What happened

Shares of oil-field services company ProPetro Holding (PUMP 0.24%) haven't done much in the years since its 2017 initial public offering. On Wednesday, its board announced a dramatic step in response. Investors are applauding the move, sending the stock up 13% as of 11:19 a.m. ET.

So what

ProPetro provides pressure pumping and other related services to upstream oil and gas companies. It's an important component of the North American energy extraction ecosystem, but it is also a business very dependent on larger macro trends and demand for natural resources.

The company's shares are down about 50% from their initial trading price, and at various times over the years have ranged from up more than 50% to down more than 75%.

On Wednesday, ProPetro said its board had authorized a new $100 million share repurchase program through the end of May 2024. This authorization represents about 13% of the company's market capitalization at the time it was issued.

"We are pleased to announce the approval of a share repurchase program by our board," CEO Sam Sledge said in a statement. "Our strong first quarter earnings and three consecutive quarters of positive net income demonstrate significant financial improvements resulting from the execution of our strategy."

Now what

Although news of a share repurchase plan is hardly grounds alone to buy a stock, it does speak to management's confidence in its outlook and that it will have ample cash to fund operations from here. ProPetro said it aims to opportunistically execute the program, taking into consideration market conditions, changes to the business outlook, and liquidity needs.

Sledge said the company "will continue to explore additional methods of strategic capital allocation beyond the announced share repurchase program" as well, which could be read by some investors as hinting at the potential for an eventual dividend.

ProPetro to some extent can't help but be subject to the whims of the market it serves, but a good capital allocator can find ways to boost shareholder returns even in tough conditions. Investors are pleased with the steps management is taking.