Natural Gas Services Group Inc (NGS) 2013 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Natural Gas Services Group first quarter earnings release conference call.

At this time all participants are in a listen only mode.

(Operator Instructions).

Your call leaders for today's call are Lindsay Naylor, IR Coordinator, and Steve Taylor, Chairman, President and CEO.

I would like to know turn the call over to Ms. Naylor.

Ms. Naylor, you may begin.

Thank you, Ross, and good morning listeners.

Please allow me to take a moment to read the following forward-looking statement prior to commencing our earnings call.

Except for the historical information contained herein, the statements in this morning's conference call are forward-looking and they are made pursuant to the safe harbor provisions as outlined in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements, as you may know, involve known and unknown risks and uncertainties which may cause the Natural Gas Services Group's actual results in future periods to differ materially from forecasted results.

Those risks include, among other things, the loss of market share through competition or otherwise; the introduction of competing technologies by other companies; and new governmental safety, health or environmental regulations which could require Natural Gas Services Group to make significant capital expenditures.

The forward-looking statements included in this conference call are made as of the date of this call and Natural Gas Services Group undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include, but they are not limited to, factors described in our recent press release and also under the caption Risk Factors in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Having all that stated, I will turn the call over to Steve Taylor, who is President, Chairman and CEO of Natural Gas Services Group.

Steve.

Okay, thanks, Lindsay, and thanks Ross, and good morning and welcome to everyone to Natural Gas Services Group's first quarter 2013 earnings review.

I'm glad to report that we started the year with a good quarter, in fact, one that I would call robust.

I will start off with the review by reminding everyone that we had a substantial nonrecurring sale of rental compressors in the first and second quarters of 2012 that will affect the year-over-year quarterly comparisons.

The topline impact was a little over $5 million, higher level of revenue in the first quarter of 2012, when compared against the current quarter.

However, we have been able to replace a fair amount of that compressor sales revenue with compressor rentals and flare sales.

Although the topline is mixed, shifts to these higher-margin productlines and some strong segment margins has enabled us to report higher levels of profitability, whether it is gross margin, operating income, net income or EBITDA.

On an apples-to-apples basis, net of the nonrecurring revenue, the quarterly comparisons would be even more impressive.

We were happy with our ability to reduce our cost of goods sold by 22% and report a 14% increase in net income in spite of a 9% revenue difference.

Now let's move to the numbers.

Looking at total revenues, in the year-over-year quarters, the first quarter 2013 revenues decreased 9% to $24 million from $26.4 million in the first quarter of 2012, with the decline due to the aforementioned nonrecurring sale of some rental fleet equipment in the first quarter of 2012.

If we net out the effect of the nonrecurring revenues, our total revenues would have grown by 13% year-over-year.

For the sequential quarters of the fourth quarter 2012 compared to the first quarter this year, total revenues increased a little over $400,000.

Breaking this down, compressor sales were up a little over 17% or about $800,000, while rental revenues were 7% higher.

But a major impact was a $1.2 million decline in flare sales.

This reflects a large year-end 2012 rush to deliver this equipment to the field.

But year-over-year flare sales were still two-thirds higher this quarter than the first quarter 2012.

Comparing this current quarter to the first quarter 2012 in spite of the decline in revenue, total gross margin increased 9% from $11.2 million to $12.2 million.

This was primarily driven by strong margins in our compressor sales business.

Overall gross margin increased from 43% to 51% of revenue, a very strong overall margin.

Sequentially, gross margin increased about $800,000 to $12.2 million or about 7%.

SG&A increased only nominally in the year-over-year and sequential quarters, and continues to run in the 8% average range of revenue in all periods.

Looking at operating income.

Comparative year-over-year quarters for operating income reflect a 9% increase from $5.6 million in the first quarter of 2012 to $6.1 million this current quarter.

Sequentially operating income increased over $600,000 or 11% and climbed from 23% to 26% of revenue this quarter.

In the comparative year-over-year first quarters, net income increased 14% from $3.5 million last year to $4 million this year.

