Q4 2019 Earnings Call
Ladies and gentlemen, thank you for your patience and please remain on the line the Gulfport Energy conference will be beginning in about two to three minutes. Once again, we thank you for your patience NFC. Please remain on the line the Gulfport Energy conference will be beginning in two to three minutes.
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Greetings and welcome to the Gulfport Energy Corp. fourth quarter 2019 conference call.
This time, all participants are gonna listen only mode. A question answer session will follow the formal presentation.
Anyone to require operator assistance during the conference. Please press Star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Mr. scandal. Thank you you may begin.
Thank you and good morning.
The Gulfport energy Corporation's fourth quarter and full year 2019 earnings Conference call I'm, just told director of Investor Relations.
On today's call is they David White, Chief Executive Officer, President and.
Executive Vice President and Chief Financial Officer. In addition, with me today for the question and answer portion of the call. It don't anymore Executive Vice President and Chief operating Officer.
I would like to remind everybody that during this conference call. The participants may make certain forward looking statements relating to the Companys financial condition results of operation plan objectives future performance in business.
We caution you that the actual results could differ materially from those that are included in these forward looking statements due to a variety of factors.
Information concerning these doctors can be found in the company's filings with the FCC.
In addition, we may make reference to non-GAAP measure.
Reconciliation to comparable GAAP measures will be posted on our website.
They did go for presentation was posted yesterday eat into our website in conjunction with it or anything else.
And your view at your leisure at this time I would like to turn the call over to David would CEO of Gulfport energy.
Thank you Jessica welcome everyone and thank you all for joining us this fall.
For the full year 2019, Gulfport reported $118.6 million.
Adjusted net income and generated $814.4 million.
Adjusted EBITDA. In addition, despite the difficult pricing environment Gulfport operating cash flow before the changes in working capital and inclusive of capitalized expenses totaled $640.3 million.
We reported free cash flow of $37.8 billion in 2019.
Overall, I'm pleased with our full year financial results and operational performance net the previously announced sale of certain non operated interests in the Utica capital expenditures incurred in 2019 totaled $574 million. This total is inline with our 2000.
18 guidance of $565 million to $600 million.
25% lower.
Then full year 2018.
Total production was roughly flat in 2019 versus 2018 and in line with guidance and expectations.
Our ability to generate cash flow in 2019, despite a declining price environment.
Was acceptable to us strong natural gas hedge book and the dedication and focus of operations teams, who work to optimize efficiencies and improve our cost structure throughout the year.
To underscore this during the fourth quarter of 2019, our per unit operating expense, including Halloween production taxes, and midstream gathering and processing expense totaled 77 cents per Mcf fee, which was 13% below the levels. We saw in the fourth quarter 2018.
We continue to focus on ways to improve our cost structure across the business.
I will discuss further in his comments.
On the strategic front, we delivered on our goal to simplify the portfolio in 2019 and completed several noncore asset sales throughout the year in a difficult environment, which generated cash proceeds come over $95 million. We were also able to retire approximately 100.
$90 million of senior debt at a 50 million dollar discount during 2019, which improve both all leverage and cash flow profile. Your today in 2020, we have repurchased an additional $10.2 million in principle amount.
Unsecured senior notes for $6.9 million in cash as we continue to evaluate potential uses of cash we will remain disciplined in our allocation of capital balancing maintaining a strong liquidity position and enhancing Barry.
Touching on reserves Gulfports yearend 2019 proved reserves totaled approximately 4.5, Tcf see what comprised of 89% national gas and 11% liquids.
Lastly, we made numerous structural and personnel changes to improve the organization. During 2019, we assembled our talented new management team, which we believe will serve the organization while in the future. We added Patrick Crane as executive Vice President and General Counsel, who brings extensive legal governor.
Yes, and compliance expertise to the organization.
We recently also named a new head of our human resources group and brought in a new Chief Information Officer finally on the finance and accounting side. We recently hired an extremely qualified controller for our accounting group and the new assistant controller.
These are in addition to bringing quintile onboard in August as our new CFO.
These key additions have substantially improved our organizational structure processes capabilities. We are building a team orientated culture here at Gulfport and whats all are working to achieve our shared strategic and financial priorities and where transparency active communication and accountability all foster.
In addition, our ongoing board refreshment process continues.
