Trican Well Service Ltd

TSX:TCW

Earnings Call Transcript 2020-Q3

[Operator]

Good morning, ladies and gentlemen, and welcome to Trican Well Services' Third Quarter 2020 Earnings Results and Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. Brad Fedora, President and Chief Executive Officer of Trican Well Services. Please go ahead, Mr. Fedora.

[Bradley P. D. Fedora, President, CEO & Director]

Thank you very much. Good morning, everyone. I'd like to thank you for joining our Q3 conference call. With me on the call are these various people from our executive team including Rob Skilnick, our CFO; and Todd Thue, our Chief Operating Officer.Before we proceed with the call, I'd like to refer everybody to our website, which is www.tricanwellservice.com. And on the website, you can go to the Investors section and download our presentation and about -- the second page of the presentation is a disclaimer talking about forward-looking information and basically the usual legal stuff around these calls. So I encourage you to read that.Just the outline of the call. First, Rob Skilnick is going to give an overview on the quarterly results and then I'll address the issues pertaining to the current operating conditions and the near-term outlook for the remainder Q4 and Q1. And then we'll open the call for questions.And so I'll now turn the call over to Rob.

[Robert Skilnick, Chief Financial Officer]

Thanks, Brad. As Brad mentioned, please refer to our 2019 AIF and business risks section of our MD&A for the quarter ended September 30 for a complete description of risks and uncertainties, and also references to common industry terms in non-GAAP measures that are more fully described in the third quarter 2020 MD&A. Our third quarter results were released this morning and are available on SEDAR. By historic standards, activity remained at cyclical lows. The average Western Canadian rig count was 53 drilling rigs, which compares to 202 in Q1 of 2020 at a 144 in the comparative Q3 2019. However, despite historically low industry activity, Q3 activity saw a sequential improvement of 135% relative to the second quarter of 2020. For this reason, the company achieved sequential improvements in almost all financial categories.The significant efficiencies achieved in our business at the end of March, combined with efficiencies already being implemented in advance of COVID-19 events have resulted in a much more resilient business cost structure. Despite year-over-year industry activity declines of 60% and our core corresponding year-over-year revenue declines of 43%, our adjusted EBITDA came in just below breakeven at negative $2.6 million compared to positive $3.5 million in the third quarter of 2019. Excluding the effects of severance and the Canadian emergency wage subsidy, adjusted EBITDA would have been approximately positive $5 million.Fracturing operations activity was inconsistent through the first half of the quarter, but then strengthened in the second half. Despite average utilization on our three crews of 53%, strong operational performance and efficiencies allowed us to generate reasonable margins in the context of the current business climate. Although cemented coil activity started off really slow, both service lines achieved noticeable improvements in activity and revenue levels as the quarter progressed. Coil activity improvements allowed us to increase our coiled tubing crew count back to four.The severance charge I referenced earlier for the quarter was significant. As a result of COVID-19 events, the company had previously reduced personnel levels by approximately 800 staff in March and April. These reductions consisted of both permanent reductions in temporary layoffs. Recently we brought back about 200 of the temporary reduced staff to work, while our remaining 350 employees were permanently reduced due to anticipated permanent activity level declines. Most of these employees were long-serving employees with an average tenure of nearly six years, many having served much longer than that time frame. Additional significant severance was incurred related to the executive departures that were disclosed in our news release dated September 15, 2020.The company's business generated modestly negative operating cash flow in the quarter before considering changes in working capital. Operating cash flow before working capital was negative $4 million despite the significant industry headwinds. However, equipment sales did provide incremental cash flow to pay for our sustaining capital and contribute to our NCIB program.Despite a network operating working capital investment of $18 million, the company's financial position remains strong with cash exceeding borrowings and a positive noncash working capital position of $49 million. Our available credit lines continue to provide the company with significant liquidity to whether this current market uncertainty and will allow us to maintain our equipment in good working condition with the potential for making opportunistic investments.Our Q3 2020 CapEx remained modest at $1 million. Our current investment plans will also remain modest and will be focused on critical sustaining capital items and allow us to invest opportunistically in items that provide long-term efficiencies and quick paybacks.Overall, our full year capital should approximate our previous indications of approximately 4% of revenue levels. While we do expect to continue to sell additional assets, the overall market uncertainty caused by COVID-19 resulted in the reclassification of our assets held for sale-back into property and equipment. We still have a number of assets that we plan to sell. And despite the ongoing market uncertainty, we sold nearly $5 million of assets during the quarter. We will continue to monetize stranded capital and redeploy that capital back into the business either into equipment or into our NCIB program.During the quarter and for the third consecutive NCIB cycle, we maxed out our NCIB purchases. Since 2017, we have purchased more than 26% of our shares. In addition, we renewed our NCIB program at the beginning of the fourth quarter and we have continued to make share repurchases since this renewal. The company continues to view share repurchases as a good long-term investment for use of any excess capital.I'll now turn the call over to Brad, who will be providing comments on the operating conditions and strategic outlook.

