Q1 2021 Dawson Geophysical Co Earnings Call
Statements made by management during this call with respect to forecasts estimates or other expectations regarding future events or which provide any information other than historical facts may constitute forward looking statements within the meaning of the private you're correct.
Keith Digitation from act of 1995.
These forward looking statements are based on management's current expectations and include known and unknown risks uncertainties and other factors many of which the company is unable to predict or control that may cause the company's actual future results or performance to materially differ from any future results of <unk>.
Norman expressed or implied by those statements.
These risks and uncertainties include the risk factors disclosed by the company from time to time in its fillings day as easily including in the company's co reports on form 10-K filed with the SEC on March 16, 2021. Furthermore, as we start this call. Please also refer to the statement regarding forward looking.
Incorporated in the company's press release issued this morning, and please note that the contents of the company's conference call. This morning is covered by those statements.
During this conference call management will make references to EBITDA, which is a non-GAAP financial measure a reconciliation of the non-GAAP measure to the uptick.
Think about GAAP measure can be found in the company's current earnings release, a copy of which is located on the company's website Ww W. Testosterone free data from the call is scheduled for 30 minutes and the competitive enough to provide any guidance.
I'd now like to turn the call over to Stephen jumper, Chairman, President and CEO of Dawson Geophysical Company. Please go ahead Sir.
Well. Thank you on your good morning, and welcome to Dawson Geophysical Company's first quarter 2021 earnings and operations call is on you said my name is Steve jumper, Chairman, President and CEO of the company.
Joining me on the call is Jim Brad Executive Vice President Chief Financial Officer before.
Before we start the call just a few things to cover if you'd like to listen to a replay of today's call. It will be available via webcast by going to the Investor Relations section of the company's website at Www Dot Dawson <unk> Dot com.
Information reported on this call speaks only of today Thursday may 13th 2021, and therefore, you are advised that time sensitive information may no longer be accurate as of the time of any replay.
Turning to our preliminary first quarter ended March 31, 2021 financial results.
For the first quarter ended March 31, 2021, the company reported revenues of 11 7 million a decrease of approximately 70% compared to $39 million for the quarter ended March 31 2020.
For the first quarter of 'twenty, one the company reported a net loss of $5 2 million or <unk> 22 loss per share of common stock compared to net income of 1 million or force cent per share of common stock for the quarter ended March 31 2020.
The company reported negative EBITDA of $1 9 million for the quarter ended March 31, 2021, compared to EBITDA of $5 8 million for the quarter ended March 31, 2020 during the first quarter of 'twenty. One the company operated one seismic data acquisition crews in the United.
States with limited utilization and one crew in Canada, the near term outlook for seismic data acquisition activity in the U S remains challenged with at historically low levels of crew in bid activity.
Based on currently available information the company anticipates limited crew activity in the second quarter would that do one crew operating in the U S with periods of low utilization in the back half of 2021 co.
Currently the company does not have a crew deployed in the U S and the Canadian season concluded at the end of the first quarter I will now turn control of the call over to Jim <unk>, who will.
Ill review the financial results, then I will return for some final remarks, and our outlook into the second quarter of 2021, Jim.
Thank you, Steve and good morning.
Revenues for the first quarter of 2021 were $11 7 million a decrease of seven 8% compared to $39 million for the quarter ended March 31 2020.
As stated in our earnings release issued this morning during the first quarter of 2021. The company operated one seismic data acquisition crew in the U S with limited utilization and one crew in Canada.
Moving on currently available information the company anticipates limited crew activity in the second quarter with up to one crew operating in the U S with pairs low utilization in the back half of 2021.
Cost of services from the first quarter of 2021 were $10 9 million, a decrease of 62% compared to $29 million in the same quarter of 2020.
General and administrative expenses were $2 8 million in the first quarter of 2021 a day.
Increase of 24% compared to $3 7 million in the first quarter of 2020.
Depreciation and amortization expense from the first quarter of 2021 was $3 4 million a decrease of 34, 30% compared to $4 9 million in the same quarter of 2020.
Net loss for the first quarter of 2021 was $5 2 million.
R 22.
Net loss per common share compared to net income of $1 million or four cents per common share in the first quarter of 2020.