To ensure shareholders are represented by fresh diverse forces with strong expertise and qualifications at the board level, We recently announced Valerie Yocum and Al Bledsoe have joined our board and believe both Valerie and al bring strong skill sets capabilities and experience to our board.
Following these two appointments in the past two months Gulfports Board is now comprised of eight directors Stefano Kumar independent and five of who have joined the board in the last three years.
As we recently disclosed David Houston, Our chairman has decided not to seek reelection around next annual meeting Gulfport has benefited from his many years of distinguish leadership on Gulfports board and our employees inboard. Thank him for the many contributions he has made the gulfport over the years.
Gulfport recently published our inaugural corporate sustainability report, which you can find on our website.
The report highlights the success, we had last year and improving our company as we responsibly developed our assets it illustrates our commitment to the high standards of health safety and environmental stewardship.
The report also highlights our efforts to improve the communities and what should operate through volunteering charitable giving and other initiatives. We also recently adopted formal corporate governance guidelines and aboard diversity policy underscoring our commitment to ensuring sound corporate governance policies.
It could also be found on our website.
In summary, Gulfport did a good job of controlling what was within our control and managing things out of our control in the best way possible.
We executed on our operational plan within budget and generated positive free cash flow, despite a sharply declining commodity environment.
Our focus on capital discipline cash flow generation carries into 2020, which is setting up to be a challenging year for the entire energy sector.
On the macro front judo natural gas supply growth over the past several years and unseasonably warm winter, we entered twentytwenty with natural gas prices at the lowest level seen in 20 years.
Having said this we firmly believe that low gas prices cure low gas prices producers are faced with ever declining access to capital shrinking borrowing basis, and a steady drumbeat from investors to and generate cash flow. These factors should lead to a declining U.S. supply in 2020, and the strong U.S. economy and continued to me.
Mangrove give me belief that there will be a brighter days ahead for gas prices and gas weighted companies such as comfortable because we believe in a much higher gas price in the future. We are aggressively cutting our activity levels in 2020 to preserve our high quality inventory for about a day simply put.
This level of pricing is not sustainable and producers are slowing down which we believe will result in the price recovery.
We want to be poised to drill our high quality inventory when this recovery takes place rather than turning to sales high rate gas wells at low prices.
Gulfports 2020 operational plan and financial outlook prioritizes free cash flow generation, which ensures we maintain our strong liquidity position.
Accordingly, we are managing activity to a line total capital expenditures within cash flow extra during 2020, we plan to invest approximately $300 million across our core assets, which is half of what we spent in 2019, we forecast minimal reliance on our revolver to fund our.
Our operations throughout the year, which again allows us to maintain a strong liquidity position and underscores our focus or capital discipline.
Turning to our specific core areas you would occur our 2020 program will be centered around the dry gas window to play we entered twentytwenty with two rigs running and currently have one rig drilling ahead today, we plan to continue with one rig program throughout the third quarter of Twentytwenty.
In the Scoop. Our 2020 program is focused on the liquids rich wet gas area of the Woodford, where we continue to see strong efficiency gains.
When normalized to a 7500 foot lateral our fourth quarter of 2019 average spud to rig release was 40.7 days an improvement of 36% from the 2018 program average and we're continuing that momentum going into 2020.
During 2020, we plan to run 1.5 rigs on average for the year and currently have two rigs drilling in the play today.
In summary, our 2020 budget is highlighted by a significant reduction in capital.
Commitment to exercise capital discipline maintain strong liquidity generate free cash flow and remain intensely focused on further cost reductions and efficiency gains in this challenging commodity environment.
With that I'll turn the call over to Quintin for his comments.
Thank you, Dave and good morning, everyone as announced in our earnings release for 2020 Gulfports Board of Directors has approved capital budget of 285 to 310 million, which as Dave mentioned, we forecast will generate free cash flow at current strip prices at 2020 budget includes 265 to.
285 million of capital expenditures related to drilling and completion activities and approximately $20 million to $25 million of capital expenditures associated with leasehold activities.
This level of capital spend we forecast our 2024 year average daily production to be 1.1 to 1.5 1.15 billion cubic feet equivalent per day or Capex is down 50% year over year, we expect only a high teens decline rate production when compared to the prior year.
Looking at the first quarter due to the low level of activity during the fourth quarter of 2019, and our previously announced asset sales. We currently expect our first quarter production to average roughly 1.1 billion cubic feet equivalent per day.
