Ranger Energy Services, Inc. Class A Aktie

Good morning, and welcome to Ranger Energy Services First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Joe Mease, Vice President, Finance. Please go ahead.

Good morning, and thank you for joining Ranger Energy Services First Quarter 2026 Earnings Conference Call. Before we begin, Ranger has issued a press release outlining our operational and financial performance. The press release and accompanying presentation materials are available in the Investor Relations section of our website at www.rangerenergy.com. Today's discussion may contain forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties including the risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update our forward-looking statements.

Factors that could cause actual results to differ include, but are not limited to, changes in oil and natural gas prices, customer activity levels, operating risks, competitive pressures, weather conditions, integration risks related to acquisitions and other risks described in our filings with the Securities and Exchange Commission. Further, please note that non-GAAP financial measures will be referenced during this call. A full reconciliation of GAAP to non-GAAP measurements is available in our latest quarterly earnings release and conference call presentation.

Joining me on the call today are Stuart Bodden, Ranger's Chief Executive Officer; and Melissa Cougle, our Executive Vice President and Chief Financial Officer.

With that, I'll turn the call over to Stuart.

Thank you, Joe, and good morning, everyone. We appreciate you joining us today as we discuss Ranger's first quarter 2026 results and our strong financial performance. Despite a challenging start to the year, driven by the severity of winter storm Fern, Ranger delivered solid financial results with meaningful year-over-year growth and continued progress against our strategic priorities. For the first quarter, Ranger generated total revenue of $159.1 million and adjusted EBITDA of $23.3 million, representing growth both sequentially and versus the prior year. Importantly, these results reflect a quarter that began sluggishly but finished with strong momentum as February and March activity levels rebounded across our portfolio. The severe winter storm in January temporarily disrupted activity in all regions for several days, particularly in the Permian Basin. However, conditions improved and activity levels rebounded and we exited the quarter with stronger utilization and improving operating cadence. That positive momentum has continued into April.

From a strategic standpoint, we remain focused on execution, safety and disciplined growth. We continue to integrate the AWS businesses, advance our ECHO hybrid rig program and invested in areas that support long-term value creation while maintaining operational and financial discipline. Looking at some specifics, high-spec rigs once again delivered strong results in the first quarter and continues to serve as the cornerstone of Ranger's performance. Revenue in the segment increased both sequentially and year-over-year, driven by incorporation of a full quarter of legacy AWS rigs, an improvement in utilization across the legacy Ranger fleet and resilient pricing. Top line growth in the quarter was driven by a meaningful shift in rig activity beginning in March. While some slight margin pressure was felt due to higher levels of white space earlier in the quarter and some maintenance-related expenses.

Despite this, segment margins remained over 20% and we expect them to improve in the second and third quarter of this year as we continue to focus on disciplined cost management, efficient scheduling and as we realize the benefits of increased scale. Operational execution across the fleet remains strong. Our teams continue to deliver safe, reliable service while maintaining high service quality and customer satisfaction. This was reflected in an expansion of our rig rate to $731 per hour. Customer demand for high-quality workover rigs remains healthy, particularly in mature basins where operators are focused on maximizing production from existing assets. We continue to see Ranger's high-spec rig fleet viewed as a preferred solution due to our reliability, performance and safety record.

During the quarter, we also made continued progress on our ECHO hybrid electric rig program. We announced the signing of a new 15 rig contract as part of our year-end earnings and construction activities are underway and advancing as planned. Our first ECHO rigs deployed in late 2025 are in the field operating currently and the early operational results are impressive. We are seeing a high amount of productive time and receiving positive customer feedback about the capabilities of these rigs. The fleet additions remain on track for delivery beginning later this year. Having visited the manufacturer and spent time on the rig and exploring its capabilities we are more convinced than ever that ECHO represents a meaningful differentiator for Ranger, delivering improved efficiency, lower fuel consumption and emissions benefits for our customers while at the same time, generating attractive returns for our shareholders.

Turning to ancillary services. This segment continues to grow in strategic importance within Ranger. We see meaningful opportunity to expand this segment organically through cross-selling, improved utilization and leveraging our scale and customer relationships. The first quarter marked another period of solid growth and improving contribution. Revenue and profitability increased sequentially and year-over-year, driven by higher activity across several service lines and a full quarter's inclusion of expanded offerings acquired through the AWS transaction. Integration efforts progressed well during the quarter, and we are realizing early benefits from combining these assets with Ranger's broader platform.

Speaking specifically to a couple of our service lines, within our P&A group, we commenced activity on our recently awarded Texas Railroad Commission contracts and are pleased with how that work is progressing and how our relationship with the regulatory bodies, both within and outside of Texas are developing. This contract aligns well with our capabilities, provides a steady source of activity and further diversifies our revenue base. The tubing, rental and inspection business acquired in the fall has also been a bright spot with significant capacity to grow with minimal capital and strong incremental margins, we are looking to increase our business in this service line and see its contribution to our bottom line grow in the coming quarters.

On Wireline Services, we were particularly pleased with the overall financial performance and stability of this segment through the first quarter. We have historically had a difficult time navigating to positive adjusted EBITDA in Q1 given winter weather and the more northern exposure of the business. Activity improved meaningfully in March, and the business exited the quarter with stronger operational performance and respectable margins.

Before turning the call over to Melissa, I want to briefly touch on the broader market environment. When we entered 2026, macro sentiment across the energy sector remain cautious with many operators planning for relatively flat to down activity levels. As the quarter progressed, geopolitical developments and improving crude oil futures began to modestly improve sentiment. We've seen this reflected in customer conversations that are increasingly constructive particularly around production-focused work and maintenance activity. Ranger's business model is well suited to this environment. Our portfolio is heavily weighted toward workover, maintenance and production optimization services on existing wells. Services that are essential, cost-effective and critical to sustaining production and bringing short-cycle barrels to market. Combined with our scale across the Lower 48 and our long-lived asset base, we believe we are well positioned to respond efficiently as activity levels evolve.

With that, I'll turn the call over to Melissa to walk through our financial results in more detail.

Thank you, Stuart, and good morning, everyone. I'll walk through our first quarter 2026 financial results in more detail and then spend some time on cash flow, the balance sheet and capital allocation.

For the first quarter of 2026, Ranger generated total revenue of $159.1 million compared to $142.2 million in the fourth quarter of 2025 and $135.2 million in the first quarter of 2025. The sequential and year-over-year increase in revenue was driven primarily by higher activity levels in our high-spec rigs business and continued growth in our ancillary services segment, including a full quarter of contribution from the legacy AWS business. Net income for the quarter was $3 million or $0.12 per diluted share compared to $600,000 or $0.03 per diluted share in the first quarter of 2025. Adjusted EBITDA for the first quarter was $23.3 million, representing a margin of 14.6%, this compares to adjusted EBITDA of $20.3 million and a 14.3% margin in the fourth quarter of 2025 and $15.5 million and an 11.5% margin in the first quarter of last year. The year-over-year improvement in adjusted EBITDA and margins reflects higher revenue, improved contribution from ancillary services, stronger performance in high-spec rigs and much improved results in Wireline relative to last year.

General and administrative expense was $7.8 million in the first quarter compared to $8.9 million in the fourth quarter of 2025 reflecting the elevated transaction expenses in the fourth quarter as a consequence of the AWS transaction.

Now turning to segment performance. Revenue in our High Spec Rigs segment was $106.2 million in the first quarter compared to $92.3 million in the fourth quarter of 2025. The sequential increase was driven primarily by higher rig hours, which totaled approximately 145,400 hours in the quarter compared to 128,500 hours in the fourth quarter and 115,700 hours in the first quarter of 2025. Adjusted EBITDA increased to $21.4 million compared to $19.6 million in the fourth quarter and $17.4 million in the prior year quarter. Adjusted EBITDA margins remained strong and above 20%, reflecting solid execution, cost discipline and operating leverage.

Revenue in our Processing Solutions and Ancillary Services segment was $42.3 million in the first quarter compared to $37.5 million in the fourth quarter and $30.5 million in the first quarter of 2025. Adjusted EBITDA was $8 million, up from $6.2 million in the fourth quarter and $5.6 million in the prior year period. The increase reflects higher activity across several service lines and the continued ramp-up of services acquired through the AWS transaction.

Revenue in our Wireline Services segment was $10.6 million in the first quarter. As Stuart mentioned, activity levels improved meaningfully in February and March, and the business exited the quarter with good momentum. On an adjusted EBITDA basis, the segment was essentially breakeven in the first quarter, a meaningful improvement compared to an adjusted EBITDA loss of $2.3 million in the prior year period.

Ranger's free cash flow for the first quarter was negative $21.7 million compared to positive $3.4 million in the prior year period. The primary driver of the year-over-year change in cash flow was working capital timing with cash flow in the first quarter impacted by the buildup in accounts receivable related to customer instituted billing blackout periods at year-end, transition-related billing changes associated with new price books and billing protocols within the legacy AWS business as well as temporary timing impacts associated with the transition to Ranger's ERP system. We expect that working capital levels will return to more normalized levels over the next 2 quarters.

Capital expenditures for the first quarter totaled $18.3 million, compared to $7.2 million in the first quarter of 2025. The increase was primarily driven by milestone payments related to the ECHO hybrid rig build-out program. During the quarter, we also received a large upfront contribution from a key customer related to our ECHO hybrid rig build-out program. These payments also contributed to an increase in liabilities in the balance sheet as those payments will be recognized as revenue over the life of the contract. ECHO represents a strategic investment in next-generation equipment that we believe will deliver attractive returns, improve operating efficiency and enhance Ranger's competitive position.

