Q3 2019 Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Pembina pipeline corporations third quarter results Conference call.
At this time, all participants journalists normally mode. After the speakers presentation. There will be a question and answer session to ask a question. During the session you only depressed start one on your telephone please be advice to these conferences being recorded if you require any further assistance. Please press stars zero I would now like to hand the conference over.
Q speaker today, Scottsboro, Senior Vice President and Chief Financial Officer. Thank you. Please go ahead.
Thank you Christina good morning, everyone in welcome to Pennants Conference call and Web cast review highlights from the third quarter of 2000 Nike.
<unk> 10 minutes, Vice President and Chief Financial Officer on the calls me today or Macdill Your 10 minutes, President and Chief Executive Officer decent <unk> Senior Vice President and Chief operating Officer pipelines, Jarrett Sprout Senior Vice President and Chief operating officer facilities, and few Taylor Senior Vice President marketing New ventures in corporate development Officer.
Before we start I'd like to remind you that some of the comments made today may be forward looking in nature and are based on 10 minutes current expectations estimate judge mentioned projections forward looking statements. We may express or implied today are subject to rescind uncertainty, which could cause actual results. He differ materially from expectations. Further some of the information provided refers to non-GAAP measures to learn more.
About these forward looking statements and non get measures P.C. companies various financial reports, which are available at having a dot com and on both feet are an anchor.
Earnings during the quarter positively impacted by higher gross profit in both facilities and marketing a new ventures due to higher terminalling revenue combined with realizing I realize gains from commodity related derivative contracts, respectively, partially offset by lower pipeline gross profit as a result of higher deferred revenue recognition during the third quarter of 2018 compared to the third quarter of too.
I was in 19.
Feminists third quarter results included adjusted EBITDA of 736 million, which was consistent with the same period in 2018.
Quarterly results were driven by period over a period increases in the pipeline him facilities divisions as a result, new assets being placed in the service, including pays four and five piece expansions Redwater cogeneration <unk> storage also impacting adjusted EBITDA with the adoption of I ever at 16 offset by decreased NGL include margins in marketing.
A new ventures to do a lower pricing environment, and a 5 million dollar one time payment within one of our joint ventures.
Busted cash flow from operating activities with also consistent with the same period in 2018 at 530 million, primarily due to an increase in operating results. After adjusting for non cash items offset by an increase in current tax expense timing of preferred shared dividend payments and lowered distributions from our equity accounts at M.S.B.'s.
Based on your date results and our outlook for the balance of the year. We have raised the low end of our adjusted EBITDA guidance range by $100 million.
<unk> guidance ranges now 2.952 $3.05 billion further current income tax expanse in 2900 now anticipated to be 250 to 270 million with the increase over prior guidance related to hire taxable income in the current year and adjustments you. Prior period tax deductions now I will turn things over the mic for an update.
Eight on some of our key growth project and business development activities.
Thanks caught good morning, everyone.
The highlight of the quarter was of course, the announcement of our 4.35 billion dollar acquisition of Kinder Morgan Canada.
And the U.S. portion of caution pipeline.
This acquisition is highly strategic <unk>, providing enhanced integration with our existing franchise extension of our value chain it clear visibility to creating long term value for all stakeholders.
Since our initial announcement, we have received Clarence under the candidate transportation out.
And early termination from the U.S. Federal Trade Commission pursuant to the heart caught but you know.
We're making progress on satisfying the remaining closing conditions and look forward to the number 10, 2019, Inter Morgan Canada shareholder vote.
Or teams are busy preparing for closing, which we now expect will occur in the first quarter of 2020.
We were meets all only have the view this transaction will make us better not just bigger.
We're also pleased to announce that we have approved the first stage of the peace Bayes nine expansion.
Are paid eight announcement earlier this year, we have continued to secure additional long term contracts for producers operating in the money.