[Bradley P. D. Fedora, President, CEO & Director]

Yes, I'll make some quick comments and then we can go to questions. So Q3 obviously was coming off historical lows in the oil patch. So the quarter started very slowly, as everybody knows, with only a couple of dozen drilling rigs running and then slowly built up as the quarter progressed. And it was fairly lumpy throughout the market that we're in. In Q3 or in Q4, there is very busy weeks followed by some slow days and then returning back to busy days. It is quite lumpy. Us, like probably most of our competitors, we're very focused on our core group of customers. As everybody knows, Tourmaline is a big part of our business. And thankfully, they were busy and we had a fairly active quarter.The Cementing business as with fracing started slow and then built up as the quarter progressed. I think at the beginning of Q3, we were less than 20 drilling rigs and now we're at around 88. And so the Cementing business has continued to build as things have gotten busy and basically the same with coil. At the beginning of Q3, we were doing very little work and then we actually got into a situation where we needed to add crews at the end of Q3.Pricing, of course, whenever you think it can't go lower, it goes lower. It's extremely competitive. I have to say it was relatively stable through Q3. And then as Q4 progressed, we've seen some volatility in pricing. Like there just isn't enough consistent work for what we think is approximately 20 frac crews running in the basin. And every time that happens, of course, you get this ridiculous pricing behavior and certain of our competitors are, obviously, violate pricing issues more than some, but that's not going to go away and so we're trying to work through that. It's a balance between securing spot work at prices that are, frankly, too low versus saving your equipment for longer term contracts that are running into 2021. So all we can do is continue to manage that. It's important to note, as everybody knows, it's a high fixed cost business and so any pricing or any additional crews that get added to our business, those cash flows go directly to our bottom line as our fixed costs will not change with the addition of crews here.In the quarter, we averaged 3 frac crews running about 200,000 horsepower and we averaged about 10 cement crews and 3 coil crews. All of those have increased over that quarter average. But as you can tell, it was a pretty slow quarter, not a lot was happening. The area that we're focusing of course is the Montney and the Deep Basin. We're very gas-focused between liquids-rich and dry gas. It's basically 95% of the work we're doing. We do very little oil work. We're very, very Montney-focused. We pumped only about 127,000 tonnes of sand. We provided all of it. Our customers in the quarter didn't provide any of their own sand. And as of the usual, about 70% of the sand we pumped was all white versus 30% domestic.We've seen the tonnages on wells stabilize this year in 2020. We were not seeing a lot of growth. But I do think like Q2, Q3, would probably not all that representative. And as Q4 progresses and Q1 -- as we look out to Q1, we are seeing some tonnage growth on a per well basis. So I think we'll get back to our customers trying to optimize what they're doing and get the best from their reservoirs.We did, obviously -- I think Rob alluded to the cost-cutting that we have done. And we have invested a lot in systems. And all of this is to say that we're in a position now that, as we grow, our fixed costs will not change. We can probably double or triple our crew count and there's going to be very little changes to fixed operating costs or G&A. And so we're at the part of the cycle where the operating leverage is starting to work in our favor. And as we get busier into the quarter here and into next year, you should see some -- you should see the financial contribution coming from those additions.But Q4 to date has been quite busy, busier than Q3, and we're not expecting that to change. We do see growth in Q4 over Q3 and we do expect growth in Q1 over Q4. October, November, we've had some weather issues but have been quite busy and we think it's going to stay busy until mid-December. And we expect that Q1 is going to start with a bang relatively.It's important to note that all the dual fuel pumps that are available in the basin are basically being operated today. And so going forward, as customers grow their programs and demand dual fuel, there is basically going to be a shortage as there's about -- as all the dual-fuel pumps that us and our competitors have are basically all working today. So that is going be a pinch point in Q1 for sure and it is something we will continue to invest in.We're not expecting the rig count to really change in for the rest of this quarter. We are expecting it to go up in Q1. To what level, I'll leave that to the analysts, but we do expect that the rig count will breakthrough 100 and that will cause tightness. So we've added 1 frac crew since Q3, we're up to 4. We're expecting that we're going to be adding another one, maybe as high as two. Same thing on coil and cement. We're running 5 coil crews today and about 15 cement crews and we'll see how that goes. And we're