Q4 2019 Earnings Call
Ladies and gentlemen, todays conference is scheduled to begin shortly please continue to standby. Thank you for your patience.
[music].
This I'm all participants' lines are in listen only mode.
After the speakers presentation, there will be a question and answer session.
Last question during the session you will need a press star one on your telephone.
Please be advised the todays conference is being recorded if you require any further assistance. Please press star zero.
I'd now like to hand the call.
Your speaker today Mr. Scott Landrus.
Senior Vice director of Finance and Investor Relations. Thank you. Please go ahead.
Thanks, Daniel Good morning, everyone and welcome to Bonanza Creeks fourth quarter 2019 earnings conference call and webcast.
On the call. This morning, I am joined by Air Gregory President and CEO, Brad to move Executive Vice President and Chief Financial Officer, and other members of the senior management team.
Yesterday, we issued our earnings press release and posted Investor presentation to our website and filed our 10-K with the FCC. This morning.
All of which can be found on the Investor Relations section or website. Some of the slides in the February investor presentation will be reference during our prepared remarks. This morning.
Please be aware that our remarks will include forward looking statements that are subject to many risks.
Uncertainties that could cause actual results to differ materially from these statements.
You should read our full disclosures regarding forward looking statements contained in our 10-K and other asixty filings.
So during this call we will refer to certain non-GAAP financial measures because we believe there good metrics to use in evaluating performance reconciliations of these measures to the most directly comparable GAAP measures are contained in our earnings release and Investor presentation.
We will start the call with prepared remarks, and then move to QNX now I would like to turn the call over the air Gregor President and CEO Eric.
Thanks, Scott Good morning, everyone and thank you for joining us for a fourth quarter and full year 2019 earnings call.
We appreciate your time and interest in Bonanza Creek.
As with previous calls we will keep our prepared remarks short in order to leave plenty of time for killing it.
The company had a successful 2019 I would like to quickly share a few highlights and thank the Bonanza Creek team and our shareholders for their support.
Our Fourq results came in as expected and were largely pre release last month. So I won't spend time reviewing those unless there are questions during Q and I.
As for highlights from the year.
We saw average production grew up 48%, which led to topline revenue growth despite a weaker commodity price.
On the cost side of the business.
We continue to deliver efficiencies that further expanded our margin.
EBITDA for the year was $204 million on a $222 million Capex program.
Well, we had a cash flow deficit of approximately $18 million for the year, we're actually free cash flow neutral in the second half of 2019.
Operationally, we continue to report encouraging well results in 2019.
In late 2018, we turned to sales the pronghorn be 28 pad and our eastern legacy acreage that reached peak rates in 2019 and greatly exceeded our type curve expectations.
We also brought online the whitetail well in our northern acreage, which we believe continues to demonstrate potential value that reservoir.
Slide 11 of our Investor Relations presentation.
The oil production from these wells over the first 12 months relative to our legacy East type curve.
To this slide we also added production results from offset wells operated by others that further demonstrate the improved well results that come with modern completion designs applied to our legacies and northern acreage.
With regard to a rocky mountain infrastructure the company benefited from multiple delivery points in 2019.
These delivery points provide flexibility that when combined with consistent low line pressures help minimize can production constraints and maximize well productivity.
We also constructed a new oil gathering system in the second half of the year, that's significantly reduced our use of truck hauling which in turn reduces truck traffic emissions and weather related risks, while also improving I realized oil price.
In 2019, we came in at the high end of our original production guidance below the original Capex guidance range and below the original Ela, we guidance range.
Cash DNA and or am I on Opex were also both within the guidance ranges, we sat at the beginning of the year.
Throughout the year, we updated guidance as we outperformed these metrics and we met or beat most recent guidance.
I want to thank the team here Bonanza Creek for helping to deliver these results.
Finally, before opening up the line for Q1, I would like to speak to the guidance for 2020 that we issued last month.
Despite the challenging headlines we're excited about the prospects for the year ahead.
Our expectation for 2020 is to grow average production by 17% at the guidance midpoint with Capex that was essentially flat to 2019.
Our capex guidance of 215 million to $235 million includes $10 million to $15 million for the start up of drilling in French Lake.
Our Ela, we guidance of $2.75 to $3 per BOE easy compares to full year 2019 Ali we have $2.95 per B. Riley.
Cash DNA trended down in each quarter of 2019, and our 2020 guidance of $29 million to $32 million compares to full year 2019 result of $32 million.
