Q2 2020 Murphy Oil Corp Earnings Call
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Good morning, ladies and gentlemen, and welcome to the Murphy Oil Corporation second quarter 2020 earnings Conference call.
At anytime during the call you require assistance. Please press star zero for any operator.
I'd now like turn the conference over to Kelly with these vice President.
Investor Relations and communications. Please go ahead.
Good morning, everyone and thank you for joining us on our second quarter earnings call today, joining us as Roger Jenkins, President Chief Executive Officer, David Looney, Executive Vice President and Chief Financial Officer, and Eric Hambly Executive Vice President operations. Please refer to the informational slides, we have placed on the Investor Relations section of our.
Websites as you follow along with our webcast today throughout today's call production numbers reserves and financial amounts are adjusted to exclude non controlling interests in the Gulf of Mexico.
Please keep in mind that some of the comments made during this call will be considered forward looking statements as defined in the private Securities Litigation Reform Act of 1995 as such no assurances can be given that these events will occur or that the projections will be a change a variety of factors may access that caused these results to differ.
For further discussions of risk factors see Murphy's 2019 annual report on form 10-K on file with the FCC Murphy takes no duty to publicly update or revise any forward looking statements I will now turn the call over to Roger Jenkins. Thank you Kelly good morning, everyone and thanks for listening to our call today slide.
To look at where Murphy stands after the second quarter water quarter. It was I'm sure. We can all agree there's not typical or company swiftly took multiple actions to ensure that when we emerged from the downturn will be a more resilient company.
Rapidly produced or capital spending for 2020 in it and then our long range plan as you look to the longer term, we will deliver a flatter all weighted production profile, what's the goal of reducing debt, so we maintain or low leverage to future price cycles.
Secondly, we work to rightsize realigned our workforce and corporate structure to drop further organizational efficiencies operations teams continued lower operating expenses as well as German that completion wells faster and more efficiently.
Achieving more her well cost most of these savings are doable, which translate to enhance margins along with free cash flow generation.
Exploration programs in various stages and focused areas, providing significant upside to our existing resource base and optionality for future development.
We continue to effectively manage kobin 19 risk ample many work from home processes, along with operational protocol. These processes a protocol been hardly affected in the office and feel it's actually deliver production within the current environment with zero impacts.
Just say organization.
That I could not be more proud to be resiliency and accomplishments over the last few months as we lock our peers had to live with incredible and certainly in stress. The cobot 19 has created.
We believe that important tentative Murphy strategy is to maintain a multi basin portfolio to provide flexibility and then the long run reduce risk [noise].
Although we may we will not be providing formal guidance today as you look toward next year. The flexibility we've built into our future business planning scenarios and their ongoing process of reducing costs will allow us to deliver on our goal is maintaining a conservative balance sheet with flatter production paying our dividend and paying down debt and then.
Oil price recovery.
On slide three Murphy second core productions on her 68000 barrel equivalents per day, consisting of 58% all at 65% liquids and a near even division between our own short and offshore assets as previously disclosed on our first quarter earnings call. Our production was negatively impacted primarily.
At 16000 barrels equivalent today, we're shutting in the Gulf of Mexico, do as we know extraordinary extreme low pricing.
We spent a total of 174 million in Capex for the quarter, including 33 main for Kings key is capex totaling 542 for the first tech the years plant. Please keep in mind that we do not expect that we do expect rather to be reimbursed to 177 million at the closing of Kinski Transit transaction, which includes 50.
Two main spent.
In the first type of 2020.
Well the oil prices experienced a black Swan event briefly falling to unimaginably negative levels I realized price for the quarter was at $23 per barrel. Currently we're seeing our various oil pricing points trade closer to deputy parity on realized basis.
She is our norm.
Overall natural gas price remained in line with previous quarters realizations as $1.54 strength CF.
Now I'll turn the call over to our CFO, David Looney to give financial update David.
Thank you Roger and good morning, everyone on slide four like our peers Murphy was substantially impacted by the historic low prices in the quarter. The result, with a net loss of 100, Thirtys, I'm, sorry, $317 million or negative $2.06 per diluted share for the quarter.
Earnings were affected by several noncash charges, all of which while I'm quoting here on an after tax basis and impairment of $16 million related to an expired offshore lease restructuring expenses of $32 million related to our office closures and El Dorado in Calgary and noncash Mark.