Comparing the fourth quarter 2012 to the first quarter of this year, net income was up $400,000 or 12% to $4 million, a healthy 17% of revenue.

EBITDA increased 13% from $9.4 million in the first quarter 2012 to $10.7 million in the current quarter.

Sequentially, EBITDA increased $1.1 million or 11% when compared to the fourth quarter of 2012.

EBITDA ran at 45% of revenue this quarter.

On a fully diluted basis earnings-per-share this quarter was $0.32 per common share, an increase of 10% over both comparative year-over-year and sequential quarters.

Looking at total sales revenue in the year-over-year quarters, total sales revenues -- which includes compressor, flare and parts sales -- fell from $12.4 million in the first quarter of last year to $7.8 million in the first quarter of 2013.

This comparative decrease was due totally to the nonrecurring sale last year.

With that event, our sales revenues would have increased 11% year-over-year.

For the sequential quarters, total sales revenues fell $500,000 this quarter from $8.4 million in the fourth quarter of 2012.

This decline was mainly attributable to a $1.2 million sequential drop in flare sales.

Overall gross margin, however, increased from 33% to 38% of revenue in the sequential quarters and was mainly driven by a higher profitability in our compressor sales business.

Looking at compressor sales alone, in the current quarter they were $5.2 million.

This compares to $10.7 million in the first quarter of last year.

And without the effects of the nonrecurring sale, they would have been essentially flat.

I do want to highlight the fact that compressor sales posted a 29% gross margin this quarter.

Sequentially compressor sales increased $800,000 or 17% higher than last quarter.

Our compressor sales backlog at the end of the first quarter was $4 million to $5 million, and we think our total compressor sales this year will be around $10 million to $11 million.

Rental revenue had a year-over-year increase of $2.3 million or 17% from $13.7 million in the first quarter 2012 to $16 million for this current quarter.

Gross margins were 57% of revenue this quarter compared to 60% last year.

Our rental margins tend to run between 57% and 60%, depending on the quarter.

And since we expense and don't capitalize any maintenance or overhaul cost, margins can move depending on the level of the make-ready overhaul expense we incurred during any particular period.

This is typically a positive indicator, because we are getting equipment ready to go to the field.

Sequentially, rental revenues grew 7% to $16 million this quarter.

We ended the first quarter with rental fleet unit utilization at 79% and horsepower utilization at 80%.

Along with and as a driver of these utilization increases, it is also significant that the number of net rental contracts started in the first quarter of this year was the highest quarterly number since 2008.

Also of interest is that while this quarter was again dominated by oil shale installations, we also saw a combination of vapor recovery units and a few dry gas installations that resulted in a more varied mix than what we have seen in a while.

Fleet size at the end of March was 2328 compressors.

This is a net addition of 49 compressors year-to-date on a capital spend of $7.7 million this quarter.

Between 35% to 40% of our active fleet is now deployed in oil shales and liquids oriented plays.

This is up from about one-third of the fleet last quarter.

I mentioned last quarter that newly implemented EPA regulations are driving the increased use of small horsepower, low pressure compressors called VRUs -- vapor recovery units -- to the capture of vapors from oil storage tanks.

And that we were successful in winning a contract to supply this type of equipment to a major operator in one of the new oil shale basins.

This type of equipment is right up our alley as far as it being smaller wellhead type horsepower, and we anticipate more activity in this realm.

In fact, we were successful on another VRU contract this quarter in a different basin.

We don't expect much revenue out of it this year, but do anticipate a ramp up in 2014.

The point here is that new EPA statutes are influencing how our customers operate.

It is driving greater use of small compressors and flares.

Going to the balance sheet, our total short-term and long-term debt was $900,000 as of March 31, 2013.

And cash in the bank was a little over $31 million.

Our cash flow from operations through the first three months of this year was $10.9 million.

Now, generally, from a market perspective where the geographic asset or commodity focused, we think NGS is exceptionally well-positioned in our core rental business.

Geographically and from an asset viewpoint, we are in a balance of dry gas and wet liquid plays.