We also provided 2020 guidance through our on my operating expenses, which will include a full year of operating the all gathering system.
So those increases are offset by the improved oil differential expressed in our board all or 35 cents, a $4, 85% set guidance range as well as improvements to the on my revenue line.
We expect our production growth in 2020 to be weighted toward the second half of the year.
With one Q being flat to Fourq, you 19 on the production side and Capex during 2020, well be weighted to the first half of the year with one Q, representing the highest spending quarter.
With that I will turn the call back to the operator for Q and <unk>.
As a reminder to ask a question you will need to press star one on your telephone.
For all your question press the pound Keith please standby well, we can pollick una roster.
Our first question comes from Wells, Patrick with Suntrust. Your line is now.
Hey, good morning.
Oh, Hi, wells how are Ya.
Well you know, okay, all things [laughter].
But no everything's good.
Question on on on French like I mean.
Obviously, it's a big part of the 21 plan.
Any chance you know any update from the operator, there and I know, it's a long shop in any chances. They rationalize their portfolio that you guys might be able to to take that in house to to the purchase that from that.
That's a great question wells and we we worked very closely with our joint development partner very frequent a partner meetings and we have these conversations.
Yeah, what I, what I can tell you is it at this point both sides are really excited about developing the asset and you know as as with you know that the the prior owners prior to that to the merger of our of our partner.
With another partner [laughter].
We continue to be really encouraged by not only the demonstrated reservoir performance, but what we can do together.
On this largely undeveloped highquality oil reservoir in Wattenberg. So I would say that you know why were eager to get started and we're certainly.
Excited about the quality of the reservoir and would be.
Very interested in acquiring the interest and taking 100% an operated position I don't know that that's in the cards right. Now we continue to work on that and that would be I think a nice win.
On the other the other side feels the same way about the potential the reservoir and I think it represents a fair part of their ongoing development program 2021 and beyond so.
From that perspective, I don't know that they're willing to to sell it.
Okay, Okay that makes that makes sense.
And then I know you guys are close to it.
You know my interpretation is that's the most recent Colorado rising push for these banks was kinda met with solid I mean, it seemed like it was on page six of the Denver post domain.
I guess with everything else going on it kind of sex oxygen out of the room is is that is that correct interpretation of what it feels like on the ground, Dan and potentially with the industry is responsible to.
Yes, certainly doesn't help but I don't know that there that there really meaningful in terms of the kind of support they're going to garner.
With that to be 181, now being the law. The land you know the operators are working really hard now that we've got a set of.
Kind of a an understanding on the on the set of rules and honestly the C or D. Ccs working really hard to build those rules to professionalize The commission and really caught up by some of what has now law into operating rules.
I don't expect that.
On the environmental activists like Colorado rising are going to make a lot of headway. This year in terms of gaining gaining support except from the most extreme.
Side of their of their base simply because it hasn't we haven't had enough time and frankly the administration. The general Assembly the operators themselves in the industry. Just haven't had enough time to demonstrate what SP want anyone can do in terms of improving.
The relationships and a.
Surface culture, and regulatory environment, So I think everybody.
Everyone I've talked to on both sides has said you got to give us some time to make this work it's too soon to be pushing for more more ballot measures and it kind of the kind of appears best I can tell is a little bit disingenuous, because it no longer resonates as.
A sincere interest to improve circumstances.
As much as it it resonates as you know on insincere effort, because you know it hasn't given the long time to take effect.
Yeah makes sense it seems kind of silly for them to go back to the setback well, especially when there was a statewide vote on that of course.
Thank you guys for the top.
Well, thank you Beth.
Thank you. Our next question comes from Mike Ski all with Stifel. Your line is now open.
[noise] anymore, Eric maybe just a follow up on the the last question.
With the rule, making process how is that [noise].
Going and in terms of piece of permitting any.
Anticipated changes there once the rules get in place in the commission.
Gets fully staffed in any permits are in particular that you're waiting on.
Yeah, that's a great question, Mike and you know I would say that job.
You know the rules are underway and all of that work that has to be done in writing and gathering stakeholder support.
By the staff.
At the CEO GCC and you know.
Other kind of adjacent organizations they lean on and work with that's taking a lot of bandwidth from the C O GCC and I I think they obviously, it's a high priority.
And the fact that that rulemaking is taking time. It also has resulted in a little bit of up.
A resource constraint at the C O GCC and.
Dr. Robbins recognize this early on he knew it was going to take time to write the rules and that's why he established a the directors objective criteria, which kinda creates this to track process. If the if the permit has kind of nothing to see here, it's rural maybe a re occupying and existing surface location or you have all the rights of way.
