Q3 2022 Riley Exploration Permian Inc Earnings Call
Good morning, My name is Emma and I will be your conference operator today.
At this time I would like to welcome everyone to the Riley Permian.
<unk> third quarter 2022 conference call.
All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session.
I would like to ask a question during this time.
Press Star followed by the number one on your telephone keypad.
If you'd like to withdraw your question again press Star one thank you.
Philip Riley you May begin your conference.
Thank you and good morning to everyone welcome to our fiscal third quarter 2022 conference call covering the three months period, ending June 30th 2022.
Participating on the call today are Bobby Reilly, Chairman and CEO , Kevin Reilly, President and myself, Philip Reilly, CFO and EVP of strategy.
Today's conference call contains certain projections and other forward looking statements within the meaning of the federal Securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements.
We'll also reference certain non-GAAP measures the reconciliations to the appropriate GAAP measures can be found in our earnings release issued yesterday afternoon.
I'll now turn the call over to Bobby.
Thank you Philip and thank you everyone for joining the call. This morning.
Yesterday after the close of the market, we announced results of our fiscal third quarter.
Driven by continued organic growth paired with significantly higher realized oil and natural gas prices.
We had record setting production net sales and adjusted EBITDAX in fact year over year for the three months ended in the nine months ended June 32020 to.
Our revenue growth was 111% and 110% respectively.
We have generated $106 million and adjusted EBITDAX for the nine months ended June 32022, compared to 65 million for the same period last year.
This represents a 63% year over year increase and is 18% higher than we generated for the entire 2021 fiscal year.
To highlight a few items for fiscal third quarter.
We averaged oil production of eight 4000 barrels per day, which exceeded our high end of guidance and represents an increase of 24% as compared to fiscal third quarter, 2021, and 12% as compared to the fiscal second quarter 2022.
We generated $45 million of adjusted EBITDAX, and 44 million of operating cash flow, representing an increase of 29% and 47% respectively over the prior quarter we.
We paid dividends of 31 cents per share for a total of $6 million, representing 14 consecutive quarters of dividends was $68 million of cumulative distributions since inception.
We reported total proved reserves of 79.
M B O E, which is 64% oil with a PV 10 value of total proved and total proved developed reserves of 1.098 billion and 807 million respectively. As of June 32022, based on Nymex strip pricing.
As we progressed through the last quarter of our fiscal year, we continue to have operating and financial results exceeding both guidance and consensus expectations.
With a healthy balance sheet.
We remain focused on corporate opportunities, including potential acquisitions that will help to advance our strategic growth objectives on all fronts.
I'll now turn the call over to Kevin to discuss in detail some of the operational results.
Thank you Bobby and good morning to everyone.
As Bobby mentioned, we had a great quarter, not only influenced by higher realized oil and natural gas prices, but also by our continued organic growth.
Riley Permian average daily oil sales of 8363 barrels for the quarter, which represents a 12% quarter over quarter growth or 24% year over year growth as compared to the fiscal third quarter of 2021.
The company average total coal sales of 10176 barrels of oil equivalent per day for the same period.
Which represents a 4% quarter over quarter growth of 12% year over year growth as compared to the same period of 2021.
As we have previously disclosed the gas and NGL sales during February to June <unk>.
Impacted from an ongoing expansion underway at our midstream partners facilities.
As of July 12 to plant expansion has been completed and is providing additional takeaway capacity to our operations.
In addition, the company continued efforts on its fiscal year 2022 development activity.
During the three and nine months ended June 30th two.
2022, we brought online five gross five net and 12 gross 10.8 net horizontal wells.
The activity above corresponds with accrual basis capital expenditures of $34 4 million and $80 5 million for the three and nine months ended June 30th 2022.
This includes $3 6 million at $11 4 million.
For the three and nine months ended June 30th spent on our ongoing Europe pilot.
Regarding the our pilot project subsequent to the end of the quarter.
All vertical injection wells have now been completed and we're injecting water into the reservoir.
Regarding deflationary pressures.
On capital.
We estimate drilling and completion costs for recently completed wells are averaging 26% higher than equivalent well designed from a year ago.
I went to some inflationary pressure, but partially offset for some efficiencies we're seeing.
Lease operating costs were $8 1 million or $8 71 per Boe.
For the three months ended June 30th this came in at the low end of our guidance.