With regard to realizations before the effect of hedges and including transportation cost, we expect our realized natural gas price to range from 70 cents to 80 cents per mcf be below Nymex prices in 2020.
We are forecasting and wider differential versus 2019 due to our decision to reduce activity, which results in periods. When our production falls below our firm transportation commitments, we hope to improve these realization three midstream optimization efforts, but are not reflecting these opportunities in our guidance. In addition, we expect to realize 30.
35% MW tie for natural gas liquids and $4 in 50 cents to five dollar discount the WT for oil for the full year 2020, which is in line with our fourth quarter 2019 differentiator differentials following the sale of our southern Louisiana assets.
Our realized prices continued to be supported by our strong hedge position and we currently have over 50% of art expected 2020 natural gas production hedged at $2.86 per MMP to you.
We estimate our 2020 hedge Burke book is worth approximately $180 million at current strip maintaining a strong strategic hedging program is an important element to supporting the long term economic development of our assets and we continue to look for ways to layer in additional hedges to support our realizations and cash flows.
In terms of cash expenses, we estimate ela, we need to be in the range of 14 cents to 16 cents per Mcf. The in 2020 slightly lower than the full year 2019 levels. We expect production taxes to be in the range of five cents to seven cents per mcf be a modest decline versus 2019 due to lower pricing environment.
Midstream gathering and processing is currently forecasted to be in the range of 55 cents to 60 cents per Mcf fee, which is roughly consistent with 2019 levels to provide further clarity into our cash cash cost structure, we have changed our methodology for DNA guidance going forward and providing guidance is total recurring DNA.
Including both cash and capitalize portions for the full year 2020, we are forecasting DNA to total 69 million to $74 million.
As previously previously disclosed in an effort to better align our cost structure in December of 19, we completed a workforce reduction representing approximately approximately 13% of our total head count.
As we continue through this year, we will look for ways to further optimize our cost structure, and then and reduce our total DNA burden and this challenging commodity price environment. We're turning over every stone trying to improve our cost structure.
Moving onto the balance sheet I want to reiterate our commitment to generating cash flow with a focus on not materially drawing our revolver and maintaining a strong liquidity position.
We believe maintaining adequate liquidity is highly important for us during this downturn.
It provides optionality to do things such as pursuing accretive PDP weighted acquisitions that good value or execute discounted bond repurchases among other things.
It also keeps the banks in our bank group in a relatively constructive place a secured leverage stays low from 2020, which is important as we're looking towards our spring redetermination in the extension of our revolver, which we will pursue later this year.
The downside to less aggressively slowing activity is that our leverage metrics will take up over time due to low gas prices and lower production.
However, we believe that we can manage this dynamic within our bank group, especially if our thesis of better gas prices in late 2020, and 2021 develops we will continue to stay aligned with our bank group as we believe actively managing these relationships and being transparent about our strategy and plans results in a better outcome for all involved.
We firmly believe that drilling through the trough depleting, our quality inventory and exhausting our liquidity to manage total leverage and dormant maintain production the wrong strategic and financial decision.
Liquidity is king in a downturn like this and acting as a good stewards of capital by exercising capital discipline. During a downturn is always a better answer and then drilling ahead and hoping for recovery in prices.
Before turning it over to Dave I want to address the material weakness unrelated third quarter restatement that was in our filings yesterday.
During the year end accounting review conducted by our new management team, including myself and our new controller and his staff, we identified an error related to the transfer of Unevaluated leasehold costs to the full cost pool amortization base.
As a result, certain leasehold costs were excluded from quarterly DNA calculations and full cost ceiling test in prior periods.
This is the legacy issue, but one that needs to be addressed based on this evaluation. We concluded that the air resulted from a material weakness in our internal controls over financial reporting and we probably develop the plan to remediate. This deficiency, which is discussed further in our form 10-K.
As a result, we restated our third quarter 2019 form 10-Q, we did not receive any other prior periods as the third quarter of 2019 was the only period, where this arrowhead immaterial impact.
Yes, it does not impact our proved reserves liquidity covenant compliance or other key metrics the drive consensus expectations, including adjusted EBITDA and cash flow from operations.
With that I'll turn the call back over to Dave for his closing remarks.