In connecting to assist them.
It gets fast tracked and the alternative to that as if you're in a county like like Boulder, a brownfield or what have you. Your trip. These objective criteria. The problem as you know if you combine the rulemaking and the time that takes from staff.
And the objective criteria in the time it takes to analyze.
The the applications.
It has slowed down permit approval Theres just no question about that but all the active operators have you know that have good.
Regular meetings and I'll just speak on behalf of Bonanza Creek, we have we have monthly prioritization meetings with the C. O GCC staff, where they ask US what are your highest priority is what are you waiting on what are you concerned about so that we can apply our limited resources to the right.
Pads and wells in areas and that has worked pretty well.
So that's all we don't have anything we're waiting on right now per se, but the pace of of permit outputs and approvals has slowed I don't think that's going to carry on forever because as soon as the the CEO GCC gets the rules in place I think the more streamlined our permit approval process that will.
Replace the now objective criteria and all the rule, making efforts that will allow a lot more resources to flow back into analyzing and and working with the operators on on the new permit so.
That's a lot that's a lot, but what I can say is right now I think we're kind of as an industry.
Slowed down a little bit we're not waiting on anything.
But the pace of approvals has slowed and I expect that it will speed back up again as the rules are are built and we move back into a more steady state condition.
Hi, Thanks for that detail I guess, an obvious one given.
What's happening with oil prices.
Say oil.
Falls to 40 and looks like it's gonna stay there for the majority of this year.
How would the plan change under that scenario or would it change.
Yeah. It we preserve a lot of flexibility, we we build our development programs and we build our capital commitments structures around around flexibility.
I talked a lot about the flexibility that are on my provides us with multiple delivery points multiple gas processors 11, interconnects multiple oil oil connection we take the same approach to Optionality. When we talk about our capital program. So we don't have any nvcs that are that are not already satisfied for years out.
Ahead of us in terms of a banking provision, we don't have acreage expirees that debris than downturn DAC and we don't have capital commitments, either with horsepower or drilling rigs that limit our ability to ramp up or ramp down in the case of the current environment ramp down and so preserving that.
Optionality really gives us comfort you know, we're watching the prompt and it and it obviously, it's it's wildly volatile.
And we're watching the strip and we continue to run.
As we've talked about in the past we run our proprietary economic optimization on real time revenue projections real time, well performance projections and real time cost models and so as all of those things continue to run through kind on hour by hour basis through our through optimization models.
We'll high grade, where we go into development program and the the orientation toward return is going to forced us to make decision and those decisions are going to be dictated by.
Five by returns and by the.
The model projections I can tell you we have a lot of flexibility, Mike and that's really good with there we're not gonna have to spend dollar that we don't decide the stat.
That's good to hear.
Thanks, Eric.
Thank you Mike.
Thank you as a reminder, ladies and gentlemen that star doesn't want to ask a question.
Our next question comes from Irene Haas with Imperial capital. Your line is now.
Yes, I have two questions firstly looking at the PV 10 calculation from filing I saw a huge improvement in both production and development cost estimate and really significant can you kind of comment on this.
And is the kind of cost structure that can be maintained a number to looking at 22, when the which is a very volatile year list, probably a lot of distressed companies around do you guys have to appetite to actually go out there and do a little bottom feeding considering that you have currency, India share price is not single digit.
Just want to check you know how you feel about this.
Thanks, Irene so on a on PDP and particularly the one p. reserves.
We're really pleased with this you know it it's a it's a tough environment and.
20, 2019 related to 2018.
The the price file retreated by more than 15% and.
You know despite that we still managed to grow our one p. reserves and we managed to grow our PDP and.
I think that that really as an indication that the businesses working across the board. It I think the development costs on on the Capex and well performance side clearly, it's working both in terms of well performance and in particular in terms of oil efficiency.
Honestly, you are or on a on a per thousand foot basis.
But also you think about just just rates and the way where we're driving.
Better early time oil performance through the combination of artificial lift optimization better more contemporary stimulation designs that are we think improving well performance and again in particular oil performance.
So despite a 15% retreat in prices 19 from 18, we managed to grow the reserves by 4% and at the same time also kind of maintain as much as we could PV 10.
While we lost some value in PV 10, it was it was.
Not as much as the price would have suggested so so again I think that suggest.
The business is working pretty well clearly quarter over quarter cost continued to improve.