Aftermarket loss on crude oil derivatives and contingent consideration totaling $158 million after backing out all these items Murphy had an adjusted net loss of $110 million or negative 71 cents per diluted share.
Slide five.
Due largely to the lower prices, our net cash provided by continuing operations was actually a negative $23 million for the quarter.
Included within this number was a 106 million dollar cash outflows due to a working capital increase which relates to our decreased level of activity.
Combined with property additions and dry hole cost of 213 million, we had negative cash flow of $236 million in the quarter.
The first six months of the year Murphy generated $369 million of cash from continuing operations with the 220 million dollar free cash flow deficit after $589 million, a property additions and dry hole costs, given that our capital spending was heavily weighted towards the first.
Half of the year with over 75% of total Capex being spent in the first six months the combination of positive free cash flow through the rest of the year along with proceeds from the closing of the Kings key transaction should leave us in approximately the same liquidity position, we had at the beginning of the.
Here, which is a truly remarkable accomplishment given these difficult times for the industry.
Through the team's efforts to reduce costs earlier this year, our elouise improve to less than $9 per Boe.
Excluding the $20 million Gulf of Mexico expense work over in the quarter. This falls, even further to approximately $7 per Bailey.
Lastly, Murphy has taken additional action to protect its 2021 cash flow with the addition of crude oil hedges at 15000 barrels of oil per day for the year at an average price of $42.93 per barrel.
Slide six Murphy maintains a strong balance sheet with $1.4 billion available under our 1.6 billion senior unsecured credit facility. In addition to $146 million of cash and equivalents. Our next debt maturity isn't maturity isn't until mid 2022 with the.
Approximately 80% of our senior notes due in 2024 and thereafter with the market shift earlier in the year, we opportunistically repurchased $19 million of senior notes with $12 million of cash in the first half of the year again as Roger stated Murphy's long term goal is to.
Reduce our total debt profile in an oil price recovery. So that we have an even stronger balance sheet going forward.
Slide seven.
Construction of the Kings key floating production system or Fps continues to progress very well along with our negotiations on the complex multi party transaction documentation with Arclight capital partners. The logistical effects of cobot 19, and extended stay at home mandates if caused delays in.
Closing the transaction. However, significant progress has been made on substantially all key agreements of late and we're targeting closing in the third quarter. This year.
As planned the agreements include reimbursement of our previous capital outlays for the Fps, including $125 million in 2019, and approximately $52 million for the first half of this year with that I'll turn it back over to Roger. Thank you David Slide nine with the revised capital.
Program reduced onshore drilling schedule Murphy to deliver free cash flow above our dividend. This year based on current prices, we prepared the company to past several years through all weighted development accretive transactions appropriate balance sheet management, our streamline yet diversified portfolio provides flexibility to multiple avenues with additional van.
You to our shareholders through exploration upside.
Slide 10.
We've reduced our capex, so more than 50% from our original budget with midpoint of 20 to 20 budget now at 700 million as previously disclosed reductions are made across our portfolio.
Well, we close our corporate offices in El Dorado, and have now relocate or headquarters to our existing Houston office additional we shut down our office in Calgary.
These office closures, along with lowering staff levels in Houston resulted in overall staff reduction head count of 30%, while a difficult decision. This flatter organizations better aligned with our business priorities going forward and results and ongoing cost savings beginning in the third quarter of 2020.
As we entered the back half the year a greatly reduced capital plans layered on what's planned reimbursement from kings key and lower DNA expenses or is it will again, resulting cash flow in excess of capex with the quarterly dividend at current prices.
Let's move now to slide 12 in the Eagle Ford Shale, we produced 38000 equivalent in the second quarter, consisting of 74% oil volumes Zelnorm Bravo and 11 wells as planned and our corn acreage Murphy does not have any operated activity planted acres for Jay for the second half year.
Kaybob Duvernay on slide 13, we produced nearly 11000 barrels equivalent per day in the second quarter, which 66% oil and 74% liquids. We continue to be very impressed with our Dubai results drilling and completion costs.
Slide 14.
Mark from reduced 237 million today no activity occurred in this and after the first quarter. That's set will generate approximately 35 million free cash flow for the year supported by fixed price forward sales contracts.