And we presently have a 60/40 fleet mix split between gas and oil.

Our movement into new basins the last couple of years has proved profitable, and we see the growth continuing.

Concerning the traditional gas basins, we have been through a four-year drought -- no growth, but no deterioration either.

But we are starting to see some interest in dry gas compression again.

It is certainly not a rush for the door, and I personally don't think we will see too much activity until the coming winter, but it is more than what we have seen for a long time.

Oil, of course, is the driver.

And although there are predictions all over the map as far as pricing and activity, I tend to think it will stay strong enough for NGS to grow with over the near term.

The newest driver is, as I mentioned, the new EPA regulations that are to be implemented over the next year or two.

We have seen a bit of business from this.

I think it will continue to grow.

As most of you know, it can be volatile until we see the real impact of our customers and their approach to operating under them.

So, whether you are talking gas economics, oil economics, or no economics via the EPA, NGS will be able to get more than our fair share of the available growth.

Although there is a lot of noise around rig count declines, predictions about lower oil prices, and the continuation of relatively low gas prices, our higher utilization and net contract gains demonstrate our against-the-tide progress in our core rental business.

The compressor sales business is still the fuzzy part of the picture for us.

This quarter demonstrates that we can take a fairly large decline in compressor sales revenues and still drive overall margins and profits higher.

To sum it up, our shift towards rentals and away from sales over the past few years is playing out positively and as we predicted.

That is the end of my prepared remarks, and I will turn the call back to Ross for questions anyone might have.

(Operator Instructions).

Brian Uhlmer, Global Hunter.

Nice quarter, very nice.

I was -- wanted to dig a little bit deeper on the VRUs, and chat on what percent of revenues, give or take right now, it is, and how do you see that progressing as we move forward through 2014.

And maybe just a little bit more color on the magnitude of the contracts you received and -- number one.

And number two, if it is just building up some inventory to get ready to deliver in 2014 due to mandates or why there is no revenue until we hit 2014?

Revenues right now from it are still pretty relatively small, less than 5%.

It is still a fairly new phenomenon.

If you recall, the first contract we got was only in November of this year.

So is still a pretty new sort of wave.

We are not building any inventory in anticipation of it.

These regulations are kicking in over the next year or two, various pieces and parts of it.

We think there is going to be some time to adjust, unless we get down towards the real end of the implementation phase from the EPA and then, of course, there may be a rush at that point.

But it is too hard to tell right now, as I mentioned in the comments.

Still pretty variable and volatile, and, certainly, anything to do with the government, especially EPA is probably not something you want to bet the farm on.

But we think it is coming.

We don't think the rules and regulations will be watered down too much or maybe delayed too much.

And, certainly, there is some industry pushback on that, justifiably, too, because there is -- on a lot of these installations and applications there is no real dollar economics to it.

But we are -- think well-positioned again.

This is stuff that is small horsepower, low pressure, right up our alley as far as our mainstay in the fleet and things like that, so we're starting to see some of that stuff move out, as I mentioned before.

Now -- and we think it will continue.

We think we will be very well-positioned from the point of -- we know how to build this stuff.

We have got some of it, and we know how to operate it.

So we think we would be a logical first choice for a lot of operators.

[It appears] you said you had addition of -- I believe you said 43 additional compressors in the rental fleet.

What does the horsepower makeup look like now compared to -- you have been trending upwards and it has fallen off the last year in terms of your average horsepower makeup.

What does it look like now, currently?

It is 49 compressors this quarter, and it has run about the same as what we have seen in the past.

These are newbuilds and we actually put out more compressors on new contracts.

Some of them came with a yard, which obviously drove the utilization up.

But on the newbuilds, they are still running and that hundred and -- our average is still in the 135 to 140 overall fleet-wise.

The newbuilds are still typically running in the 200 horsepower nominal size, plus or minus 10% or 20%; still predominantly oil shale driven from the newbuilds standpoint.

Okay, with that in mind, what led to the margin expansion?