Thank you question from my perspective, I feel very good with the organizational changes we have made over the past several months, adding several highly qualified and talented individuals in key roles within the accounting Department.
Confident that the new leadership will improve our internal controls process and procedures going forward. These improvements coupled with the key additions to the senior leadership team mentioned earlier will result in a more effective and efficient company going forward.
Our new teams are always looking at all options to create value and improve our company and when combined with our high quality assets, we are positioned to bill long term value.
While the low natural gas prices, we see today are certainly a headwind for us and our peers. We firmly believe there will be better prices in the future, our 2020 outlook and financial plan to substantially reduce capital spend save inventory and maintain liquidity ensures gulfport is well positioned to enjoy the benefit.
As of a commodity rebound as it occurs.
Looking to 2021 based on the supply demand dynamics in the current market and the previous mentioned items. We have the view that gas prices will rebound to more rational levels as we move into next year. Considering this as we planned for 2021, we look to carry forward our commitment to continuing capital discipline targeting.
Cash flow generation and not focusing on production levels, but rather building our capital plan towards positive cash flow.
This concludes our prepared remarks, thank you again for joining us for our call today, and we look forward to answering your questions.
Operator, please open up the phone lines for questions from the participants.
Thank you the floor is now open for questions. If you would like to ask a question. Please press star one on your telephone keypad at this time.
And Tom indicate your line is in the question Q.
Press Star too if you would like to remove your question from the Q for participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys once again that star one to register questions. At this time. Our first question is coming from Neal Dingmann of Suntrust. Please go ahead.
Hi, Good morning, David T. My first question is on capital allocation, just looking you generate some nice free cash flow in fourth quarter and I'm, just wondering if you're able to keep cutting spending as you mentioned and driving the free cash flow. My question is.
How do you probably at prioritize allocation, especially when you look, but given where some of your bonds and and things are trying to that nature. Thank you.
Yes, thanks, Neil good morning.
As stating the obvious this is a pretty tough market.
For most in the business for small mid cap gas producers I'd say, it's particularly tough.
As Quintin said in his.
In his prepared remarks really liquidity balance sheet strength, our key for US we have the way I look at an all options on the table, we do have an approved.
Bond repurchase program, we look at that and we'll continue to look at that.
In terms of capital allocation within the business, we clearly want to spend within cash flow. We took the position this year as the shoulder winter change from what we were expecting.
And this thing called Corona virus, starting to impact the demand side. We took the view that we should have a budget that was a combination of our hedge book and the strip, we actually think that the second half of the year will be better than strip for supply fundamentals, but we took the conservative view to.
Live within cash flow and so thats kind of what we've done.
As you know when we spoke at Pryor times, I really wanted to get a more ratable spend in our capital program through the year. Unfortunately, the way that the external factors have moved we've kind of had to give away with that and Donnie and his team will have most of the capital spent before the middle of the year, So that's kind of where.
We are I was hoping to be a little more ratable between the two basins.
But again, we're responding to where the market is but simple answer keep all options open keep flexibility here keep liquidity youre kind of keys for us.
Okay, Great and then just my second question just on the slowdown in activity could you just talk about any any potential holding acreage or just talked about leasing if you would thank you.
Yes. So so good question have good core positions in our two basins. There is a small amount of dollars in the budget too.
Keep some key leases as you know in this game longer laterals is better in your core areas. So there are some leases that we have that help promote that and so there's a little bit of capital in there, but other than that because there's no real attention on that at all.
Great. Thanks, so much.
Thanks Neil.
Thank you. Our next question is coming from Holly Stewart of Scotia, Howard Weil. Please go ahead.
Good morning, gentlemen, just again.
Okay.
Dave any color you can provide on the the future cost reduction opportunities I know you mentioned it both in the in the release and then and you're right. In your presentation includes vendors as service providers as well as midstream Counterparties.
Yes, so so Holly I think certainly given the market that we're in cost cutting is really important in.
Clinton then his new team are very very focused on that and I would say that theres opportunities here I think there's opportunities to deal with a midstream providers as well so far.
For us it's another scrubbed through everything.
How much when you've got low levels of activity is a little bit tough.
But but we're looking at everything to cut costs out of our business.
Okay, Great and then maybe Clinton could you provide the well cost assumption numbers that are in the Tony Tony guidance for both the scoop in the Utica.
Yeah, actually I think danis better suited to answer that Holly Moness Donny.
