3rd Quarter 2026 - Conference Call - RANGER ENERGY SERVICES INC

Explicit Guidance:

• FY2027 Adjusted EBITDA: Management expects STEP's coil tubing assets to contribute > $10 million of adjusted EBITDA in 2027.
• FY2028 Outlook: Significant further upside to adjusted EBITDA contribution from STEP assets is anticipated in 2028.
• Long-Term Goal: Target of $100 million in annualized adjusted EBITDA is maintained, supported by the expanded ECHO fleet, STEP acquisition, and reorganized ancillary services.
• Capital Allocation: Majority of cash flows in the "next several quarters" will be allocated to ECHO delivery payments and repayment of STEP acquisition revolver borrowings.
• Dividends: Board declared a $0.06 per share quarterly cash dividend, payable December 4th to stockholders of record as of November 20th.

Business-Segment Outlook:

• ECHO Rigs (High-Spec): Contracted fleet of 24 rigs will be completed by end of 2027. Five rigs delivered through Q3 2026; remaining fleet scheduled for delivery through Q3 2026 (note: transcript context suggests this is a typo for 2026/2027 timeline, explicitly stating "end of 2027" for the fleet count). Future rig commitments are expected based on positive customer feedback and data validation.
• Coil Tubing (STEP): Integration of 13 units operating from the Bakken to South Texas; now a multi-basin provider in a $1.5 billion U.S. market. Ability to offer both coil tubing and high-spec rigs for drill-out programs.
• Ancillary Services (AWS legacy): Reprocessing of underperforming lines (transportation, mixing plants, tubing inspection) expected to improve accountability, utilization, and profitability in the coming year. P&A and rental margins expected to remain high.
• Wireline: New work programs began in October; Q4 2026 expected to show improvement following Q3 activity decline.

Market and Competitive Outlook:

• Pricing Dynamics: Management expects "white space" and price erosion caused by budget-constrained customers and smaller competitors to normalize as customer budgets reset in 2027.
• Competitive Shift: Anticipated reversion to higher-quality operators as customers face operational failures and safety issues with lower-priced providers; Ranger expects to regain share through safety and inspection reliability.
• Labor Market: Anticipation of a tightening labor market in 2027 as construction sectors compete for workers; management is proactively managing this constraint.
• Customer Spending: Customers are expected to move from "budget exhaustion" in 2026 back to higher spending levels in 2027.

Macro / Industry Outlook:

• Commodity Prices: Acknowledged sharp price increases in Q3 followed by a recent retreat; management believes production-focused services are well-positioned as budgets reset.
• Activity Trends: U.S. production and land drilling activity expected to continue growing; interest in ECHO technology is broadening beyond the initial two to three key customers.
• Regulatory Environment: P&A work supported by an expanding and steady base from the Texas Railroad Commission.

Strategic Initiatives:

• ECHO Fleet Expansion: Chevron committed to 4 additional ECHO rigs in Q3 2026; total contracted fleet will reach 24 rigs by end of 2027. Agreements include upfront customer payments or day rate premiums to support capital returns.
• STEP Acquisition Integration: Closed October 8, 2026; acquiring $27.5 million in assets to create scale, add "coil plus extended reach" technology (30,000+ ft depth capability), and cross-sell to existing customers.
• AWS Integration: Realized $5.2 million in annualized cost synergies (ahead of $5M target); fully repaid acquisition debt within one year.
• Capital Returns: Continued share repurchase program (4.8M shares since 2023) and dividend payments; target to return >25% of free cash flow to shareholders.

Risks and Headwinds to Outlook:

• Commodity Volatility: Fluctuations in crude and natural gas prices could impact customer activity levels and budgets.
• Labor Constraints: Potential for labor shortages in 2027 due to competition from other construction sectors (e.g., data centers).
• Market Disruption: Continued price competition from smaller, lower-quality competitors could delay margin recovery.
• Operational Risks: Risks associated with integrating STEP and AWS assets, including potential underperformance of specific service lines (transportation, mixing, tubing inspection).
• Weather and Regulation: Standard operational risks and regulatory changes affecting customer spending.

Management Tone on the Future:

• Confidence Level: "Confident" in the ability to deliver durable, long-term value; describes the "moat" as deeper than ever before.
• Strategic Stance: Committed to pricing discipline despite short-term share loss, believing quality and safety will drive a reversion to Ranger's services in 2027.
• Caveats: Explicitly stated that a "firm view" or numerical guidance for 2027 is "too early to tell" due to moving parts, specifically labor and commodity volatility. Management describes the outlook as "cautiously optimistic."

Miscellaneous:

• Financial Position: Zero net debt as of Q3 2026; liquidity of $76.2 million ($70.2M revolver availability, $6M cash).
• Cash Flow: Generated $20 million in Q3 2026 free cash flow; YTD free cash flow of $18.3 million.
• Contract Liabilities: Short and long-term contract liabilities totaled $19 million at quarter-end, primarily from ECHO customer upfront payments.