Q4 2022 Peyto Exploration & Development Corp Earnings Call
Speaker 2: At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again.
Speaker 2: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, to JP Lachance, President and CEO . Please go ahead.
Speaker 3: Thanks Justin. Good morning folks and thanks for joining Payto's fourth quarter and year-end 2022 results conference call. I'd like to remind everybody that all statements made by the company during this call are subject to the same forward-looking disclaimer and advisory set forth in the company's news release issued yesterday.
Speaker 3: In the room with me today to answer any of your questions we have the entire management team. Kathy Turgeon, our Chief Financial Officer. Riley Frame, our VP of Engineering. Tavis Carlson, our VP of Finance. Todd Burdick, our VP of Production. Derek Zember, our VP of Land and Business Development.
Speaker 3: Lee Kern, our VP of Drilling and Completions.
Speaker 3: By all accounts, Q4 and 2022 as a whole was a very successful year for the company. The team grew annual production by 14% and PDP reserves by 8%. And that coupled with our higher commodity prices that we realized last year drove record cash flow and earnings for the company's entire 24-year history.
Speaker 3: But before we get into some of those details, I'd like to acknowledge and thank the folks here in the office for their efforts in achieving the past quarters and year-end results.
Speaker 3: We have a small but dedicated team in our Calgary office and that makes it all happen.
Speaker 3: Of course, an important part of our success is those folks in the field, the operators, the foremen, the maintenance crews, they keep our wells producing and our plants going.
Speaker 3: We had a very cold snap just before Christmas where all the hands were needed to keep production on stream. It's always good to see that the percentage of pay-dos lost production during this period was only about half of that of what the industry lost as a whole. To me that's a testament of our field folks' dedication and focus in the field.
Speaker 3: It's during these cold weather days when we as Canadians are reminded that not only is natural gas reliably heating our homes, but in many other places, especially here in Alberta, natural gas provides a reliable electric power generation too. In that sense, natural gas is truly life-saving energy.
Speaker 3: and we are proud of PADO to be one of Canada's top suppliers of it.
Speaker 3: Okay, enough of the soapbox here. 2022 was very much a consolidating interest year, a year where we consolidated interest and expanded our processing capacity, especially in the Braco area. FADO did two very complementary acquisitions. One was an underutilized gas line in Q1 and one was a...
Speaker 3: for undeveloped land in Q4.
Speaker 3: We might get Darab to expand upon these a little bit later and give us some more color on that. We also constructed the Chambers gas plant, which came on in Q2, and we've continued to optimize that facility up to a capacity now of 65 million cubic feet a day of gas and 2,500 barrels per day of liquids.
Speaker 3: We've also linked all those plants together in the Brazzo area to provide operational flexibility and total processing capacity now up to 250 million cubic feet a day.
Speaker 3: We also spent capital to expand and debalment gathering systems in Sundance in 2022 to accommodate future growth.
Speaker 3: I think all told we spent about $100 million which was a major facilities and pipelines last year.
Speaker 3: That's a very large portion of our capital program relative to past years and we don't expect to spend that this year. Perhaps we'll get Todd to expand upon our facility projects for 2023 later.
Speaker 3: For our February 16th reserves release, you'll note that PEDO replaced 165% of production with new PDP reserves and we did it for a finding development acquisition cost of $8.46 a barrel or $1.41 per MCFE. We're a gas company. We like to quote things in MCFE.
Speaker 3: which is high by pay-to-standards but still one of the most efficient amongst our peers given the inflationary pressures the whole industry endured last year.
Speaker 3: We also realized much better prices, including our hedging losses. When you couple that with our industry leading cash costs, it means we generated a cash netback of $3.74 per MCS E or 2.7 times more than it cost us to add those reserves.
Speaker 4: which is what we want.
Speaker 3: I mentioned gas prices were up last year. NYMEX natural gas prices averaged $6.38 per MMBtu up from $3.84 in 2021. But there was also incredible volatility last year where prices ranged from lows near $3.50 to highs over $9.
Speaker 3: ACO prices were also volatile, but with the added challenge of the market disconnection that happens during the summer maintenance season, where once again prices drop towards zero.
Speaker 3: It is for these very reasons that Payto has an active hedging strategy to smooth out the volatility so we can plan our capital programs, commit to paying dividends and continue to strengthen the balance sheet. It is also the reason why the company has a market diversification program with volumes pointed at various markets like...