The first stage a phase nine includes pipelines to does bottleneck the court or north of Gordondale as well as upgrade one pump station.
This will allow us to access approximately 100000 barrels a day of latent downstream capacity.
Eight nine also enable us to complete our vision of full product segregation across piece pipeline.
It will drive operational and capital efficiencies strengthen feminist competitive advantage and all too ultimately benefit our customers.
It's all lead to further very low cost you bottlenecking opportunities throughout the system.
We call pace, and and which will working on that.
We have now approximately $1.8 billion apiece expansion is under way, which an aggregate are trendy on time and on budget.
Also announced was the approval of 120 million dollar cogeneration facility at Emperor's, Alberta, which will provide heat and power to the extraction and approximation facilities and reduce overall operating costs.
And in addition will provide a doctrine in P.H.D. emissions intensity.
With his newly announced project and I recently completed project at Redwater Cogeneration is becoming an area of growing competency for Pembina.
We see more opportunities ahead.
Where continued to progress our potential alliance pipeline and our cable expansions as well as the northeast P.C. fractionation facility and look forward to updating the market in due course.
R.P.D.H.P.P. project continues to progress is engineering procurement and construction bits have been received and are currently being evaluated.
Early works preparation is underway animal continue through the fourth quarter of 2019.
On Jordan Cold Bellante federal and state permitting process are ongoing.
Subsequent to the corridor Burke advised.
Burke revise his federal for issue and so the final environmental impact statement and now we're expecting out on February 13th of next year.
In closing I'm pleased to report we have released are 2018, E.S.T. performance metrics, which are now available on our website.
Recognizing a growing focus on E.S.P., we're pleased to share our progress in developing to new E.S.T. stands.
Including a carbon stand and a diversity inclusion stand.
<unk> stand means what we stand for we're looking forward to providing further information on these developing strategies in future reporting.
There's always I'd like to thank all of our stakeholders are customers are investors our communities and our ploy further ongoing support.
That will wrap things up operator, please open up the line for question.
Certainly thank you at this time I would like to remind everyone in order to ask a question. Please press start from the number one on your telephone keypad. Our first question comes from Jeremy Tony from J.P. Morgan.
Ahead, you're line is okay.
Hi, This is Joe for Jeremy.
I wanted to start off with the piece stays nine god targeting that sanctioned and.
You mentioned it kind of the the first stage there could you talk about what the second stage could look like and maybe in a a timeline for potentially announcing that.
Sure Joe This is Jason so really the there if you think about what phase nine the the broader project that we talked about earlier in the year was it was really the bottlenecking on the west end up our pipeline system and then it with a power up of our our pipeline system going into it.
Button from Fox Creek, So the portion of the and the the project that we're really talking about is the D. bottlenecking on the west end of the pipeline and not really accesses the capacity that we're creating with the seven and eight.
The downstream How're you know, it's sorta I guess is volume dependent.
As our volumes begin to ramp up we have a fair bit of running room, that's been created with our our extensions up to this point. So for the first phase lives really access is 100000 barrels the capacity that that's their available for us and and then make a introduce the concept of phase Tan.
We going to be looking at optimization opportunities now that we have the ability to segregate our products all the way from look like in because we're not batching, we'll be able to tune the way that we operate our pipeline system and we expected to be able to leverage some more capacity out of the assets that are already in the ground and so.
You know ideally, we'll be able to before we have to proceed with the downstream expansion, which we formerly referred to as phase nine we'll be looking at you know the optimization projects and and seeing how much capacity. We can we can get which is.
Very cheap effectively free I guess.
Okay. Thanks, that's helpful. And then also wanted to ask quickly on gets the alliance expansion.
Discussions with customers continuing but.
Anything more you can say there I guess when you can expect.
Discussions with customers to conclude and kinda I guess, how how that is progressing.
I guess, we're you know we've been we've been working on that project for for Awhile now. There's you know there's a there's a physical.
