Apr. 30 at 11:17 AM
$PUMP ProPetro Holding sees FY26 capex
$540M-
$610M
The company said,"The Company now anticipates full-year 2026 capital expenditures incurred to be between
$540 million and
$610 million, up from the
$390 million and
$435 million range highlighted in the Company's fourth quarter earnings report. Of this, the completions business is expected to account for approximately
$140 million to
$160 million, including approximately
$40 million to
$50 million related to planned lease buyouts for a portion of the Company's FORCE electric fleet portfolio. As a reminder, the five FORCE electric fleet leases were secured with an initial three-year term and include options to either buy out or extend the leases at the end of that period. The intent behind these leases was to defer upfront capital expenditures while securing the equipment at an attractive cost of capital, supported by the earnings from the FORCE electric fleets.
This strategy proved successful, enabling the Company to rapidly transform its fleet and still generate accretive cash flow. The Company's current intent to exercise the upcoming lease buyouts reflects the completion of a deliberate and strategic capital allocation decision. By exercising these options, the Company will take full ownership of the FORCE fleets. Each buyout will immediately reduce the Company's lease expense, currently reflected in operating expenses, and strengthen its commercial flexibility. The Company currently expects to buy out all five fleets, with buyouts anticipated to begin in late 2026 and continue through 2028. Also, as a reminder, the Completions business guidance range includes capital reserved for refurbishing a portion of the existing Tier IV DGB fleet, investments in fleet automation technology, as well as measured investments in direct drive gas frac units.
Investments in the Company's gas-burning equipment portfolio are especially valuable in the current market context. Accelerating demand for these fleets is driven by higher diesel prices and a significant diesel-to-natural gas price discount in the Permian Basin, resulting from the Iran War. This price differential enhances the economic viability of natural gas-powered fleets, making these investments critical for capitalizing on market opportunities and strengthening the company's competitive position. Additionally, the Company anticipates incurring capital expenditures of approximately
$400 million to
$450 million for its PROPWR business in 2026. This projected increase is attributable to down payments for future deliveries associated with the recently executed framework agreement with Caterpillar.
While these PROPWR capital expenditure estimates reflect the total cost of the equipment, they do not account for the impact of financing arrangements, which are expected to reduce the near-term actual cash outflows or cash capex required from the Company. For the second quarter, the Company expects to operate approximately 12 active frac fleets, reflecting early signs of recovery and heightened activity in the Permian completions market as the strengthening commodity environment, driven by the ongoing Iran War, begins to support improved pricing and demand across the Company's completions business.
Pertaining to PROPWR, in the first half of 2026, the Company's primary focus is still on the successful deployment and scaling of PROPWR assets across our existing contracted customer base. By emphasizing strong performance and actively de-risking deployments during this period, the Company is positioning PROPWR for long-term growth. This strategic approach is expected to establish a strong operational foundation, enabling PROPWR to begin delivering positive and increasingly meaningful earnings in the second half of 2026, in alignment with the Company's growth objectives. Outlook"