Speaker 3: Lynn, Ventura, Dawn, Emerson, and Henry up
Speaker 3: Often the use of various marketing or transportation or basis deals.
Speaker 3: What we don't have is essentially any ACO exposure this summer as we expect to see a repeat of last summer's maintenance program.
Speaker 3: Late this year, we'll have about 10% of our volumes flowing to the newly constructed, highly efficient Cascade Power Plant, which is pretty much close to completion near Edson, Alberta.
Speaker 3: And that's part of a 15-year gas supply agreement.
Speaker 3: We're building that pipeline now and we're excited about setting up some gas later this year.
Speaker 3: As we move forward in 2023, we are taking a cautious approach to our capital spending in light of the fall of natural gas prices.
Speaker 3: We built a flexible program that focuses drilling in core areas only and we've deferred the higher cost Whitehorse Minehead program for now.
Speaker 3: Starting out a little slower allows us to make the call to wrap up later in the year depending on prices.
Speaker 3: The prices are in contango and we are continuing with our systematic hedging program. We're up to about 60% hedge now on average for 2023 at prices near $4 in MCF which helps give us that confidence to spend within that capital guidance and sustain that dividend.
Speaker 3: We also have 25% of our forecasted gas volumes fixed for 2024, so we're continuing to secure future revenues beyond this year.
Speaker 3: So before we open up to questions, I'd just like to point out one more important thing here. The global demand for natural gas continues to grow and it's never been more important to the French security than it is today.
Speaker 3: I read last night that Freeport LNG has approved the start-up of their final liquefaction train. So that's good news on take-away capacity from the Gulf. Should be a pull on prices there.
Speaker 3: There will always be a seasonal supply and demand swing.
Speaker 3: is well dependent. So we should expect to see price volatility to remain. But payouts is well equipped with our low cost structure, our price risk management and our disciplined approach to shareholder returns to thrive in this environment as we go forward. Okay, so enough out of me. Let's turn the call over to questions. Before we go to the phone lines.
Speaker 3: I just have one question that came in overnight. It comes in right off the top and maybe we should just address because it's a recurring theme. The question that came in from email and it's similar to some others. Gas prices have dropped in half since you guys set the dividend level last November . Are you going to have to cut the dividend?
Speaker 3: So, just to be clear, we do not forecast having to change the dividend from this level of this time. Our dividend is still far less than our projected earnings.
Speaker 3: We have ample protection from our hedge book and we continue to add hedges in the future that are higher than the prices we have today because of course the forward curve is incontangled.
Speaker 3: If prices roll back or sorry roll forward we will first look at our capital program and then we'll make adjustments to ensure we're still making smart.
Speaker 3: good returns with the money that we're spending. And as I mentioned already, we've already done that. We're targeting the lower end of our guidance to pull back and to hydrate our projects. So we're deferring to longer pay-out wells and the facility projects. And we expect that if prices do remain low, service costs will reach the lower end of the range.
Speaker 3: So with that, let's open it up to the phone lines if there are questions for folks who want to answer the poll. We'll see who's here to answer them. The question is always with whom will you prepare the question.
Speaker 2: And thank you. As a reminder to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. So withdraw your question. Please press star 1 1 again.
Speaker 2: Please stand by while we compile the Q&A roster.
Speaker 2: And one moment for our first question.
Speaker 2: And our first question comes from Karthik Raja from Bloomberg. Your line is now open. Your line is now open.
Speaker 2: Karthik, your line is now open. If your line is on mute, please unmute.
Speaker 2: Okay, just one moment please.
Speaker 2: for our next question.
Speaker 5: One moment
Speaker 2: And our next question comes from Jared Mccauley. Your line is now open.
Speaker 6: Hello, congratulations on the results. I know there's lots of hard work and I wanted to thank you for that.
Speaker 6: The topic that I wanted to inquire about...
Speaker 6: The topic that I wanted to inquire about is a gap that
Speaker 6: I think it would be helpful to reconcile the gap.
Speaker 6: And when I pose the question, I'm really most interested in reconciling that gap in order to understand
Speaker 6: how that gap might affect 2023.
Speaker 6: So the question is the target for the firm was a hundred and ten thousand barrels a day for year-end.
Speaker 6: In December , the president's letter
Speaker 6: confirmed that. In January , the president's letter didn't quite confirm it but basically said that we were on track. There was a little bit of hedging and a little bit of concern expressed about timing.