Was it -- very small versus our expectations, anyway.

Was that a pricing gain or just better utilization of existing assets?

On the rental side?

Yes, yes, sir.

Yes, I think the pricing is continuing to roll in.

Just remind everybody we had a price increase October 1 on our fleet on any new set going out.

So I think that will continue to roll out, just depending on how fast we get the equipment out on a quarter by quarter basis.

So I think we are still seeing some of that.

And our guys -- our sales guys in the field are pretty good at trying to push that for opportunity -- market opportunities try to get that pricing up.

So I think it is part of that.

Some of it is just going to be as our utilization climbs, we will get a little better -- just operating margin from that point, a little more density, things like that.

Okay, perfect.

I will turn it over.

Thank you very much.

Joe Gibney, Capital One.

Just a question on the compressor sales margin in the quarter.

29% is pretty high.

Just curious, is it just higher horsepower mix this particular quarter?

Should we still be thinking about the low 20% forward margin expectation as we have in the past?

Yes, I would still keep it in that 20% range.

It is extraordinarily high, and I wanted to highlight that a little, but we had some pretty high spec stuff come in.

It was -- a lot of times just luck of the draw, on some of this stuff.

You can -- if you're not careful high spec can really hurt you, but if you watch it pretty close and bid it right you can come out okay, which, obviously, we did.

So there is maybe some high spec stuff driven.

We were able to get in there and get some good efficiencies going, keep the floor loading up and the throughput through the shops good.

And that is what helps a lot, because that drives down your effective unit burden rate.

So it was things like that that we just hit it all right this quarter.

But yes, please don't look for that every quarter.

I think we still need to be looking in that typical 20% range.

And if we get quarters like this, it is just a little icing on the cake.

Sure, understood.

Only other one I had was on price increases on your rental fleet.

I know you just went through mid-single-digit kind of scale price fleetwide.

What is next?

I know you have talked a little bit about some signs of life on the gas side, and price increases on just your existing come installed fleet, which would be more gas oriented.

It's probably more customer-specific and basin-specific and takes more time and selectivity, but just curious sort of what next and potential to maybe move price a little bit higher on other portions of your fleet that maybe aren't necessarily liquids directed.

Right, yes, that is what we are going to try to do throughout the rest of this year and certainly into 2014.

And you're exactly right, being a little more strategic.

The majority of the fleet still is gas focused.

We have still got a relatively low gas -- natural gas price.

We will probably have a little better luck towards the end of the year.

Certainly, we are starting to identify where we think we have got some strength.

We can move some of that price on the installed fleet, but I am anticipating a little higher gas prices towards the end of the year just due to summer.

And I don't want anybody to think that is a prediction, because I don't predict gas price anymore.

But just generally, it will tend to go up in the wintertime.

So I think we get a little more there, too.

So, yes, we are going to try to move that a bit.

It is going to be by customer, by geography, by equipment and things like that.

If we are strong in markets we got a little better opportunity than maybe some new markets we are moving into and trying to penetrate.

Sounds good.

I appreciate it, Steve.

Nice quarter.

[Ian Bruce], [Private Capital].

Quick question on the -- I know in the past couple of course you have alluded to the fact that on the manufacturing side that you may be getting close to capacity.

I am just wondering if you have an update on when you may be bringing some additional manufacturing capacity online, how much that would cost, how that would be paid for -- cash, debt, some combination of that?

More than likely, and one of the things we are looking at is we have got two fabrication facilities -- one here in Midland that is typically predominantly dedicated to rental compression, then one in Tulsa that typically drives a lot of the custom fab stuff.

And what we are looking at really is bringing Tulsa more into maybe the rental side of it a bit more.

We have used them for a little, I guess, swing capacity sometimes when we needed more rentals and things like that.

But we are looking at maybe trying to essentially bring them up a little more on the rental side.

It depends a lot on what our backlog is on the sales side there, but as I mentioned, the backlog is $4 million or $5 million.

We think the sales are going to be just a flat year for that.

