Ranger Energy Services (RNGR) 2024 Southwest IDEAS Conference summary

Business overview and strategy

• Focuses on well servicing and maintenance of existing oil and gas wells, not drilling new wells.

• Market cap is approximately $360 million, with a production-focused revenue model considered resilient through cycles.

• Converts about 60% of EBITDA to free cash flow, maintains zero net debt, and has a robust capital returns program including dividends and share buybacks.

• Operates mainly in the Permian Basin, Eagle Ford, Haynesville, Anadarko, Bakken, and Rockies, with a stronger oil than gas exposure.

Financial performance and capital allocation

• 2023 revenue was $636 million, EBITDA $84 million, and free cash flow $54 million.

• Returned about $40 million to shareholders over 18 months via dividends and share repurchases.

• Maintains a minimum commitment to return 25% of free cash flow to shareholders, with 80% of recent returns via share repurchases.

• Share buybacks have reduced outstanding shares by nearly 15% at an average price of $10.36, with current trading at $15.75.

Market positioning and growth opportunities

• Largest service provider for major oil companies, with high market share in high-specification rigs.

• Revenue and EBITDA have grown despite a 20% drilling rig count decline from 2022 to 2023.

• Recent acquisitions in 2021 transformed the company, adding $15 million in EBITDA per quarter.

• Growth opportunities identified in plug and abandonment (P&A) and infill gas processing, supported by government funding.