in a position thankfully that we can continue to add equipment into the basin without any changes to any of our fixed costs. So we'll continue to monitor that. We won't put crews on the road unless we're going to make money. Nothing has changed there. It's -- the basin, I would say, as everybody would expect, is extremely -- or what we're working on anyway, is extremely natural gas-focused. Clients are clearly taking advantage of higher gas prices and using that to drill profitable wells in the Montney and the Deep Basin. And as long as those gas prices hold, we think activity will be relatively busy. Unfortunately for us, our margins are still tight, but certainly, it's always a good thing when your customers are making money.We do get questions on people. I'm not going to say we have people issues yet. Certainly, there's areas in the basin like Grand Prairie where they've stayed relatively busy and the people that have been laid off have returned home to various parts of Canada. That's always a tough market, but we're still not seeing any significant hurdles on the people side.We do think we're going to be add -- we're going to be able to add the people that we need to add certainly for the next six months or so anyway.On the supply chain and just general cost efficiencies, we continue to make sure we grind the cost out of our systems and structure a company that we think is running at its most efficient. We've been thinking -- we've been going through our supply chain and our vendors and trying to get the best prices we can obviously. We continue to look for every cost savings that we can find. And again, it's important -- the significance of this is, as we do grow revenue, all of that margin or all of that field margin will flow to the bottom line.On the technology side, as everybody knows, the frac business is sort of in a bit of flex and our strategy is to maintain financial flexibility, look for ways to differentiate ourselves or look at consolidation opportunities. We'll just continue to investigate the various opportunities that we have and hopefully make the right decisions with -- on the backs of thorough analysis.So we, the industry is changing. We're getting away from diesel-driven frac crews. We're starting to hear about the desire for electric or natural gas-fired equipment and we're in the fortunate position that we can look at any and all of those opportunities. And when we find the right opportunity, we'll make a move and we hope to differentiate ourselves, not only through our balance sheet, but through the equipment and the services that we offer.The ESG pressures put on our industry, they are real. We are responding to them. We are working in our company to quantify and identify all of the things that this industry has done in the last few years and they're significant. We've reduced freshwater consumption, we've reduced diesel consumption. We've reduced the number of trucks on the road, and we have reduced the amount of chemicals we're hauling around the country side by replacing it with dry chemicals or bulk chemicals giving chemistry options that allow our customers to use produce water or recycled frac, flow back water.All of these things, the industry has made great strides in our environmental footprint. And I think it's -- we probably need to do a better job of sort of informing the public and the investment community as to what those things have been and just how significant they are. So our ESG plan internally will continue to develop, but mostly, with the goal of providing our customers with concrete data as to how much less diesel or water, whatever it is that they're consuming now versus even a few years ago.On the capital side, we're going to pick our spots, look for areas of differentiation. Our equipment is all in very good shape. We have a lot of equipment on the fence, but it's basically ready to go and so our capital needs are fairly minimal. And as we have to pull equipment off the fence and put equipment into the field, our costs are certainly just not that significant. And we'll continue to look at the new equipment designs and whether it's more dual fuel or Tier 4 engines with the general desire that we want to reduce emissions, reduce the amount of diesel we're burning, use customer sales gas on location just to create the most cost-effective and efficient frac fleets as we can.On the cementing and coil side, we don't -- a lot of that technology hasn't applied to those business lines yet. But certainly, we're looking at every and any opportunity whether it's with new blends or new chemistries to do a better job and provide more efficient services to our customers. Our primary focus continues to be in Canada, continues to be in the Montney and the Deep Basin. And so we're not looking to grow outside of Canada. We're going to continue to build market share here. We will continue to sell off old equipment given the opportunity, keep our balance sheet strong and keep that flexibility, continue to buy back our stock and just look to make the next move and provide good services to our clients.So I think I'll stop there. And operator, we can go to questions now.

[Operator]

[Operator Instructions] Our first question is from Andrew Bradford with Raymond James.