Good day costs on a unit basis and on absolute basis as well as on Opex. Both are a mine Ellie those are all sustainable we're going to keep working on him, but but we haven't done anything.
So today that that in pairs or hurts, our ability to continue to perform in the future. So you can continue to see.
Incremental and and sequential progress on on all of those dimensions as we apply more and more technology in the ground and on the surface for efficiencies.
With regard to M&A, Yeah, we're absolutely.
Yes, it out.
Maintaining an active posture.
It is really hard given given valuations and the rate of change.
With regard to both oil price and also valuations makes it makes it really tough because it's hard to pin data evaluation upon which you can transact.
But you're right. It is creating a lot of opportunities and we have a good balance sheet and we have good performance at a strong team that we think gives us some advantage on.
Some acreage, particularly when it when it.
You know allows us to sort of benefit from fixed cost absorption and really drive synergies, whether industrial logic synergies or synergies related to.
Costs and people.
So we're in the market we have the appetite we have the public currency, although you know our valuation.
You know means.
It's a little bit more difficult you know, we won't we won't go out and do something that that implies a value on someone else that we're not getting for Ireland for our own assets one of the things, we're really proud of Irene as that we've we've been patient.
For two years and that patients has paid off that's allowed us to focus on blocking and tackling on maximizing the value of the acreage we already own and really focus on kind of three quarter cycle performance without going out and and buying new acreage, but we are absolutely in the market and we also have an appetite.
We just have to make sure we're not we're not going to do anything silly, we're not going to pay too much.
And then when we think about scale, we think about cash flow. So we're very oriented toward.
Business improvement focus efficiencies and cash flow.
Okay. So sounds like it the right opportunity arrived and the math works you do have the capacity for this that's exactly right I mean, thank you great. Thanks.
Thank you and our next question comes from Old works with Coker and Palmer. Your line is now.
Good morning.
No.
Hi, just had a couple questions.
I'm not the slides you updated the production curves for.
The from corn.
And I mean, whitetail well and.
I remember a month ago they were outperforming the.
The type curve I, just wondered when you Didnt reserves this year Gary your engineered.
Give you any credit for <unk>.
<unk> improvements in those areas.
Did we absolutely got Scott, it's got some positive uplift with regard to.
Our recent well performance not only in these areas, but across other parts of the acreage so.
I think because these have been on long enough and have demonstrated in a real way.
Whether you're talking about side, you implied flowing bottom hole pressures or rates relative to.
You know expected performance, we've definitely gotten an uplift so I think you'll see the performance on a cost and well well performance flowing through the the one p. reserves.
Okay can you give sort of a ballpark maybe what's your take on improving you've got to view ours or.
A ballpark on improvement any you ours I I'll tell you know left we we just went through the reserves process and then we updated the deck.
I don't think we changed our.
Area by area.
Type curves. So when you go to slide 12.
What we think is a legacy central French Lake legacy Eastern legacy West.
Well, we've got a you know some improvement in particularly in in and around the northern block and around the B 28, we like to be we'd like to be pretty.
Pretty conservative in terms of how we generate these type curves. So we last slide 12 unchanged.
Certainly the performance flows through.
And in terms of our.
One p. reserves performance there were.
I see.
Yeah, I see a 1.4 million BLE improvement in.
Pud revisions and also a substantial PDP revision as well so so both existing wells that were online.
Saw an upward revision in terms of volumes and this was corrected for that for the 2019 price as well.
As did as did our puds. So we're definitely seeing it flow through I just wanted to point out that while we're we're updating the.
The actual performance slide for the northern block and B 28, we didnt make changes to our type curves because we'd like to we'd like to keep those you know more.
A little bit more conservative, but give you some leading indication of where they might be going.
Great Fannie and <unk>.
Thank you also bunker.
Looking ahead and 65 year rule.
You are assuming any.
Any trend at all in and service cost going forward, you know flat down or inflation.
Well, we thought we certainly saw some improvements in our 2019, one p. reserves performance related to costs in terms of the five year future. Those we think those are probably.
Flat to down.
But we had we had two significant upward revisions in our warranty reserves, we had a significant upward revision in PV 10 related to the oil gathering pipeline and you can imagine you can imagine that that.
Pretty dramatically improves to the basis differential the economics of that.
The lumpy reserves, we also saw pretty significant improvement as a result of we did three rounds of RFP is leading up to about Christmas time, we're continuing to put to to refresh those RFP is in today's environment, and so I would say flat to down over the five year.
