Q2 2022 Ring Energy Inc Earnings Call
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I would now like to turn the conference over to Al Petrie Investor Relations for Bank Energy. Please go ahead.
Thank you operator, and good morning, everyone.
I'll begin our call with comments from Paul Mckinney, the chairman of the board and CEO , who will provide an overview of key matters for the second quarter. We will then turn the call over to Travis Thomas Rings, Chief Financial Officer, who will review our financial results. Paul will then return to discuss our future plans.
Outlook before we open the call for questions also joining us on the call today and available for the Q&A session, Alex <unk> Executive Vice President of Engineering, and corporate strategy Marinas Bad Daddy's Executive Vice President of operations, and Steve Brooks Executive VP of land legal human resources.
Horses and marketing during the Q&A session. We ask you to limit your questions to one and a follow up.
Youre welcome to reenter the queue later with additional questions or would also note that we have posted a Q2 2022 earnings corporate presentation to our website. During the course of this conference call. The company, we're making forward looking statements within the meaning of federal Securities laws investors of course.
And that forward looking statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward looking statements and the company can give no assurance that such forward looking statements will prove to be correct.
<unk> disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information future events or otherwise.
Accordingly, you should not place undue reliance on forward looking statements. These and other risks are described in yesterday's press release and in our filings with the SEC.
These documents can be found in the investors section of our website www dot and marine energy Dotcom.
Should one or more of these risks materialize or should underlying assumptions prove incorrect actual results may vary materially.
This conference call also includes references to certain non-GAAP financial measures reconciliations of these non-GAAP financial measures to the most directly comparable measure under GAAP or <unk>.
Find in our earnings release issued yesterday finally, as a reminder, this conference call is being recorded I would now.
Now I'd like to turn the call over to Paul Mckinney, our chairman and CEO .
Thanks, Al and welcome everyone and thank you for your interest in renewable energy. We appreciate you joining us today to discuss our recent results and outlook for the rest of the year.
As you know on July 5th we announced we had entered into a definitive agreement to acquire the assets of privately held stronghold energy.
The operations are focused on the development of 37000 net acres in the Permian Basin Central Basin platform, where we also conduct operations.
Before we get into a discussion about the pending transaction, we want to share with you the results of our very successful second quarter.
Our second quarter results are a direct reflection of our ability to execute on our value focused proven strategy. During the quarter. We benefited from strong performance of our drilling and completion program. Our continued focus on operating cost control and significantly higher realized oil and natural gas prices. The result.
Was record setting sales revenue and adjusted EBITA adjusted EBITA increased 33% when compared to this year's first quarter. In fact, we have already generated nearly as much adjusted EBITDA in the first half of 2022 as we did in all of 2021.
We also posted another quarter of free cash flow generation, our 11th consecutive quarter and reduce debt by an additional $10 million.
Our posted sales volumes for the quarter were 9341 barrels of oil equivalent per day, which was over 5% higher than the first quarter and at the higher end of our guidance range.
As I said earlier driving our higher end performance was the continued success of our 2022 drilling program as well as our capital Workover program.
Looking specifically at our drilling program during the second quarter, we drilled nine wells completed seven wells and began the completion process on four wells with all activity for the period focused on our northwest shelf acreage.
Leveraging our learnings from the last year, we remain squarely focused on the geology selecting the best landing zones and improving our completion methods.
Two of the wells completed in the second quarter were one mile horizontal wells that were drilled in the first quarter and had a working interest of 100%.
In addition, we drilled and completed three one mile horizontal wells with a working interest of 100% and two one and a half mile horizontal wells with a working interest of approximately 99%.
We also drilled and began the completion process on an additional four one mile horizontal wells two of the wells have a working interest of 100%.
One had a working interest of 87, 5% in the fourth has a working interest of 75%.
During the second quarter, our lease operating expenses as expressed on a per BOE basis were 13% lower than the first quarter of 2022 due to lower costs and higher production.
We attribute the lower cost to the efforts of our operating team and their focus on driving efficiencies in our operations. As you know we have continued to execute on our program to convert wells from downhole electrical submersible pumps to Rod pumps capital Workover program, we call C. T. R's this program leads to longer economic.
It lives of the wells improves the ultimate recovery of oil and gas reserves and has been a significant contributor to reducing our total cost of operations.