Turning to liquidity. As of March 31, 2026, total liquidity was $42.5 million consisting of $35.6 million of availability under our revolving credit facility and $6.9 million of cash on hand. We continue to believe our balance sheet provides ample flexibility to support operations, fund planned capital investments and pursue disciplined capital allocation.

With that, I'll turn the call back to Stuart for closing remarks.

Thank you, Melissa. In summary, the first quarter highlighted the resilience and strength of Ranger's business. We delivered solid financial results, generated meaningful adjusted EBITDA and exited the quarter with improving momentum. Our high-spec rigs and ancillary services businesses continue to perform well. The AWS integration is progressing as planned, and our investments in next-generation equipment position us well for the future. As we move into the second quarter, we remain focused on disciplined execution, safety and delivering value for our shareholders. We believe Ranger is well positioned to navigate the current environment and capitalize on opportunities as activity levels evolve.

With that, operator, we can now open the call for questions.

[Operator Instructions] And the first question today comes from Don Crist with Johnson Rice.

I wanted to start with what we've been hearing out of a lot of other companies that the oil strip has really kind of been reset here. And while a lot of people think that if Iran War ended today that the long end of the strip is going to continue to rise going forward. I don't know if you have any thoughts on that kind of macro view. But can you relate that and how you're seeing your customer behavior conversations going as a result of kind of that narrative that we're seeing come through the industry?

Sure. Thanks for the question, Don. I think when we talk to our customers, what we're hearing and it really depends a little bit on the size and kind of geography of the customer. So I think in our conversations, most of the biggest customers for now are remaining fairly disciplined. We are taking more inbounds. We're getting kind of more interest. But at the moment, they're not meaningfully changing workover -- I mean, the workover programs. I mean I think we are seeing some stuff on the margins. I think as you get into some of the smaller players or in some basins that were a little bit more on the margin. We are certainly seeing an increase in activity and more demand, particularly to accelerate barrels, right? So on the workover program. I think our sense is that as this continues to play out that we think things are setting up pretty well for the back half of the year.

And I guess the second thing, third thing I would highlight is on our quarter and I think in the comments from both me and Melissa, we highlighted that we exited the quarter strongly and that's a trend that has continued into April. So we are certainly seeing some tailwinds.

Okay. And just as far as a function of kind of white space in your calendars, I know when we met a couple of weeks back, you said that, that was going away rapidly. But are we to the stage where you could possibly reactivate rigs to meet demand? Or we still have a little bit of slack in the system?

There's a little bit, but not much. I'd say we're kind of getting to the point now where like if somebody wants to do a smaller program and we have a little bit of slack in the schedule, we can fit them in. But we're kind of getting to the point now to where we're hiring crews and we'll need to add capacity.

Okay. And Melissa, 1 for you. I think the working capital build this quarter kind of shocked several of us. And I know in your comments, you said that, that should unwind. But any further comments there? I mean, it seemed like a pretty decent-sized number, but that should reverse pretty quickly in my opinion.

Yes, Don, we did -- I think it was -- we knew it would be, and we have tried to signal that it would be a negative cash flow quarter because we saw some of it early days. To be fair, I think we were hoping to have more progress by the time we get to March 31. The reality is we had a very substantial billing blackout by one of our biggest customers in December. And when we look at legacy Ranger businesses, we're still kind of hit with 10 days unwinding and trying to push through from that. Then on top of that, you had exacerbated issues around AWS because we were getting to combine pricing books where those price books, they tend to drag out your billing cycle because you have to get all these different pieces of the puzzle in place to allow the invoices to flow through on the new price book.

Then I would say, on a final on the AP side, because we were moving the AWS organization into Ranger for April 1, we made a call late in the quarter to actually clear out the open AP so we paid out and there was an extra few million dollars that was paid out that long-term benefit to Ranger to kind of make that transition much smoother. But again, short-term impact to the quarter on the working capital side. We do believe when we get into Q2, the April 1 go live on the ERP will probably continue to leave us challenge for the next month on -- and then I think we'll start to finally start to see DSO really improve when we get into May and June. So I don't think you'll see everything get back to normal by the end of Q2, but I think we'll see a lot of normalization in Q2 and then we'll pick the final piece of it up in Q3 on the DSO side. Helpful.

And your next question comes from John Daniel with Daniel Energy Partners.

I think I'm going to stick with the theme of Don's question because we also hear the same view that operators believe the forward curve is mispriced and should be higher and smaller operators are reacting to that right now, as you mentioned, and we've seen, and we know those small players are always the first movers and larger companies as we also know tend to be slower. But presumably, they make the upwards activity shift next year. So forgive that long-winded preamble to my question, but if you share that view, how would this glass half full outlook impact your vision for Ranger? What I mean by this Stuart, is now the time to get ahead of it in either fast track consolidation? Is now the time to accelerate even more ECHO new builds? Or do you just get a little bit aggressive on the front end and start pushing pricing a bit harder. I know there's probably other choices, but just kind of if you could opine on strategy?

Yes. I think you probably sort of characterize the conversations right in that. I think as we go in and we look at activity and it can be a range of things, right? Our willingness to get multi-rig discounts. As you can imagine, that's becoming more challenging to entertain. As we think about sort of hiring a crew when you have line of sight to 50% utilization or full utilization. So I think on the margin, it's easier just to be more confident, more aggressive on that. I do think on the ECHO program, we've had a lot of discussion about as we bring those rigs into the market, will they displace rigs? Or will they be completely additive. And I think as we go forward, we're feeling more and more confident that they will be additive, which has a huge impact to the business. So I feel like with those rigs coming in, we are kind of naturally adding capacity and hopefully, at the right time.

So hopefully, that kind of makes sense. But I mean, I think just in general, I think I'm not sure you're going to see a massive shift in strategy, but I think on the margin, we're certainly feeling pretty confident.

Okay. And if I remember correctly in the slide deck, I think you had 193 active rigs, maybe that was as of year-end. Can you just say what the active count is today? And...

Yes. I mean, right now, it's about the same. It hasn't meaningfully changed. That number includes -- you always have some rigs that are getting preventative maintenance or refurbs, et cetera. But I'd say right now, it's about the same. But again, kind of to Don's question earlier, we're kind of getting near that point where to satisfy new demand, we're going to have to activate rigs.

Okay. And I got 1 more, and then I'll turn it back over. But One of your very, very small competitors was complaining to me that they can't find parts to reactivate equipment. Can you just speak to the supply chain and do you think that's an anomaly? Or just how does that impact you guys?

I'm not sure it's an anomaly, but I don't think we have felt that. So I don't think we're feeling supply chain issues. What I would tell you is it wouldn't surprise me if 2 quarters from here, we're talking about labor tightness, again, which we haven't really talked about for a while. But at the moment, we're not really having issues on supply chain.

[Operator Instructions] Your next question comes from Derek Podhaizer with Piper Sandler.

I wanted to hit on the production optimization theme that you highlighted in your opening comments, talking about accelerating barrels. Maybe just help educate us in the market as far as how we should think about Ranger taking advantage of the current macro, be it on the workover program. You obviously have rigs that are dedicated towards completion or production, coiled tubing, anything else inside of the ancillary solutions segment of yours. Just trying to think about how you guys can also benefit as these E&Ps look to accelerate DUCs or optimize the current production pace to take advantage of the front month here?

Yes. Thanks for the question, Derek, I hope you're doing well. Again, I think kind of when we talk to customers, I mean obviously, the shorter-cycle barrels they have is to go into -- just go into a workover. And certainly, we're seeing right now, some of the smaller customers get pretty aggressive on those programs. To go do a drill completion kind of create a program for that, obviously, takes time and the curve is still pretty backwardated and as you know, not very liquid from a trading perspective in the out years. So I think what we're seeing is people trying to get physical barrels in the market pretty quickly. That obviously is right down the fairway of everything that we do in the high spec rig segment.

I would say for some of our other service lines that tend to be a little more completion oriented. And so I'm thinking things like the coiled tubing business, some of the ancillary completion-related services we picked up with AWS. I think what we are seeing is those are just kind of generally firming up. So I'm not sure it's again -- it's not like it's a doubling of activity, but where somebody maybe in the past said, "Hey, I've got some work, I'm going to go give them back to you in 6 weeks. Now they're saying, "You know what, I want to keep it because I don't want to give it back. So I think we are seeing just sort of really steady work on the completions side, which obviously sort of helps the financials across the board.

That concludes our question-and-answer session. I would like to turn the conference back over to Stuart Bodden for any closing remarks.

Thank you, operator. Thanks to all of you for your interest in Ranger. And obviously, please reach out to us if you have any questions. Have a good week, everyone.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, and welcome to Ranger Energy Services Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Joe Mease, Vice President, Finance. Please go ahead.

Good morning, and welcome to Ranger Energy Services Fourth Quarter and Full Year 2025 Earnings Conference Call. We appreciate you joining us today. Before we begin, Ranger has issued a press release outlining our operational and financial performance. The press release and accompanying presentation materials are available in the Investor Relations section of our website at www.rangerenergy.com.

Today's discussion may contain forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update our forward-looking statements.

Further, please note that non-GAAP financial measures will be referenced during this call. A full reconciliation of GAAP to non-GAAP measurements is available in our latest quarterly earnings release and conference call presentation.

Joining me today are Stuart Bodden, our Chief Executive Officer; and Melissa Cougle, our Chief Financial Officer. Stuart will begin with a strategic and operational overview, outlining our accomplishments in 2025 and provide an outlook for Ranger for 2026. Melissa will then walk through a financial summary of the results for Ranger's fourth quarter and fiscal year. Following their remarks, we'll open the call for Q&A. With that, I'll turn it over to Stuart.

