks like a little more.

[Michael Stock, executive]

In general, sort of like most years, you're going to have a fourth quarter 4, right? So comparative to the third quarter. So it's always relative. Again, the ramp out of coated didn't happen. But in general, in a flattish -- in a more sort of like steady environment like we're in now, fourth quarter will generally be lower than third. It doesn't necessarily mean there will be a low on general market activity as this past fourth quarter was compared to third. But yes, there's always that kind of drop off. So yes, that's generally the shape of the arc, so to speak. And so yes, as we said, flattish it's going to be growing as we go through the year, you can probably have a little bit of roll-off in Q4 unless macro changes, right? I mean there's a lot of changes there's a lot of potential macro puts and takes as we go through. So that will become clear as we go through the year.

[Operator]

Our next question comes from Wiqar Syed with ATB Capital Markets.

[Waqar Syed, analyst]

Chris, one for you and one for Mike. Could you talk about OpCo investment? What's the rationale there? What's the size of the investment in that venture? And then Mike, in terms of moving the crude to Australia, what's the cost involved in mobilization? And when will those costs be incurred or reflected in the numbers?

[Christopher Wright, executive]

Yes. Look, what is Liberty passioned about and we have some skills in energy, how to develop and take new energies and commercialize them. Obviously, our focus with Turbo, it's barely a move at all from our core business. Oaklai's definitely more of an outreach. Oaklai was a $10 million investment. So it was less than 2% of our CapEx. So smaller investment in that. But we look at what could be changing in the future of energy, what technologies could play a growing role that Liberty could be helpful in. And think of LTI. What LTI's long-term business. It's to deliver gas and electricity where it's needed. And today, that's in the oilfield, that's running our frac fleets for the start, then it's going to grow to other oilfield applications. But we're doing things on a policy front. It's making electricity more expensive and a little bit less stable grid. If we had LPI in Europe, we could make a mic just keeping the lights on, having high thermal efficiency, mobile addressable power needs. So that will expand. LPI will ultimately provide providing power solutions in the oil and gas industry outside the oil and gas industry. What else could play a role in that sort of shorter-term operate smaller grids, Oaklais small modular reactors. The interest in the technology is tremendous. We held an event in Midland, Texas. Oil and gas companies, Liberty and Oaklai. Interest absolutely tremendous for everyone that's looking at these larger companies building their own grids maintain building grids. What are you going to run those on. Natural gas, maybe natural gas and nuclear.

[Michael Stock, executive]

So on the Taman, the Australia, basically, it is on fleet's worth of work for about 2 months in the latter half of this year, late Q3, early Q4, and the cost of sort of mobilizing is basically covered. So yes, it's really not going to change the numbers, particularly we're going to be running on extra fleet. On free with the profitability for about 2 months. That's kind of the effect on the income statement.

[Operator]

Our next question comes from Keith MacKey with RBC Capital Markets.

[Keith MacKey, analyst]

Just wanted to start out with LPI. And Chris, I know you just mentioned there's broader and more longer-term ambitions for that business as a delivery of natural gas and power generation. But if this year plays out as you expect with your doubling LPI's capacity and you get to 90% of your fleets on next-gen technology, what approximately will be the coverage or how many LPI fleets or how many LPI kits or however you want to call it, will service your Liberty fleet? So just trying to get a sense of the opportunity going forward. Is it going to be like half of your fleet will be served by LPI or more or less than that?

[Christopher Wright, executive]

I'll take that one, Keith. So it will probably be about half of the gas usage. We're going to focus very specifically on the places where you've got 100% downtime, right? So the Digi fleets. The dirty fleets you need, when you don't get gas, you don't have steady gas, those fleets aren't working, right? So the number 1 focus is making sure we support the 100% gas fleets and then moving to more of our high usage Tier 4 fleets. So I'd say about 50% of our gas users will probably be covered by LPI by the end of the year on pro, I think that's a good number... By that. And that's just within that original application.

[Keith MacKey, analyst]

Got it. No, that makes sense. And just going to the Digi frac versus Digi Prime, can you maybe just discuss a little bit more of the factors that are leading you and customers to choose one versus the other? Is it upfront capital? Is it efficiency? Is it where the equipment ultimately goes in the field? Just a little bit more color on your thinking would be helpful on that.