But with an 18% increase quarter over quarter.
As a result of the delayed remedial work from the second quarter due to limited work of a rig availability.
At this point I will now turn the call over to Philip Rally to review our financial results.
Thank you Kevin.
After a brief overview of our financial results I will focus on highlighting metrics not found explicitly in our financial statements our earnings release to provide more color and transparency for you.
We're reporting net income for the quarter of 39 million driven by $62 million of operating income, partially offset by a 12 million loss on derivatives and $11 million of income tax expense.
Our quarterly EBITDAX of $45 million implies over a 70% margin when compared to revenue adjusted down for realized hedges.
Operating cash flow closely mimic EBITDAX, which was $44 million for the quarter were 97 million for the nine month period.
To summarize here are a few quarter over quarter variance metrics revenue net of hedges increased by 28% cash costs increased by 25% or only 15% excluding production taxes, which closely resembles oil production growth of 12% and <unk>.
Cash flow from operations increased by 47%.
Year over year is obviously more dramatic.
Revenue net of hedges increased by 83% cash costs increased by 46% or only 21% excluding production taxes, which is even less in oil production growth of 24% and.
Cash flow from operations increased by 113%.
That is the pattern you want to see cost increases commensurate with volume growth and bottom line cash flow increasing disproportionately more than costs.
And a reminder, that this is all organic growth no acquisitions. So the absolute metrics are relevant for comparison.
Next to offer some color on price realizations and revenues.
Quarter over quarter, our realized oil price improved 17% and our net realized oil price after derivatives improved a similar 16%.
Our absolute volume of hedged barrels did not changed quarter over quarter, while the percentage of hedge barrels effectively decrease from 64% in the March quarter to 57%. This June quarter on account of increased production.
The weighted average hedge price was unchanged.
Made no changes to our hedge positions since last quarter other than the roll off our hedging strategy remains unchanged from the prior quarter with objectives to maximize upside exposure to maintain flexibility to react to changing market environments and to manage risk for very low prices.
Slide 15 in our Investor presentation is updated for increased forecasted production guidance in the coming quarter, showing there were approximately 50% hedged at midpoint guidance with a similar level for the subsequent quarter and falling just under 30% down to high teens for 2023.
One small detail on the upcoming quarter that differs from prior quarters, and that's at 27000 barrels or about 7% of hedge volumes. This quarter, some wider collars and floors of 45 and ceiling of $115 per barrel, which may not potentially correspond to any realized losses at least at current spot prices, whereas.
Prior quarters had either out of the money swaps or collars. So if you exclude those collars and were 47% hedged.
At some point, we may add a second half 2023 hedges likely via some wider colors and not until the quarters are a bit closer.
Moving on to natural gas, our net realized price increased by 90% quarter over quarter basis differential was about negative 63 cents about a 10 cent higher deduct in the prior quarter our competition for gas based on long haul pipes is not so much what ha as it is markets to the west, California hitting trap.
Click into Mexico, or Utah, or it's the north to Oklahoma.
Our processing fees were just below $1 90, leading to a net of about $5 before derivatives and $1 29 after derivatives.
Nat gas revenue was up 59% quarter over quarter on account of this price improvement, but still a bit disappointing given the curtailment.
Nat gas derivatives in turn had a disproportionately large impact given the combination of the curtailment and highest settlement prices going forward at least as of today, we're unlikely to hedge natural gas.
Ignoring any macro fundamental view on future gas prices. The fact is that oil comprises the vast majority of our revenue and we're not making decisions to drill wells based on gas price realizations.
The silver lining here is the gas revenue net of hedges for the upcoming September quarter has the potential to double or triple given improved processing rates and where prices are currently.
So while the absolute values relatively small compared to oil revenue the extra one $5 million to $2 million here is helpful.
For Ngls the market price of our composite bark barrel garnered $50 this quarter about $6 50 more than the prior quarter.
Relative to W. T I this quarter's 46% matched last quarter.
Our overall revenue mix was skewed high towards oil given the high prices and the Natgas dynamics.
Yeah.
A casual observer can look at where oil prices are today relative peaks, a few months ago or even the prior quarter average as well as our mostly flat production guidance and then naturally come to the conclusion that surely will have lower revenue this September quarter.
But here's an interesting illustration to consider it.
If W. T I averages about $86 for the remaining seven weeks of this quarter.