EBITDA in the first quarter of 2021 was negative $1 9 million compared to EBITDA of $5 8 million in the same period of 2020.
And EBITDA reconciliation was provided in our earnings release issued this morning.
And now ill highlight some balance sheet items.
Our balance sheet continues to remain strong.
As of March 31, 2021, we had.
Debt, including obligations under financing leases of approximately 587000.
We had cash and short term investments of $47 million.
Our current ratio was $10 one to one.
And working capital was approximately $49 7 million.
And with that I'll turn the call back to Steve for some comments on our operations well. Thank you Jim.
As we all know since the onset of the COVID-19 pandemic over a year ago. The seismic data acquisition market not just in the U S. But worldwide along with other oilfield services remained challenged in the particularly in the U S and Canada.
While there are encouraging signs of recovery in certain oilfield services, such as drilling and completion services current demand for seismic related services remains at very low levels and.
In recent months, we have oil prices have improved over $60 per barrel range as oil demand has increased with states beginning to further open businesses air travel increasing in the rollout of the COVID-19 vaccines.
The U S rig count currently at $4 48 is steadily improving as is the number of hydraulic fracturing crews.
Based on currently available information that we've stated we anticipate seismic data acquisition activity in the lower 48 to reach a low in the second quarter and ended the third quarter of 2021 with slight improvement anticipated later in 2021.
As we have stated in prior earnings releases demand for seismic data acquisition and recent cycles lags behind the recovery in drilling and completion activity as exploration and production companies initially deploy capital into set services and work through their inventory of drill both projects. The same is true on the front.
Side of a downturn as drilling and completion services or scaled back while currently active seismic related projects continue as seen in 2020, where our activity levels remained relatively high through the second quarter and ended the third quarter. After the onset of the COVID-19 pandemic.
The timing of a return to an increase in demand for seismic services in 2021.
As further delay due to the depth of the most recent downturn slow recovery of capital capital budget increases as oil prices remained depressed into 'twenty, one a larger than typical post downturn inventory of drilling prospects and a slower recovery of rig count to work through the inventory backlog.
During the latter part of 2018 and continue win continue we ended the first half of 2020, we successfully acquired multiple high density large channel count projects in certain areas of the Permian Basin. These fully processed datasets first became available to the industry in late 19.
And continued coming to the industry in 'twenty 'twenty. One early results of these datasets indicate substantially improved subsurface image quality compared to prior seismic datasets examples of which are just beginning to become public.
Increases in data quality and imagery are currently being utilized for improved well planning geo steering of long lateral well bores Geo has got identifications and avoidance enhanced reservoir definition and rock property description between well data samples and strategic placement of disposal well locations.
As the industry begins to recognize and appreciate the value of these high density large candle channel surveys, we believe demand for such surveys will improve the company's state of the art equipment base allows us to deploy multiple large channel crews when demand does improve and.
And are continuing to respond to these difficult times, we are significantly limited capital budget spending reduced fixed and variable operating expenses implemented a comprehensive equipment program in preparation for rapid response to increase activity levels.
In addition, we continue.
Our commitment to our robust health safety and environmental program.
Ongoing relationships product quality and key personnel. The company made no capital expenditures during the first quarter of 'twenty. One as stated in our December 31, 2020 earnings release, the company's board of Directors has approved an initial budget capital budget of $1 million for 2020.
2021, excuse me the company's balance sheet as Jim stated remained strong with 47 million of cash restricted cash and short term investments and 49 point force was $49 7 million of working capital as of March 31 2021.
The company is nearly debt free with notes payable and finance leases of 587000 as of March 31 2021.
Conclusion, while today's conditions in the seismic data acquisition market remains challenged.
And are likely to remain so in the coming months. We are encouraged by the overall improvement in both the economy and the oilfield service sector improvement in drilling and completion activities helped set the stage for a successful recovery of the seismic data acquisition sector.
I, thank our hard working employees valued customers and trusted shareholders as you work our way through these difficult conditions.
Toward better times ahead, and with that on your well I believe we are ready to take questions.
Thank you. So if you would like to ask a question. Please signal by pressing star one on your telephone keypad.
