Independence Contract Drilling, Inc.

ICD reported first-quarter 2024 adjusted net loss of $7.2 million, or $0.50 per share, and adjusted EBITDA of $11.8 million. Average rigs operated were 15.1, and margin per day was $11,829, ahead of guidance due to very strong cost control. SG&A was $4.3 million, including about $216,000 of stock-based and deferred compensation expense; cash SG&A was $4.0 million. Interest expense was $9.9 million, including $2.7 million of noncash amortization and debt discount. Cash payments for capex, net of disposals, were about $8.2 million, with about $4 million of CapEx accrued in accounts payable at quarter-end. Liquidity was $20.4 million, including $6.9 million of cash and $13.5 million of revolver availability. For Q2, management expects operating days of about 1,350, margin per day of $9,750 to $10,250, revenue per day of $29,000 to $29,500, and cost per day of $18,900 to $19,400. Cash SG&A is expected to be about $3.7 million, stock-based comp about $1 million, and interest expense about $10.4 million.

Anthony Gallegos emphasized that ICD outperformed its prior guidance because of better utilization, cost discipline, and relocating a working rig from the Haynesville into the Permian. He described the Permian as the company’s key growth vehicle and said the Haynesville remains challenged in the short and medium term, with no meaningful rebound expected until at least the second half of 2025. His tone was constructive but measured: he sees opportunities from fleet high-grading, private E&P activity, and the company’s 300-series conversion program, but repeatedly noted flat market conditions and elevated churn.

Philip Choyce walked through a quarter that beat expectations on margin despite ongoing pressure in the market. He cited adjusted net loss of $7.2 million, adjusted EBITDA of $11.8 million, margin per day of $11,829, SG&A of $4.3 million, cash SG&A of $4.0 million, interest expense of $9.9 million, and liquidity of $20.4 million at quarter-end. He also highlighted $3.5 million of convertible notes repaid at quarter-end, $13.3 million of accrued interest paid in kind, and a decision to pick the next convertible-note interest payment due September 30, noting the PIK rate is 300 basis points below the cash rate and that preserving liquidity and managing revolver paydown are priorities.

Analysts pressed on whether dayrates are stabilizing, and management said pricing has moved sideways, with lower realized rates mainly tied to contract renewals and basin churn rather than aggressive discounting. On SG&A, management said the first quarter included some seasonal and one-time restructuring costs, with cash SG&A tracking around $15 million annualized, though some relief could reverse in Q2 due to summer heat and West Texas operating conditions. Questions on rig replacement and performance-based contracts drew a response that ICD is winning work by reducing days per well and days on pad, and that while bonus-style structures are not in place today, management is open to them and expects such arrangements could happen in the future.