It should be more than $17 per barrel are 16% below last quarter, and we could generate revenue net of hedges on the same level as last quarter.
Just a quick bridge at a midpoint production guidance and that price you lose about $12 5 million in oil revenue than.
And then we make an incremental $2 7 million gas and NGL sales, mostly driven by increased capacity.
So net net revenue before hedges would be down by a bit less than $10 million.
Then you look at hedges, you see volumes drop off and at the 86 dollar price.
Our oil fixed price settlements would drop by over 40% or more than $10 million oil.
Oil basis, and Nat gas hedge settlements could increase by half a million.
So overall revenue net of hedges nets out to just under $62 million, even with last quarter.
Looking further out you can appreciate our earning potential with anticipated continued volume growth and significantly reduced negative hedge settlements even with some backwardation.
Moving onto cash flow and cash flow allocation.
Cash capex was $37 million or 7% higher than accrual basis Capex.
This is reasonable in light of the prior quarter cash capex corresponding to only 40% of accrual.
The components of the $10 million of financing cash flow includes 6 million for dividends of $2 million credit facility pay down a bit under $2 million of expenses to tied to the refinancing of our credit facility.
Quarter in credit facility balance was $61 million.
Looking ahead near term, we may pay that down by roughly $5 million over the coming four to six weeks.
On capital allocation generally our current mindset is to continue to seek higher organic growth.
Growing through the drill bit does require a higher reinvestment rate and thus leads to lower free cash flow conversion rate compared to lower growth companies such as many of the large caps keeping production flat.
We recognize there's a trade off and then a much used valuation metric for a lot of the investment community is a free cash flow base yield.
Though we do see our free cash flow growing in the year ahead.
Year to date, we've allocated about 78% of cash flow from operations before working capital to cash Capex.
Roughly 15% of that Capex can be associated with our E O R project exclude.
Excluding you are then worried about 66% reinvestment rate tied to traditional E&P investment.
So you can compare the 66% reinvestment rate versus the 24% year over year oil production growth and that's pretty good if.
If you exclude year to date hedge settlements of $60 million, you get cash flow before working capital of $159 million and a corresponding 41% reinvestment rate.
Then consider that 41% rate to the 24% growth and compare those two metrics to some other companies that are less hedged.
Year to date, we have distributed 83% of free cash flow in the form of dividends.
A few final thoughts here on the macro environment and ESG.
Oil and gas continues to be the number one primary energy source globally by a long shot with.
With oil alone Riley Permian, it's just small participant.
$3 five trillion per year global market.
We've witnessed a structural downward shift in investment in oil and gas over the past few years, partly in response to shareholder priorities for mostly domestic companies, but more broadly in response to growing ESG mandates and shifting of capital allocation globally.
We are believers in the many positive aspects the ESG can bring the corporate governance and stewardship with.
We balance our objectives of producing low cost energy with our commitment to looking after the environment, our employees and our shareholders.
But we're also seeing a refreshed welcome dialogue this year reexamining ESG based on perspective and context.
In the last three years, we've experienced foreign supply chain breakdowns, leading to rethinking of offshoring manufacturing and labor as well as dramatically heightened geopolitical tensions and global energy crises across continents.
In this context, providing basic energy needs from responsible sources should be valued.
At Riley Permian, we are a U S company with 100% domestic operations, 100% domestic staff responsibly, producing 100% domestic natural resources that are among the highest demanded products in the world in which helped close feed.
Shelter warm cool and transport our global population.
Thank you and I'll turn it back to Kevin now.
Thank you Philip.
I will now give guidance for the company's activity for our fiscal fourth quarter and the full fiscal year 2022.
For the fiscal fourth quarter, we forecast accrual basis capital expenditures of $28 million to $34 million.
<unk> with those forecasted cost the company estimate drilling four gross and three two net completing seven gross four net and turning to production seven gross four net horizontal wells.
Along with other customary capital project expenditures, including prep work for our fiscal 2023 development program, along with $4 million to $6 million for our pilot project.
We forecast fiscal fourth quarter of 2022 oil production to average 8000 208600 barrels per day and total equivalent production averaged 11100 to 11600 barrels of oil equivalent per day.
We anticipate fiscal fourth quarter, LOV, low <unk> of approximately $8 million to $10 million.