Uh huh.
Good day, everyone an opportunity right. So.
I'll start with our first question from gross growth turnaround capture your line is open. Please go ahead.
Hi, Steve.
<unk> questions.
Maybe you could get certainly it was a Y with so much rich rich seismic data already in place it in the hands of the oil companies why the want to reshoot for images again.
And the second question is how much surface area has not been shot in United States with this new seismic imaging that you spoke about in the press release.
That day, they can say they want to be re shot.
Those are great questions, let me.
Address those.
Are the best I can Bruce I'm going to jump to the second one.
First.
We see it.
Ever since the industry has moved towards three D data acquisition techniques we.
We have continued to answer these questions for the last.
Nearly 30 years about how much has been shot today and how much is left to be acquired and.
The answer is there is there continues to be a large.
The pieces of acreage and land all through the country that is perspective that has not had in many cases, a first round of three D exploration.
But the even more so has not had some of the.
Newer techniques.
Techniques applied to it so over the last 30 years, we've seen channel accounts on a crew moved from 2000 to 4000 to 10000 to 20 and now we're talking crew sizes of up to 50000.
Which does two things it enhances it.
Aerial coverage capacity as well as the density at the same time and so we believe that over time and historically.
There are many basins that are there.
Perspective across the lower 48 into Canada that either need first round or potentially a second round over that time frame, we have gone back into multiple areas.
Several times and acquired new datasets with newer techniques, many of which we've talked about here.
And.
So.
Every time, we've done that in the past as a general rule, we have seen a image quality in detail improve.
In the past week, we have also talked about.
In our conference calls over the years about concentration of activity.
And we have if you go back you know 10 years ago, the activity level was more robust and in other basins around the lower 48.
We began to see a contraction back into.
The Permian specifically several years ago, and southern Midland Basin, and then we moved into the Delaware and now some of our focus it tends to be more in the northern Midland Basin and in the Central Basin platform.
And so really we have and in the last three years, we have acquired some very large surveys.
Through the multi client model that have been very intense with this new shooting geometry and techniques and those datasets have taken some time one of the issues our industry deals with is lag time on delivery of data process a process data, it's something that.
He is being worked on and continues to improve but it takes a while for these data sets to reach the market and so we're just starting to see some of those datasets reached the market, which happens to coincide with where the most recent concentration of activity and rig count improvement.
And so it is very difficult environment, right, now, but but we're saying.
You know improvement in movement.
Of activity talk of movement of activity to the northern part of the Midland Basin Central Basin platform, we've done quite a bit of work over the years in the Delaware Basin for example, and it's a prime candidate for.
Imagery improvement and so well you know to answer your question. We believe there's running room all across the lower 48, that's dependent upon E&P activity.
And no I think it is fair to say right now that that we have and in the near term we have.
Some very active areas that had this new dataset, we're not seeing the rig count coming back as quick as we typically have in a downturn and so I think we're dealing with in my opinion, a timing issue here as opposed to a value of the product issue.
Yes.
Right. So so you're thinking that will of course, we're seeing completions increased much more than the actual amount of drilling rigs. So what do you think is a good correlation well is drilling rig activity increases.
What's the time lag between that increase and the demand for shooting do you think.
Well it is very difficult for me to put a timeline on it on these things Bruce and I don't want to get out ahead of myself, but I think theres a couple of things there.
Net are important debt that we need to talk about here and we've kind of alluded to in the press release. The first is I'm not sure anybody really knows what the drilled uncompleted number it really is what what how many actual ducks are out there that have been drilled and.
Sitting on completion, so in today's world It is not uncommon for.
Our completion activity to move at a little bit more rapid pace than drilling activity.
So the second thing is while we're seeing some recovery in in in rig count.
And I would I would add that there's debt. There's certainly continues to be pressure on all oil field service is not just us, but all oilfield services are under pressure. These days, but we're seeing a slower ramp up in rig count coming out of a down cycle than we've seen in the past in that.
It is further.
Complicating issues for us and so.
I don't see that changing in the near term honestly to a great degree I think we're seeing the E&P companies in Q1 results are coming out with a pretty strong free cash flow numbers, we're seeing more and more companies issuing one time special dividends are there's a focus on.