I mentioned we will probably have $10 million or $11 million in sales.

We had a pretty good first quarter, but it will probably flatten out at $2 million or $3 million a quarter going forward.

And with that, we have got some opportunity to shift more of that floor space to rentals up there.

That is where we are going to look at.

I'm a little reluctant to go out and buy new fab space, brick and mortar, because as we said in the past, it can really hurt you if you don't need it.

Yes, we will look at that first.

We are also thinking about the potential outsourcing, if we could find a good, dedicated outsourcer to do some of that stuff.

So have got some plans in mind as to how we can get some additional swing capacity through the Company.

Okay, great.

And then any thoughts -- if expanding capacity, if that is something that is needed and it is not going to require a huge cash outlay -- any thoughts on uses of cash as it continues to build on the balance sheet?

Well, what we will do is -- this market -- we generally think it is up.

Only question is what is the slope up?

Is it a 10% grower, or a 20% grower?

And really if you look at a 10% to 15% grower, that is probably where we are into a $30 million capital year.

If you go into 15% to 20% or higher grower, it incrementally grows pretty quickly.

So, from the cash standpoint, we are going to use that as a buffer if we see the market accelerating a little more and we need a little more -- and we need more cash than our operating cash.

So it would be balance sheet cash to really ramp up the rental side of it.

But, again, if we get 18, 24 months down the road and we are still generating cash and we see those -- we don't see any further need for that an or any other activity we might need the cash for, yes, then we will look at something from a shareholder standpoint.

But we are going to watch it here for a year and a half or so, just make sure what this market is doing.

Okay, great, thanks.

Jeffrey Kerr, Kerr Financial Group.

I think I might've missed this.

Did you say the sales -- I wrote down $10 million to $11 million; is that quarterly, or what was that number?

No, no; for the year.

So, $10 million to $11 million in compressor sales.

And there is $4 million to $5 million and backlog, right, Steve?

Is that --?

Right.

So that is going to move, I guess, gradually out, and it is only going to be $10 million, $11 million in sales?

Yes, what we are thinking is -- you know, we are in May now.

We had about $5 million in sales first quarter.

And we think that is just going to -- the first quarter we had a lot of equipment coming in.

If you remember, fourth quarter of 2012 we had a rush, pretty good quarter on that, too, from the point of people trying to get equipment out and done.

Right.

And we had some backlog stuff that finally we were able to recognize revenue on, because we got it shipped.

And, really, first quarter was an overlap from that, too.

We had a lot of units finish up.

We have got a backlog there closer to $5 million than $4 million right now.

We have probably got -- further out there that we see, pending jobs of about double that right now.

That is where I'm getting that $10 million from.

I am not taking any other number out of the air.

Now if something else comes up, certainly, that could go higher.

By right now what we are looking at is about that level and again, that kind of fits into what we are talking on the rental side.

If we need more capacity we are going to have to take some from Tulsa.

And, so, that would again fit in with this sales number we are talking about.

Do you think it is a linear thing or is it just going to be depending how the market demand is?

On the sales side?

Yes.

Yes, there is nothing linear about that business.

Right.

I tell you what, as you can look at every quarter going back eight years, and it is just up and down, up and down, just very jagged.

So it is real hard to predict, as I mentioned; kind of still fuzzy for us.

And we tend to shift towards rentals anyway.

We think it is a better business, sort of the margins and positioning.

So if we end up with some more sales out, and we still could, that is fine.

We'll report on that every quarter and keep the backlog updated.

But right now we are seeing that $10 million, $11 million.

And if we -- and with that, we are looking more on the rental side maybe having the capacity to upsize that if need be.

I guess a point of clarification, at $10 million, $11 million, is it total for the year or the last three quarters?

Total for the year.

Total for the year, okay.

In flare, a big drop off in flare, like you said, with the explanation being the rush orders in the fourth quarter.

Any outlook -- will it -- will demand return a little bit in that area?

As I mentioned, that was a rush.

And certainly Q1 fell off, but Q1 was still about two-thirds higher than Q1 of 2012.