Separation between you know production north and south the there's a large river in in the United States that started to segregate that play were really focused on the northern side of that and we're talking to the customers producing on that side. The development up there is starting to could become more clear as we get to word.
End of the year and you know producers put their budgets together and things like that so we think as we come to the to the close the year are very early next year I think that's when we'll be able to get some more concrete information about it.
Thanks, that's helpful Oh format.
How are next question comes from not Taylor from tutor Pickering halt and company. Your line just hoping please go ahead.
Hey, good morning, guys looks like volumes are down in pipelines, because it take or pay recognition that was last year over year I'm just.
Yeah work through how do you explain that in the context of phase four and five coming on and are you seeing less volume than you expected, there's customer slow drilling fun.
Mmm Mad I I would say, it's more of a timing issue, obviously, our best 50 or I first 15 came into account last year and the recognition and the timing of those barrels was more back end loaded. So we didn't really recognize any take her pay revenue in Q1 or q. to last year and then we took almost all of it into account in <unk>.
Oh Dear.
Then if you look at this year, there's been kind of more about a smoothing of the recognition of that just as we refine some estimates and volume profile. So you don't want a full year basis. When it's all said and done we obviously will be up in our in our pipelines <unk>.
Conventional pipelines because the phase four and five but really if you look at at the difference between his quarter and Q3 of last year. This about a 20 million dollar difference. So if you normalize that pipelines would actually be up close to $20 million.
Quarter, it's really just the timing of the recognition.
<unk> what about the physical volumes are you guys seen the volumes that you're expected.
Yeah, the physical volumes are ramping up throughout each quarter, we're seeing volumes you know increments there.
There there are progressing as we expect and then on our contract profiles as well <unk>, we see a ramp in 2020 and 2021 in terms of the from contract and say Okay profile. So as we go forward. So if you recall, we put a phase four and five into service in at the end to 2090.
Into the the first year. The contract is really 29, the end at 2019, and 2020 and ER Pardon me end of 2018, and 2019 and as we go into 2020 2021, that's when volumes continued around on a contract basis.
Okay. That's helpful over the L.P.G. is that expected to be a primary primarily source just from redwater being propane or would you also consider exporting butane there as well and then.
And get some color on how you're thinking about improved and Edmonton NGL spreads relative to U.S. benchmarks and how that would impact other pieces in your business. Specifically how is you know this improved domestic pricing been accounted for on your P.D.H.P.P. assumptions.
Good morning manager at here with respect to the Prince Rupert Terminal. Currently we're we're only focused on exporting propane from that facility customer demand, though and with some salt pricing on butane in Western Canada. There are a lot of people asking us about the opportunities to export.
Other L.P.G. products out for that but primarily right now we're focused on just a broken molecule and all let's do talk about some of the separation yeah. We've been we obviously you are watching all of the on a commodity markets and Ah, Yes, we take into account as we update our economics, we are always updating with the the most recent there has been.
I'm up into some of the commodity value.
Recent days and we we do account for all that as we look at it and we still still see the bayes and with an abundant resource in our confidence on the beach dark value feeding the P.D.H. in our export facilities being low cost opportunities that we can get to better netback, praising an international markets are within.
Better value added commodities. So we we want you to all the time, we just all or economics and are still excited by both opportunities.
Yeah, maybe just to clarify where where you guys anticipating are expecting you know improve domestic pricing here in some of your P.H.P.P. assumption. So this is kind of as expected.
Yeah, it's but it's pretty much I was expected there again into long term, we're a long ways from being in service and there's you know, we we watch it and again, it's more relative to what the other opportunities are you know what his Mel Bellevue pricing and call me pricing versus Edmonton pricing, we still believe that we will be advantage feet.
Talking the up into an area, which supports the P.H.P.B. economics, Yeah, maybe just one incremental comment I'd make it is when we sanction. These projects. We obviously ran multiple scenario analysis in Monte Carlo analysis to take a long term you were the pricing. It wasn't based off of you know strip pricing at a point in time that that sanctioned the economics, we take a very long term view of it too.