What we're looking at for Utica, we're targeting for drilling and completion only about 770 870 per lateral foot.
That kind of compares to the best Wells, we did last year of about 50 in the Utica DNC only scoop. Thanks, as Dave mentioned it in his prepared remarks continued to see those days come down around 40 days now.
Scott, we're targeting around 1200 1300 per lateral foot.
So I think we're very focused on that as Dave said were.
We're going to be out capital spend here very shortly so it's not a lot left in front of US we're really focused now on elderly and things like that to drive our driver costs down.
Donnie what were the 2019 too.
2019, Scoop was about 12, the best wells in the Scoop oil 50, I believe it was.
And our range now that we're targeting is about 12 to 13.
Okay, Great and then just maybe one more if I could on a from a macro standpoint, I know you guys Didnt.
Or had a very front end loaded program in a in the Utica last year and it sounds like there's some unplanned downtime on a gathering system out there as of late but can you just maybe talk about what you're seeing in the basin. It seems like production is it's off really materially over the last few months in the Utica.
Yes, so if we look.
On the macro gas supply I think round November time, we're starting to come down and we were actually feeling pretty good on the supply demand balance occurring until we got into this unusually warm.
Shoulder to the winter season, and then added complications of Corona virus. So I think on the supply side, we're feeling pretty good we were hoping to.
Bolster our hedge book based on what we thought was going to happen at the back half of the winter.
What we're seeing now with other operators, including US cutting capital is we seeing several of the key basins Permian accepted where the number of drilling rigs and the number of Dol is being spent is pretty close to maintenance. So below maintenance. So I would expect the trend of declining supply to continue.
New.
And as you know if you're not got a well drilled by June it's not going to contribute to production in the year. It takes about six months on average for everybody to do this so I can see a situation where the second half of the year is going to see a supply continuing to fall and we've got likely to see price improve.
So whilst our budget doesn't reflect that improvement we believe that we could exit the year to 60, plus in terms of gas price and I think that sets up 21 being a lot better so the macro even with this first half of the year being an issue I think is a better situated so.
We just decided to take the conservative view when in both our unique or an astute programs and as Quintin highlighted just very much focused on keeping liquidity and flexibility. So that that's what we see it that's how we look at it.
Great I appreciate the comments.
Thank you Hello.
Thank you [laughter] coming from Jason Wangler of Imperial capital. Please go ahead.
Hey, good morning.
Wanted to ask you mentioned, obviously about the your differentials and having some firm transport.
Commitments that maybe you guys want me can you maybe talk about kind of the level of that and then I think it kind of rolled into maybe something you were talking about with the maybe buying some PDP assets, how that might be able to kind of help you out with that situation this year and going forward.
Yes, most of the shortfall is really in the scoop this year.
And it's not a huge amount.
In the Utica in particular, we there's a few months this year, we fall slightly below the 50 committed to that in his script there is.
Most of the year, we're going to be well below it.
On a dollar basis, our differentials or a firm transport cost in the scoop are cheaper than they are in the Utica, which is a good thing when we're falling short and the scoop.
Your point on Amazon or Andy is well taken.
We have seen opportunities and.
The scoop in particular mid con where transactions of happen at very very low valuations things that would be.
Our balance sheet accretive to us when we can use our balance sheet to buy things that could be financed primarily with the revolver.
And improve our leverage profile and also allow us to meet our ft commitments, a little better so that is something we look at.
No I wouldnt comment on anything specific but obviously when there's a downturn like this is is when you can create value by.
Moving on.
Opportunities to buy things very cheaply. So it is something we're looking at but we're always focused on maintaining a strong balance sheet. So anything we would do in regards to M&A Randy when would also be.
Making sure that it doesn't impair or or make our balance sheet any worse than it currently is.
Okay, I appreciate that and maybe.
Maybe still for your question I think David mentioned that you guys had a basket for the bond repurchases is there a number that you have handy that at that level of what you guys can purchase at this time or is there or is that move around or how does that work.
It's always a balance right I mean as I mentioned in his prepared remarks, maintaining strong liquidity gives us optionality and flexibility going forward.
And eight at depressed environment like this.
Barring your revolver in a material fashion is just not a smart thing to be doing so.