Shareholder return.
That's out there and so I would anticipate that to move through for the next few quarters.
The indicators that we would look for would.
It would be.
Our continued improvement in rig count our movement into new basins is you know for example.
It's encouraging that we're seeing some activity in the central basin platform, along the shelf edge and in the Central Basin platform.
You know well, we'll continue to see some movement I think back into the Delaware Basin.
And and I think we're starting to see you know people talk about some things down in the Eagle Ford So.
I think theres a variety of things that we'll continue to look forward and communicate with our shareholders as they as a materialized, but I don't think there's any one specific.
Saying that I can point to and say that that's the thing we got to watch because I think it's a combination you know we really havent seen a whole lot of adjustment in capital budgets on behalf of the E&ps are we'll see what happens when we get to mid year and later.
You know, we're not seeing a dramatic increase in rig count, we're seeing improvement, but but I'm encouraged I think we will see some of those and begin to materialize in the back half of the year.
Well, it's interesting your comments about ducks, because I often likened it to a.
A retailer manufacturer you go through your inventory.
Eventually you have to replenish it right. So they don't have to drill, but they're basically running through their inventories. So it's just the I guess, what you say, it's not a question I guess, but when for your services.
Well, that's what I believe are at that.
That's been what history has shown.
It's it's it's difficult to describe the debt this last downturn that we've been through.
It hasn't been just a supply issue you know.
It hasn't been just a demand issue it's been a complete shutdown. So when you think about the downturn that we went through in 2020 for us in the back half of the year, that's bled into 'twenty, one but for other oilfield service companies It really began.
In late Q1 of <unk> of 'twenty.
We went from a greatly reduced activity to almost zero I mean groups that were running multiple rigs in the teens went to zero and so we basically went through a full year or nine months at least of a really very very limit.
Good activity happening anywhere on top of that.
We've had quite a bit of M&A activity on the E&P side, which has.
Taken up resources to complete those transactions. So it's been a oh you know.
A very difficult unique situation that we've not experienced before I'll, let met but history has said and I think we'll continue to say that seismic data continues to bring value.
Particularly if you're looking to optimize drilling and completion results and I think we're seeing that I I'm highly highly confident that our E&P customer base.
For the most part are using seismic data to achieve those objectives and I don't think that will change and I think in fact, it could improve over time as our technology gets better we get more information and better integration to well data.
Great. Thanks, just one other question could you just explain why you enacted the poison pill for one year.
Well couple of things there Bruce and I appreciate the question.
I would preface this by saying Dawson Geophysical has had a a shareholders' rights plan in the past we had one in 2000 and.
And now excuse me 1999, there was a 10 year plan that we renewed.
And in 2009, and it went away with the merger with T. G. C. So a shareholders' rights plan is something that we have had in the past we had contemplated the plan for quite some time going back early part of last year, we began to see some.
<unk> and they are.
Stock price through a late 'twenty and into early 'twenty, one and then we've seen clearly a little bit of a reversal in that.
And so we revisited the shareholders' rights plan concept and.
Believe that with the advice of our professional services providers that are we went with a pretty basic plan pretty standard plan with a.
Are pretty standard terms and conditions in there just.
Just to protect all of our shareholders and.
Uh huh.
It's something we'll revisit over time, but that's the.
That's really the Oh.
Impetus for us putting that plan into place.
Okay. Thanks.
Thank you Bruce our next question from.
From Scott Morris and Kevin. Please go ahead your line is open.
Stephen Your 30 years in this very cyclical industry, where do you where do you put this cycle versus prior cycles.
Oh boy, it's by far the deepest.
You know I came into this industry and in and I didn't know it but I came in in a down cycle.
But I don't you know.
In the past we've dealt with.
You know an oversupply issue.
Related to OPEC movement, or we've related you know we've had a demand issue related to economic conditions.
This was a multi headed.
Monster so to speak.
There were several things that that came into play on this one not only did we have a supply issue with <unk>.
Supply levels not just in the U S. But worldwide, we had COVID-19 related complete demand destruction.
That at the end of the day, probably wasn't as deep as anticipated, but it was very very deep.