As we look to the future we have achieved our goal of optimizing artificial lift on our existing wells and we will be performing fewer C. G ours. During the second quarter, we performed for C. T ours, including three in the North West shelf and one in the Central basin platform with.
With respect to our capital spending we spent $41.8 million during the quarter and exceeded our second quarter guidance of $34 million to $36 million. The variance was primarily due to accelerated completion activities on the four additional wells that were placed on production in early July .
Our full year capital spending guidance of $120 million to $140 million remains unchanged. We are simply changed the timing and pace of spending this quarter as a result of the efficient execution of our drilling and completion program. We look forward to our continued efforts in this regard during the second half of 2012.
Two as we drive additional efficiencies to increase production to.
The combined result of our efforts to date has been free cash flow generation that was used to reduce our debt and further strengthen our balance sheet.
During the first half of 2022, we paid down 20 million in debt and lowered our leverage ratio to two one times, which was almost a full turn and a half lower than where we stood at year end 2021. We ended the second quarter was 81 and a half million dollars of liquidity, which was approximately <unk>.
32% higher than at the end of 2021, and a 58% increase from the same time last year.
Looking to the third quarter, we expect to drill seven to nine wells, while completing and placing on production eight to 10 wells and expect sales volumes to be higher than the second quarter and range between 9500 to 9900 barrels of oil equivalent per day.
In response to the strong performance, we experienced in the second quarter and to date in the third quarter. We are increasing our full year sales volume guidance range to 9300 to 9700 barrels of oil equivalent per day from our previous guidance of 9000 to 9600 barrels of oil equivalent per day.
With respect to the fourth quarter.
We intend to provide more insight after we close the pending stronghold acquisition. We believe there is a great opportunity to take advantage of the improved capital efficiency of the combined portfolio to meet or exceed our production growth goals. We're less capital having said all of this we will continue to retain the ability to adjust our drilling and other capital.
Spending programs to reflect any material changes in commodity prices if necessary so with that I'll turn it over to Travis to discuss our financial results in more detail Travis.
Thanks, Paul and good morning, everyone. We appreciate your participation on today's call and interest in Marine energy and.
As in the past my comments today will primarily focus on our financial position and sequential quarterly results for a detailed discussion concerning comparisons to last year's second quarter. Please see our press release and 10-Q, we filed yesterday with the S E C.
During the second quarter of 2022 we sold 729000 barrels of oil and 723000 Mcf of natural gas for a total of 850000 P O.
This is compared to sales of 676000 barrels of oil and 732000 Mcf of natural gas or a total of 798000 Boe for the first quarter of 2022.
Second quarter realized pricing was $109.24 per barrel and $7.29 per mcf or $99.95 per B O E D.
During the first quarter, we had a realized pricing of $93.80 per barrel and $6.49 per mcf or $85 41 per Boe.
Our second quarter average oil price differential from Nymex W. T. I was a positive 81 cents per barrel versus a negative 90 cents per barrel for the first quarter of 2022.
This difference is mostly attributed to the Rguest CMA role, which averaged $2 60 per barrel in the second quarter and only a dollar one cent per barrel in the first.
Our natural gas price differential from Henry hub for the second quarter was a negative 23 cents per mcf compared to a positive differential of $1 81 per mcf for the first quarter.
Contributing to the difference was a change in the agreement and how we account for gathering transportation and processing or G. T P costs, which I will discuss shortly.
Our second quarter natural gas price differential adjusted to the new contract and including estimated G. T. P cost would have been a negative dollar and 14 cents per Mcf.
The combined result was a record quarterly revenues of $85 million, there were 25% higher than first quarter 'twenty 'twenty revenues of $68 2 million.
Looking at the more significant expense line items on the income statement.
Louis was $8 $3 million or $9.77 per BOE, which was below the low end of our guidance range compared to $9 million or $11.22 per Boe for the first quarter 2022.
Primarily contributing to the decrease was a lower level of Workover expense in the second quarter.
G T P costs were 500000 versus $1 3 million in the first quarter of 2022.
Due to a contractual change effective may 1st we no longer maintain ownership and control of the natural gas through processing.
As a result G. T P cost moving forward will be reflected as a reduction to the natural gas sales price and not as an expense line item as such for modeling purposes for the third quarter and moving forward the gas price deduct it should be used in lieu of the G. T P expense.