[Andrew Bradford, MD, Equity Analyst & Head of Energy Research]

When you have -- so you've activated a crew since the third quarter, and you're talking about activating a fifth for a crew under the circumstance -- under in the correct circumstances. Can you describe, how many guaranteed work do you need to activate that crew? What are the sort of business conditions that are required? Because in your preamble, you sort of described a situation in the basin right now where there might be about 20 truckers out there and that's not quite enough tension in the market to support stable pricing. So you're adding a fifth crew now and then -- so what sort of circumstances do you need to see or what kind of guarantee work do you need to have to make you do that?

[Bradley P. D. Fedora, President, CEO & Director]

So it would have to be sort of project-based awards and the indications from our core customers as to what their plans will be for 2021. Given our 4 crews today, we cannot get to everything that is on the board today. And so we're not prepared to reduce price to add those crew -- to add that crew, but we're not expecting a big price increase either. And keep in mind that the people that we're adding to add that crew are all variable. They're all variable cost and so they would come and go with the workflow, and there wouldn't be any incremental salaried positions added. And so we do have quite a bit of flexibility there. If the work does go away, so do the costs. But really, it's fairly detailed discussions with the customer or the look through the project timing and making sure that we have the equipment for everything that we've sort of made promises for. And today I can tell you, we don't really have enough but because it's so gas-focused, we all know what can happen if we end up with a warm December. So we're staying nimble until we have to make those final decisions.

[Andrew Bradford, MD, Equity Analyst & Head of Energy Research]

Okay. So the variable cost part was my next question. So all -- everybody on the next crew or the staffing requirement for the next crew is they are not -- none of these guys will be salaried?

[Bradley P. D. Fedora, President, CEO & Director]

Right. So we didn't actually lay off any supervisors. We basically had cement and frac and coiled crews staffed almost entirely with salaried supervisors over the summer and into Q4 here. So we made the decision that we were going to keep all the people with the knowledge and the experience. And so we just -- we're, fortunately now, as a result, we can spread those people around now and the people that we do add are day-rate employees.

[Andrew Bradford, MD, Equity Analyst & Head of Energy Research]

Okay. Just the last one from me would just be around capital allocation. Looking at the buyback versus the potential for M&A in the sector. And maybe just your comments around how you view the sector could or could not benefit from M&A as activities slowly picks up here.

[Bradley P. D. Fedora, President, CEO & Director]

It's tough to beat the buyback. We traded 50% to 60% of book or whatever the exact number is. As everybody knows, buyback is permanent. It's a tough investment for us to beat and so, you've seen us deploy almost all of our capital into the buyback and we continue to do that. I mean there are places where we do need to consider investing more bi-fuel that kind of thing, but it's -- we've always got that buyback in the back of our minds here. That's been our way of growing on a per share basis over the last couple of years. We've bought back whatever, 28% of our stock, and so our per share numbers have obviously grown by that amount. So it's a tough thing to beat. And so when we look at buying our own stock versus consolidation, it really gets down to, I mean, it gets down to price. I mean consolidation makes sense. I mean if things get cheap enough, you can justify the economics of consolidation. But from a longer term perspective, I think our strategy would be more focused around low-cost operations and differentiation. And so in order to beat that out, we'd have to see consolidation at really attractive prices.

[Operator]

The next question is from Cole Pereira with Stifel.

[Cole J. Pereira, Associate]

So a lot of commentary today just around improving utilization on the gas side, as expected, heading into the winter drilling season. Would it be fair to say that a lot of this activity is still, call it, largely maintenance spending? Are you getting any indications that E&Ps might be starting to actually think about growth on the gas side?

[Bradley P. D. Fedora, President, CEO & Director]

I'm not sure we would know the answer to that. But I mean it is definitely both, but I don't think I could give you a very well-informed answer on the split between maintenance versus growth. It would be very customer-specific. That's better asked. I don't want to speak on their behalf.

[Cole J. Pereira, Associate]

Got you. No, totally fair. So your comments around bi-fuel. How would you be thinking about that in terms of timing? Would that be more of a 2022 type of situation? Or if things pick up in the market for that stays tight, could we see some of that in the second half of next year?

[Bradley P. D. Fedora, President, CEO & Director]

Yes. About a quarter of our fleet today is bi-fuel and the time line on converting more of your fleet is a few months, it's not a few quarters. So we'll continue to sort of upgrade and maybe experiment with new technologies on the bi-fuel side, so that will be a 2021 thing for sure.