Thanks, Joe, and good morning, everyone. I appreciate all of you joining us today to discuss our fourth quarter and full year 2025 results. I'll spend some time walking through our operational performance during the quarter, highlight the strategic milestones we achieved in 2025 and then talk more broadly about the trajectory we see for the business as we move into 2026.

Let me start with an overview of the year. We posted total company revenue of $547 million with adjusted EBITDA of $73.2 million. I'm pleased with how the organization executed throughout 2025, particularly against the backdrop of a market environment that required discipline, adaptability and continued focus on operational performance. Across the board, our teams delivered consistent execution in the field, maintained strong alignment with customers and supported the integration of new assets and capabilities that will position Ranger well for the long term.

In the fourth quarter specifically, activity levels were generally consistent with our expectations. The market continued to reflect the same characteristics we've spoken about over the past several quarters: Relatively stable demand, customers focused on high-quality service execution and a continued emphasis on efficiency and cost management.

Against that backdrop, Ranger continued to perform well. Our well service operations, wireline offerings and ancillary services demonstrated solid utilization and maintain the margin profile we have built through disciplined pricing, cost control and operational efficiency. Let me turn now to a few of the strategic initiatives that shaped the year, starting with the American Well services acquisition.

We completed this transaction with a strategic intent to broaden our footprint, enhance scale and strengthen our service offerings in the Permian Basin. I'm pleased to report that the integration is progressing well. Our focus during the fourth quarter and continuing into early 2026 has been on ensuring that the combined operations function cohesively that our teams remain aligned with the expectations we established at the outset and that our shared best practices are implemented efficiently.

All of these areas have integration milestones that are on track and being achieved. The operational overlap continues to progress well, and we see nothing approximately 120 days into our combination that would derail our long-term synergy plans. We've maintained transparency with our teams and customers, and we've ensured continuity of service while beginning the process of capturing efficiencies that the combined platform enables.

The AWS team has been collaborative and their operational culture aligns well with Ranger's emphasis on safety, efficiency and reliability. The acquisition also strengthens our customer reach and enhances our competitive position. We are solidifying relationships with operators who value scale, responsiveness and the ability to execute consistently.

We continue to see opportunities to drive incremental value from this combination as we move through 2026, and we are encouraged by early results. The other strategic initiative that saw meaningful progress in 2025 was our ECHO rig program, which has been one of the most exciting internal developments in our history. As many of you know, ECHO represents a significant advancement in well service technology, one that reduces emissions while also delivering greater overall control and safety on location.

As we rolled out our first 2 ECHO rigs in 2025, we continue to validate the platform's performance with customers, and the feedback has been very reassuring. As one example of the efficiencies of our ECHO rigs, in the first 450 hours of deployment last year, one of our ECHO rigs used less than 22 hours of generator power, with the balance coming from the onboard battery system being recharged through the regenerative capabilities of the rig.

At the beginning of this year, we signed a contract for 15 ECHO rigs to be built with the key operator in the Lower 48. This contract reflects a few important themes. First, customer interest remains strong. Operators are increasingly looking for ways to improve operational efficiency and safety on site while also reducing emissions. ECHO directly addresses those needs and provides a flexible platform that can work independently or leverage infield or pole power.

Second, the platform is beginning to demonstrate real measurable value. We have worked to quickly address any issues identified and are starting to quantify the operational efficiencies produced. The theme we continue to hear from operators is that the ECHO platform is differentiated. We're still early in the broader adoption curve, but the pace is accelerating faster than what we initially expected when we launched ECHO.

The pipeline of interest remains robust. And as customers gain more experience with this technology, we expect those conversations will continue to mature. ECHO is one of the most meaningful strategic investments we have made as a company, and we are excited about the momentum it continues to generate heading into 2026.

Outside of the accomplishments on the growth side with AWS and ECHO, our legacy core Ranger businesses have continued to perform well despite the headwinds that were present through most of 2025. Our high-spec rig fleet continued to benefit from operational consistency, steady workload and disciplined labor management, areas that have long been strengths for Ranger, with holiday scheduling at year-end showing more resiliency than expected.

Although our Ancillary Services segment performed well as a whole, the situation was more nuanced with some service lines finding new growth avenues and efficiencies in the fourth quarter, while others contended with white space. Finally, our wireline services continued to navigate a challenged business environment in the fourth quarter.

That said, we have seen recent signs of improvement and experienced a couple of key customer awards. We also maintained our commitment to capital discipline throughout the year and deployed capital in a balanced and deliberate manner, investing in opportunities that support our strategic goals while maintaining flexibility on the balance sheet.

As Melissa will discuss in more detail later, our free cash flow generation allows us to both pursue growth opportunities and return meaningful capital to shareholders. In 2025, we used approximately $40 million of our free cash flow towards the purchase of American Well Services while also repurchasing nearly 1 million of our own shares last year, which represents almost 5% of shares outstanding. This disciplined approach to capital deployment positions us well as we move into 2026, where we expect to continue generating healthy levels of cash while also supporting the rollout of our ECHO fleet and completing the integration of AWS.

Let me now touch briefly on the broader 2026 outlook. We expect the operating environment to remain generally stable and similar to 2025 from an activity level standpoint. making 2026 a year of execution and strategic evaluation. We will continue to integrate American Well Services, support our teams in the field, advance the rollout of the ECHO platform and explore opportunities to strengthen our service offerings where it aligns with our capabilities and our financial strategy.

We will stay focused on the fundamentals: safety, efficiency, cost control and customer service, and we'll continue to make decisions that support long-term shareholder value. Despite expectations for a relatively flat 2026, there is reason to be excited about the future looking to 2027 and beyond. Our pro forma financial profile with the AWS acquisition gives us an annual EBITDA generation opportunity of more than $100 million in 2026, with room far beyond in a supportive macro environment when commodity supply begins to tighten.

By the middle of 2027, we expect to have 15 new ECHO rigs operating in the Lower 48, and we believe more contracts for further rig deployments will be underway, providing for an ever more differentiated service offering with best-in-class assets. Over the next 18 to 24 months, we believe the U.S. onshore market will see activity improvement and Ranger will be ready with high-quality assets to be deployed. Both oil and gas markets are seeing more incremental support than expected this year, even before geopolitical developments in the past 7 days.

Whether taking a near, medium or long-term view, we will remain disciplined in our deployment of capital, ensuring long-term value creation. Before I hand things over to Melissa, I want to again thank the entire Ranger team for their hard work and commitment throughout 2025. The company delivered solid results through consistent execution, thoughtful decision-making and strong discipline at every level of the organization.

We have momentum entering 2026, and we are confident in our ability to continue building on that foundation. Our field personnel continue to be the heartbeat of this organization. And throughout 2025, our crews delivered safe, reliable and efficient work for our customers in a variety of operating conditions. And their commitment is evident in the trust we continue to earn from operators across all service lines. As we've said before, Ranger differentiates itself through execution, and our teams continue to validate that every day.

With that, I'll turn the call over to Melissa to walk through our financial results.

Thanks, Stuart, and good morning, everyone. I'll now take you through our financial results for the fourth quarter and full year 2025. Starting at the top line, revenue for the fourth quarter was $142.2 million, up from $128.9 million in the third quarter and essentially flat with $143.1 million reported in the fourth quarter of 2024.

The sequential increase reflects higher activity in our high-specification rigs and Processing Solutions and Ancillary Services segments brought about from a partial quarter of included AWS results. These increases were partially offset by continued softness in wireline. Breaking out the revenue by segment. High-spec rigs generated $92.3 million of revenue in the quarter, up meaningfully from $80.9 million in the third quarter and up from $87 million in the fourth quarter of 2024.

Rig hours grew 16% sequentially to 128,500 hours in the quarter. Processing Solutions and Ancillary Services contributed $37.5 million of revenue, representing a 22% sequential increase from Q3. This reflects both organic performance and the contribution of service lines acquired through the American Well Services transaction.

Wireline services revenue was $12.4 million, down from $17.2 million in the third quarter and consistent with expectations given lower completed stage counts during the quarter. On the profitability side, net income for the fourth quarter was $3.2 million or $0.14 per diluted share compared to $1.2 million or $0.05 per diluted share in the prior quarter.

Adjusted EBITDA for the quarter was $20.3 million, representing a 14.3% margin compared to $16.8 million or about 13% in the third quarter and $21.9 million in the fourth quarter of the prior year. The sequential improvement reflects stronger revenue and margins in our high-specification rigs and Processing and Ancillary segments, partially offset by continued margin pressure in wireline.

When looking to 2026, we did see heavy winter storm impacts in January that will likely put our first quarter results largely in line with Q4, although early March activity levels give us confidence that our full year 2026 goals remain within reach.

Turning to the full year. Ranger generated $546.9 million of revenue compared to $571.1 million in 2024. While modestly below last year, the result reflects consistent execution and a generally stable operating environment in our core business with some softening in activity in specific service lines and wireline and ancillary segments. Full year adjusted EBITDA was $73.2 million, representing a 13.4% margin compared to $78.9 million and a 13.8% margin in 2024.

From a segment perspective, full year financial results remained stable and aligned to the drivers we've outlined throughout the year. HSR continued to anchor our earnings profile with strong utilization and disciplined pricing. Processing and Ancillary delivered improved performance driven by the incremental contribution from the AWS acquisition. Wireline saw headwinds related to lower utilization and pricing and remains an opportunity set for Ranger in the future.

Turning to CapEx. Ranger continues to invest capital in a disciplined and measured manner. Total capital expenditures for 2025 were $26.1 million, down from $34.1 million in 2024. The year-over-year decrease reflects reduced growth spending as 2024 included approximately $10 million of growth-related CapEx. Growth capital in 2025 was deployed selectively and focused predominantly on the ECHO rig deployments.