Production taxes were $4 $2 million versus $3 2 million for the first quarter the tax rate remaining steady at a little less than 5%.
DD&A was $10.7 million compared to 9.8 for the first quarter, both substantially unchanged on a Boe basis.
Cash G&A, which excludes share based compensation was $3 9 million versus 4 million for the first quarter 'twenty two into the first quarter included additional accounting tax and legal fees associated with filing the 2021 10-K intra.
Interest expense was $3 3 million versus $3 four for the first quarter with the decrease substantially due to a lower average daily borrowing balance our RVO.
During the second quarter, we posted net income of $41 $9 million or 32 cents per diluted share.
Excluding the estimated after tax impact of pre tax items, including $12 $2 million of noncash unrealized gain on hedges and $1.9 million for share based compensation expense, our second quarter. Adjusted net income was $31 $3 million or 29 cents per share.
This is compared to the first quarter of 2022, net income of $7 $1 million or six cents per diluted share.
Excluding the estimated after tax impact of pretax items, including $13.5 million for noncash unrealized losses on hedges and 1.5 million for share based compensation expense. Our first quarter. Adjusted net income was $22 $3 million or 22 cents per share.
As of June 30th we had $270 million drawn on our revolving line of credit and liquidity of $81.5 million, including $2 2 million of cash and $79 2 million available on the revolver, which reflects a reduction of 800000 for letters of credit.
We are pleased to pay down the facility by an additional $10 million in the second quarter and look forward to further debt reduction during the remainder of 2022.
As I mentioned on our last quarterly call in April a total of $6 5 million of our common warrants were exercised at a price of 80 cents per warrant accordingly, our second quarter results reflect the issuance of $6 5 million shares of common stock and the receipt of $5 2 million of cash.
There are currently approximately 23 million common warrants that remain unexercised.
Turning now to the outlook for the third quarter of 'twenty 'twenty. Two we are targeting sales of volumes of 9500 to 9900 Boe per day with the midpoint of our guidance, representing a 4% increase from the second quarter and more fully reflects the benefit of the continuous drilling program. We initiated in late January .
As Paul discussed, we expect to drill seven to nine wells and complete and place on production eight to 10 miles during the third quarter we.
We also expect alloy of $10.25 to $11 50 per Boe.
As noted in the earnings press release G. T. P costs moving forward will be reflected as a reduction to the natural gas sales price and not an expense line item.
We are increasing our full year 2022 sales volume outlook to 9300 to 9700 BOE per day, we continue to anticipate total capital spending of $120 million to $140 million for full year of 2022, which includes the estimated cost to drill a 25 to 33 wells and complete 25.
To 30 wells.
Our full year capital spending outlook includes targeted well reactivation workovers infrastructure upgrades and continuing our successful Ctr program and northwest shelf and Central Basin platform.
Also included as anticipated spending for leasing contractual drilling obligations and non operated drilling completion and capital Workovers.
As Paul noted our 2022 capital spending program assumes a favorable commodity pricing environment.
If prices were to pull back materially we have flexibility to reduce capital spending as necessary.
For full year 2022 we anticipate alloy of $10.25 to $11.25 per Boe.
In terms of our hedge position as we have mentioned more than a few times before the roll off of the majority of our lower priced hedges occurred beginning of the year. The benefit has been clearly evident in our year to date financial results.
In late June and during July we added our hedge position to secure strong pricing levels in support of our acquisition of stronghold C. B P assets.
We utilized put options with an average strike price of $100.90 in 2022 and $90.64 in 'twenty 'twenty three.
We will continue to pursue a proactive hedging strategy that supports our ongoing capital investment strategies to help protect our cash flow generation and remove some of the pricing volatility that some of you might have noticed in the market recently.
I will now turn it back to Paul for his closing comments before we answer any questions Paul.
Thank you Travis as you have heard our second quarter results demonstrate the benefits of our decision to transition to a continuous one rig drilling program supported by stronger realized prices for oil and natural gas, we expect production and operating cash flow will continue to grow throughout the remainder of 2022.
Assuming the existing price environment continues.
Complementing these efforts are our ongoing initiatives to drive further efficiencies in our operating cost structure.
Before I turn the call over to questions I would like to discuss the merits of the pending acquisition of strongholds Central basin platform assets we.