In conjunction with that we we've had.
An overhang for the last several years.
Of just overall.
Energy Investor apathy, so to speak where that where the demand for our returns, particularly at the E&P side of.
That appears to be correcting itself.
With recent results are the supply issue.
It clearly is going it looks like it's going to correct itself I don't know when.
When U S supply will get back to pre pandemic levels, but at the current rig count it's not going to happen real soon.
And obviously demand is beginning to pick up.
For oil and we can talk about political things around that as well and the social aspects as well but.
You know if I had to read them I would put this one at one and I would put the early 80 somewhere around you know maybe third place and Theres not a second but this for for our industry and with all the things that came together in particular and it hasn't been just unique to our company. It is all across the.
<unk> and worldwide.
Now it is encouraging that we're starting to see signs.
Of improvement in the international markets with regard to the seismic data activity.
I think we're starting to see improvements in the marine World.
Offshore World and so you know those are always positive signs as well. So we're seeing some things that are pointing the right direction, but but man, we're coming out of a deep hole there Scott.
From your point of view, we all know OPEC will.
Capacity will eventually get absorbed.
But.
The lack of investment that is going on have you have you witnessed this this severe lack of investment.
In the past maybe going back to the eighties.
You're talking about an end and in the U S or worldwide.
O U S in particular, but maybe even worldwide I'm really just trying to get your sense of.
The ultimately appears to me to be a cost associated with the significant lack of investment.
And with the focus on free cash flow our debt.
In your view does that ultimately bite, assuming a world debt.
It gets back to normal.
Well I appreciate the question Scott I'm by no mean abroad.
Abroad energy expert I'm, just the seismic yeah, but are ideal.
I I.
Our our company and our shareholders and our.
And employees, obviously worked very closely with what our E&P customers are doing in and we follow them very very closely I think there has been a.
Uh huh.
Particularly on the international side, I think and and in Marine I think theres been a.
Serious underinvestment over time, particularly in the last 10 or 15 years.
I think in the lower 48.
I think and we've said this for some time.
I think there.
This is just my opinion I think we're headed for.
Proved a investment that will be done more prudently.
With better science and technology may be around it and I think there'll be more prudent investment going forward there's been.
Obviously.
A lot of capital.
And then put towards the energy sector in the last five to 10 years.
But I think when you look going forward I would anticipate increased but more prudent investment. So I do think there is an investment whole worldwide.
That are not just in Oh, E&P, but in services and even in midstream.
Net.
I think there's a day coming that those investments will have to be increased.
And it's our hope that there'll be done prudently.
And if they're done prudently with a utilizing a good technology and size that that that should be good for the seismic sector not just us but worldwide.
Thank you.
And we have one last question from John or trucks from research investments. Your line is open. Please go ahead.
Hello, Stephen jumper. Thank you very much first of all I look noticed your revenue is asking for the quarter were up compared to last quarter I think you've done very well there. Thank you very much I've noticed that what you have to do here is you deal.
Deal with the fact that the downsize of the of your staff, but then there'll be able to come.
And be able to respond as does your cash.
It's come back in and ask for work how has that been going my sense is that you really have a sense from feeling for your people and making them.
The adjusted to the changes in your debt when business recovers, you'll still have a good crew available how is that going for you.
Oh, Great question, Jay and I appreciate it.
Is that that's been a very difficult thing not just for us as a company, but I think through the the seismic sector.
As a whole and in general oilfield services I think we've done a week.
We've had a tremendous number of cutbacks in the last year, plus we've worked really diligently at reducing our cost structure at the same time I think we're doing the best we possibly can.
To maintain the right resources in terms of personnel equipment and capital to react accordingly.
We.
Uh huh.
You know the recovery in my opinion is not going to be like in the past years, where you're going to have to get to eight 910 crews to do well if we can get to two large channel count crews for example.
We as we did in the first half of 2020 are we can do pretty well.
And much improved and so the crew count bar is not as high as it once was now windows crews they carry significant channel count increase.
And so.
But but we've worked really really hard in the last couple of years and understanding what a large crew looks like how it operates and how to improve that efficiency and so even in the last six or nine months, we've been in an up and down phase and we've been able even with COVID-19.