[Operator]

The next question is from John Gibson with BMO Capital Markets.

[John Gibson, Analyst]

Talked about the -- Tourmaline, obviously been a big customer, and they've been pretty active on the acquisition front here recently. I'm just wondering if you have seen an impact to your business or any conversations with them in terms of potential work going forward.

[Bradley P. D. Fedora, President, CEO & Director]

Yes. We expect our work to grow as their activity grows whether it's through drilling on their existing lands or as they inherit acquisition drilling programs. We, generally -- as long as we're doing good work for them obviously, we expect to grow with them.

[John Gibson, Analyst]

Okay. Great. A second one for me. Back to the dual-fuel units, I know you talked about them basically all being utilized in the basin. So in order for you to add more crews, would you need to invest in additional dual-fuel capacity in the short term? Or could you activate crews from existing equipment on the sidelines?

[Bradley P. D. Fedora, President, CEO & Director]

We would -- yes, we will likely continue to add dual fuel as we add more fleets because the demand for dual fuels has but increase and it's becoming almost a must-have, I guess. There are certain places or certain customers that are more flexible, but the kind of work that we're pursuing typically does require dual fuel.

[John Gibson, Analyst]

And this would have to happen before you theoretically add any more fleet?

[Bradley P. D. Fedora, President, CEO & Director]

Not necessarily. I mean one doesn't have to come for the other, but I mean you -- generally with the intention that if you're going to add another crew, you would want it to be dual-fuel capable as soon as possible.

[John Gibson, Analyst]

Okay. Great. Next one for me, just on the asset sales, can you quantify what that level stands at currently?

[Robert Skilnick, Chief Financial Officer]

Sorry, the asset sales for the quarter? Like the...

[John Gibson, Analyst]

Or assets held for sale, sorry. I know some moved in and...

[Robert Skilnick, Chief Financial Officer]

What's -- well -- no, we don't have a quantification. Like we took it down to 0 on the balance sheet. It was sitting at around $15 million. But I mean, we'd have assets listed on the real estate market north of $20 million at this time. And you can go on the real estate websites and go track it down if you're interested.

[John Gibson, Analyst]

Okay. Fair enough. And then, last one for me is, can you quantify if there is going to be any more restructuring charges here to hit in the remainder of the year? And then also what do you expect for Qs in Q4, 2020 and 2021?

[Robert Skilnick, Chief Financial Officer]

Yes. I think -- so, on the first one, we think we're largely done on the restructuring here in the short term. I mean we've got to continue to look at the business and see how that's moving and progressing. Like if we're permanently at a 3,000 well count, there's going to be some challenges there. As far as the Qs' program goes, it's only really defined until the beginning of December. I would expect it to be slightly below the Q3 number. And then looking out to next year, it's waiting to see how it's fully defined to get clarity into June of next year.

[Operator]

The next question is from Waqar Syed with ATB Capital Markets.

[Waqar Mustafa Syed]

Thank you, Brad, for a very comprehensive rundown on activity and outlook. Just one first clarification question. The number -- you've mentioned that there are 5 coiled tubing units and 15 cementing units. Now is that a number for the fourth quarter or is that what you expect for the first quarter of next year?

[Bradley P. D. Fedora, President, CEO & Director]

That would be like today's -- the current number.

[Waqar Mustafa Syed]

Okay. Great. And would you think that's going to...

[Bradley P. D. Fedora, President, CEO & Director]

We would expect -- yes, we would expect the number of cement crews were running to increase proportionate to the rig count.

[Waqar Mustafa Syed]

Okay. Makes sense. Now secondly, it's interesting to hear your comments on demand for dual fuel systems in Canada, South of the border in the US. We are seeing similar trends as well. Now one pumping company in the U.S. is investing in the logistics for supplying CNG or putting infrastructure or bringing infrastructure to use field gas. Is that something that you think has value in Canada as well? And is that something that you would consider investing in as well?

[Bradley P. D. Fedora, President, CEO & Director]

No. Yes, no. I think the future here is using gas right on the pad, like the customer's own gas on the pad. And we've already got the [indiscernible] of the world, providing CNG. So it's not something we would pursue. We're trying to get away from ancillary logistics investments, as it's tougher and tougher to get paid for those investments. And so we're hyper-focused on making sure that we get a return on anything we invest in them and we get it quickly.And so typically, the history of the pressure pumping industry is that the more ancillary equipment or services you provide, sort of the less likely you're going to get paid for it. So our CapEx is going to be very, very focused on things like dual fuel.