Period is very reasonable today, given what what we're seeing right now in the strip and no. This is Brad keep in mind.
Our reserve reports based on a four year program at a five year program.
Oh, great. Thanks for clarifying that.
And just last one you know yeah.
If we turned out.
Taking a little bit more bullish since we get passed the Corona light or sorry, maybe OPEC keeps them production disciplined.
You know I'm looking ahead supposedly.
Prices go up nicely I suppose we got 60 for for a while how long.
How much higher.
Thanks, I guess kiffin cruise assets.
Is available in the DJ at this point I mean, just I guess in terms of.
What could the industry realistically put off as far as.
Additional rigs and I don't know six month period or a one year period sort of best case, we should think.
I I'm not entirely sure I understand the question no.
But I think you are asking if if oil prices.
Gain some support and perhaps T.I.s around $60, what kinda development do we expect on the whole and in and around DJ.
Well I was thinking has the practical matter for adding rigs as you know as you from as.
You know the trend has been down for so long.
Are there are the rig more importantly are there other crudes, so that even in a best case scenario you would.
Yes, it would be really able to Greg I'm, assuming it couldn't happen too fast I just wondered.
What you thought about that yeah, I I I can tell you from Bonanza creeks perspective, we really like operating in inefficiency channels, and we think a one rig level loaded.
Program offers us a great deal of flexibility.
And you can.
Slow down you can gap out the programs was not quite as level, but you maintained the efficiencies because you keep the whole spread together.
And the same is true on the on the Frac side. So you know you you when things are a little slower like they are today you can gap it out.
And you still you still have the the economies of scale around.
Stockpiling and big pads and that sort of thing.
But when when things heat up and I think hypothetically $60 a barrel T I would.
Probably still lend itself to.
Fast fully leveled.
One rig program and fully utilized one frac crew program for US I think it we've got a we've got to see something perhaps a little a little higher than that to dive into the second channel, which would be you know a fractional rig or even even a full time level loaded second second rig and the reason for that.
It is where we just we think you know right now we're fully anticipating French lake.
In here here, we are talking about Q4, but even even if under the circumstances with commodity price the way, it's moving around that happens to be in early 21.
We're running half a net rig there on the non off program and we're running a full gross operated rig or on our own legacy, which gives us a great deal of flexibility in how much how many wells, we can spud and turn to production.
I think this range of where we are today up to 60, it's still a one rig operated program just it's a matter of how how how much you gap it out between locations or how much you really put the calls too.
Accelerating that.
That one rig.
Okay, great. Thanks, a lot.
Thank you know.
Thank you once again, ladies and gentlemen, if he would like to ask the question.
Sorry.
Our next question comes from Mike Yellow Stifel. Your line is now.
[noise] here just a follow on your last thoughts there. If you say looking ahead, a religious put your 2020 played out some but looking at a 21, if you stay at the.
One operator rig will not off.
What does assuming you have a bus a decent $50 oil price or thereabouts.
What a kind of growth would you anticipate for 21 and is there an inflection point there or I know you've had some free cash flow at times here do you get to a sustainable free cash flow level at some point and 21 or is that further up.
Yeah, I think 21 is going to be 21 is going to be pretty challenging I mean, if we're if we're talking about the current.
Pace of development that that that we are involved in today.
And let's say, we let's say the price stabilizes and we don't we don't exercise options to slow down this one and a half.
Just wanted to half rig program that we've talked about over the next couple of years.
You know, we definitely have to draw on the revolver and spend a access capex in 21.
And then you know because that's primarily a drilling program with with.
Completions lagging by perhaps six months.
And then you're spending completions dollars that don't have revenue associated with them until about 22 now 2022 as the as the revenues start flowing out of French Lake.
Those lines Cros, and then in 22022 and into 2023.
You do just quite the opposite you know the revenues and the cash flow overwhelmed the Capex and then moving forward from there.
Company clearly paying back.
The RBL and then generating.
Unlevered free cash flow you basically from that point forward as we continue to operate that level loaded program.
That's all model that strep and so.
Well stripped from you know maybe 10 days ago. So we feel really good about the about the robustness of that program.
And you know what we really like the fact that French like is absolutely excellent rock and it's a great. We have great operating partnership there.
And if it starts in early 2001, instead of Q4 of of 20, we're fine with that because the truth is we've got a great operated program with a ton of flexibility to ramp up or ramp down and smooth this out but you know even at.
Even with low fiftys kind of price strip out for a number of years.