So --.

Okay, I missed that.

Okay.

So the trend is still up.

We have had a little spike there on Q4.

People -- if you remember the end of last year everybody was worried about what is going on, what is the tax regime and everything else.

So a lot of stuff moved forward, compression, flares, everything, so just a spike up and now just resume the regular, I think the regular trend up, because the flare business still looks pretty vigorous.

Okay, good.

VRU contract, is that a new relationship?

No, it is -- well, in that basin it is.

Yes.

Okay.

But we deal with this customer in other places.

Okay.

Can you give us, I guess, some more detail how that VRU works?

Is it something that is planned or is -- do the E&P guys know ahead of time that they're going to need this?

Or is it -- how do those regs get applied, I guess?

The regulation, and I can miss some of these dates, but the regulation was essentially, I think, proposed October 11 to take place, be effective October 12.

And then by October 13 you had to have some of this stuff starting to go in.

Now the regulation has been pushed to April 14, so there is a six-month delay on it.

So operators [do you know] what the regulations are and whether they are going to need to do something.

Now there is -- as with any of these regulations, there is a lot of parameters in it as to how it affects you and whether it applies to everything else.

But the operator generally knows in the area they are in.

And it is typically going to be in these oil or it oil shale plays, especially oil shales associated gas, because this is what they are trying to control, or just gas emissions off these oil tanks.

So, if, for example, you are in the Niobrara, that is in that oil shale play out there.

That is a typical one, or the Bakken or stuff like that.

They will typically know.

They might not know down to location by location, but they generally know what they're needing to do.

We are starting to see these contracts we got, I think it's an indication that bigger players are starting to [pile] on this stuff, because it is going to be every well that falls into that regulation going forward.

Now the smaller guys aren't.

I think there is still wait and see how the regulation plays out.

Maybe it is extended longer, maybe the threshold isn't as bad or something like that.

It is a typical -- I don't like it, so I will wait until I see what happens.

So, again, that is why I caution we are seeing some of it.

I think it is going to grow.

It is very hard to say how fast it is going to grow or if there is a delay in it or anything else.

But I think it is coming, again, as I mentioned a while ago.

It is just the slope of the growth is the question.

Got you.

The way to maybe think about that is it could increase the pie for the industry overall, but (multiple speakers).

Right (multiple speakers).

This is a market that wasn't even -- it was there, but you didn't have to do anything.

Right, right.

Because before, you let the gas vent.

And now you have to capture it.

So, yes, it is a totally new market for compression.

And that is why I say I think we are going to be a prime beneficiary, because this is equipment we are very familiar with.

Right, right.

Okay, great.

And one final comment is just that -- would encourage you to return to the comments that you used to do, and I think they're a little bit missed, Steve, so I'll just pass that along.

(laughter).

Okay, my political comments?

It was one battle.

It is not the war.

The war goes on (laughter).

No, I know.

I know.

And I have been warming up to it a little more, Jeffrey.

So you never know.

Okay, good, Steve.

Okay, thank you.

(Operator Instructions).

Dustyn Owen.

Looks like we will give a shot to the Tulsa folks, I guess.

And following the prior comments since -- yes, it would be interesting to hear some more of that commentary at the end.

But, sorry if I missed it, get back to the compressor growth in the quarter, I guess, and that -- I've got a utilization number there, but sorry if I missed it.

It is a 7% revenue sequential revenue gain (multiple speakers).

Unit -- unit growth?

49 units.

49 new units added to the fleet first quarter.

Okay.

And then utilization is up to 79% on a unit basis.

Perfect.

That is it for me.

Matt Beeby, Williams Financial.

Question, a follow-up to one of the earlier questions.

Are you seeing any appetite for increased term as far as the operators may be sensing that you might be pushing on prices?

Or is everything still going out under the standard six-month contract?

We have been pushing the term for really probably 12 to 18 months.

We are getting more 12 month contracts out there, but really not from a pricing perspective.

I don't think the operators are looking at it for that, because we are essentially the ones pushing it more so, just for a little more stickiness to the contract.