The Aiko hub for the remainder of 2020 and full year 2021.
Slide 16, and our Gulf of Mexico business, we produced 72000 barrels equivalent per day.
I'm proud of 78% oil as previously disclosed disclose and discussed here were negatively impacted by shut ins during the quarter, primarily a one facility.
Workovers completed that Dalmatian DC 130 forward and Cascade for and completed during the quarter for total expense of some $20 million. In addition, the second Welner front runner campaign was brought online so well this deferred as part of our capital reduction plan announced and discussed here.
Several non operated projects continuing to advance, including the drilling a kodiak during the second.
Second quarter, which is complete and is now waiting a decision we made on the timing of the completion.
Slide 17 or major projects.
We have policing Marmont, Sam Rob remain on track for first oil than mid 22, our team has been executing well over the project, thus far and its main within budget, but significant contract awards for key execution elements behind US further we're pleased to announce we signed our rig contracts or 10, well operation This project starting up and.
At least 2021, which will allow us progress.
Final permitting on the project.
Our operating partners by the first produce well in the campaign St Malo Waterflood project as well this quarter.
People over the next three years for these major projects will averaged 260 million and annually hit ahead of achieving significant production in 2023, which is a key understanding of our projects and capital going forward is continues to support these major offshore projects through this down cycle. This year.
Slide 18 were making progress on block 51 to 105 and the two long basin of Vietnam.
Receive final approval for these attainment area.
The field in the second quarter, we continue to mature remaining bought Prospectivity here and are waiting submission for the field development plan for approval third quarter. This year.
On exploration slide 20, non op partner Merck participate in the amount we re exploration wells in the second quarter at a cost to us of 8 million well. This is dry hole. Unfortunately.
The third quarter Murphy as a non op partner will spud another opportunity called high garden, and the Gulf of Mexico targeting upper and middle market seeing targets.
Total well cost again is estimated to be $8 million net our company.
On slide 21, and other exploration remain well maintain a significant optionality with diversified exploration portfolio, mainly folks in the Gulf of Mexico, and U.S., Mexico, Brazil, and Vietnam, all in various stages of evaluation and our offshore Mexico blocks, a three year discretionary disk Chaloux appraisal program.
Regulatory approval, allowing us to drill up to three appraisal wells and complete all needed geologic and engineering studies.
Murphy's to non operate positions in Brazil, and moving forward as partners agreeing to drilling prospects in the surgery Bay, Oligos basin, and seismic evaluation well underway in the port of Wild Basin.
The Vietnam. Our team has secured seismic that don't 15 dash to which to date, Jason 15, one block as shown here with the joint operating agreement nearing partner Finalization. We're excited for the long range plans, we have in these areas and opportunities they may bring us and offshore international developments ahead.
Slide 23 at our future plans.
Looking at the quarter third quarter, we expect production range of 153 to 163000 equivalents per day guidance is impacted by two major events. We in our planning have an assumed storm downtime of nearly 5000 barrel equivalent per day for the quarter and we have repairs that are Delta house facility, leading to an addition.
8000 barrels equivalent per day downtown there.
Recently had a natural gas hydrate blockage in an export pipeline that occurred exiting our Delta house facility, which helped to production.
That has been Remediated, however, we need to make some additional necessary repairs and system, which lead to further downtime this quarter.
Further planned maintenance at a non operated have a narrow facility resulted an additional 1200 barrels a day of downtime.
Well the year, we plan to span a range of 680 720 as we've discussed earlier this morning should oil prices moving to higher in the back half the year, we have no intention to add to our capital we intend to build cash on the balance sheet and turn allocate to free cash to reducing debt.
As we began the budgeting process or 2021, we plan to spend within cash flow producing oil weighted high margin barrels focusing on continued cost reduction and delivering our long standing dividends.
We plan to give official guidance and every 21 that demand we believe our capital program in line with 2020 spending Murphy could deliver production volumes of approximately 150 to 160000 equivalents per day on current pricing with our normal percentages of oil and liquids.
Last slide 24 take few minutes to leave you where we are at this Tom We're building a plan that emphasizes a flatter production profile going forward to support debt reduction in a price recovery. We continue to be laser focused on costs in our company across all levels to improve our margins.
We have a lineup of meaningful exploration opportunities over the next year and we we will be upside to our current restore space through targeted exploration.