Our our leverage ratio still you know, even even under kind of a $50 flat price file we're still less than a turn of leverage even at its peak and so this is this is a really.
Really robust program and that doesn't contemplate button on the calm in terms of efficiencies, which I think we've built a track record of creating.
So we feel pretty good about it but but we because you can't see the future we preserve the optionality and flexibility on what the capital side and elsewhere in the program to to pivot hard if we need to.
And on the growth side is that still kind of mid teens growth should be looking at for the next couple of years.
Yeah, I think it's not going to yeah go ahead I would classify it.
Mike is as modest growth I don't know, if we want to refine it to a specific.
Number yet yeah, I I think it's a you know where we stand today brands exactly right mid teens is probably the best the best thing we could say you now for.
You know, we're talking about 17% 20 over 19.
And you know that same kind of progression until you get a little bit more of the of the French like slug of production contributing so 2022 and three.
That starts to happen.
So 20 and 21 I think you can look for.
Mid mid teens is probably a reasonable thing to sort of expect.
Okay, and then just one last one for me.
You bet does the.
Oil mix change much for you this year at all and if so how do you see that played out.
We we I think we actually guided 57% to 60% and we feel pretty good about that range.
It really does it really does depend on you know on any given quarter it depends on.
The number of pads, we've turned to sales in the previous quarter or two and the reason for that as you know.
You understand and we've talked about this as well in the past.
DJ is a solution gas drive environments. So when you put when you put wells on production, particularly in the oil prone rock like ours.
If you manage the reservoir pressure well you can coax a lot more oil out early in the curve, which we do and that that holds back the gas, but but eventually as you drawdown the S. RV.
Naturally you're going to get closer to the vapor pressure the of the fluid.
With the bubble point, and then you'll start to see the Geo our come up naturally that's happening on all the wells, we've put to sales and as you build a larger and larger base inventory.
More and more of those wells are going up in JLR. So it gets a little bit harder for the for the pads that you turn on to move that ever growing base. That's growing NGL are so I think what you're going to see is less volatility in our in our oil cut.
And it's going to its going to kind of continue to converge in this 57% to 60% range kind of high Fiftys if you like.
Got it thank you very much yeah. Thanks, Mike.
Thank you and our next question as a follow up from Welles Fitzpatrick with Suntrust. Your line is now open.
Hey, guys. Thanks for let me hop back on obviously, a lot of lot of talk on M&A and whatnot and the basin, but what about you know the there's there's lot of private equity backed guys. It might be a little bit below critical mass on the midstream side, what what about any kind of roll up of those types of systems at my.
Involve RMR high is is a below the low commodity environment is that is put in any pressure on on moves like that.
It is it is wells.
It's creating opportunities, but it's also creating paralysis as you can imagine when things move this fast.
The the gathering companies and midstream or.
Look around and say you know maybe there are opportunities to buy systems like our ally and take advantage of the difference in the in the two multiples, which we could benefit from as well we were not interested in a sale lease back something that will hurt our upstream business.
With with with fees.
And we think our balance sheet allows us to be patient in that regard, but there are opportunities I think in something we've we've given a little thought too which is participating in something that that really creates scale and true economic efficiencies on the gathering and midstream along.
The eastern flank.
Yes again the problem really is you know midstream or is are looking at their their inch miles of pipe capacity and then they're looking at distress in the MP business and they're trying to forecast how is that stress going to play through in terms of volumes and fees rent fee revenue for them.
And that that contributes to paralysis on their side, because they because they're not sure how to how to model. It on the other side Theres huge opportunity, particularly if you think about RM Ais a wholly owned entity within within Bonanza Creek.
And the fact that we could probably unlock some value there and there are others like us. So we continue to have those conversations, but again I think the strength of our balance sheet and the patients of of our.
Leadership team and our board.
Gives us gives us time.
To really make good decisions.
In an environment, where they're going to be lots of opportunities I think.
Okay, No makes sense, it's a it's a unique advantage. Thanks for let me back on Yeah, you bet well thanks.
Thank you, ladies and gentlemen, clues or question and answer session.
I would now like to turn the call back over to Eric Berger for any closing remarks.
Yeah. Thank you operator, and thanks again for everyone joining the call and your interest in Bonanza Creek mine.
I just want to remind you know those who will be unveil early this week at credit Suisse 20, Fiveth annual energy summit will be there, we'd love to we'd love to have conversations whether you end up.
Well look forward to see any of that thank you.
Ladies and gentlemen, this concludes todays conference call. Thank you for participating you may now disconnect.
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