We expect to close the acquisition later this month or early September as you may recall, when we announced this deal the company's production after adding these assets will almost double and the stronghold production will further diversify our commodity mix the transaction will be immediately accretive to cash flow per share free cash flow per share.
There as well as production in reserves per share and it will improve our leverage ratio and ability to pay down debt.
The inventory of investment opportunities included in this acquisition will also provide increased optionality and capital efficiency on multiple fronts. So what do I mean, when I say increase capital efficiency. It means that the opportunity is contained in the combined portfolio can achieve the same production growth for fewer dollars.
Which will allow us to allocate excess cash from operations to more quickly pay down debt and ultimately return capital to our stockholders through cash dividends or stock repurchases to illustrate this point our leverage ratio at the end of 2022 as a result of this transaction is expected to be approximately one and a half time.
<unk>, despite adding that in comparison, we previously targeted two times leverage ratio on a standalone basis at the end of this year. This improvement in leverage ratio is due to the improved capital efficiency and higher free cash flow generation of the combined assets, which as I said earlier will allow.
Al to pay down debt at a faster pace. Both this year and next while continuing to invest and grow production assuming current pricing.
The transaction truly complements our existing footprint of conventional focus central basin platform and northwest shelf.
Our operating team has extensive experience operating stack pay multi zone vertical asset from the earliest parts of their careers. We look forward to further revitalize and an area. We know so well with modern drilling and completion technologies. We also look forward to welcoming the strong whole operating team to rain.
We also want to discuss the merits of partnering with Warburg Pincus and the four banks that underwrote the financing tourist securities citizens Bank Keybanc and Mizuho Bank as you know the owners of stronghold have agreed to take a significant amount of ring equity as part of this transaction we believe.
Their ownership should encourage our existing stockholders because of warburg's long history of creating value with similar transactions. We also welcome. The addition of two Warburg directors to our board and look forward to working together.
With respect to the four banks they chose to underwrite this transaction because of their knowledge of the assets and the strength of the portfolio. The credit facility will provide new benefits to our stockholders, including the ability to pay dividends and buy back stock in the future under certain conditions as you may know our existing <unk>.
That facility does not allow us to do this.
To sum things up we are very excited about the future and the many opportunities that lie ahead. Once we closed the stronghold transaction, we will be a bigger and stronger company with more alternatives, we're creating value for our stockholders. We will remain focus on the fundamentals of keeping our costs low and allocating our capital to projects that deliver the highest.
Returns in support of our value focused and proven strategy and with that I will turn the call back to the operator, and we look forward to answering your questions operator.
We will now begin the question and answer session.
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At this time, we will pause momentarily to assemble a mouthful.
Our first question today comes from Jeffrey Campbell with Alliance Global Partners. Please go ahead.
Good morning.
Congratulations again on the acquisition.
I wanted to ask you.
For your overview.
Services materials costs for the second half.
Alright.
Brendan.
Some of the upper revisions.
Costs that we hear about.
Slide 10 of the presentation shows zinc costs have risen versus prior periods.
So my overall impression.
Inflationary pressures.
Forecast.
Okay.
Cheers.
Yeah.
Yeah. Thank you, Jeff for that and yes, you're right we.
We did try to factor in.
You know rising prices at the time, we look back at history and saw how are prices for several of the goods and services that we employ had.
Over the 2021 and so as we budgeted for this year, we did extrapolate out a similar projection of increased costs out. So far are in my opinion anyway, we knocking on wood here, we've been fairly accurate costs are still coming up but they're still in line with <unk>.
What we had originally projected at the beginning of the year.
Okay.
And for my second one.
Thinking about producing more and spending Alaska you referred to it in your remarks. So I'm just wondering if you could provide some color regarding productivity expectations between the strong hold.
Meanwhile, inventory versus the re completion inventory.
They're both pretty large inventories.
I'm wondering if we should think of the new wells is more in line with it.
Production growth.
<unk> targeted.
Right.
Yeah, I'm I'm I'm going to turn that question over to Marino is but I think that's a good assumption.
New wells do bring on more production the re completions do tend to maintain because they are at with each rig completion in the production volumes that you get.
After completing the re completion are generally less than drilling new wells do you want to add any more color to that sure. Another thing that that adds to the equation is the fact that the cycle times between our assets and the strong molasses, it's less capital being spent but the production gets online a lot sooner.