As always we believe in protecting the health and safety of our workforce during the cold with 19 crisis.
Maintaining a multi basin portfolio for additional risk reduction in flexibility to key for our company.
Half of our executive team I want to.
Give my sincere appreciation to our employees was driving force front, our company culture spot the incredible uncertainty and stress of this time.
Although we may not know the timing one thing we can count on some recovery in oil demand people around the globe rely on our products to make everyday life better Murphy intends to be there for that recovery I'll now take your questions and waiting that now thank you.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question simply press star followed by one Touchtone phone you will hear three John from acknowledging Everquest and your questions will be pulled in the order their receipts.
Speakerphone, please lift your handset before pricing.
One moment for your first question.
Your first question comes from Roger read with Wells Fargo. Please go ahead.
Good morning, Roger Yes.
Hey, good morning, Roger How're you doing.
Good.
Quick question for you on the debt side.
I appreciate you want to get debt down I think that is a critical thing.
For the whole industry here, what would you describe as right debt metrics for us to think about or at what point you would feel comfortable saying you could go to maybe 50% cash flow to capex, 50% to debt reduction that sort of saying just.
Thank you put a tighter framework on on expectations there.
Well I mean, a strip pricing like most companies it will take a few years or to make advancements in our debt. What we're trying to do now its first thing have to stop barring and put money on your revolver. That's first step and Thats, what led to our we had priorities to lower our capital on lower our cost structure.
And get that solidified around this mid range of 700 million.
That allows us to make it through the year, even with our dividend and with all these planned recovery from the kings key to allow us not to have any barring this year at these prices, we have which is positive and you got to maintain that going forward as a first step at strip prices for most say a week ago.
As a key part of our strategy and then we're looking and planning on a long range plan now at this same range of that disclose this morning, a 150 60 me we're still working this Roger and we want to take prices that are currently there and any advancement above that look too late lowering down debt. So if you're a per.
Percent believes in a recovery, we're going to keep this same level spending and capital probably the midpoint of our capital quite honestly now at 700 is probably on the high standards our capital that we see the next two to three years and in kind of price recovery like that once you get through these big projects, we have significant capital as opposed to this.
New much lower capital as part of these projects Roger as you know that flow in 2023, but are significant long term profiles of very high EBITDA per be we at 23000, a day for several years plateau as shown in the slide when we get beyond that period, we will have significant reductions in debt and we want to take this dead in a recovery down.
Pretty low in the company, we haven't establish those goals that you asked for yet, but we're trying to lower its way down.
And get into a situation where in volatility like we had in this year and these one off events that we get keep our capital maintained with our liquidity and everything we have and not have to helter skelter, our capital budget like that all Tom.
So thats.
Something we've been working with our board owned.
A lot of meetings allow discussion over the last four months.
Okay. Thanks for that so within a program like that.
It would be reasonable present, you'll continue to.
As we look at obviously this year there were some opportunities on the hedging front, but I'm. Just curious 21 do you think about the strip where it is would you.
Want to hedge much of 21 as it comes in or would you prefer to.
Let's see a market recovery, which I think after the depths we've seen.
That are better than strip would be I think most people's expectations for 21 22 lumber.
Well, we're we're in pretty decent shape because in a recovery makes so much EBITDA per barrel. You know if you look at any kind of data, we're going to be a leader in EBITDA and cash flow from operations.
We do have a hedging plan, we're not to disclose that plan. This morning, but we have traunches as David discussed a few minutes ago Weve marched are way up on that to 50 15000 at around 40 $44 $43 for $3.
So that we're kind of done at that level, we're looking to and the price recovery to hedge more I wouldn't see Murphy over.
50000 barrels a day kind of hedged company, we've not been a leader in that regard because we have the balance sheet liquidity not to be a leader in that but we have a game plan, it's going up pretty aggressively from here. So I wouldn't anticipate a lot more hedging at the 43 level, Roger but we're walking away up and stair steps and may use of.
Collar device as things get higher which we haven't done before moving to middle of planning out what to do about that so.
Our CFO team and our Treasury team course working on.
Hedging gain plans, we have a plan right now and it's going to need to walk up some more before we take any more off the table on that.
Okay, great. Thank you for the clarity there. Good luck. Thank you Roger Thank you.