Speaker 6: Then in February , and on each occasion you showed the production in the table, in February
Speaker 6: the table showed it at 105, which was clearly below the 110. So, you know, high marks on transparency about not achieving the target.
Speaker 6: Then in March we're at 103 and again high marks on transparency and you know I know there's been some some issues about deferring production.
Speaker 6: We're at 103 and again high marks on transparency and you know I know there's been some some issues about deferring production. However...
Speaker 6: What that leads one to look at is
Speaker 6: a very strong declaration of the 110 being intact as of December .
Speaker 7: And then
Speaker 6: when we look at where we are today,
Speaker 6: We are now 1,000 barrels a day as per the March letter. We are 1,000 barrels a day below the Q2 2022 level.
Speaker 6: that's all these numbers are from from the letter.
Speaker 6: That is despite spending $335 million.
Speaker 8: wealth he Neal feels
Speaker 6: Q2 and that's net of acquisitions. I've taken the acquisitions out.
Speaker 6: And that's net of acquisitions. I've taken the acquisitions out. So.
Speaker 6: That's a pretty big gap. I know that there's some inflation in there and I know there's some in the 335 and I know that there's some cold weather in there at the end of the year. But five rigs were going pretty much until the end of the year and the money was spent. So if we could cut a lot of your outlets and Hawai'i thats being out there, we might
Speaker 6: I racked my brain and looked through everything to try to figure out why we would have this big gap when all that money was spent.
Speaker 6: And you did touch on it, you know, maybe more on facilities and all the rest of it. But I just was interested in if you could shed some light on the gap. And again, I think you did a great job last year. I just have this topic that I don't understand. And what I'm really looking for is for you to look out over the next year.
Speaker 6: and tell us whether or not, whatever it was that interfered with production increase over the last three quarters, you know, a lot of money on de-bottlenecking or facilities, are we looking out over the next year and is that going to be less of a factor? And you did touch on it in your remarks earlier, but...
Speaker 6: I'd just like you to be a little more in-depth on this. Thank you and I'm very interested in the answer.
Speaker 3: One of the things we put in our reserve release was the decline rate that we actually experienced.
Speaker 3: Part of the reason for the miss in 2022, at least at the end of the year, was the declines were higher than we thought or forecast. That was one of the issues. You touched on the cool weather and added to that as well. All for till after the break and we will talk to you later.
Speaker 3: for a full two weeks at year end. We actually dropped the rig. We did not have five rigs run the rig to the end of the year. We only had four. We dropped the fifth.
Speaker 3: mid-way through the quarter. That's part of the reason why production wasn't quite as high as we expected it to be. The decline is a big part of that coming into the year. So that's one of the reasons why we're behind at the very beginning.
Speaker 3: As we move forward into Q1 now and the rest of the year in 2023, we have four rigs running. One of those rigs is more or less dedicated to the minehead and the area basically drilling earnings well so we don't get quite the same effectiveness from that rig as we would on production because it's earning at a disproportionate rate.
Speaker 3: In other words, we spend capital but we don't get the same net results from it. That's one of the other reasons. The 110, just as a reminder, was a target and we did expect to meet that and we failed to meet that. The team recognizes that. Notwithstanding that, we were able to grow production annually by 14% over the year.
Speaker 3: Strong results just the same, but that target was missed.
Speaker 3: As we go forward, we're not in any hurry here to bring on a bunch of extra production with prices the way they are. We are being cautious and careful on how we're spending our money and whether we bring on production. We talked about this in February .
Speaker 3: looked at doing some optimization maintenance projects and accelerated those into this first quarter because it doesn't make sense for us to bring.
Speaker 3: I don't think Sheryl wants to blow this top off, the initial gas production at a time when prices are relatively poor. We have hedged a lot of volumes, but we don't have them all hedged.
Speaker 3: So that's the other part of the story. I think I touched on most of what you said. The decline probably is the most significant difference and that's why we're behind coming into the year.
Speaker 3: Does that help answer your question there, Jerry?
Speaker 3: Does that help answer your question there, Jerry?
Speaker 5: Hello!
Speaker 6: Hello? Hello, Jerry. You still there? Yes. Yes. That's very helpful to answer my question. I just on the decline.
Speaker 6: I would just be interested if you could explore that a little more because again
Speaker 6: Does that mean that
Speaker 6: If the wells were at target initial production and then they decline more rapidly.