[Waqar Mustafa Syed]

Okay. It makes sense. Now you made a comment about the sand pump per well has been relatively flat last 2 quarters and could go up. Now could you maybe give us some numbers in terms of what the average sand pump per well is currently in the Montney and Deep Basins?

[Bradley P. D. Fedora, President, CEO & Director]

I don't have that data with me. So I don't even want to try to answer that. We can follow up on that, but I'd have to get back to my computer.

[Waqar Mustafa Syed]

Okay. No worries. No worries. And then just final question, as activity picks up in the first quarter, how do you expect your revenues to be, on a year-over-year basis, in first quarter 2021 versus first quarter of 2020? Just broadly would be -- yes.

[Robert Skilnick, Chief Financial Officer]

Yes. We're not going to make last year's numbers. Now if we could get pro-rata to the average rig count, I mean that's as good a place to be as anywhere at this point.

[Operator]

[Operator Instructions] Our next question is from Keith MacKey with RBC.

[Keith MacKey, Analyst]

Just a question here on customer consolidation. You mentioned Tourmaline, we could potentially see more consolidation in the basin. But ultimately, likely fewer potential E&P customers for frac companies is an outcome here. So do you see it as a positive that your customers have been the ones consolidating? Or is there a material risk that some of the other pumpers who maybe have their customers get consolidated come after your work?

[Bradley P. D. Fedora, President, CEO & Director]

Yes. We've been fortunate that our efforts to work for the consolidators versus the sellers has generally paid off. But you don't always have that luxury and especially in a tough market like this. But from a long-term strategic perspective, we are obviously taking into consideration all of those issues and targeting our efforts accordingly. And we would agree with you. We do expect the customer count to get more focused and have bigger but fewer customers. And there's a lot of implications of that as to how you're designing your service offering and your integration of things like safety in ESG and we're playing through that. We're playing through all those issues when we think about what does this basin look like in two years. So -- and we're making -- we think we're making moves accordingly, so...

[Keith MacKey, Analyst]

Got it. And one more for me. Maybe -- could you just walk us through a road map on what it would take for pricing to get better or significantly better over the next, call it a year or two?

[Bradley P. D. Fedora, President, CEO & Director]

I mean it's not complicated. We've got about 1.8 million horsepower in the basin today. About half of that is heavy-duty, continuous-duty style pumps. That's appropriate for high-pressure wells in places like the Montney where customers are expecting to pump 20 plus hours a day. And about half of that equipment is dual fuel.So the dual-fuel heavy-duty equipment is consumed already at these levels. So as this -- if this well count starts to trend towards sort of 4,000 plus, you are going to see constraints in -- on the equipment side. And that's what you'll need to get better pricing. We're actually expecting pricing to firm up as early as Q1 just because I think all the frac companies in the basin, with -- you might add a crew here and a crew there, but it's not like any of us are in a position to double down on crew count or something like that. So we do expect some firmer pricing in Q1. And it only takes one company to ruin it all, unfortunately. And we do see that and we have seen that in Q4.So we'll see a little bit of firming up in Q1 and then anything beyond that is going to require oil prices, gas prices stay where they are and oil prices to go up and people start to add to their programs. It's all the obvious stuff. But the good news is in Canada. Like it's not -- the supply and demand fundamentals in Canada are way more attractive than they are in the US. And we're not that far away from kind of a fairly tight market. And it's a high fixed cost business and so all of those -- all of that additional revenue goes straight to the bottom line. And I think a lot of times people don't appreciate just how much operating leverage exists in these businesses. And we've done a lot of work over the last couple of years to reduce our fixed costs and our G&A.And I'll say it -- I said it before and I'll emphasize that again, we can double or triple our crew count from these levels without any material changes to our fixed costs.

[Operator]

This concludes the question-and-answer session. I'd now like to turn the conference back over to Brad Fedora for any closing remarks.

[Bradley P. D. Fedora, President, CEO & Director]

Okay, yes. Thanks, everyone. We appreciate your interest and your time to join our call. The management team is available for follow-up calls for the rest of today and Monday. You can get our numbers off the website. So please call us if you have any follow-up questions. And thanks again. Have a good weekend.

[Operator]

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.