Your next question comes from Wilson with Stephens. Please go ahead.
Good morning gave good morning, good morning, Roger.
Hello.
Very impressive this quarter.
Thanks.
The second half.
In 21.
The biggest improvement that you have done on the site today.
Well, a I look forward to not being higher than this we did have a real good quarter at keep in mind that.
You have variable and fixed costs as you know and we delivered these cost here, even with the big feel shut in.
For a good bit of production. So I'm quite proud of that we you are seeing to the supply chain improvements and all types of services and Rebidding and reevaluation of vendors that is quite common of course vendors are doing that.
We did one thing unique about our opex, what we call opex or else. We here as we have had some very serious offshore completion recompletion work that our operating expenses that are kind of one off but these are.
Well over 100% rate of return projects at strip. So when you turn away alone from zero to five 7000 barrels a day.
This environment, you make a lot of money steel so.
Thats seven level pretty low do real well on Opex in Canada, bringing that down Eagle Ford through the years lot of focus on chemicals and.
Uptime, and rod pumps and various levels of bar Fisher lift. So it's a goal virus to keep this got to be below nine and it's our goal to do that and I think we're going back to do that.
Outside the Workover situation.
Great and then.
May activity in the Gulf of Mexico.
Yes.
Coming online the Fourq.
[music].
21 timeframe right you talk about volume expectation for those wells.
Those wells I'll, let Eric talked but let me let me frame. This so we have he's going to tell you the volume expectations as well as Kelly OEP as well that's already drilled and completed and this ties back to BP facility and Weve laid the umbilical in about to work on the pipeline. So that's going to happen in the fourth quarter of course.
You know with risk of Covidien thing when can we get that type of course, we had that coming on late in the year and then the other two projects are being of course, non op and they're being planned to be executed by our partners at oxy.
And we have we're partnered with Kosmos in others, Kodiak I'll, let Eric speak to the expectation there.
Yes, so the Kallio project is expected to come online in the middle of the fourth quarter.
And the initial rate contribution for the fourth quarter is in the five 600 net Boe per day range with the IP would be one here.
At a bit higher than that like about 1200 net Boe per day.
Okay, Great and then.
When you look at the major projects.
That is.
260 million.
Run rate can you talk about how major project spend has come in to date versus the original expectations.
We're trending.
Better than originally expected, but I just wanted to clarify.
Yes, it's early days in that and you hate to say go out in the ahead of schedule. We've had some elements of the equipment and procurement that is below budget, we're happy with our rig rate was below budget. There. Some some gives and takes in the sub sea is down and the rig rate is down to the original plan of course, we enjoy.
There to the project can and capital that was ongoing we the facility, which is part of this kings key we don't own it but we were supervising the direction of the building no. It's going very well they have to mobilize that on a shift from Korea to the goal from bringing over here and take it off shored set it up but I'd say now that we're cautious.
Mystic on being below sanction here with a couple of years to go but are found ourselves very well positioned.
In that regard.
And then Gail another key understanding about all this stuff about maintenance Capex and what's your capex going to be I think it's quite phenomenal actually about the we're laying out high levels of framing here. This morning course, with two or three months to work with our budget with our board.
But if you start looking at a capital level on the lower end of our guidance we have this year.
Keeping production in the mid 150 like that yes keep in mind that $270 million of that lets say 700 million is for projects that were not flow till 2023, and these are very very high range project to way better than drilling the equivalent of 270 million of pads and onshore.
Sure you that.
So.
So you keep in mind, our maintenance Capex to maintain production is really quite low and quite impressive but.
But were in our market cap compared a lot of times. It appears that are just putting all of their capital into onshore drill bit.
We of course, not doing that but it's a pretty low maintenance capex for the rest of the business. If you pull out something that doesn't flow for for three years I think thats a key point to make this morning.
Absolutely.
That 150 in the one kind of potential range.
Anyone should we assume roughly composition is like 56% that a good bogey.
Okay.
Okay, great. Thank you.
Our goes up and make lower so it'd be in that range for sure.
Your next question comes from Steve Becker with Keybanc. Please go ahead.
Hey, good morning.
20 to one.
Morning.
Is the 2021 outlook is that based on a certain price.
All the work we're doing now as strip from a couple of weeks ago and looking to.
To use oil price recovery to help our balance sheet.