That should give you some comfort around that.
Great. Thanks for taking my questions guys.
<unk>.
Our next question comes from Rob help from Scotiabank. Your line is hoping please go ahead.
Morning, everyone.
First question. It's just on there came l. transaction can you give us an update on any status other row first there and as a follow up there you know if they are not exercise would those be of interest to acquire additional interesting.
So in terms of your first question I mean, obviously, we we're we're willing to acknowledge that there's there's a rope are we really can't talk about the dynamics of that were covered under a confidentiality agreements. So can't comment on on the specifics, but we would hope to have that wrapped up you know one way or another by the end to end of this year.
And in terms of interest on the other assets you know obviously, we bought K.M.L. over also we like all the assets you know we haven't had those discussions but certainly.
We do like those assets.
Alright, and then just more broadly speaking with Cam L. It does add some additional assets, let's call. It in the you know and in the Chicago area region with the alliance expansion of potential ox able expansion just want to get a sense of how you're thinking about your assets in that region, and whether or not you know that could be you know a new plot.
To build off of down there.
Clearly clearly we've been.
Since.
We did the bears and deal and step into our stable you know, we just took over operatorship that.
That assets and and we're starting to focus on what is possible around that outfit.
He's leg of Kocian is is you know proximate to to the asset and then we're looking at that it's it's not <unk> you know, we paid for and and in the acquisition, but that's certainly is is you know an asset. We're we're studying but we're we're studying.
All possibilities downstream Rob you know you know that's how we do it right we buy something we study it and then we we look for additional vertical integration opportunity. So absolutely we're lucky.
Alright, I, maybe a little earlier appreciate the color. Thank you.
Thank you.
Our next question comes from Robert <unk> Catellier from C.B.I.C. capital markets. Caroline is open. Please go ahead.
<unk>.
Just a couple of questions here.
We saw in Canada.
Okay.
What a your expectations or.
Partnership.
Specifically.
Commitment to.
Apple in the area.
Jarrod you want to take that sure I <unk> <unk> Robert Jarrod here.
Yeah true garrison midstream, we're still seeing you know C.R.P. the partnership with a Mitsubishi in Ghana, we're still seeing a lot of drilling up in that area. They are.
This is you know well documented they are extremely focused on the liquid rich portion of that and you know and obviously I'm gonna benefits you know Jason talked about having to be bottleneck going west of Gordondale, obviously, not as it was primarily due to a significant amount of liquids being bound up and not Dawson Creek, whose.
Oh, the way up into Port Saint John area right now, we don't we don't see any changes based on that announcement yesterday at all and then further to that we are extremely well positioned obviously on the drug outside with LNG, Canada phase one going to be coming on stream and then the one side of that part.
Ship Mitsubishi's ownership and not in their their desire, obviously fulfill a dryer gas molecules to have.
To take those west So you know it's business as usual from what we from what we know.
Okay I wonder if you could just comment longer term what happens with.
Obviously.
Leverage point is whether or not Jordan Cohen moves forward, but I'm feeling that we're seeing some expansion from g.
Et cetera coming in the market. So so what.
Sure.
Oh look for.
Rob This is Jason I guess with Ruby the you know the contract renewal start coming up at you know middle the end of 2021 and and so we're working with Kindermann working on that there's a number of a number of different things going on you know include.
<unk> you know the there's the one old pipeline that could be reverse that goes down into the Rockies space and it'll create a need for more e. grasberg. Yeah. There's there's conversions that certain parties are considering of gassy grass pipelines to crude service. So.
You know, we're we're definitely looking at it and we're looking at the options and working really closely with kender Morgan who's the operator that outside it and and looking at all all the all the different scenarios. There obviously Jordan Cove is would be a a really positive outcome, there and and the time.
