Liberty Energy on the Lookout for ‘Transformative Opportunities,’ CEO Says

Ron Gusek, the new CEO of Liberty Energy, had been in his new office for just two months when a global trade war broke out and oil prices began sliding, from $71/bbl to less than $60/bbl. Gusek was appointed on Feb. 3, succeeding his friend Chris Wright, who is now the U.S. secretary of energy.

Since then, it’s been busy times. In March, Liberty acquired IMG Energy Solutions, a Pittsburgh-based developer of distributed power systems. In April, the company announced an alliance with Range Resources and Imperial Land Corp. to support the development of a power plant dedicated to a data center in Washington County, Pennsylvania, near Pittsburgh.

In April, Gusek presided over his first earnings call as CEO, just two weeks after President Donald Trump announced a series of global tariffs that sparked economic uncertainty and deflated oil prices.

Gusek is also directing the company’s expansion beyond completion services and technologies and into power and energy storage solutions. He answered questions from Senior Technology Editor Richard F. Stubbe in early May. The full interview will appear in the June issue of Oil and Gas Investor.

This article has been edited for length and clarity.

Richard F. Stubbe: The world has changed pretty dramatically in the past three to six months, with considerable uncertainty in global trade and a decline in oil prices. How is Liberty adjusting?

Ron Gusek: There are a couple of things to think about. Let me talk about the completions business, our core business, first. Our focus there has always been that if we delivered industry-leading performance service, safety support on location, that would see us weather the ups and downs as best we possibly could, relative to the rest of the industry.

Before the 2015-2016 downturn, we launched our sixth frac crew in February of 2015, and the rug got yanked out from under us. But we were in the fortunate position of not having to lay down a single crew. All of our crews kept working. We just grew market share. People that we’d had to say no to, customers we couldn’t go to work for because we didn’t have enough capacity, we were able to call and say, “Hey, we have white space on the calendar now. To the extent you have work available, we could come and do that for you.” And so, our customer base grew. And then, as we came out of that downturn, we were able to hang on to all of that work. And so, Liberty tripled in size over the next 18 months, and we hung on to all that market share and the growing customer base.

I wouldn’t view this situation as any different than that. Our goal leading into this is on the outward facing side, industry-leading technology, industry-leading performance and efficiency, industry-leading safety on location, industry-leading supply chain to support that. And then, in the background, a fortress-like balance sheet that allows you to weather the storm with the hope that, even if there is some amount of attrition in the number of frac crews running, that if that is 15% for the industry, that it’s something less than that for Liberty. Maybe it’s 5% to 8% for Liberty so that we are in a position where it doesn’t impact us as much.

RFS: On the earnings calls in the first quarter, I’ve heard the word uncertainty more times than I had in the previous five years. Most of the companies have said they’re in discussions with customers about how to prepare. Liberty and Northern Oil and Gas both struck a different tone—looking forward to opportunities.

RG: We’ve been through two major downturns in Liberty’s history—the 2015-16 downturn and the COVID-19 downturn. And both of those led to transformative opportunities for us. We bought Sanjel Corp. in the 2015-16 downturn. They unfortunately had to file for bankruptcy, and through the bankruptcy auction process, we were able to buy the U.S. business. And then in COVID we did the Schlumberger transaction, taking the North American pressure pumping business from Schlumberger. And so, both previous huge downturns that we’ve been through have presented us with amazing opportunities that put our company in a different position coming out of that downturn than we were going in.

RFS: You mentioned on the earnings call that you’ve been talking to your customers about how they’re approaching this rough patch. What are you hearing now?

RG: It’s still too early to say that anything meaningful has changed. You’ve heard a few announcements, of course, some supportive, some saying we’re economic down to the mid- to low $50s, and at this point in time we’re not changing our program. That message has come from some of the larger providers. You’ve started to hear a little bit of messaging, but nothing dramatic. OPEC+ has provided some clarity around their plans, and so we have some sense of what additional capacity is going to come to the market.

But the other piece of the puzzle is the demand outlook. And it’s difficult to understand how that is going to play out until we have some more economic clarity, specifically around how the trade situation is going to land and the potential impact that has on economic growth globally over the remainder of this year and headed into 2026.

If we could find a path back up into the low to mid-$60s, I think we feel some ripples, but it’s not a hugely worrisome situation if oil ultimately settles down in the mid-$50s.

RFS: Some of the majors have indicated they can make a profit with oil at $35, but prices don’t tend to stay below $60 or above $100.

RG: Right now, we’re just eating into the free cash flow. I think, certainly, the larger E&Ps would tell you that they are in a position to cover the costs of drilling and completing the well, dividends and maintenance, capex and all of that at a number maybe in the $40s and certainly in the low $50s. But all that’s being eroded right now is the amount of free cash flow they have available to return to shareholders.

It’s not a decision around the sustainability of the company to cut rigs. It’s a decision around whether this is the ideal environment to be producing those barrels of oil in. I don’t think they’re at that position yet—certainly not the bigger folks. For the smaller privates, it’s probably a different situation, and so they will react a little bit differently.

But for a large number of the folks out there and certainly those bigger players, I think a very, very different thought process inside, ultimately tempered by the question of how much they would be prepared to let oil production fall. I don’t know how far, but I don’t think it’s a million barrels a day.

RFS: Last item on my list is the MOU outside of Pittsburgh. How did that come together?

RG: I think it’s true to say, and I hope I’m not misspeaking for the E&PS out there, but certainly those E&Ps who are on a gas resource or have gas to take to market are looking for additional options to bring their gas to market to ensure long-term use for that. And this power conversation has become a pretty meaningful one. There is a recognition that a power generation in the lower 48 probably grows enough to consume an incremental 7 or 8 bcf/d of gas by the end of this decade. And so then the question becomes, how do I as an E&P ensure that I benefit directly or most directly from that? You could stand back and just take the “rising tide floats all boats” approach, or you can look for ways to directly benefit from that.

We had three parties come together, a land developer (Imperial Land Corp.), Range Resources and ourselves. Range is looking for the opportunity to secure long-term demand for its molecules and, ideally, right there where they’re produced. And so, they have a real benefit to be at the table for a conversation like that as the committed gas provider to this particular situation. Imperial’s natural business is finding opportunities to develop land and turn that into an improved or beneficial use for that. And we’re trying to grow a new business in the power generation side of things. We have found that there are a lot of natural partnerships among existing players in the space.

RFS: Who made the first call?

RG: In this case, we acquired IMG Energy Solutions in March. They are a Pittsburgh-based power generation company. They’ve been in the gas power generation business for a little better than a decade. They built maybe a dozen gas-fired power generation plants, small modular design. And so, they were already a known entity for doing that. That conversation was in process when that transaction took place. We just took it across the finish line.