[Michael Stock, executive]

Yes, Keith. So for both of those, they offer the advantage of that transition to natural gas. So whether we choose to use it for power generation and then an electric pump or in Digi Prime's case directly for running a pump, they both offer customers that important transition. Where you really start to think about where we might apply one versus the other comes down to whether or not the customer believes they would have access to grid power, for example. So did you frac, we have the ability to take power from any source. It's agnostic as to where that electricity comes from, primarily, that would be generated on location by us. But we have a number of scenarios where customers have asked about the opportunity to use some amount of grid power or potentially even ultimately all grid power to run a frac fleet. And so in that case, that's going to be 100% Digi frac solution. In a scenario where we don't have that environment where the primary driver is just the consumption of natural gas, you're probably going to see Digi Prime as the first choice that we would put out on one of those locations. We get a little bit better thermal efficiency and just modestly lower emissions footprint as a result of removing that conversion from mechanical to electrical and back to mechanical again. You'll see Digi frac on top of that or Tier 4 DGB one of those 2 as they are, we'll call it the peaker plant on top of that to absorb just the ebbs and flows of frac to ride the line on pressure or whatever the case might be. But DigiPrime being the workhorse in that sort of environment.

[Operator]

And the next question from Daniel Kutz with Morgan Stanley.

[Daniel Kutz, analyst]

Maybe, Michael, just thinking about free cash conversion for this year. So you gave us the CapEx guide and that kind of represents 45% of the adjusted EBITDA guide you gave us some figures around cash taxes, which my scratch math kind of says might be 10% of adjusted EBITDA and then you kind of have some cash interest and maybe stock comp offsetting each other. So ex working capital, do you think 40% to 50% free cash conversion? Is that in the right ballpark? And then secondarily, do you have any thoughts on whether working capital might be neutral, positive, negative this year?

[Michael Stock, executive]

I'm get some scratch math. You're running that and have those numbers prefinfront of me as a percentage of EBITDA. But working capital, I think, is going to be basically flat. We're talking revenue base. I mean our working capital kind of moves with revenue. So I think working capital is going to be basically flat. We're talking about cash taxes, as we said, in the time about a 20% range, as you say, interest and EBITDA offsetting each other, you got depreciation Yes... You know to get back to you. I do the math... I don't want to throw it out on the call.

[Daniel Kutz, analyst]

Fair enough. And then maybe, Chris, you mentioned earlier a comment about kind of needing more activity just to offset production declines. I was wondering if you've done any work or could unpack that, like do you think that we're kind of below where we need to be for both oil and gas activity to offset production declines. Do you think public or privates are kind of below where they would need to be from an activity perspective to hold production flatter or maybe grow a little bit. I'm just wondering if you could unpack the comment about activity as it relates to the production.

[Christopher Wright, executive]

Yes. I wish I had a more confident comment because we do some bottom-up analysis and productivity and where we're going. But honestly, we were also probably a bit surprised by the rate of growth last year, given that activity. And I think the most likely reason is a larger percent of that activity was from sizable publics that have the best acreage. So the quality of locations drilled, which is generally trending downward, people drill their best uppers and move out. But as you saw, a shrinkage of private activity last year and a growth actually among the activity among the publics that have the very best drilling locations that probably was the biggest factor a bit in the surprise for how fast oil and gas production grew. But we've got to go through our data. So I don't have any great confident proclamation there. My guess is current certainly, on a granular level, we're working for players that are at activity levels now that are definitely declining production, others that are modest growth and others that are flat. But like that is where we are today in total activity, you won't see that until summer production data. We're probably at fast flat in the sum of oil and gas production. So yes, I don't think activity drops much from where it is here. It's more likely to move up a little bit as the year goes on to stay around modest growth, which I think is the target.

[Operator]

Our next question is from Saurabh Pant with Bank of America.

[Saurabh Pant, analyst]

I had a question. I think Derek asked early on, on efficiencies. If I want to take that forward and just talk big picture, we always tend to talk about the ratio between rig count and frac fleets. Any thoughts on how much room there is to keep improving efficiencies? And if that can have a potentially meaningful impact in terms of where that ratio goes. And the reason I ask that for context is one big E&P had an event in the Midland, I think, last week, and they were talking along those lines. So curious to get your thoughts on that.