We continue to employ the same rigorous return on capital screening for growth investments that have served us well for several years. Our full year 2026 pro forma financial profile of more than $100 million of annual EBITDA remains supported with a highly disciplined approach to capital deployment.

Maintenance CapEx is anticipated to be aligned with historical trends and run at approximately 4% to 5% of revenue. ECHO CapEx will push that number higher this year, but recall that these contracts include provisions that include upfront CapEx in many cases that will result in deferred revenue and/or guaranteed hourly commitments in the future. We will call out specific ECHO spend that is significant in future periods.

Turning now to cash flow, which continues to be one of the most important elements of Ranger's financial profile. For the full year 2025, cash provided by operating activities was $69 million compared to $84.5 million in 2024. The year-over-year decline reflects financial dynamics such as lower profitability in wireline, timing of working capital and costs associated with integration activities.

Free cash flow for the full year was $42.9 million or $1.89 per share compared to $50.4 million in 2024. Our EBITDA to free cash flow conversion rate posted at nearly 60% for a third straight year in a row. This strong and consistent cash flow generation continues to be a hallmark of Ranger's financial model and reflects disciplined operational execution and tight control over capital spending.

In 2026, we expect that our free cash flow conversion rate will be closer to 50% as a consequence of the timing of ECHO rig capital, and we will be transparent about those impacts and expectations as the year develops and as delivery and payment timing is more solidified.

We also ended the year with $67.7 million of total liquidity, consisting of $57.4 million of availability on our revolving credit facility and $10.3 million of cash on hand. We finished the year with $3.5 million in outstanding borrowings. Ranger was able to optimize working capital through the end of the year and finish in an incredibly strong liquidity position.

We do expect to see borrowings in the first quarter as we anticipated a working capital build as spring arrives and activity levels increase, coupled with typical labor costs unique to the first quarter. On the capital returns front, we take great pride in sharing that we returned over 40% of free cash flow to shareholders in 2025 through a combination of dividends and stock repurchases.

During the year, we repurchased nearly 1 million shares at an average price of $12.26, totaling $12.3 million. This capital return strategy continues to be an important part of our value creation framework and reflects our confidence in Ranger's long-term cash generation capability.

As we enter 2026, we remain focused on maintaining operational discipline, supporting the integration of AWS, pacing the deployment of our ECHO fleet and continuing our track record of consistent financial performance.

With that, I'll turn the call back over to Stuart.

Thanks, Melissa. As we close out the fourth quarter, I want to reflect on the progress we've made and the opportunities ahead. The acquisition of American -- well Services is a clear example of our disciplined approach to growth. It's a transaction that enhances our scale, expands our service offerings and strengthens our position. With AWS, we're not changing who we are. We're building on what we do best. Our integration plan is already in motion, and we're confident in our ability to execute. We've done this before, and we'll do it again with measured urgency, precision and a focus on creating value for our customers and shareholders.

At the same time, our ECHO Hybrid Electric Rig program continues to gain traction. These rigs represent the future of well servicing and the AWS acquisition gives us a better platform upon which we can accelerate that future. We are committed to being the best well services provider in the Lower 48 on behalf of our customers, employees and shareholders. Strong free cash flows and strong returns to investors remain our guiding principles, and we will continue to make our strategic decisions and allocate our capital with discipline and foresight.

With our balance sheet in excellent shape, our integration playbook in action and our technology roadmap expanding, I'm more optimistic than ever about the next chapter for Ranger. I want to thank our Ranger employees, customers and shareholders for their partnership and commitment this past year. With that, operator, we can now open the call for questions.

[Operator Instructions] The first question comes from Don Crist with Johnson Rice.

My first question is surrounding the ECHO build-out and the conversations you're having with customers there. Just an update on how those conversations with other operators are going? And as a second step to that, what is the manufacturing capability of your partner? Do you have a lot of capability there to put a lot more orders on the books? Just any comments around that?

Yes. Thanks for the question. Obviously, very excited about the contract that we signed earlier in the year. We are in a couple of pretty advanced conversations. I think what we found historically is sometimes it takes a while and then it happens really fast. But we are having really kind of very productive conversations.

As far as manufacturing, we've been working with that -- with our vendor pretty closely and feel like that we can expand manufacturing capacity if needed. I would kind of highlight these are refurbs. And so there are some things that we can do on our side to streamline the process and increase throughput. So we don't feel like manufacturing should be a bottleneck for us. There are some long lead time items that we're pretty mindful of. But other than that, again, we feel like we can respond to the market demand.

That's reassuring. And I don't believe you mentioned it in your prepared remarks, but I did want to touch on the plug and abandonment contract that you put in the press release. The comment about regulatory agencies, I don't know if you want to disclose who this contracts with. But if I remember correctly, this could probably expand your P&A fleet pretty significantly. Any comments around that?

Yes. It's -- look, it's the Texas regulator. So it's public, you can look it up. So what this is, Don, and I think one of the reasons we're excited about it and wanted to call it out in the script is that these are for complex wells in particular. And so we really have been trying to position ourselves on some of the government P&A programs as a kind of contractor of choice for some of the more complex P&As. And so that's really what this represents. And you're right, I think it's something that we think we have growth opportunity within this regulator and in other states as well.

Okay. And how many rigs do you think that's going to occupy? I mean if I remember correctly, it was low single digits that were kind of dedicated to P&A in the past. Any kind of metrics around that?

Yes. It's still kind of I think 3-ish kind of plus or minus depending on the program at the moment. But certainly, if we needed to ramp it up, we could. But it's kind of low single digits right now. That's right.

Okay. And one for you, Melissa. As we kind of think about CapEx for the ECHO rig program through the year, any kind of metrics around kind of quarter-by-quarter dollar amounts that we could kind of put in the model?

So what I would say, Don, it's a very good question. that's Part of my comments around -- we'll let you know. A lot of it depends because there's progress milestone payments. So you'll see a little bit start to trickle in, in the first half of the year. But the reality is most of that CapEx really starts to show up when we make final milestones and we start to have deliveries month after month in the back half of the year.

So I think we've got a long way to really organizing how that flows. We have a model, but I also think we're too early in the build cycle to probably give hard guidance on that. That said, I think you'll see light build in the first half of the year as just kind of some progress payments are made, but then it will really ramp up in the back half of the year. And just calling attention to -- the wording was pretty intentional when we said the conversion rate has deteriorated a bit this year on timing because in some cases, we have capital coming in from customers timed alongside this.

So what you'll see is, and I'm just trying to give a sense of the complexity because you might see us lay out capital that ultimately ends up getting refunded to us further down the line, too. But we will try to call that out each quarter to any degree. It's material, which I suspect it will start to be material, well, in Q1 of 2026.

Right. But it's safe to say that you should still build cash through the quarters as -- even with this CapEx?

Yes. I think the one thing we were calling out, Don, is Q1 -- there is a few things going on in Q1, actually less so on the ECHO side, more just to do with seasonality and working capital build. So I think you will not see cash start to really come in until Q2, Q3, Q4. But our guide right now is closer to 50% conversion rate for the year, and most of that will show up as is typical in the later quarters of the year and not in Q1.

[Operator Instructions] The next question comes from Patrick Podhaizer with Piper Sandler.

Derek Podhaizer. Patrick's my cousin. Sticking on the ECHO Rig build-out. I guess how should we think about the 15 rigs plus the 2 rigs under operation as far as maybe like a percentage of your fleet? And then where could this go if you continue to execute on additional contracts? And then also, are these all incremental rigs to the fleet? Or are you replacing some of your older legacy assets? Just maybe some color on that as well.

Yes. So I'll kind of try to take it in pieces. So obviously, we have the 2 in the field. This is a contract for 15 to 17. Right now, once they're deployed, that would be kind of a little less than 10% of the kind of active fleet, which does include some rigs that are constantly in refurb/repaint, maintenance, et cetera.

As far as the conversations, I do think that -- I think it's really hard to put a number on it. And the only reason I say that is that kind of based on the conversations we're having, I mean there's a scenario where it could be the same number again. But I think probably it looks like the next contract would be for less than 10, most likely. So if that kind of gives you sort of a sense. And then I think depending how just sort of the next 18, 24 months go, again, I think we do think there is kind of longer-term demand for this.

You want to remind me of your second question, sorry, Derek?

Yes, just sort of incremental or replacement?

It's very customer dependent on that answer. I think for a lot of the ones that we're deploying right now, I think that if there is not a change in the macro environment, I think they will do some replacement of existing rigs. I think what we would highlight is that given who the customers are that are interested in ECHO, the rigs that get displaced tend to be high-spec and very high-quality rigs. And so we're certainly thinking that they'll find homes pretty quickly. That said, I think we want to be kind of open and transparent that the first wave of ECHO rigs will replace some of our existing rigs.

Right. Okay. That makes sense. That's helpful. And then how should we think about the earnings power with the ECHO rig build-out? Just looking at your margins right now in high spec, you're in the low 20s to end the year. As we move over the next 18, 24 months and these start to become a bigger part of your rig mix, where could those margins start going to when we also start thinking about integrating AWS and now with the build-out of ECHO, how should we think about the margin profile?

Yes. It's a good question, Derek. And I would tell you, we're still working on how that can come together. Again, you've got a little bit of timing. Each one of these contracts sort of looks and flavors itself out differently. So in some cases where you would have a contract that has more upfront capital, then we'll have deferred revenue, which actually turns into amortization. So you're not going to get -- even though we're getting probably pulled forward returns, it's not going to be as readily obvious in margins because it doesn't -- it will be an amortization item as opposed to a current revenue item and collection item.