Timing of that is is is still unknown at the moment. So I think at the moment it.
It's a bit of a wait and see.
Yeah. It's it's <unk>, it's just my view, but I think that you know for for for buyers of gas Midland.
Ah Ruby isn't important diversification if they have a single source.
Of gas that that hub is not nearly as as valuable to to buyers a gas of having.
You know multiple in less than that that really goes back to the the reason it was built into first place. So you know my my personal view is that.
People are not going to abandon diversifications, just just too risky for for the buyer set that up.
Yeah, but that makes sense.
Thank you for putting out that U.S.G. updates.
Yeah. Thank you thanks for noticing.
Our next question comes from Robert Kwan RBC capital markets. Your line is helping please go ahead.
Morning.
Coming back to to came Ellen the timing so you've tightened it up here under the first quarter of 2020 I'm. Just wondering is that based on specific feedback and interactions with computation Bureau.
Yes.
Okay.
I guess turning to to the Emperor's Cogen facility, you've talked about it reducing costs I'm just wondering yeah.
The economics around that from your perspective is that based on current mass or do you have concerns.
About future delivered power costs.
What what we see happening is is in the future is is wire costs continuing to go up and this particular call again.
Will not beyond the grade we will will have demand in excess.
This production and and because we were you know capturing waste heat to offset other natural gas lead otherwise have to buy air go. There's there's great <unk> economics in it. So it's just a model. We're we're very pleased with how the red wire.
Cogeneration Wow workout.
And we we see.
Just as a strong analogy see identical unit you know.
Robert how we build stuff we build one we like it and then we build a lot of them and and we see two maybe three huge opportunities. You know these are just solid base hits for us to just to self apply and consider that you know other projects like Suncor and other projects like this are going to.
Continue to.
Hold demand off the grid, which in turn will make the wire costs higher so I I I think you know this maybe the the start of that kind of a trend.
And is owning like your yeah, clearly developing and constructing these facilities, but his owning the coach and kind of a long term business strategy or just given how many how much private capital is running round with low.
Cost of capital would you look to monetize these things.
It's a it's an option I mean, we you know God God layers of protection, if anything ever went wrong I'm Gonna you know we've got layers. This stuff that we could do and and you know that could be one of them, but we're in the business of constructing an operating infrastructure and so this is this is right down the fairway you know as I say it either.
Solid economics, and you know, we learned something about electricity business, while we're at it and.
It's an obscene vertical integration.
<unk> into the value chain, so directly connected so for now it you know, it's it's right down the fairway.
It wouldn't be the first thing we sell put it that way.
Got it if I can just finished with guidance and you tightening up the range you know outside of things like commodity prices and say some volumes that facilities are there any other key drivers.
That would movie around in the range or or potentially even take you out of the range and how much would those drivers actually have to move to do that.
The only Robert the only thing that would really take us out of the ranges and absolute crashed in in commodity prices, but recall that we've put in close to 50 per cent hedges on our N.G.L. business as well as some pretty significant hedges on our on our storage book over the winter.
So it would have to be a pretty dramatic fall off in commodity prices.
<unk>, Okay. Thank you much.
[noise] again people would like to ask the question. Please press star send the number one on your telephone keypad How're next question comes from Andrew Husky. Some credit Suisse. Your line is open. Please go ahead.
Thank you good morning, maybe just following up on on the power conversation to the extent you had cogens that were actually physically connected to the grid.
Did you see a market environment in the future that's more volatile in that you'd actually sell power into their success for you.
Where you mean, we're we're not in this to to be a merchant power player. We're just in it to to to tell supply and operating facilities.
Clearly more more attractive.
That's possible, but it's certainly not how we presented it to our board.
Merchant power.
Play you know with our you know our guard rails that'd be an 80 per cent fee for service.
You know this this that would not be something we would be a entering entering into the the American power business.