I don't -- we haven't seen -- I don't detect anything from an operator wanting longer-term just to avoid price.

I think they will typically just try to negotiate it, if it comes about and worry about it then.

Maybe better way to ask it, what percent or what kind of -- is your mix of the term contracts that you have got for the rest of the year, i.e.

what is your backlog visibility through 2013?

On the rental side?

Yes, that is rental.

There is not a whole lot of visibility on that.

About the only visibility we have -- on the rental side of the business -- different from the sales side -- rental operators typically used to being able to get rental equipment within 3 to 4 weeks.

So that is about as far as you can see out now.

Obviously, when we are making projections to build equipment, and now we are having to make projections out six-plus months, sometimes approaching nine months because equipment is getting tighter, we are -- we don't -- some of that we have got -- we are getting contracted from operators, but some of it we are not.

If you go back about two years ago, probably 90%, 95% of the equipment we were ordering, forecasting to build was pre-contracted.

But your deliveries on an equivalent are probably only about three months.

Now you have 6 to 9 months on some of this stuff and we're having to take a little more of a crystal ball look at -- it is probably a 50-50 deal now as to what we need to order, because operators just are not going to -- they are not going to contract that far out on rental stuff.

They will take a chance and finding it.

So we are having to do that.

So really from -- long answer to maybe a shorter question -- from a backlog rental perspective we don't have a whole lot of visibility on that.

Probably no more than 4 to 6 weeks, really, as to what people are contracted there.

Okay.

I have one more relatively quick one, I think.

Can you just talk about where most of the units went that you put out into the field this quarter?

And is there any increased appetite for plays like Utica, Bakken, some of those areas?

It was a smattering -- it was pretty broad.

As I mentioned, we saw oil shale stuff.

We saw some VRU stuff and we saw some dry gas stuff.

Now the dry gas stuff was pretty much of a minimum, but a minimum is more than we have seen a long time.

So, really, we have stuff go out into the Niobrara, into the Granite Wash, still majority being these liquids plays and a little into -- no, I won't even -- yes, a little into the Utica.

And then -- yes, that is probably the majority of it.

And then just a little dry gas in San Juan and Barnett.

Then maybe just a quick follow-up there.

Is it that you saw more of a dry gas component or is it basically same quarter-over-quarter?

You mentioned the dry gas interest being a little bit greater.

Is it a reflection in what you saw in the last quarter or more of a reflection going forward of the (multiple speakers) come in?

No, we really haven't seen any up to this quarter.

And, again, I don't want to make too big a deal out of it, because it really is not a whole lot.

The only reason I mentioned it is -- first time in a while.

Now I do think, and mentioned this last call too, I think it is going to -- I think -- I anticipate a little more of a tailwind from dry gas business this year, where we have had none for four years.

So just a little breath will be a tailwind, but I think as the gas price goes forward -- and of course gas price is down over the last couple of weeks by 10%.

Everybody freaks out over that, but it is no big deal.

We are in the shoulder season.

Gas prices always fall during the shoulder season.

Then as we start getting towards fall and winter, I think that will be an interesting time to see if this price gets back up over $4.

And I think it might.

And then I think then we will have some surge in that, because the thing is we will be going into -- presuming we have winter, which typically we do, we will go be going into a winter with a decent gas price.

And the operator will have some assurance that he will have a few months of the decent gas price.

Now when you're coming off winter going into summer, and you have a $4.20 or $4 gas price, that is well and good.

But you are typically going into a lower-priced seasonal environment.

So I am thinking -- I'm looking more towards the end of the year to really see how the gas price moves.

I think it may move up, and that is where I think if we get any tailwind on the dry gas side, it will be end of the year.

All right, thanks, Steve.

Good color.

(Operator Instructions).

At this time there appear to be no further questions.

Okay, Ross, thanks for your help.

Appreciate everybody joining on the call.

And I look forward to talking to you next quarter.

Thank you.

This concludes today's conference call.

Thank you for attending.