On the inverse side, whether we -- where we get more hard core rate uplift over the life, you will see margin uplift. So it's going to be a little bit of a mix of both coming through the pipeline. On the AWS side, what we are seeing is when -- it's the best of operating leverage and the worst of operating deleverage because what we are seeing, for example, in December where we had a lot of good activity and utilization, we saw real margin expansion in just one single month. That said, the winter storm in February hit us hard, and we had the opposite effect.

So I think we're still trying to establish a better cadence and flow. I think there is margin expansion to be expected this year. I just think it's too early to tell you that's 200 bps or 100 bps or 300 bps. It's probably not the 5% though. I would say that again.

This concludes our question-and-answer session. I would like to turn the conference back over to Stuart Bodden for any closing remarks.

Thank you, operator. Thank you, everyone, for joining. Thank you for your interest in Ranger, and have a great day and a great rest of the week. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good morning, and welcome to Ranger Energy Services Third Quarter 2025 Earnings Conference Call. [Operator Instructions]

Please note, this event is being recorded. I would now like to turn the conference over to Joe Mease, Vice President, Finance. Please go ahead.

Good morning, and welcome to Ranger Energy Services Third Quarter 2025 Earnings Conference Call. We appreciate you joining us on an exciting day in Ranger's growth journey.

Before we begin, Ranger has issued a press release outlining our operational and financial performance for the 3 months ended September 30, 2025. The press release and accompanying presentation materials are available in the Investor Relations section of our website at www.rangerenergy.com. Today's discussion may contain forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update our forward-looking statements.

Further, please note that non-GAAP financial measures we referenced during this call. A full reconciliation of GAAP to non-GAAP measurements is available in our latest quarterly earnings release and conference call presentation.

Joining me today are Stuart Bodden, our Chief Executive Officer; and Melissa Cougle, our Chief Financial Officer. Stuart will begin with a strategic and operational overview, including commentary on our acquisition of American Well Services. Melissa will then walk through a financial summary of the transaction and the results for Ranger's third quarter. Following their remarks, we'll open the call for Q&A.

With that, I'll turn it over to Stuart.

Thank you, Joe, and good morning, everyone. Today marks a significant milestone in Ranger's journey. This morning, we are proud to announce the acquisition of American Well Services, a leading Permian Basin focused well services provider with the fleet of 39 active workover rigs, new complementary service lines and over 550 employees. This transaction represents a strategic acquisition that strengthens our position as the largest well servicing provider in the Lower 48 and enhances our ability to deliver differentiated technology-enabled solutions to our customers.

Let me start by sharing why AWS is such a compelling addition to Ranger. Outside of adding meaningful scale to our high-specification rig business in the Permian Basin, AWS brings a well-maintained fleet of high-spec rigs that includes extensive supporting equipment and an excellent safety track record. The AWS business also provides a suite of complementary service lines to Ranger, including tubing, rentals and inspection, chemical sales, mixing plants and transportation and logistics, amongst other services. Their operations are deeply rooted in the Permian Basin since founding. And their team has built a reputation for safety, reliability and operational excellence similar to that of Ranger. They have grown the business strategically over the past 7 years through a combination of inorganic and organic growth, and they have established themselves as a strong customer base that is anchored by major operators. This acquisition will expand Ranger's rig count by approximately 25%, strategically increasing our market share in the premier oil and gas basin in the Lower 48, while also unlocking meaningful pull-through revenue opportunities for Ranger's own high-spec rig business. AWS' customer base is highly complementary to ours. While we share some of our largest customers, there are new customer relationships that broaden our market reach on the AWS side, and we look forward to further expanding these relationships in the future.

From a financial standpoint, the purchase price of approximately $90.5 million represents less than 2.5x trailing 12 months EBITDA, with consideration consisting of a prudent mix of cash and equity, along with an earn-out that is tied to AWS' assets, generating at least $36 million of EBITDA over the next 12 months. Additionally, we expect to realize approximately $4 million in annual cost and revenue synergies once integration is complete. The transaction is immediately accretive to earnings and cash flow with minimal dilution. In addition to the share repurchases, we have been successfully executing over the past 2 years, AWS represents an even higher return on capital comparatively, given the discount of the deal multiple to our own trading multiple. We are supporting the transaction with minimal borrowings on our revolver and pro forma leverage of less than 1/2 turn. On a pro forma basis, Ranger is now expected to produce over $100 million in adjusted EBITDA in 2026 under current market conditions, with an earnings potential that is much higher when commodity prices recover in the future. Our Executive Vice President of Well Services, Matt Hooker, Melissa and I are here in the Permian Basin today, while hosting this call to welcome our new Ranger team members of aboard and continue the integration planning that has already commenced. We have been preparing comprehensive integration plans based on proven playbook from prior acquisitions, including our successful integration of the Basic Energy assets. AWS personnel share our cultural focus on safety and operational excellence, and we are excited about building upon the great foundation already created by both companies to forge an even stronger path together in the future. We will complete the integration with focus and efficiency, and we anticipate finishing the majority of integration activities during the third quarter of 2026.

AWS is a strategic extension of what we already do well. It strengthens our existing abilities in our flagship service line, cements our footprint in the Permian Basin and enhances our ability to serve customers, all while doing so at a great valuation. Acquisitions like AWS accelerate our strategic road map, position us for continued success and give us the ability to whether cycles better while enjoying enhanced pro forma cash flows that enable other ongoing efforts like the ECHO rig deployment program. Last quarter, we announced our ECHO hybrid electric rig program, which represents a step change in the workover rig space and continues to gain momentum. Ranger's ECHO rig is the first of its kind, double electric hybrid rig, bringing to market a program to convert existing conventional workover rigs into a new rig that greatly reduces emissions, while also taking a meaningful step forward with regards to safety. The first 2 ECHO rigs have been delivered to the field and are currently completing their final testing before they begin working on live wells. Customer interest remains robust and we see strong demand for the efficiency, safety and environmental benefits these rigs offer and expect additional contracts to be signed in the coming quarters.

Before I turn the call over to Melissa, I'd like to make some comments about our quarterly performance as well as some early views on 2026. For the quarter, our financial results showed continued resilience in our core production-focused service lines, although we did see weakness in declines in completion-focused areas and in some of our northern focused districts where commodity price pressures are leading to activity declines. We mentioned in our prior call higher-than-normal levels of asset turnover as certain customers adjusted their well programs in light of current market conditions. And this has resulted in greater than expected standby time on the books this quarter. We reported $128.9 million in revenue for the third quarter, which represented a quarter-over-quarter decline largely as a result of our completion exposed businesses. Ranger reported $16.8 million of adjusted EBITDA for the quarter, achieving a 13% adjusted EBITDA margin. Our high-spec rig segment continued to be the cornerstone of our business, contributing $80.9 million of revenue and $15.7 million of adjusted EBITDA, with margins of 19.4%. Activity levels within our production-focused rigs increased quarter-over-quarter and are on track to return to previous year peaks. That said, completions activity declined more than offset those increases, where customers took extended breaks between drill up programs and released some rigs due to budget exhaustion or generalized activity reductions.

Our Ancillary segment had mixed results this quarter, with the largest declines coming on the back of depressed coiled tubing activity. Year-over-year, the combination of completion activity declines and reduced P&A activity brought about from depressed commodity prices has put pressure on this segment. We expect to see a rebound in both of these businesses in the back half of 2026 when lingering commodity supply concerns are resolved. We have also been encouraged by recent progress and contracts signed within our P&A business with regulatory bodies for a safety-sensitive plug and abandonment work, where Ranger's experience and track record make it a provider of choice.

This quarter, our Wireline segment showed some stability despite lower activity levels with revenue of $17.2 million and $400,000 of adjusted EBITDA. At the end of the quarter, we were encouraged by the signing of 2 new customer contracts with major independent operators, which give us light of sight to more sustainable revenue levels in 2026.

Margins in this segment remained challenged, and we expect this trend will continue through the winter months, with recovery planned in March as the winter weather effects [ subsides ].

Looking forward to 2026, we are encouraged and optimistic on the back of newly created growth avenues with the AWS acquisition. We have weathered the pullback over the past several quarters with continued strong cash flows and deploy these cash flows wisely to make investments countercyclically, buying back a meaningful number of our owned shares when the stock came under pressure. And today announcing an acquisition that is anticipated to bring about strong returns on capital. Next year, we expect to generate greater than $100 million of EBITDA for the first time in Ranger's history, which represents a pivotal milestone in our growth path. We believe there is much room to grow from there when market conditions improve and when our ECHO rigs see increasing adoption in future periods.

With that, I'll turn the call over to Melissa before providing a few final closing comments.

Thank you, Stuart. I'd like to first walk through a few specifics around our announced transactions. Today, Ranger entered into an agreement to acquire American Well Services for a purchase price of approximately $90.5 million in a cash-free, debt-free transaction. The consideration consists of approximately $60.5 million of cash with reductions for indebtedness and select other items as well as 2 million shares of Ranger common stock. An earn-out of $5 million payable in cash in 1 year is dependent on achieving $36 million of EBITDA in the first 12 months. Ranger used its existing cash on the balance sheet for the cash consideration portion of the transaction and supplemented with borrowings on its credit facility.

Pro forma, Ranger anticipates having approximately $30 million of borrowings, post close on its facility, representing less than 1/2 turn of leverage. Ranger intends to repay the borrowings in due course with free cash flow. The company has identified $4 million dollars of operational and administrative synergies that are anticipated to be realized by the end of the third quarter of 2026. Everyone on the Ranger team is excited about what the future holds for the combined organization.