Good in place and COVID-19 protocols, our staff who's done a great job had been able to respond quickly.
And efficiently.
Not just from an operational efficiency standpoint, but from a.
Financial efficiency standpoint, and so we watch that very very closely and there's no question. We've lost some good people, but I think we were trying to manage this thing.
The best we can our understanding that we need to reduce cash burn to best we can at the at the same time be able to respond.
Two our E&P customers' needs and on behalf of our shareholders. So.
I hope that answers your question I would just like to.
I take this opportunity to comment that I'm really proud of our of our group.
They've responded very very well for this whole situation attitudes are strong they're good there they're positive and so we're working hard to maintain.
That ability to respond in a lot of different areas and a lot of different ways and I applaud our group.
For doing the work that they've done.
And that's important to recognize those people and the.
The other thing is how are you getting a sense from your customers are they starting to reallocate money towards seismic out there talking with you do you get a sense of that debt, they're wanting to sit down and talk with you about what they could do and how they could use your seismic crews to getting better data.
Are they open to talking in and.
Sharing ideas.
Well, that's a great question and just let me answer it this way.
Oh, there's one.
The there there there's multiple ways for us to judge the market.
That those those are contracts in hand, which we've outlined here based on what we say is going to happen in Q2.
Debt, that's pretty lean right now to bid activity bid activity is pretty slow as we mentioned in the.
Press release, and but is there is some bid activity and the third thing is industry conversation and we're having conversations.
And there are certainly.
Groups within E&P companies, particularly on the <unk> geology, and geophysical side that have concepts and ideas and thoughts or things that they would like to get done in 'twenty, one and into 'twenty, two and what you hear in those conversations is.
We think we would like to have this we think we would need it we'll just see what the budget looks like over time in the back half of the year and so.
You know and it is.
Specifically capital being allocated towards the seismic data acquisition I think e&ps are very quiet about their capital budgets right now I think.
In the past you know we would be notified that X Y Z was going to spend a b C in SaaS.
Seismic data in the next coming year, we booked for the last few years, we've not had that guidance, but I think you know right.
Right now each project has to stand on its own from a budgetary and physical standpoint given.
Given the climate that we're in and so you know.
Yes, we're going to have a very difficult second quarter.
Probably ended the third.
Bid activity is.
Slightly improving maybe it is there there is some talk or bids that are out there, they're they're pretty lean at this point.
But then we're starting to have some conversation and some chatter and so you know that that makes my crystal ball B. It's cloudy as it is but that's that's kind of where we are a J.
So you are seeing some some relative changes in a positive nature, but really nothing that's going to convert into contracts.
And the immediate but it's sort of they're talking at least theyre talking about what they wanted to do and looking at those but yeah. I think that's right I think.
You know well.
We'll learn a lot more in the back half starting in the back half of 'twenty one.
A win win win you know, we'll see how much budget adjustment there is an at mid year.
We'll see if there's you know if we go to the back half of the year looking at budget exhaustion or if if we're going to be looking at budget improvement and.
At this point I, just don't have a clear answer for you, but I remain optimistic for the long term prospects.
Very good yes.
At least they're talking about it doing something but havent definitely made a concrete congratulations thank you for being out there trying to get that business.
Thank you J GAAP and have a great quarter.
He has keen more questions.
Go ahead, Steve Roth from <unk>. Your line is open. Please go ahead.
Hey, Steve when you and I spoke last time, we had talked about the.
<unk> of at least senior management, perhaps.
That's being offered a salary.
Salary reductions and shares in place of salary and my thought behind that was obviously to have management get greater ownership.
Using our cash burn you don't have to make it mandatory but I think that if you offered folks 25, 50% of their salary. They made in stock. They made just like that and then.
Probably bring us back to the.
First caller's question about the poison pill, perhaps obviating the need for that but let me just stick to that issue would you consider offering and even for yourself, taking a salary reduction and then taking shares because I would like your.
Interest as an owner to be lined up with the with mine.
I understand the question a I will say this that all across the board there have been significant salary reductions in the company at a at at at various levels that hadn't been done in the last a year and many of those certainly.
Had been from from the.