So that that that's another big part of what creates the capital efficiencies with the combination of the assets comparator will bring in less production.
With those new wells, but because it's coming on online so much faster.
We're just going to have to evaluate the combined assets and and get a better feel for things once once we get our get our hands on the on the properties.
Okay, Great and I appreciate that I look forward to more color on.
Things like you are some costs and so forth once you close the acquisition.
Thank you Jeff.
Yeah.
The next question comes from Noel Parks with Tuohy Brothers. Please go ahead.
Okay.
Uh huh.
Hi.
Oh.
Your line is open.
Oh, Hi, good morning can you hear me this morning.
Yes, we can.
Great I just was wondering could you talk a bit about.
Sort of the status.
Just your your rig outlook.
What is that.
Tom Hall properties combined I'm, just wondering as far as what.
In combination are you you think you will have for for contracts going forward.
Right.
Well at this stage right now we haven't.
I had to make any changes to our existing program going forward.
And I don't know if we got into a lot of the details about the stronghold team earlier this year the strong whole team was running a rig.
We're looking at the virtues of picking up a rig in that area.
And we have not decided on exactly what we're going to do in the fourth quarter, because we really want to spend more time getting into the details.
With me.
The strong whole asked that spend more time with the strong whole team because they know them, so well and so with respect to you know, adding other rig or that absolute capital spending levels, we havent decided that and that's the primary reason why we said we were going to wait until after we close the transaction before we announced our guidance for the fourth quarter.
Okay.
Great Thanks and I.
I guess the other thing.
Uh huh.
But maybe could you just.
Touch again on the the G T P costs and.
You can just kind of review that I think I got most of it but that that expense line I guess, there's going to be going away and then.
It'll everything I'll just be reflected in the realized price that.
You know Travis that's correct and you've got a little background noise, there as well Oh, sorry Edward.
Because they are taking control of the gas at the wellhead.
Because of ASC 606, just an accounting difference so we won't be netting that out of the realized gas price. So going forward you will see a the differential will change on the gas, but we will not have that line item under the expenses going forward.
Okay.
Okay, great. Thanks, a lot.
Okay.
The next question comes from Jeff Robertson with Watertown Research. Please go ahead.
Thank you good morning, Paul with respect to your comments about Warburg Pincus.
So as their ownership stake of 34% in two director Sir two board seats does that suggest that they think they can get a lot more value longer term from their investment in strong hold through ring.
And equity upside and then secondly are there shares covered by a standard registration rights agreement.
The other good questions and I'm not going to speak on behalf of Warburg Pincus.
But yeah. That's my assumption that the reason why they were willing to accept a such a large amount of the total consideration is in ring equity is that they they do believe that they can create more value with the combined assets and so the.
To answer your second question, Yes. They are if you go back to the purchase and sale agreement that was included in our announcement.
In the table of contents, we can see in there there's a form of a registration rights agreement.
The majority of those terms have been negotiated.
But that will be signed and executed at the point of closing on the property and so yeah that registration rights agreement as you know stipulates. Our you know our support and assistance associated with with any future transactions or sale of the stock my.
Asian of Warburg Pincus with other similar transactions that they tend to hold onto their stock and they tend to.
Work with the management teams to create additional value they have a long history of doing that and and so yeah. That's that's that's my perspective that did I answer your question Jeff.
Yes, you did I know I know they've held some of the companies I've been involved with they've been involved for years.
So.
As a second question you talked about the.
Pro forma free cash flow capacity of ring and.
In 2021, I'm, sorry, 2022 and 'twenty three.
And you mentioned a notion.
A share capital returned to shareholders is there a leverage ratio that you need to get to where you want to get to before you would even realistically consider that.
Well yeah. So if you look at the new credit facility that will have in place as we've mentioned.
The current credit facility doesn't allow us to make any kind of restricted payments.
But the facility that will have in place upon closing does allow us to do that now I believe the earliest that we could ever get to the point of actually paying.
Dividend or a stock buyback would be 12 months after I'm not committing that that's when we would do that but the marketplace has been very loud and clear to the oil and gas industry and and investors in the oil and gas industry really wanted to have a real return and it is our intention to provide real returns to our.
Our stockholders in the future and that's part of the reason why we've.
You know put these mechanisms into the future and the credit facility will have upon closing.