Turning to third quarter results. Revenue for the quarter was $128.9 million, a decrease of 16% from $153 million in the third quarter of 2024 and down 8% from $140.6 million in the second quarter of 2025. The decline was primarily driven by reduced completions activity in the broader market as well as activity declines in the Bakken and Powder River Basin this year.

Net income was $1.2 million or $0.05 per diluted share compared to $8.7 million or $0.39 per diluted share in the third quarter of 2024 and $7.3 million or $0.32 per diluted share in the second quarter of 2025.

Net income reductions are a consequence of the aforementioned reductions in activity, both year-over-year and quarter-over-quarter. Ranger is reporting adjusted EBITDA for the quarter of $16.8 million, representing a 13% margin.

Now let's look at performance by segment. High-spec rigs generated $80.9 million in revenue, down from $86.7 million in the prior year period and $86.3 million in the prior quarter. Rig hours totaled 111,200 hours for the quarter with an average hourly rate of $727. Work hour reductions were related to a reduction in completions devoted rigs during the quarter, while the hourly rates were affected by larger-than-normal amounts of standby time for rigs when they operate at a much lower margin between active jobs.

Adjusted EBITDA for the quarter was $15.7 million.

Processing Solutions and Ancillary Services delivered $30.8 million in revenue, down from $36 million in the prior year and $32.2 million in the prior quarter while operating income was $3.4 million and adjusted EBITDA was $5.5 million for the quarter. Year-over-year activity declines were predominantly in plug and abandonment and coiled tubing service lines while quarter-over-quarter declines were related to coiled tubing and Torrent Service lines where some recently idled equipment has not yet found new contracts.

Finally, Wireline services reported $17.2 million in revenue with an operating loss of $4.2 million and adjusted EBITDA of $400,000. This segment was impacted by lower activity as well as noncash inventory adjustments of $1.6 million that affected operating income but were treated as an adjustment to EBITDA given their onetime nature. Our efforts this year to create a more sustainable operation and run with improved cost efficiency are most evident when comparing the positive EBITDA this quarter with the $2.3 million EBITDA loss in the first quarter this year where we had similar revenue levels. We intend to build upon these efficiencies in 2026 with the signing of additional contracts, as Stuart mentioned in his comments.

And turning to the balance sheet. As of September 30, 2025, total liquidity was $116.7 million, consisting of $71.5 million of capacity on our revolving credit facility and $45.2 million of cash on hand.

Free cash flow for the quarter was $8 million or $0.37 per share, reflecting continued strength in our cash conversion. Year-to-date, we've generated $25.8 million in free cash flow which has been deployed in the announced transaction today with AWS as well as through our shareholder return program.

During the quarter, we were very actively, repurchasing 668,000 shares for $8.3 million, bringing year-to-date shareholder returns, including both share repurchases and our base load dividend to $15.6 million. Our capital allocation strategy remains focused on balancing disciplined growth with shareholder returns.

Capital expenditures year-to-date totaled $19.1 million, down from $28.7 million in the prior year period. The current year-to-date figure includes payments related to procure and build our 2 newly delivered ECHO rigs. Our leverage profile remains conservative, and we continue to maintain financial flexibility to pursue strategic growth opportunities like the AWS transaction, while simultaneously returning capital to shareholders. We will continue to be prudent stewards of our balance sheet and capital return framework in the year.

Before I hand it back to Stuart for closing comments, I want to reiterate that our financial discipline strong liquidity and consistent free cash flow generation position us well to execute on our strategic priorities.

Thanks, Melissa. As we close out the third quarter, I want to reflect on the progress we've made and the opportunities ahead. The acquisition of American Well Services is a clear example of our disciplined approach to growth. It's a transaction that enhances our scale, expands our service offerings and strengthens our position in a key basin. With AWS, we're not changing who we are, we're building on what we do best. Our integration plan is already in motion, and we're confident in our ability to execute. We've done this before, and we'll do it again with measured urgency, precision and a focus on creating value for our customers and shareholders. At the same time, our ECHO hybrid electric rig program continues to gain traction. These rigs represent the future of well servicing and the AWS acquisition gives us a better platform upon which we can accelerate that future. Together, we're delivering innovation, efficiency and safety in ways that set us apart. We remain committed to our purpose to be the best well servicing provider in the Lower 48 on behalf of our customers, partners, employees and shareholders. Strong free cash flows and prudent returns to investors remain our guiding principle and we will continue to make our strategic decisions and allocate our capital with discipline and foresight. With our balance sheet in excellent shape, our integration playbook in action and our technology road map expanding, I'm more optimistic than ever about the next chapters for Ranger. I want to thank our Ranger employees, customers and the AWS team for their partnership and commitment throughout this process. We're excited to welcome AWS into the Ranger family and look forward to everything we will achieve together. Thank all of you for your continued support. We'll now open the call for questions.

[Operator Instructions] The first question comes from Don Crist with Johnson Rice.

Congrats on getting the AWS transaction across the finish line.

Thanks. appreciate it.

I wanted to ask about kind of the geographic footprint of AWS. Is it mostly in the Permian? Or does this kind of expand you into other areas? And I guess that goes for both the workover rigs as well as the other service lines.

Everything is in the Permian Basin. It's a 100% Permian Basin player.

Okay. And then as far as like tubing rentals and inspection and some of the other business lines that you're not in now, like how big is that in relation or maybe you want to characterize it into EBITDA or whatever metric you want to use as compared to the high-spec rig fleet?

Yes. From, from a revenue perspective, it's about 45-55 meetings. About 55% of the revenue is a direct overlap with Ranger and about 45% is service lines that are unique to Ranger. But I think one of the things we're excited about is a lot of the service lines are being sold into some of our existing customers. And so we think there may be an opportunity to expand them in the future.

Interesting. And my last question, and I'll return to queue is on ECHO rigs, where are we in the process? I believe they've both been delivered, but have either 1 of them going to work? And kind of what are your first impressions now having it in your possession?

So there's 2. One is in the Bakken currently and one is in the Permian Basin. They are each kind of undergoing final testing. We expect the one in the Bakken to be working on live wells within the week. And we think the one in the Permian Basin right after that. We're pretty excited, Don. If you just kind of just go -- if you go up to the rig, if you just think about the safety features it has, how quiet it is, we've obviously talked about some of the incremental benefits. But I think everybody that has been up and close to it has been pretty blown away. So we're very much excited to get it over a live well.

The next question comes from John Daniel with Daniel Energy Partners.

I'll echo Don's comments on consolidating the Permian, good for you. First question is the customer base for American. Can you -- sure you don't want to name the customer, but can you give some color as to the customer base?

Yes, they have pretty similar customers to us and they have a very large customer that we're very familiar with as well that we do a lot of work with. But I think as I made in the comments, they do have some other customers that Ranger has not historically worked with. So we think there's an opportunity there. But for sure, there's some meaningful overlap with the customers. But we think that's going to be a positive. We expect all that work to continue.

Got it. And then on the ECHO rig, when your customers are looking at that, are they looking at the adoption to replace an existing one of their workover rigs. And when they do that, are they looking to displace one of your competitors? Or are you -- is this potentially a maintenance CapEx, growth CapEx? Can you just elaborate on how you see the adoption rolling out and how that changes the competitive landscape with those customers that take the rig?

Sure. So right now, they're additive. We're not taking away. That said, as we think about over time, we would expect that these rigs would be deployed and would either replace some existing rigs of ours or competitors. But we don't think that's going to be one for one, right? So if you put 2 ECHO rigs out, maybe they collectively displace 1 conventional, something like that.

Fair enough. And then just a final one, I'll try to get you the answer. Would you give us an over or under on how many ECHO rigs get built in '26?

Over or under in '26?

Yes. What would make you happy? And what would disappoint you? How about that? Just doing it another way.

Well say take over or under at 10.

This concludes our question-and-answer session. I would like to turn it back over to Stuart Bodden for any closing remarks.

Thanks, Steve. Again, just thanks to all of you for your continued interest in Ranger. As we said, it's an incredibly exciting time with the deal, with the ECHO rigs. We're really just excited about how everything is coming together. So we look forward to talking to all of you in the weeks ahead. Thanks a lot.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the Ranger Energy Services Second Quarter 2025 Conference Call. [Operator Instructions]

Please note, this event is being recorded. I would now like to turn the call over to Joe Mease, Vice President of Finance. Please go ahead.

Thank you, and welcome to Ranger Energy Services Second Quarter 2025 Results Conference Call. Ranger has issued a press release outlining our operational and financial performance for the 3 months ended June 30, 2025. The press release and accompanying presentation materials are available in the Investor Relations section of our website at www.rangerenergy.com.

Today's discussion may contain forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update our forward-looking statements.

Further, please note that non-GAAP financial measures will be referenced during this call. A full reconciliation of GAAP to non-GAAP measurements is available in our latest quarterly earnings release and conference call presentation.

With that, I would like to now turn the conference call over to our CEO, Stuart Bodden; and our CFO, Melissa Cougle, for their prepared remarks.

Thanks, Joe. Good morning, everyone. Today, I'm pleased to report another strong quarter for Ranger. Second quarter results reflect the resilience of our production-oriented strategy, the hard work of our field teams and our ongoing commitment to disciplined execution.

We exited the winter with a strong pickup in activity early in the second quarter, which has continued into the summer months. We have seen higher-than-normal levels of asset turnover as certain customers adjusted their well programs in light of current market conditions.

That said, demand in Ranger's core service lines remain strong, and Ranger's results showcased the consistent earnings power and resilience of our business model, our focus on capital discipline and our ability to lead the sector in innovation.