Okay, Great and then I just wanted to ask about Eagle Ford next year.
Is there a plan in place to add activity currently or are not really.
Sorry, I missed the first part you question add what.
No Sir.
That.
No.
Taken up little bit Thats, Okay, no, we're maintaining our capital we do have some ducs in the Eagle Ford, we're not a big duck outfit here Murphy, probably about 12 14 ducs in the Eagle Ford So we'll be able to start the year off pretty well positioned in past years, we didnt really leave the year with many ducs. So it'd be our first begin completion project will start right after.
The holidays.
In the early next year, but we're not looking to add rigs or anything resi year, we're going to ride out this.
This capex range, we have in our disclosure this morning.
Okay. So nothing in 2021, though.
No 2021, we're getting back in Eagle Ford again for sure. Yes, we're going to have we're going to be still maintain that Eagle Ford production and we have certain capital to maintain that no. Sir I thought you are asking this year, we don't have any more activity. This year 2021 part of that capital that Weve disclosing. This morning is of course related Eagle Ford shale.
Yes, I agree the include shale and our big projects is big hunk of that cap.
Okay. Appreciate it thank you.
Your next question comes from anything with Scotiabank. Please go ahead.
Embedded.
So my question is on the Gulf of Mexico, JV It looked like the units.
Quite a bit lower this quarter can you. Please explain this afternoon and is this is a good baseline going forward.
I'm sorry, what was that ma'am on the gene you say gionee.
The DNA.
DDNA well, we had some impairments in the first quarter you might recall were something not too favorable here Murphy, but we did have some impairments, which many of our peers did as well and that lowered that DDNA there but.
Okay got it and.
My follow up is on the Eagle Ford.
So on a longer.
Longer term basis, how are you thinking about.
Running in the Eagle Ford.
We're really in the middle of our plans here now and.
Just had to last couple of weeks of looking at that not disclosing that long term, but that we're trying to work in the 30 to 35 K. a day range.
In there for 250 million year, Capex kind of maintenance, there and I think thats going to do pretty well and will lead to a lot of EBITDA in the oil price recovery fleet flatten out our production there, but that's what we're thinking on that betting.
Okay. That's it thank you.
No. Thank you.
Ladies and gentlemen, as a reminder, should you have any questions. Please press star one.
Your next question comes from Pavel.
No.
And James Please go ahead.
Good morning, Bill how are you done.
Good morning, Thanks for taking the question so.
We talked a lot about kind of.
Thanks, though the oil market on it until it's from up slightly different angle.
With six months into that pandemic.
Talk about how you have.
GAAP dead on your offshore assets.
If I kind of social distancing measures that that you've taken in the golf too.
Protect the workforce.
Really thank you for asking that Thats rarely ask I.
I can't tell you how pleased them how proud I am of my offshore team.
We're way ahead of this gain was a really good crisis management team real early in January or kind of around January 28, and we were opera opportune optimistic there. We bought about 4000 test kits and started and got these things procured and started testing every single person that goes offshore.
Today, there is near 350 cases of Cove, it and the offshore Gulf of Mexico off of facilities platform to rigs and Murphy knock on wood has had one.
This is unbelievable performance, we were headed gain we didnt do just fever test. We do these brick test where you can get you blood in Texas very quickly screened a lot of people.
Really into all the distancing all the cleaning and now this can can change on you quickly, but so far we we feel that were leidy leader and industry on it.
No we are and as we've done really really well in that regard and I'm Super pleased about it so our big things screen and on the beach.
And then of course to distancing and working offshore.
Situation as well thank you for asking that.
Okay.
About 21 so.
Total capex flat.
How would you and the kind of resumption of exploration in the.
The Max portion of the goal for anywhere else, where what that funded out of.
Well, that's a net capital that we disclosing it probably be next year and high Sixtys to do the wells that we want.
We were planning for a couple wells in Brazil, two wells in Mexico.
Tom and well in the goal.
Okay. So.
10% of the budget roughly yes, it happens equal Thats fair, yes, good point, yet think of that way, but yes.
All right thanks very much.
No. Thank you.
Mr. Jenkins there are no further questions at this time. Please proceed.
Okay. Thanks, everyone for calling in today appreciate it and then we'll look forward to seeing at our next quarterly results meeting later this fall. Thank you.
Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines have a great day.