With the low end corresponding to actual fiscal third quarter results and the high end accounting for costs associated with the increased production volumes and continued inflationary pressures.
In addition, we are forecasting cash G&A expenses of approximately $4 one to $4 7 million.
With modest upward revisions for our full year fiscal 2020 to accrual basis capital expenditures.
Of $109 million to $115 million up from previously provided estimates of $102 million to $111 million.
For full year fiscal 2022, we are forecasting an annual total wells completed and brought online 19 gross 15 net wells.
We anticipate full year accrual basis EUR related capital expenditures to total approximately 16 to 18 million.
Approximately $4 million of what was previously estimated accrual basis capital expenditures for our <unk> program are now anticipated to incur in fiscal 2023.
The company plans to began C O two injection during calendar fourth quarter of 2022.
Based on our current estimates we forecast full year fiscal 2022 oil production to average 7800 barrels to 7900 barrels per day, representing a 22% to 24% growth for fiscal year 2021 average oil production.
In addition, we forecast full year fiscal 2022 total equivalent production averaged 10000 310400 barrels of oil equivalent per day.
And with that I will now turn the call over to Bobby for closing remarks.
Thank you, Kevin and again, thank you to everyone for joining us today for our third fiscal quarter call.
As we look forward our team is taking several steps to navigate through inflationary pressure for services and products, including securing materials and services well ahead of schedule activity plans.
We remain focused on a disciplined model of low leverage production growth and return of capital through dividends to our shareholders. Thank.
Thank you again for your support operator, you May now open it up for questions.
Thank you.
As a reminder, if you would like to ask a question Press Star then the number one on your telephone keypad.
Well pause for just a moment to compile the Q&A roster.
Your first question comes from the line of Bertrand honest with true Security. Your line is now open.
Good morning, guys, you kind of touched on it in the prepared remarks, but I was just looking for a little more.
Color on the shareholder return front you are at about 5% with the base dividend is the plan to just grow that as as cash flows grow or are you thinking about layering in other options or are you maybe it would be the other train of thought where maybe some additional organic growth or external growth is really the best.
Use of cash.
Yeah. Thank you Brooks this is phillippe.
It's a it's a fair question for now I think we're focused on the dividend we've talked about different measures.
Our goal to grow the dividend annually.
We cant speak exactly as to what will happen until our board approved something but if we want to prove something annually at this point, we just paid our fourth dividend at the same level. So.
We're hopeful we can we can raise that in the future.
Our general goal is to raise that high single digits close to 10% or so.
In addition to that at the moment, we see benefit of paying down debt and building liquidity a bit it gives us more optionality for pursuing acquisitions and such if we should see something attractive just given capital availability in the market and such we're mindful of using too much debt for some.
And so it's nice to have the full availability, even though our current leverage is so low.
We have talked about different types of different return programs. Obviously, we watch the market, we see others do buybacks for example.
We discussed that with our board and I understand some of the tradeoffs benefits and drawbacks there.
One note is that we do have a relatively lower float and we're working to improve that.
But at the same time, we can recognize the potential benefits of supporting our stock price during times of volatility. So we'll keep looking at it in a final thing I'd say is the.
Free cash flow was.
What surprised this year with the.
A bit higher spending with EUR projects.
Hedge settlements going forward, we should have.
More.
Based on what we're seeing in our forecasts and even with some backwardation and so that that should give us some more options.
And that the high the note on high single digit growth is that based on maybe the company's outlook.
Where the markets are growing on a macro sense or is that more about where you think next year Riley cash flows are.
I think it supports our long term vision of what we can achieve and have as a sustainable dividend we see.
Haven't disclosed or even formalized even internally a 2023 budgets, but it's it's fair to say that we want to continue the type of growth that we've achieved to date.
Even with the overlay.
Some of the backwardation for my little illustration, there the tradeoff with the rollout of the hedges can still be a net positive. So we do see.
Cash flow in such growing quite a bit more than high single digits.
Overall, EBITDA in such growing quite a bit more than that and yet on the dividend. We want to have something that we can support long term through some volatility.
That's perfect and then my next question was just kind of on that topic the hedging slide.
You assume just for the percentages, but the presentation, 15% growth year over year I just wanted to understand is that just for simplicity Matt.
Or is that to kind of give a baseline growth and does that have some assumed.
Commodity strip pricing.