And but I'm not going to say what that will be at this point I think it's a little premature to Amazon and all kinds of things market conditions prices, our stock price and all that kind of stuff what are the best opportunity for our shareholders and we'll make that decision closer to the time that we actually we actually do that.
Did I answer your question on that.
Yes, you got it thanks for taking my questions.
Youre welcome.
As a reminder, if you would like to ask a question. Please press Star then one until the question queue.
The next question comes from Neal Dingmann with choice.
Please go ahead.
Good morning, Thanks, Thanks for the time.
First question just on the stronghold.
Lauralee again, honestly and you'll have to be close but I'm. Just wondering I think on the M&A call you'd mentioned at least I know they haven't had a rig there Gordon.
I don't I think there's some noise maybe.
Maybe not putting a rig there initially is that sort of still the.
But I'm just wondering again I guess overall I'm just thinking when you all look at capital allocation.
Anticipate either this year early next year.
Allocating.
<unk> funds, there or how should we think about it.
The allocation for the second half of this year.
Yes.
Yeah, I'm going to give you my two cents, what I'm gonna, let a couple of others here chime in.
No that would not be a good assumption I look at the opportunities and their portfolio. Many of their opportunities are every bit as economic as ours.
So we will be allocating some D&C capital to the strong whole assets because they are just that strong.
We just haven't been willing to commit to say at this point when we will do that I don't think it's out of the question to believe that we could pick up a rig in the fourth quarter right.
Right now we are looking at our capital spending program.
Comparing that to the opportunities that are in those strong whole portfolio from my perspective, and I'll I'll reiterate my strategy or our strategy as a company we have not liked the leverage that we've been carrying on our balance sheet and we believe that with the combined portfolio and increased capital efficiency of that port.
You know.
We can actually achieve the same production growth for less dollars and so we want to apply those dollars of reducing debt and we want to get and the goal is to build a fortress balance sheet and so but.
But to say that we won't allocate D&C capital to those assets no. That's not the case I think that.
It's more probable that we will ramps do you have anything else you had no I agree 100%, Paul we're talking about D&C, we're planning on it as of right now I think the questions are like like Paul said, when we will start and how many wells, we'll actually drill that that's kind of where we're at right now again evaluating.
Everything in that regard.
Got it great details Paul and then just a pump not asking I know, it's too early yet for 'twenty three guide, but I'm just wondering when you all kind of look now.
It potentially is going to wind down in the next year to start could you talk about maybe when you think about twenty-three again just bring in broad terms you know what you might you know what it might look at it from activity wise maybe hedging.
And maybe lastly service cost any any thoughts on you know again, you guys something that.
And I would agree I don't think you guys have.
As much pressure as some others out there so again I'm not looking for any sort of re guide but just.
Sort of broader how you're thinking about sort of exiting the year and starting next year.
We think about that.
Yeah, and we're willing to talk about broad terms I mean, if you look at.
The materials, we released at the time that we analysis acquisition.
We took the.
Capital spending profile of the AR of ring and then we combined it with our capital profile that we had assumed or it was included in the analysis of the of the strong whole assets.
And I think that the capital spending that that.
Information suggested for the fourth quarter, probably would be high if you don't I wouldn't take that fourth quarter and multiply it times four times, assuming that that's what we're going to spend next year. We believe that we can optimize our capital spending spend less money than that and still deliver immediate growth expectations that our shareholders have.
And also the debt repayment plans and so I.
I think that going into next year again as everything.
Everything's caveat it on what future prices are and all that kind of stuff.
But.
But the portfolio really does provide an opportunity to optimize.
It broadens, our our inventory of a really high rate of return.
Low breakeven cost opportunities and so our capital spending will be less than if you were to take those fourth quarter estimates and multiplying by four.
Could we be that high perhaps as a function of if oil prices rebound to continue moving at higher levels.
We would we would be.
Balance the issues associated with growth and paying down debt and preparing ourselves to actually deliver real returns to our shareholders.
Thank you so much.
Youre welcome.
This concludes our question and answer session I would like to turn the call back over to Paul Mckinney, Chairman and CEO for any closing remarks.
Thank you battery and so thank you all for joining US today as we said a little earlier, we're very excited about what the future holds especially.
After we complete the.
The pending transaction with stronghold.
And so we look forward to continuing to work hard for you guys and we look forward to hearing from you again and join US on the next call.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
Yeah.