For the second quarter, we reported $140.6 million in revenue, a year-over-year improvement that is impressive given the drilling rig and frac spread declines currently impacting drilling and completion exposed businesses. Ranger reported $20.6 million of adjusted EBITDA for the quarter, achieving 14.7% margins, consistent with last year's performance and sequentially stronger than Q1. All segments delivered sequentially improving results despite falling rig counts with company-wide Q2 revenue and adjusted EBITDA improving 4% and 33% quarter-over-quarter, respectively.

Our High Spec Rigs segment continued to be the cornerstone of our business, contributing $86.3 million of revenue and $17.6 million of adjusted EBITDA, with margins staying over 20%, again, demonstrating the stability and profitability of production-focused services. Activity levels in customer demand remained stable, although managing through recent white space has put some pressure on margins. We are encouraged by a consistent base of work heading into the second half of the year and the resilience in pricing stability we have seen thus far.

Ancillary Services and Wireline both improved quarter-over-quarter, with Ancillary Services generating $32.2 million in revenue and $6.6 million in adjusted EBITDA. Our Coil Tubing service line saw a significant improvement quarter-over-quarter with consistent demand for our coil spreads as weather conditions improved in the spring while our Rentals and Torrent service lines saw continued strength and resiliency. Our P&A service line has seen a pullback in activity by some customers given the discretionary nature of these costs, although the long-term growth potential of this vital and environmentally sensitive work remains intact, while regulatory bodies and customers contend with an ever-aging population of wells in the Lower 48.

Wireline achieved a meaningful turnaround this quarter with positive adjusted EBITDA of $1.6 million on $22.1 million of revenue. Once winter effects subsided and our restabilization efforts improve profitability, our work in this segment continues.

With this quarter's result, we are also proud to announce a transformational milestone in well servicing, the launch of our ECHO rig, the industry's first hybrid double electric workover rig. This technology is the culmination of 2 years of engineering effort from trusted manufacturing partners, converting an existing Taylor rig design uniquely available to Ranger. It borrows technologies from outside traditional oil and gas and applies electrification strategies from other industrial sectors that are truly differentiated from anything on the market today. It also utilizes Ranger's existing spare asset capacity for conversion to reduce construction costs and avoid further market saturation.

These rigs bring a long list of enhanced benefits, but some of the key highlights of this hybrid rig solution include: a 0 emissions profile when wellsite power is available with a 90% reduction in emissions even in off-grid settings; operations that are stunningly quiet when compared to traditional conventional rigs, improving the ability of crews to communicate and coordinate activities; a fully electric drivetrain that utilizes regenerative braking with precision drawworks, remote safety lockouts and a digital interface capable of applying machine learning, which is a game changer in conducting safe and optimized operations; a plug-and-play modular construction design that will allow for major component maintenance and replacement without significant downtime; and a 30-minute recharge window that can be conducted during continuous operations.

Ranger committed to 2 ECHO rigs earlier this year with both currently under construction and anticipated to be delivered and tested before the end of Q3. The rigs have been contracted with 2 major U.S. operators with provisions ensuring capital return thresholds are met as well as options for future rig conversions. We spent time this past year ensuring that the ECHO platform is scalable and capital efficient with costs that are shared with our customers and/or captured in an uplifted rate. Simply stated, the ECHO rig is poised to reshape how well servicing work gets done in the Lower 48.

This is not innovation for its own sake. This is practical innovation that improves operations, enhances safety, reduces emissions and positions Ranger to lead the way as operator expectations continue to evolve. It also demonstrates our engineering leadership and our ability to bring forward-looking solutions to the market at the right moment.

Before I turn the call over to Melissa, I'd also like to provide some thoughts on Ranger's current strategic priorities and our views as we look to the second half of the year. The past couple of years have brought newfound pressures in this space as new activity lows seem to be a recurrent theme each quarter. Despite this market pressure, Ranger has been able to produce consistent, durable and strong cash flows and has shown the ability to put these cash flows to smart use, whether through buybacks or targeted CapEx investment.

We have had some pressures in select service lines, but they remain isolated without affecting our core service lines. When we look towards the back half of the year, we see continued shuffling and rig deployment that can bring about some white space and schedules and margin pressures. That said, our base of work remains stable, and we feel the third quarter will show continued resilience.

The fourth quarter has historically been unpredictable depending on customer budget exhaustion and general macro sentiment, and we feel this year will be no different. We will provide additional color as available during our third quarter earnings call.

Ranger's strategic priorities remain the same. We will be disciplined capital allocators who look to maximize free cash flow and prioritize shareholder returns. We believe that further growth in the future will be key for Ranger, and in the same way we approached the basic asset acquisition in 2021 and in development of our new ECHO rig, we will be thoughtful and meticulous in our pursuit of accretive M&A and organic growth opportunities that create value for Ranger shareholders and ensure our balance sheet strength is protected.

We remain a partner of choice to large consolidated E&Ps who prioritize safety, reliability and multi-basin reach. That strength has allowed us to capture incremental market share this past couple of years during the most recent market contraction.

Finally, I want to commend our field teams and support staff. Our people are Ranger's greatest assets, and their dedication and discipline are what makes these results possible.

With that, I'll turn it over to our CFO, Melissa Cougle.

Thanks, Stuart, and good morning, everyone. As mentioned, Ranger showed up in the second quarter with another set of consistent results, further reinforcing our production-focused resiliency in the face of declining rig counts.

Second quarter revenue was $140.6 million, up 4% sequentially from Q1 and up 2% year-over-year when comparing to the second quarter of 2024. Adjusted EBITDA for the second quarter was $20.6 million, a sequential increase of 33% from the first quarter and 2% lower than the prior year quarter due to both service line mix and some margin pressure from rig transitions between customers. Consolidated margins were 14.7%, a significant improvement from the first quarter and consistent to those seen in the second quarter of 2024.

From a segment perspective, the High Specification Rigs segment reported $86.3 million in revenue and $17.6 million in adjusted EBITDA. Revenue slipped slightly quarter-over-quarter and improved year-over-year while adjusted EBITDA and associated margins improved quarter-over-quarter and decreased year-over-year. Rig hours have continued to improve and grow showing strong demand and utilization of the fleet. While pricing slipped 2% quarter-over-quarter, these declines were isolated and driven largely by adjustments to rig packaging profiles.

Turning to Processing Solutions and Ancillary Services, revenues for the quarter were $32.2 million, an improvement of 6% from the prior quarter and 4% from the prior year quarter. Adjusted EBITDA for the segment was $6.6 million with 20.5% margins for the second quarter, an improvement from the first quarter, but decreased from the prior year due to service line contribution mix.

Wireline returned to profitability with positive EBITDA of $1.6 million on $22.1 million of revenue, a significant sequential improvement that we believe is repeatable in the third quarter. We remain focused on creating a more consistent activity profile and looking for ways to further drive down fixed costs.

Ranger's balance sheet is stronger than ever. Free cash flow year-to-date totaled $17.8 million, up 45% from the prior year, and we exited June with $48.9 million of cash and $120.1 million of total liquidity. We deployed a portion of our liquidity during the quarter, repurchasing 278,000 (sic) [ 278,100 ] shares of Ranger stock for a total spend of $3.3 million. These share repurchases have continued into the third quarter as we see the Ranger share price at current levels as an incredibly compelling investment and use of capital. We paid our quarterly dividend of $0.06 per share on May 23, and today, our Board approved the third quarter's dividend. That brings our capital returns to shareholders as of June 30 to well over $5 million, in line with our ongoing commitment to returning at least 25% of free cash flow to shareholders annually.

Turning to the back half of the year, we expect continued stability in Q3. High Spec Rigs and Ancillary Services should continue to show steady performance, while Wireline's recovery is being closely managed. We are optimistic about third quarter performance while cautious once we enter the fourth quarter and winter weather arrives, which will likely slow activities once more.

CapEx spending remains disciplined, and we are holding prior guidance having made select investments this year in the ECHO rigs Stuart discussed earlier. We have begun trimming CapEx whenever possible to give us maximum flexibility in responding to market conditions. We will remain focused on delivering high-quality service while investing in targeted innovation that supports long-term profitability and shareholder returns.

With that, I'll turn the call back over to Stuart for closing comments.

Thanks, Melissa. To summarize, Q2 reflects the strength and consistency of our business model, strong cash conversion, resilient core segments and disciplined execution. Importantly, it also is the exciting start of something new with the launch of ECHO, a platform that showcases how Ranger can lead with innovation without sacrificing returns or reliability. We remain committed to generating free cash flow, returning capital to shareholders, maintaining balance sheet strength and delivering smart growth, both organically and through selective M&A.

Thanks again to our employees, partners and shareholders for your continued support. With that, operator, I would like to open up the call for questions.

[Operator Instructions] The first question comes from Don Crist with Johnson Rice.

I wanted to start with the new ECHO rig contract. Congrats for getting this over the finish line after 2 years. But I'm assuming that these assets are going to cost to touch more. But on the contract, is it designed to have a similar payback as you would on a normal rig? I'm just assuming that these are going to be a little bit more expensive for the operator but save money in the long run from a diesel perspective.

Yes, I'll kick it off and then Melissa can chime in, Don. The short answer is, we do think they'll have very similar return profiles or maybe even better. We'll see how the market is. The way that we thought about it is, you're right. There's an incremental cost to doing these refurbs and making the ECHO rigs over and above what we would typically do in a complete refurb. The customers have -- the 2 contracts we referenced, the customers have spent a lot of time with us and they have a lot of faith in the technology. So they have actually through kind of a combination of down payments and agreements for increased rates over a defined set of hours to pay or to help share that incremental cost. And when you kind of put that all together, we get very similar return profiles as a typical refurb for us.