Probably both on the first part of your question just to clarify that first column, there with 50% does tie to our guidance. There is zero percent or very small amount of growth. There and then the subsequent quarters do assume at 15%.
Year over year growth there.
It's indicative of where we want to grow if not more.
Just to put that into context.
Thinking about volumes.
I think it's a fair amount it doesn't have a comp it doesn't have an overlay with the commodity prices. It's just a pure volume.
Pure volume exercise there.
That makes sense I'll hop back in the queue. Thanks, guys.
Your next question comes from the line of Noel Parks with too High Brothers. Your line is now open.
Hi, good morning.
Good morning.
I just.
A couple of basic ones.
Just thoughts at this point about what you might be looking at for for rig rates going forward and just curious for the the.
The rigs that you the classic brings that you use.
Are you seeing there.
Vendors sort of avoiding.
Youre locking in.
Longer contract out of hopefully you will see sort of upside for per spot pricing or instead or they might be looking to try to.
We'll be into a longer commitment these days.
For us we've.
Done well and being able to secure rigs for a good part of our fiscal 2023 program. So.
So far.
That puts us through probably the spring of 2023, although we see the availability of the option to extend and add on.
With the vendors that we've chosen to use so far.
So I think that a lot of the guys in our area are just trying to look at.
Utilization and consistency versus.
The volatility that comes with the spot price.
Okay.
Gotcha.
Okay, great and.
And anything.
On the materials front, you could talk about.
Materials are still tight.
Fortunately, we have locked up a lot of the raw materials that we need for our program.
Steel fan.
The rigs and some of the service crews and continuing to look to add to that list but.
It is.
A very tight market and to be able to ask.
Accelerate quickly.
Be very challenging right now without plans well ahead.
Securing the items that are in tight supply.
Sure.
Create a pretty consistent with what we're hearing.
Across basins I'd say.
And.
Yeah, I guess, just as you as you look at.
Longer term investments.
For example.
For the year of a project and how.
How that might.
Extend over time.
For example in the carbon capture.
As the interest rate environment.
Given any major change sort of your your.
Scenarios that Youre modeling forward just in terms of looking at cost of capital and then.
Rates of return.
Okay.
Yeah.
It's a fair question I think given where our leverage is such a small component of our overall enterprise value that we focus primarily on cost of equity capital.
We consider that to be quite a bit higher than that.
That has gone up a bit.
We are fortunate we've got some interest rate hedges in place that are that are in the money and helping us out there a bit embedded there that you don't see too often going forward, though with the.
Growth.
Price and free cash flow profile that we see we frankly see.
Leverage continuing to decline on an absolute basis. So it's just a pretty small number overall.
It can influence our thinking on say a debt finance acquisition.
But the type of growth that we're looking at is primarily driven by our cash flow, we don't see needing to dip into.
To do that materially.
On the carbon capture front I'm very briefly most of what we're looking at is more of a partnership model, where we might do a fee for service and Riley Permian is not using its balance sheet to say by the capture equipment that might have a return that is lower than what we consider our cost of capital.
B.
But rather just take our fees for taking and using our storing the CEO too.
Got it great.
Great. Thanks, a lot. Thank you.
Are you.
Your next question comes from the line of Jeff Robertson with water Tower Research. Your line is now open.
Thank you good morning.
Kevin as you as you think about 2020 fiscal 2023 activity levels would you expect at this point given where costs are.
Our commodity prices our debate.
Carry on the activity levels that you have forecasts for the fourth quarter of 'twenty two.
Yes, I would expect.
To continue to operate at a pace.
Similar to the year that we're in.
Especially as Philip alluded to with hedges continuing to roll off.
We will have more cash flow, we want to continue to grow at a pace that we've grown over the last four or five years.
And overall I mean D&C cost.
Gone up around 26%.
Oil prices have nearly doubled.
It's not one to one were still.
Our returns and growing the company so.
Don't see it.
Slowing down at this point, we have a good return on the asset we have.
Kevin do you have a feel yet for.
What 2023 costs might look like as you procure.
Some of the equipment that youll need for the fiscal 'twenty three capital program.
Paired with 26 sort of increase Youre seeing now.
I think that we've probably seen a lot of the increases already.
We realized in the last quarter or two.
As we go forward, we hope to even be able to arrest further inflation or possibly lower the cost or some of the efficiencies we are continuing to gain and.