[Christopher Wright, executive]

Yes. We saw that note, and there's going to be a whole new ratio now. And so look, I think it's important to step back and put those in context. When you're doing simul-frac or tribal frac, that's not one frac fleet, it's pumping, right? That's a trial frac might not be 3 frac fleets, it might be 2.4 frac fleets or something. But that's for horsepower for equipment, you have more equipment on location when you go to those larger operations. So in frac fleet size that are doing things like that, we don't view that as one frac fleet if we're doing something like that. That's more capital equipment. And we look at returns, not on fleets but on capital investment. So there are efficiencies. And if you've got a perfect supply chain, large pads and you're willing to put capital out a long time, there is activity like that going on. But it's now grows up, I don't think you're going to see a wild change in the deployment of that going forward. It will continue to grow, but it's not going to massively move the rig to frac count ratio. Part of it's just rates of efficiency improvement, both rigs and frac spreads have had great rates of efficiency improvement. The other factor you don't hear talked about so much is frac intensity it used to move depending on sand prices. Sand prices are high, frac intensity will pull back a little bit. Share prices are low, frac intensity, you'll grow. But there's another factor, which is reservoir and rock quality as we're gradually drilling lower rock quality, what's the offset to that? Do you want to accept these production declines nobody does. So what happens is frac intensity grows to offset. So in the next few years, you'll see a growth in frac intensity that is trying to offset the balance of slightly lower drilling locations that are being drilled. I'll give one example. We have a great private customer in the Haynesville used to work for one of the big players in the Haynesville drill in the core acreage. And here they are 4 or 5 years later today, their IPs and their EURs of the wells they're drilling today are almost the same as pretty much the same as the core locations they were drilling 5 years ago at a different operator, but what do they do? The pounds per foot of sand, the pumping rate and the clusters, they basically increased frac intensity in this case, by factor I but that increase in frac intensity offsets a degradation of reservoir quality. This is a faster degradation because it's someone who own the core acreage to someone acquiring not core acreage. But the biggest offset to acreage degradation is frac intensity. So I'm not worried about so we're going to go to 5 1 frac fleet Sarig, that's not happening.

[Saurabh Pant, analyst]

Got it. Right. No, that's fantastic Coles. Really appreciate that. And then one quick follow-up. I think you made a comment to somebody's question, I think you were talking about the Bakken specifically, I think you said you expect the Bakken to keep back up in the second quarter. Any more color on that? Because typically, we think of Basel Eagle Ford, some of these relatively older basins as growth, no growth or whatever you want to call it rate. So a little bit more color on the back end because you have a unique position over there.

[Christopher Wright, executive]

It's just a little bit specific around it. The bottom generally, there's a number of operators that slowdown in Q1 or don't do it but there's some specific operators sort of doing that in Q1 that's going to change. Again, I think it was a very busy basin through Q3, slowed down a bit in Q4 and then kind of went off for some winter weather breaks in Q1 and it's coming back in Q2. It's good it kind of offset a little bit of the opposite seasonality you get in Canada.

[Saurabh Pant, analyst]

Okay. It's more of timing and seasonality more than anything else.

[Christopher Wright, executive]

Yes, Bakken is really one of the basis that has a little bit more of a seasonal character to it than Permian or Haynesville and new Southern Basins wood.

[Operator]

And our last question today comes from Thomas Curran with Seaport Research Partners.

[Thomas Patrick Curran, analyst]

We've already covered the stakes you've taken in Turbo and Aqua and you've shared some helpful context around each of those. So I guess we should now cover the $5 million investment you've made in Natron, would love to hear a similar framing for that, Chris and Ron. And then between the 3, there clearly is this growing portfolio of minority equity stakes in early-stage clean energy tech companies that Liberty is building. Chris, you've already touched on how you think of Liberty as an energy solutions company, not just an oil and gas one, but there would seem to be a clear broader strategy here, not just opportunistic one-offs. So could any of these positions expand into something beyond just a financial asset such as a new technology offering or some sort of JV or alliance for Liberty?