Okay. And I wanted to ask about Wireline Services. Obviously, that market has been challenged for quite a while, but there's been some M&A in the sector, some companies going away and others buying other companies. And in the second quarter, your results were much better than I would have expected. And I wanted to know if the market was tightening and some of those excess assets are going away through M&A? Or is it something more on your side that you're doing to control costs and boost margins?

I think on the impact of potential consolidation in the Wireline, I think it's too early to tell, Don, or too early to really see the benefits of it. I think the improvements are really related to 2 things. One is the team really has done a great job of really getting incredibly focused on cost and managing labor costs and fixed costs. So a lot of that has been on the Ranger side.

The second thing is, just as you move out of Q1 and into Q2, we do typically see kind of steadier activity in Q2, particularly in the North, and we did see that. So some benefit from the market but I would also say a lot of benefit from internal actions.

Okay. And then one final one for me. You were not the first company this quarter to say that the fourth quarter is kind of uncertain at this time. But do you think there's an opportunity for some of the gas basins to pick up and kind of fill in some of those white spaces that may crop up in the fourth quarter through other actions in the gas -- in the oil basins?

I think we're certainly hopeful that, that could be the case, Don. We certainly saw that earlier this year when the forward curve firmed up in gas. We saw an increase in activity and then a little bit of a slowdown once the decline. But I think there is that -- I think also a lot will just depend on where people are as relative to their budgets and production profiles as you get into the back half of the year. It's just too early to say, but certainly, a strengthening gas market would help for sure.

The next question comes from Derek Podhaizer from Piper Sandler.

I wanted to ask a question around scaling the ECHO rig. Just how do we think about that, whether this is customer demand driven? Where do we go from 2 rigs to something greater than that? How should we -- is it a natural maintenance cycle or natural attrition of your legacy rigs? Maybe just some more help so we can understand what the total addressable market can be for the ECHO rig in the future.

Sure. Thanks for the question, Derek. I think right now, I think it's really related to customer demand. I think we are -- we don't want to build a number of these and build it and hope they will come. So I think it will really be tied to customer demand.

What I would say, though, is based on the conversations we've been having with the 2 customers in particular and some other customers that have looked at it as well, there appears to be significant demand for this. And I think it's hard to know exactly what the TAM is ultimately on this. But I do think that if we had in the next 3 to 5 years, 20-plus ECHO rigs out it, I don't think it would surprise us. But I think we do just want to make sure we're being really disciplined about how we spend the capital related to ECHO and make sure that they're tied to customer -- to a specific customer demand.

That makes sense. Is this basin agnostic? Can these go in every basin across the U S.?

They can. Interestingly, the 2 that are deploying, one is going to be deployed in the Permian Basin, one is going to be deployed in the North. So we are actually testing different kind of weather packages with the 2 different rigs that are going out. But yes, it will be weather agnostic or basin agnostic.

Right, right. That makes sense. So sticking on High Spec Rigs. I noticed the rig hours obviously picked up here, so that's great to see. And looking back in the model, I mean we're at the highest level since 2022. Maybe could you just help us, again, understand holistically the primary drivers of that. Obviously, you're an efficient operator, safety and all that, you had some vendor consolidation. But what's helping you capture that market share? Or is it just this focus on production efficiencies from your customers? Maybe just help us understand what the big drivers are that we're seeing this rig hour increase despite kind of the deflationary market that we've been in, in U.S. land since 2022.

It really is a combination of the things that you just said. So one is, as you know, we have really worked hard to make sure we have strong relationships with the biggest players just because we think they have the most consistent profiles and that continues. So a lot of it has been driven by that. A lot of it has been, as we've talked about before, just on the back of consolidation generally and particularly in high-spec rigs, consolidation has helped us.

I think the other thing I would say is when you kind of look at the customer mix, we are really having kind of increased success in deploying rigs for kind of not necessarily the majors, but other larger customers, but even some kind of mid-tier from a size perspective. And I think the reason that we're getting that work really is around efficiency, safety, reliability, et cetera.

Got it. Okay. That's helpful. Just last one for me. Torrent, you guys mentioned it in the release. But maybe just an update there. I know that's an exciting growth avenue for you guys. I think you previously guided us doubling EBITDA in 2025. But maybe where does Torrent stand? And how do you think about it as we move through the rest of the year to next year?

I think right now, it remains on track to double EBITDA. It's -- again, I think it's been pretty steady. The team has done a great job of kind of enhancing the customer base. I think as we look to the year, I think the big decision for us is what kind of capital do we want to deploy into that business. Again, it will need to be tied to customer demand. I don't think we just want to do kind of spec builds. But again, right now, it looks to be kind of on track for the year.

The next question is from John Daniel with Daniel Energy Partners.

I guess I'm going to focus on ECHO as well. Stuart, when you -- some of your customers have like 50-plus rigs, workover rigs across the country at any given time. And I would assume that the people that are starting at the ECHO are the larger, higher quality names. I'm just curious like when someone adopts 1 or 2 of these rigs, how quickly will they -- would you expect or hope that they would really rapidly accelerate? Because if you're using one and you're having a good experience, it would seem like you'd want to have more than one, if that makes any sense. So just let you pontificate.

Yes. It makes a lot of sense. What I would say is with both of the customers we're talking about, I think we mentioned in the press release and mentioned in the script that there's basically an option to build additional rigs for both of these customers. They are both indicating that they would like additional rigs. Again, they spend a lot of time with us. They're very familiar with the technology where they have gotten themselves very familiar to the technology.

So to that point, it wouldn't surprise us. We don't have anything firmed up yet, but we're having a lot of conversations, John. And it wouldn't surprise us that very quickly they come back and ask us for a number of additional ECHO rigs.

Okay. And then one more for me. I don't know if you want to disclose it. But from the time you started retrofitting ECHO rig one to the time it was completed. I'm curious like what that time frame was and then what's the optimal time frame, you could get it down to once you start seeing multiple repeating orders? How quickly can you improve the retrofit process?

Yes. We think that just given the demand that we think is going to come, we've been talking a lot with our vendors on this. The first ECHO rig has been, I think months, right? It's been a number of months. But I think that when we sit down and we talk with the vendors, we think that we can actually get it down significantly quicker than that.

The one thing I will say is that there are a number of long lead time items, right? Particularly around batteries. And so I think that's one of the things that when we've been talking to customers is that if they say, "Hey, I want one and make it up March of 2026," well, that means we need to start sort of buying long lead time items now, right, or very quickly. So that's kind of the nature of the conversation. But assuming we have those items in place, the actual refurb process can be pretty quick.

[Operator Instructions] The next question comes from Peter Sidoti from Sidoti & Company.

I wonder if you, gentlemen -- or you can give me a hand on capital spending this year and next year. And you seem to be building a fairly large cash forward here, a strong balance sheet. If you could provide a little more meat on what you'll be doing with that.

Peter, so I'll take that and give a start, and Stuart can tuck in behind it. So what we previously guided was year-over-year similar, so in the ballpark of low 30s, and we don't see that being particularly different this year. ECHO was included in that budget, if you will. So I think we see a steady state. We are looking at, hey, if the market got a lot worse, could we throttle it back a little bit in the back half of the year. We'll see. The ECHO rigs are more than 50% paid or about 2/3 paid for at this point.

As far as the cash balance, we do have a cash balance. I think there is a lot of discussions we have internally around capital allocation. You saw us start to spend. We were a little bit hesitant at the beginning of the year when the market started to inflect. And part of it was just sort of some cautiousness. We also saw a lot of support in the stock price at a much higher level. Then we had Liberation Day and we had OPEC come in behind. So we just thought it was prudent to kind of take a little bit of a step back.

This summer, we actually saw the distribution of our largest shareholder. And you saw us kind of start to take a -- put our toe back in the water, so to speak. We've done repurchases. We intend to continue to do repurchases. They have continued into Q3 as I made in my comments.

I think the balance remains wanting to hold on to a little bit. So to the extent the share price is a really compelling investment for us. I think you would see us continue to do that because we do have the 25% minimum commitment. I think what we also are measured by is as we think about ECHO and the potential demand in the future, the customer conversations are going in a few different directions. Some include some upfront sort of CapEx sharing. Some include uplifted rates, just as Stuart said. So that's giving us some reflection and wanting to make sure we have cash on hand if it looks like we need to outlay for that. And I think there's always a little bit of holding on to a little bit of cash is never a bad thing because our M&A conversations, we really didn't touch on because we're so excited about ECHO. But our M&A conversations have been richer lately.

So if that ever -- eventually, I think we do hold a lot of optimism and a belief that we will get additional M&A transactions done in due course. And I think being able to support some of that capital would be constructive for us as well. So I think we view it as making sure we have enough cash to kind of go in a few different directions because there are several paths in front of us, and we want to make sure we can support all of them without levering up. Is that helpful?

Yes. Peter, I don't have anything to add. Melissa said it exactly right. I mean I think the intention is through a combination of repurchases and potential M&A, those would all be good uses of cash. The only thing I would say is when we speak to investors, we're not out and specifically trying to build a war chest, right? I think that's just kind of how it's happened a little bit. But again, I think we see real opportunities both through capital returns and also M&A in the future.

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back to Stuart Bodden for closing remarks.

Thanks, Steve. Again, thanks to everyone, to our employees, our partners, our investors for your continued interest in Ranger. We're very excited about ECHO. Please follow us and follow along social media. We'll have more things being announced in the coming months around ECHO. So again, thank you very much, and I hope everyone has a great week.

The conference now has concluded. Thank you for attending today's presentation. You may now disconnect.