For instance, sand, we're starting to self source sand, so that'll be a savings and just becoming more efficient in our operations in may.
Making sure there's everything is done.
To the right degree versus over fracking or Overdrinking, a well so.
Hopefully we were at the peak of that I can't.
So that certainty but.
We hope that's the case.
And then on the gas processing capacity.
How much of an impact is that does that have on your fourth quarter production estimates of 11, one to $11 six <unk> a day in other words. If you didn't have constraints do you have a feel for what that number might be but the production number range might be.
For fourth quarter I think we have.
It baked in that we're going to produce or sell most of which we produce.
As stated we started selling at or indeed, Q level or higher.
In July and the plant expansion was completed on July 12, formerly announced completed so I think that.
We are on target to meet our production production range of guidance.
If not beat it.
Still just trying to make sure we don't have any surprises with the new plant.
So far everything is working smoothly and we're excited to see the results.
Okay. Thank you very much.
Your next question comes from Sandra Vandenbrink with Takahe Capital Corp. Your line is now open.
Thank you good morning.
Gentlemen, first I'd like to congratulate you on a successful quarter and thank you for your continued hard work and focus.
My question could you speak to where you are with the C O two flooding for enhanced oil recovery.
Good morning, Sandy This is Bob morning, Hi, Bobby.
Yeah, as we calibrate and they're all six of our initial plan. The injection wells are now online we are injecting water.
At a slightly higher rate than we actually originally modeled which means and that's that's a good thing for us.
<unk>.
We are.
Just starting to see some communication not breakthrough or anything like that between communication.
Between our view of the World So things are on schedule player.
We plan to start injecting cotwo in the fourth.
Calendar quarter.
Which we would expect to see some response.
Relatively soon but it's still too early to make an exact prediction but.
Things are things are online.
I chatted with them in this morning.
And they're very happy with the response that we're seeing in the way that your operations going.
Great look forward to hearing some more results.
Your next question comes from the line of Richard Gere Neely with long quite partners. Your line is now open.
Good morning to follow that last question.
Does the new tax credits, which seem to be.
Great.
A large increase.
Meaningfully changed the dialogue.
Oh two.
I can take that this is phillippe.
We're pleased overall to see that go through it. It is as you say, it's a meaningful increase for EUR storage, it's about $25 incremental.
For permanent it's 35, both correspond about a 70% increase.
This industry for equipment is not insulated from inflation just like.
Just like the rest of the world. They are suffering from that sow costs for equipment have gone up as well.
Maybe maybe maybe 40%. So we're hopeful that just like our financial performance that the revenue is still outpacing the cost increase.
But there is there is some trade off there.
There are other aspects of it that are helpful. You've got five years of direct pay.
And you've also got a reduction in the minimum size threshold from say 100000 tons down.
Hum.
Way down down to 12000 or so.
For for the groups that we're talking to.
We are.
We're processing all of this.
We've got potentially a tax appetite in the future.
We've talked to groups that are more financial types that could help us monetize that tax credit but some.
Some of this does make it more interesting and what I can say is we're working hard on it then.
We're excited about it.
Especially the credit what that could represent for something.
For us would be really meaningful.
We've got this fully permitted project is ready to go it doesn't have the timing delays like a classic well might have for the permanent storage. So we see.
Citing opportunity to essentially start with something there and then later in its life potentially shift to permanent.
Good thank you very much.
As a reminder, if you would like to ask a question Press Star then the number one on <unk>.
Telephone keypad your.
Your next question comes from the line of Jeff Robertson with Robert a water Tower Research. Your line is now open.
Thanks, Philip a follow up on the EUR as you start to inject cotwo in the fourth quarter of calendar 'twenty two.
While you're injecting when before you get response will the <unk> costs are the Sidoti cost rather be capitalized as a capital expense.
And then it reverts to an operating expense when you start producing or is it does it going to be in operating expenses, while youre in now.
Yes, you are right. The former is how we're thinking about it it's capitalized towards the beginning and then at some point, we make a determination.
And.
Shifting to operating.
Okay. So how long are you trying to be clear.
With that going forward, yes, that's right and so as we start talking next year, we'll try to give some clearer guidance as that can be a little bit confusing.
Thank you.
There are no further questions at this time. This concludes today's Q&A and today's conference call. Thank you. So much for attending you may now disconnect.
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