Speaker 6: you know, how does that affect the economics overall and what do you expect of the decline rate in the future? So that would be, would I think, round it out very nicely.
Speaker 3: We actually look at the economics of all of our projects on an ongoing basis. We adjust our tide curves all the time so we make sure that what we're doing out there, spending capital effectively, is making us money, including the current environment that we're in today. We have budgeted or planned for a steeper decline in 2023.
Speaker 3: should be closer to 29% based on GLJ. It's going to be in a range that's around 29% for year over year. So we have already budgeted for that and that's part of our model. Just because the wells decline a little quicker at the front end doesn't necessarily mean that their reserves aren't...
Speaker 3: It's just the profile that we have to better manage here as we go forward. Certainly the economics of these projects are still great, even in today's price environment.
Speaker 2: Thank you. And thank you.
Speaker 2: And one moment for our next question.
Speaker 2: And our next question comes from Mike Dunn from CIFIL. Your line is now open.
Speaker 9: Thanks. Can you hear me?
Speaker 9: If you can, go ahead, Mike.
Speaker 10: I just thought I'd ask here if you could maybe flesh out a bit for us how you expect the production to look through the quarters of this year based on your updated outlook to maybe targeting towards the lower end of that capex guidance range.
Speaker 3: We expect that we could fall a little bit here in the first half of the year depending on what we do through breakup. We do plan to run rigs through breakup. At this point in time, it's likely three rigs. That will depend on the weather. To be honest, every year we've gone in with a plan and it depends on how much we plan to run.
Speaker 10: built this flexibility in there. Okay thanks JP and then another one for me if I may
Speaker 10: your note talked about the flare extended reach wells at Sundance maybe just
Speaker 10: Explain for me how many of these you maybe did last year and how many you're thinking of doing this year?
Speaker 3: I'm going to ask Riley to maybe comment on these for us. Yeah, you bet. So, we drilled a handful of these wells last year. There's a couple of different features typically kind of underdeveloped horizontally in the past. So, being able to go back in.
Speaker 3: and drill these with some longer laterals on the heels of some land deals that were done here to connect some sections and all that stuff has kind of proved up the concept that these tighter channels really do work and they're giving us some great results. We drilled four wells last year and we've already got two wells down or three wells down this year and we've got another.
Speaker 3: They're looking very positive.
Speaker 9: All right, well, thanks for that. That's all for me.
Speaker 9: All right, well, thanks for that. That's all for me. Thank you.
Speaker 2: And if you'd like to ask a question, that is star 11. Again, if you'd like to ask a question, that is star 11. And one moment for our next question.
Speaker 2: And our next question comes from Chris Thompson from CIBC. Your line is now open. Thank you very much for sharing the unicorn time. calling in about half an hour or so.
Speaker 6: Hey everyone, thanks for taking my question.
Speaker 6: First one here on cash taxes, how should we think about that for 2023?
Speaker 11: Hey Chris, it's Thomas Carlson here. Do you think current script prices and our planned cap expending for the year?
Speaker 11: We're estimating that an effective tax rate would be around 10% of forecast cash flow.
Speaker 11: We did end the year with over a billion of tax goals. That's going to help minimize that tax rate.
Speaker 11: But the annual deductions on those aren't going to be enough to fully.
Speaker 3: Fully sheltered tax looking forward. So on strip pricing then, what's your level of cash tax ability in 2023?
Speaker 11: It'd be around 10% of a roofie for tax cash Tsch wit
Speaker 3: Okay, and then next question, what are you planning to do with the XS Empress service that you have subscribed? If anything, maybe you could just tell us a bit more about that.
Speaker 3: If you look at our marketing slides, you'll see there's a bar on there that shows the excess empress service that we have, that we were supposed to get here by the end of this month. We still haven't officially got that yet. It's Tronch 5, it's called. So we'll get that. When we get that, we will then look at ways to monetize.
Speaker 3: greater than 19 cents is going to basically add additional funds for us right income.
Speaker 3: It should be a real advantage to have that service, but we need to get it first.
Speaker 3: Okay, and then on the service cost side, have you seen any level of reduction in service cost, just given where prices have gone in those conversations? I might have Lee answer that directly.
Speaker 3: directionally, Q1 is the busiest. It's always the busiest time of the year.
Speaker 3: I think all the rigs, every year you look at the history, that's when the rig count is the most of any given year. That is one of the reasons why we pulled back that rig last year because we participated there.