[Christopher Wright, executive]

Certainly possible. Certainly possible. What we look at, like we get pitched everything, but if there are things that really look like they have a reasonable chance of great success, and there is some synergy. We can either help them on the road to success or turbo obvious, it's services and engineering, we're doing. There are different ones. Nitro is a huge amount of investment in lithium-ion batteries, right, because they have the highest energy density. But they have some fundamental problems. And the worst for us, we use batteries. Think of both Digi frac and Digi Prime employ batteries in the field, as temporary storage power mechanisms, DigiPrime is a hybrid thing. So it's moving energy back and forth between batteries, storing and giving power out, sorry, in mumbling. But in case, what's neat about Natron was that it's a sodium ion, which I think you're going to see a lot more of that going forward. It's just an ion that fits well in the matrix. It can discharge faster. It can recharge faster. It can live longer. It does not have the fire hazard. It has lower power density. So boy, if you're sending someone to the moon, you have a lower powered entity. So it doesn't win on everything, but it wins on the things that matter for us, fast discharge, easy to charge, low fire risk like that's a technology that done well is going to play a role and probably going to play a role in the Liberty world. I don't know if Ron wants to add anything to it, but I think that...

[Michael Stock, executive]

I think Chris covered it well.

[Thomas Patrick Curran, analyst]

Yes, you're certainly not alone in your excitement and optimism about the technical advantages of sodium ion among the LIB alternative battery chemistry opted out there. So I understand where you're coming from there. And then just with LPI, when it comes to the visible demand underpinning your plans to double capacity by year-end, are you already starting to see non-oil and gas interest emerge from third parties for LPI...

[Christopher Wright, executive]

We've had dialogues about that. We're always away from ready to deploy and do that. We're not going to do it just to do it, right? It's got to be, we've got to find the opportunities that are compelling economically and that fit our skill set and expertise. We're still building that skill set and expertise as we're building those for power plants. But if we engage in dialogue with other parties, absolutely. Is there interest in having more power on grids or for industrial facilities... Absolutely.

[Operator]

This concludes our question-and-answer session. I'll turn it back to Chris for closing remarks.

[Christopher Wright, executive]

On February 5, Liberty will release our 2024 bettering human lives report. It is significantly expanded from previous versions with more case studies and more topics covered, all in the same centered around data style. Writing this report took up a lot of my holiday vacation, but increasing energy literacy or energy sapriety is critical to our future. Let me give you a taste of just one section called Energy Edition. This section looks carefully at trends in energy production over the last 12 years. Are we in the midst of an energy transition that we hear so much about. The data says that the answer is no. This is not an opinion or a preference Heck, I work in other areas of energy and began my career in nuclear and solar. This is simply an honest reading of the data. In 2010, the world consumed a little more than 500 exodus of energy. 12 years later, in 2022, the world consumed a little less than 600 ex jewels of energy. Great progress was made in growing the energy resources available to expand opportunities and better the lives of the world's 8 million people. What energy sources provided this additional energy beyond the 500 exodus that we consumed in 2010. The runaway fastest-growing energy source in the world over the last 12 years is natural gas, which supplied roughly 40% of the additional energy over that time period. Fully half of the additional natural gas supply came from the American shale revolution. What was the second fastest-growing source of energy during these 12 years. Oil provided 24% of the growth in global energy with the large majority of that coming from the American shale revolution, the third fastest growing energy source was coal, which supplied 14% of additional energy to empower our planet. Wind came in fourth at 9%, solar at 7% and hydro at 4% of the growth in global energy supply. These numbers are not percentages of total energy supply today, they are only percent of the growth in energy supply, the new energy over the last 12 years. Oil and gas supplied 63% of the growth in energy, which represents an increasing market share of global energy over that 12-year period. Hydrocarbons as a whole had flat market share as cold market share slightly shrunk. How can we call this a transition for global demand for natural gas, oil and coal continues to grow without even a diminution of market share. Don't get me wrong. I'm not celebrating this fact. I'm just calling out others for pretending it isn't so. I'm very keen to see the world far better energized so that the 7 billion people living far left energized lives can enjoy the lifestyles of the Lucky $1 billion. To achieve that goal, it would be very helpful if nuclear, which saw 0 growth over the last 12-year period, geothermal and any other affordable, reliable energy source could contribute much, much more to satisfying the world's demand for more energy. We need more energy, better energy. If you want to read more about the global energy system, climate change, poverty and prosperity look for the release of Liberty's battering human lives 2024 report on February 5. Thanks for joining us today.

[Operator]

The conference has concluded. Thank you for attending today's presentation.