We're fortunate that were not drawn hardly at all right now and we're not expecting to be drawn much on a revolver through the year and that was one of the primary reasons, we set our budget, so low which gives us optionality and look at things like PDP discounted acquisition Vanore bond repurchases at deep discount so.
I wouldn't comment on a number but we will continue to evaluate that just as David mentioned earlier. It is an opportunity for us we would weigh that.
With other opportunities and what it does to our liquidity situation.
I appreciate it thank you.
Thank you. Our next question is coming from Jane Sanco of Stifel. Please go ahead.
Good morning, all and Ah Thanks for taking my questions.
First on those on a friendship. Thank you one clause or just trying to understand conceptually how we should.
I think a about goal with medium term production outlook is there for ones like Ah well golf board would need to maintain and grow EBITDA to maintain leverage metrics and how ft portfolio plays into that equation.
Yes, Jane I think 2021 looks so long way away right now I would say that.
I think as I would.
Reiterate my macro comments I think supply continuing to drop I think we're going to get a good look at storage levels likely at the end of the year around mid year.
I think if those are at a range where prices move I think it'll set up 21 quite nicely.
We have a belief that 21 pricing will be better on average than what 20 is and so part of the.
Influence in taking these steps in our budget and activity for this year is anticipation of that.
And so if you can see a to 65 to 75 kind of number for next year. Then 21 will look somewhat like our activity levels in 19, and not looked like all levels. In 20. So 20 looks like it's a bridge between what took place in 19, and what we see as potentially going to happen in 2000.
We want if the other thing happens in gas prices are where they are now in 21, I think theres a whole bunch of fundamental issues that will be present.
Rather than supply demand fundamentals and I think we have to evaluate that much closer to understanding what those were so that's the way I'd look at it.
Okay. Thank you so much and then the second question is on the revolver and Oh, the upcoming Erie determination Susan.
What's your current expectations for the put for they've all been day determination season.
Yes.
In very active in our dialogue with our lead banks in our revolver.
Roop as we've gone through this budget.
Review and kind of.
Process and.
Pretty clear to me as a gas weighted company that took the price deck is alright, thanks are coming down significantly from where they were in the fall and there is going to be a lot of a lot more stress on a lot of companies.
As it relates to borrowing bases in the spring redetermination, especially gas weighted companies.
Again, we are lightly drawn so we.
If there is a reduction in our borrowing base our commitment level. It won't be anything that has any kind of a material impact on our.
Liquidity at will and we'll impacted I guess, but but sense for lightly drawn it doesn't have a.
It doesn't really hurt us as much as and when someone else it might be 50, or 60 or 70% drawn on the revolver. So.
This is one of the key things that we're focused on and why our budget is.
It's structured as it is so we can so we don't need to rely on the revolver because banks are skittish right now, especially with gas weighted small cap names and we.
I want to make sure that we're in a comfortable position as it relates to our borrowings under our revolver and this downturn.
Got it thank you so much.
Thank you Jay.
Thank you our final.
Coming from done Mackintosh of Johnson Rice. Please go ahead.
One David.
Your question.
On slide four you talk about how do you expect to generate free cash, but have minimal reliance on the revolver for the 2020 activity. Just wondering if you can kind of help me understand that it when you say minimal reliance are you referring to kind of the 120 that you already have drawn or you think you want to draw a little bit at some point, just just trying to figure that Steve it's out.
Yes.
Yes, and our program as was mentioned earlier is very front half loaded. So we will draw the revolver. Some through June timeframe, and then the second half a year, we'll pay it down and if our thesis of higher gas prices in the second half the year sets up to be true, we'll pay down more than what we're currently projecting understood, but under a script scenario.
Through the year, we're roughly neutral to slightly positive cash flow.
Don't have any material draw on the revolver by the end of the year hopefully we'll have about similar to what we had at the end of 19, we're projecting to have similar amounts drawn at the end of a 20.
Apps and recovery and prices recovering prices happens it'll be less strong.
Okay. Thanks said upfront and then.
Of course address asked already thank you.
Thanks I appreciate it.
Thank you at this time I would like.
Mr would for closing comments.
Operator. Thank you. We appreciate everyone's time today and how should you have any questions. Please don't hesitate to reach out to our Investor Relations Group. This concludes our call. Thank you.
Ladies and gentlemen, thank you for your participation. This concludes today's event you may disconnect your lines and walk off the webcast at this time and have a wonderful day.
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