Speaker 3: But maybe V, do you want to comment on anything? Yeah, sure. Nothing yet, unfortunately, as JP alluded to. Q1 is high time for activity. Activity hit a high water mark this year.
Speaker 12: outpaced a lot of people's expectations.
Speaker 12: 250 rig active rig count in Western Canada. Between that shortage of personnel, still working through some supply chain issues, I think some of those, I think for the most part that's been sorted out. One of the barriers to deflation is...
Speaker 12: It's a bit bittersweet, but is the impact from FX.
Speaker 12: The Canadian dollar keeps continuing to devalue and so we're competing with our American counterparts for a lot of commodities.
Speaker 12: That's not helping us in any way.
Speaker 12: We're working on it. We're hopeful that
Speaker 12: A lot of our services are recognizing kind of the soft spot in gas prices right now. It's about a third of the activity out there.
Speaker 12: We're hopeful that come middle of Q2, Q3, we'll see some impact, but nothing material yet, unfortunately.
Speaker 12: come middle of Q2, Q3, we'll see some impact, but nothing material yet, unfortunately. Got it. Okay.
Speaker 3: Okay, and then on your capital spending plans for this year, how much of that is non-productive capital spending?
Speaker 3: In the budget. So I would argue that everything we're doing productive in some way it's going to add value to the company. So But as far as what's not directed directly's is not.
Speaker 3: directly on wells and still sort of just on other things like facilities and whatnot. That average is probably around 20%. I mean Todd can allude to the fact here maybe it's a good time to talk about what we have in the facility side.
Speaker 12: Todd, what's the stuff that we're doing that isn't related to drilling wells? Sure. Obviously last year we had the chambers planned and that...
Speaker 12: That was a big part of an abnormally high facility and project budget. This year obviously
Speaker 3: JP mentioned that we're working on the cascade connection, so that's been going really well. No major issues. We expect to have the pipeline done here probably in the next two to three weeks.
Speaker 3: with the final connections, some facility work that still has to happen should happen in Q2. So we'll be ready there. That's a fairly good piece of the facility or project side. A little bit of plant optimization is planned to happen. an old man and and just not
Speaker 3: BoE are pretty advantageous versus what you get when you drill a well. Not only do we get extra production out of that as well, that will help bring up production on the base and stabilize it a little bit. That's the key things that we're working on.
Speaker 12: should bear fruit through the year. Thanks Todd, that's good. Any other questions Chris?
Speaker 3: Yeah, sorry, one more for me if you don't mind. So just on the third party outages coming up this summer, where are you guys seeing the highest pain points for pricing through the summer?
Speaker 4: When you say third party outage, is what you mean, sorry?
Speaker 12: Well, so that would be like maintenance on an NGTEL pipeline or other facilities that will impact you guys. Yeah, there is a small outage, I believe, at planes that may affect our NGL volumes will just warm up. That's the beauty of us operating our production. We can change the conditions of how we operate. So that's a smaller one that's happening. That's happening.
Speaker 12: if there's STR cuts, if there's firm transportation cuts to that system. But that depends on how NGTEL operates the system here this summer, whether they do that or they cut IT deliveries and restrict storage. So it really depends on how they...
Speaker 2: manage their maintenance schedule, how it may affect us, but we're protected in all ways. Okay, thank you very much. I'll hand it back. And thank you. And if you have a question that is star 11 again, if you have a question that is star 11. And one moment we do have a follow-up question.
Speaker 6: And we have Gerald McGawkin. Your line is now open. Again, JP, the last year, one of the headwinds that was pretty obvious was the Released land sound.
Speaker 6: The hedging was at prices that when AECO spiked, it led to quite a negative impact, which you absorbed well because of the great results.
Speaker 6: quite a negative impact on the royalty costs. The fact that our hedges are now
Speaker 6: above ACO or very near ACO is pretty transparent and obvious. And so I think that's well understood. The part that is less well understood, at least by me, I know it exists, but I don't quite know the dimensions of it, is the favorable impact that this has.
Speaker 6: looking out over the 2023 year when, you know, ACO is near our hedges or indeed ACO is below our hedges, there's quite an adjustment, I think, to the projected royalty costs.
Speaker 6: which is a favorable tailwind this year compared to last year. I was just wondering if you could shed a little light on the dimensions of that and the mechanics.
Speaker 4: Sure, yeah, so just a reminder that when we pay royalties we pay them on the ACO price.