Okay. Appreciate the clarity on that and and maybe just done on the budget status on a couple of projects. So Prince Rupert struggling a little over budget and I think do for an A. is under budget. What are the drivers that are happening on those two projects because everything else is sort of down the fairway on on on time it on budget.
Yeah, you know, we we take more of a portfolio approach and you know everything's under budget. Then means our guys are sandbagging their costs. So that that's not good.
And you know the the inverse so.
You know we're we're we're focusing you know from here forward about what the portfolio looks like and I think that that's the most important guidance that we can give give the street, what's happening or the minutia of.
What's going on in any any given <unk> can be related to you know scope changes maybe we're prebuilding you know can be weather related and all that and so were you know our guidance is is is going to be a generic in that regard I'm looking forward.
Okay, what one final one if I'm a I'm with the rail curtailment announcement that came out.
You see any major benefit to you're bound to your business.
Well I mean, we're we're coal owners you know if if kindrick closes <unk> corners, and really the Marquis rail facility and in a in Canada and so we don't really know what that means but it has our attention for sure.
We just add any incremental heavy oil production usually comes with condensate demands. So obviously not not a direct benefit but an indirect benefits through through hopefully higher up produced volumes.
Okay, great. Thank you.
Our next question comes from Patrick Kenny from National Bank financial.
Please go ahead.
Thanks, guys just to follow up on alliance outside of the expansion and sorry, if I missed it here, but when you expect to extend the existing contracts how should we think about tools and term relative to the existing.
Yeah.
So the first round his contract renewal come up at the end of October and we've been inactive discussion with all are all our customers and we've.
I think we've made good progress on on the extension to some of those terms.
I think maybe in the fourth quarter, we can provide enough date on in terms of what the term of the overall average terms and things like that look like.
Okay great.
Then just for the <unk> closing right around the corner here curious to get your thoughts on you know what might be the most attractive market right now maybe for Scott here just in terms of.
The purchase price for U.S. coach and you know thinking about Canadian versus U.S. public debt or perhaps.
No new bank did or <unk>.
Yeah. So so we have multiple options on that front I mean, just start off we hedged over 50 or just about 50% of the purchase price add economics slightly better than dinner aboard economics that was a good start to to the funding plan. We already see took a lot of money off the table back in September with.
The bond deal, we did Dan at pretty attractive <unk>, a portion of it as we sit here today you know we have an undrawn credit facility, we have an accordion with that credit facility to increase it. Even further we have a billion dollar term loan that we've negotiated that we could drawn as well so from a pure liquidity.
On closing, obviously know issued there we have ample capacity longer term right. Now we are doing that exact analysis between looking at the U.S. public the U.S. private and the Canadian public and just kind of going through the pros and cons. If you put me on the spot today, I'd say that we're probably likely going to do an issue in the.
Pride of place market.
Okay. That's perfect. Thanks, guys.
Our next question is from a lie is supposed to call us from Industrial Alliance Securities. Your line is open. Please go ahead.
Good morning.
Warning.
Like to focus a bit on the cogen facilities, because I sort of clearly see a pattern here with redwater tempress today and the central utility block do you see.
You know a further trap line that 10 turn all and and you know I'll I'll push it a bit further would they roughly the same size in terms of dollars or or or how do you look at that because you mentioned that you see a trap wine.
Yeah.
And again, you look at our history, we build the same gas plant over and over the same profit over and over and and so.
We.
Might see keep the building the same you know.
100 million, plus or minus unit and adopt a bunch of different locations.
Cogen is not part of our P.D.P.P. now, but it very well could be.
You know in in in the years to calm certainly there'll be a sufficient power demand just support that so that's just another example of.
Of the the opportunities, but again you know our focus.
Yeah.
Plan, we have in front of buses is self supply, it's not merchant power.
Okay.
Thanks for that moving a bit to P.D.H.P.P. you know a large capital project that I would consider you know moderately complex.