Section 16 officers have been filed.
You know our management ownership is something that we talk about I will tell you. This that we are aligned with our shareholders and we understand what we're trying to get done, but I do hear your Oh comments and I appreciate them.
And we'll certainly relay them to the right people at the board level.
Let me ask you. This is the part that I'm not understanding from me as a shareholder I understand to a degree not as well as you do the business cycle of oil.
And in E&P, and then even our what we do.
You understand that even deeper so we've got a share price that's roughly around our cash and we are managing our cash burn probably as best you can.
But what I don't get is why sitting in Europe positions. The suggestion I just made doesn't get it yeah, great I'd love to own more shares at year end.
Normally restricted from buying stock so if I could get a 50000 or $100000 in shares right now I'd be sitting in the cat birdseed.
Putting aside the we'll consider is I appreciate it and the rest.
I'm not following why this isn't something that you're.
You personally.
Our jumping out saying that sounds great I'd love to do that.
Hum.
Got it.
Steve Thats a.
Little bit difficult question from me to answer here on this call and so.
No.
I do think the board.
Does consider.
Management ownership positions and I'll just tell you that we will continue to have those conversations.
Alrighty. Thanks.
Our next question from Mike <unk> City Cabot 10 minutes from your line is open.
Hi, Stephen Jim Good morning, Yeah, I think we'd reiterate there would be that the prior caller it'd be nice to see management and the board take a bigger ownership stake in the company at these price levels at this point in the cycle, but.
The question I guess a standard.
Stemming of James' question.
Specifically with the multi client.
Customers that you have can you talk about what.
How those conversations have gone and what you think would need to happen for them to be more active and seismic acquisition going forward. Thanks.
Great question, Mike and I appreciate your comment as well.
And I appreciate all of our shareholders comments and questions by the way.
That's what we're here for is to is to hear those questions and hear those comments and react accordingly. So I. Appreciate these calls and I appreciate the one on one calls.
The multi client guys have have ideas.
And several of them have things they would like to do but they are kind of dealing with the same thing we're dealing with and that is.
How much funding, they're getting from E&P companies and at this point in the cycle, how much capital they are willing to put into a project.
And so you know.
Multi client project and I am not in the multi client business. So I am not for poor climbing to fully understand their model, but but as I understand it.
They will do a risk assessment on a project and make a determination of how much underwriting they need to start the project.
And when times are difficult in spending or light as they have been in the E&P world for the last.
12 months or greater.
Certainly in the last six months.
As that spending is lie then then they're underwriting levels drop and then they have to assess whether they want to the timing of which they want to put capital into a project and so when you're dealing with multi client folks.
And they are great customers of ours, and we've been very active with them for a long time and work closely with them.
There.
They're they're having to deal with.
Both external funding and internal funding and getting that right mix to get a project to go and so when we talk about the multi client world.
And some of their conversations.
You know there are projects that are out there that have been talked about looked about.
But then there's maybe they were a signature or two away from getting that project going so it's kind of a cascade effect to a certain degree with the multi client gas.
Okay. Thanks, and thanks for the hard work during a tough time.
Thanks, Mike.
Yeah.
And it appears there are no further questions at this time.
Well I would first like to thank everybody for joining in on the call.
Obviously.
We're in we're in tough times.
Here I appreciate the great questions and the commentary that we had oh on this call as we have mentioned in our press release, we anticipate.
Q2 to be very very difficult, but.
But we see things on the horizon and that are encouraging with.
Our rig count improving and our free.
Free cash flow generation and the number of completion crews going back to work in some of the conversations we're having particularly seeing seismic activity pick up in other parts of the world and in the Marine World. So we are encouraged we thank our shareholders for their continued trust a re.
Really wanted to have a shout out to our employee base for the hard work and the difficult things that they've dealt with and as always thank and appreciate our wonderful client base and we'll continue to work as hard as we can in these difficult times and we'll continue to try to make the right decisions that we've seen most prudent for <unk>.
Our shareholders are.
Our employees both in a well.
Again, thank you for your time and we'll have another conversation after our Q2 report. Thank you very much.
And this concludes today's call. Thank you for your participation you may now disconnect.
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