Speaker 4: The par price or the eco price. When we have all this diversification away from eco and the fact that we have hedges, I would say are unfortunately in the money in some cases as we look forward. That's not why we're doing it.
We're doing it to secure revenues, not necessarily to beat the market. Obviously, head royalties are going to be lower with lower prices and so that will be much better than last year. So that will be helpful, it will be accretive. Since our diversification to all these other markets as you described.
actually puts us in a better position, puts us above, should put us above the realized price. Our realized price should be better than the equal price.
That has an added compound effect to our cash flows because we won't be paying as much royalties either. As you pointed out, last year, royalties were quite a bit higher as a percent and we also had real-life prices that were lower than the ACO at that time. It is going to be very accretive, I think, this year. Let me take another one.
dimension you can put on that because I know in the worst quarter
You know, we had a 95 cent royalty and it eased back to 75. But, um, the, the, and I'm really trying to get at the dimension of, uh, the tailwind, meaning.
You know, if if ACO is going down and we're experiencing the decline and the fact the royalties go down, well, we're not better off. But if in.
if if ACO is going down and we're experiencing the decline and the fact the royalties go down well we're not better off but if in the forward quarters
The impact on our revenues is only a third of our production, but the impact on the royalties is on 100% of our production with favorability skewed to the hedged portion.
that grinds out a certain non-proportionate tailwind.
you know, it looks like it's, you know, well in excess of 10 cents, but I don't really know how to model it. So I'm just, you know, back of the envelope, you know, 10 to 20 cents is the disproportionate improvement in royalties. So I do you have anything on that or?
We can take it offline. We can take it offline maybe, but we're estimating our royalties for this year about 9%, about 9% based on the current strip. When you roll it all in for 9%, I'm just confirming. It was 11% in 2020. And the average for 2022 was 11. So that puts some perspective on that.
We can take this offline, Jerry, if that's okay. Thank you. Okay. And thank you.
I have 1 more question from email I'd like to get to that we never, we never addressed here. Justin. So I'm going to turn I'm going to ask questions for Derek here. We had. We spent 95 to 5Million last year on. On acquisitions, and that includes crown land sales. We've got 20 sections last year.
What we've done with those assets, we had a great year in 2021 where we bought an asset in the Cecilia area, returned it into gold, but we certainly exploited it very well and grew the production in that area. How have we done with the assets that we just bought last year? I know one was at the end of the year.
We're definitely happy with the acquisition. We're able to close in 2022. We typically don't do big, flashy deals, but our goal is to do deals that make sense and are profitable. The acquisitions are very similar to the acquisition in action.
in that they provided me a result and opportunity to the complementary nature of the assets. The corporate acquisition added an underutilized 45 million a day newer Aurora gas plant, 73 transactions alone and approximately 900 BOD a day from that wells.
On the property acquisition side, we picked up 42 that highly prospective sections that came with the process.
600 BOOE a day from 12 net wells. That also came with 59 kilometers of pipe and a 50 millimeter day compressor.
We were able to grow this property to over 5,000 people at year end and close the deal on September 13th.
We are continuing to drill the land and I believe we are now pushing past the 6,000 gill weed. We are able to do this because of the incredible fit.
for existing land-based infrastructure. Also the technical facilities did an excellent job of piloting and executing prior to and after closing. Yeah, and if you haven't done so, I recommend checking out our corporate presentations to see if that's what we get, especially the acquisitions provided here.
On the farming side of things, we're in early days on mine head farming and we've also started going on the axle farming that has created some of the second over here.
We currently have the ability to earn 35 sections across these markets.
As for 2023, we continue evaluating new opportunities and remain opportunistic. It's the right deal for that itself. We always try to have some layers in the fire so hopefully we can try to have some of those opportunities here this year.
Also on the asset team front, in addition to being very active in crowd sales, evaluating them, we're also very active doing smaller firemen swaps and pooling to enable growth of these different419 buttons that are common in this event to individuals and businesses in many areas.
This activity has been ongoing already in 2023 and will continue throughout the year.
So, yeah, we've been very effective with those smaller deals. They're not big, flashy things, but we certainly have been effective with those smaller back-end type acquisitions as an organization. Okay, I don't, is there any more questions? I'm showing no further questions over the phone.
Okay, well thank you very much for attending the call and we'll talk again soon. This concludes today's conference call. Thank you for participating. You may now disconnect.
To raise and lower your hand during Q&A you can dial star 1-1.
I have.
Thanks for watching!