What are you doing on the construction costs medication side.
That might be different too I mean, it or or what you would consider maybe standard practice, but still like to hear it to keep those costs in line.
Why is it says to tailor talking so we've been very clear from the outset of R.E.P.C. contracting strategy to be a lump sum process. Lumpsum contrast for us so our our model at this point in time is that for the two large packages the P.D.A.'s and the P.B.
<unk> right seeking and working with you see contractors to to receive those lump sum bid. We continue to look out and work with those parties at this point in time look at all cost reductions.
During our our labor rates, we've negotiated labor rates in advance, we've a word or long lead equipment to remove Carson uncertainty. So we're following up a process of as you describe removing costs costs on certain him from the project and we continue to evolve and for support.
Great. So no change in strategy correct.
No changes strategy.
Okay. One last thing just wondering if you know within six weeks or so you will provide another capital a budget update or not a and could there be potentially new projects. I know there were two announced today that that might come up.
Yeah, we we typically put out our our capital press release in in early December so that that you should expect to see that.
Yeah.
<unk>, we may you know, how some busy color on on our business and and what we're up to that won't be in the form of promises but more.
Directional.
Similar to what you would see an investor date as part of that release.
Great. Thank you very much for all those answers and that's it for me.
However, next question comes from <unk> from G.M.P. Your lines. Okay go ahead.
Morning, everyone.
I mean with with respect to the Watson Island L.P.G. terminal I know, it's not up and running it obviously, but are able to provide a bit of an update on what the potential scoping size could be.
If the first phase is successful and what you have room for their.
Yeah, absolutely injured here, so obviously customer demand to get products off of the West coast.
British Columbia to to either Latin America, and or Asian markets is is extremely high we are like I do want to.
Make sure that we're very very focused on getting phase one on stream as per the timeline that we publicly disclosed and getting all of our permits in place, but with respect to that in the northeast D.C. area as that increased Conan Satan crude is coming on to fulfill Jason's biplanes with dotcoms incremental associated gas and.
A lot of in jails, which is true driving a lot of the the customer request with respect to northeast P.C. for rock and tying it to potentially a watch an island expansion in the future. So the demand is definitely there, but we are extremely focused on getting pays one up and running.
To be clear there are expansion opportunities there, but we're we're evaluating those in concert with northeast D.C. Frock development.
Got it.
It it's perhaps too early to talk about this but are you able to provide any high level details around some of I guess, the operational optimization opportunities with running condensate up coach and then also having some of 'em, obviously, the p. system running them in 10, and some of the benefits you may be able to realize there.
We'll do that if and when we close.
You know it it's it's not our our place to to.
Do that at this time, we got to focus on clothing, and then we'll we'll talk more about our our our plans. There realistically you know we have an investor date in made I'd probably be a good time to further outline.
Outline in in detail what what are our plans are we you know we standby that you know we shouldn't be able to.
To.
<unk>.
50 million energies at a very you know very low nominal cost that three three this acquisition and then another 50 million kind of according to the types of metrics you've seen.
From stamina on average in terms of capital deployment.
Okay.
One for me I mean scarred, obviously, the cash tax guidance got bumped up for 29 team are able to provide any insights into 2020, I know even dog guidance has.
That would that could be helpful.
Yeah fond of current tax expanse basis, we would expect it to be a lower than what we're seeing in in 2019 and again, that's just the timing when.
Certain assets are into Perl partnerships, some aren't as well as some accelerated a C.C.A. deductions that that start to come into place in 2020. So as we sit today you you could expect it to be marginally lower than 2019.
Perfect. Thank you very much will turn back over.
No further questions about this time I turned the call back over to the presenters.
Well, thanks, everybody Hope you had a great a Halloween last night and thanks for your ongoing support have a great weekend.
Ladies and gentlemen. This concludes today's conference call you may now disconnect.
Yeah.
Oh.
Oh.