Q4 2022 USA Compression Partners LP Earnings Call

Speaker 2: Good morning and welcome to the USA Compression Partners LP 4th quarter 2022 earnings call.

Speaker 2: All participants are now listening only mode. After the speakers presentation, we will conduct a question and answer session.

Speaker 2: To ask a question, you'll need to press star followed by the number one on your telephone keypad.

Speaker 2: As a reminder, this conference call is being recorded.

Speaker 2: I would now like to turn the call over to Chris Porter, Vice President, General Counsel, and Secretary. Thank you. Please stand, Mr. Porter.

Speaker 3: Good morning everyone and thank you for joining us. This morning we released our operational and financial results for the quarter and year ended December 31, 2022. You can find a copy of our earnings release as well as a recording of this call in the investor relations section of our website at USACompression.com.

Speaker 3: During this call our manager will discuss certain non-get measures. You will find definitions and reconciliation of these non-get measures to the most comparable US GAAP measures in our earning release.

Speaker 3: As a reminder, our conference call will include forward-looking statements. These statements include projections and expectations of our future performance and represent our current beliefs. Actual results may differ materially.

Speaker 3: Please review the statements of risk included in this morning's release and in our filings. Please note that information provided on this call speaks only to management's views as of today, February 14, 2023, and may no longer be accurate at the time of a replay. I'll now turn the call over to Eric Lomb, President and CEO of USA Compression.

Speaker 4: Thank you, Chris. Good morning everyone and thanks for joining our call. I'm joined on the call by Eric Scheller, our COO, and Mike Pearl, our CFO .

Speaker 4: I would like to begin today's call by highlighting USA compressions continued operational and financial improvements. There were outline in this morning's earnings release. For the fourth quarter 2022, USA compression generated record quarterly revenues coming into slightly above $190 million.

Speaker 4: These record revenues were enabled by continued quarter over quarter fleet utilization improvements that resulted in a fourth quarter utilization exit rate of just under 92%.

Speaker 4: Along with increased utilization, we saw records setting quarterly per-horsepower average revenue and an approximate 10% increase in quarter over quarter distributable cash flow coverage, which came in at 1.18 times. We were very pleased with our fourth quarter results.

Speaker 4: which we believe speak to the durability of our cash flow screen and highlight the benefits of our focus on discipline, capital investment, which allows us to grow our fleet organically while improving our utilization rates and financial performance.

Speaker 4: Next quarter, we discussed our positive views on the energy macro environment in our belief that we are in the early innings of a commodity price supercycle. Our views have not changed.

Speaker 4: We continue to expect the commodity price backdrop to remain supportive of production growth, which in turn continues to support the long-term demand for natural gas compression services.

Speaker 4: We believe the producers continue discipline capital investment approach will sustain tightness in energy markets into the foreseeable future, thereby providing a commodity price backdrop that is supportive of continued drilling and therefore supportive of current and future demand for natural gas compression services.

Speaker 4: Last quarter, we also explain that USA compressions operational and financial performance is more dependent on the production cycle than on the drilling cycle that correlates more closely with near to medium-term commodity prices.

Speaker 4: In recent weeks, the spot price for natural gas declined under $3 per deck of therm and remains suppressed compared to historic levels, as mild winter weather. LNG X4 delays and rising inventories continued to depress spot and forward strip price natural gas prices.

Speaker 4: This sustained price decline was not anticipated, but also was not disruptive to our business.

Speaker 4: I would like to take our prior quarter analysis one step further to articulate specifically why near-to-medium term disruption in natural gas prices do not change our views on the future demand for our natural gas compression services.

Speaker 4: A large percentage of USA compressions flea horsepower is located in basins that feature crude oil production.

Speaker 4: It is not possible to produce crude oil from shale without also producing associated gaps that must be processed, treated and or transported.

Speaker 4: During periods of depressed natural gas spot prices, associated gas is considered somewhat of a byproduct of produced oil. However, natural gas status as a by product does not mitigate the immediate need to transport process or otherwise responsibly handle associated gas that is produced alongside crude oil.

Speaker 4: So long as Crude Oil Production remains economic, producers will continue to produce oil, along with associated gas volumes that require compression services to ensure proper and responsible natural gas take away.

Speaker 4: Current surveys estimate breakeven WTI prices for existing U.S. onshore wells at approximately $30 and in the mid-$50 range for newly drilled

Speaker 4: At these break-even prices, we expect incremental drilling to continue, which supports future demand for natural gas compression services, irrespective of current natural gas spot prices.

Speaker 4: Even if WTI prices do not support new drilling, currently producing US-onshore share wells continued to mature, causing the productive ratio of gas to oil to increase, which increases demand for natural gas compression to ensure the consistent volume flow of oil from existing wells.

Speaker 4: In USA compressions other operating regions such as Appalachia, Marcellus, there is little to no oil, so spot prices for WTI do not provide the same support for continued natural gas production.

Speaker 4: In these gassing basins, pipeline permitting restrictions and depressed natural gas spot prices present challenges to future natural gas production growth.

Speaker 4: Notwithstanding, producers continue to produce from existing wells because shutting in wells carries the risk of permanently damaging the reservoir and may cause financial defremence arising from firm transportation commitments.

Speaker 4: Over time, continue natural gas production across these basins decreases field pressures, which increases the need and demand for additional natural gas compression.

Speaker 4: In basins like Appalachia Marcellus, depressed natural gas prices are conducive to USA compression, maintaining its current service levels with improved natural gas pricing, presenting opportunities for incremental natural gas compression growth in the future.

Speaker 4: To summarize, we do not view seasonally dislocated natural gas prices as a meaningful headwind to the pillars of USA compression strategy.

Speaker 4: that include generating a durable stream of cash flow from our existing fleet, improving our financial performance by increasing fleet utilization, and practicing returns-based capital investing, reducing leverage, and achieving financial optionality.

Speaker 4: Before turning the call over to Eric Scheller to discuss fourth quarter operating results, we'd like to make a few comments regarding safety.

Speaker 4: As a company, the most important thing we can do is ensure that our employees return home safely each day.

Speaker 4: We are extremely proud of our tireless focused on safety that has resulted in a 2022 total reportable incident rate that was more than 80% lower than the industry average. This is a significant accomplishment and I thank every USA compression employee.

Speaker 4: for the commitment and strict adherence to our safety policies and procedures. With that, I will turn the call over to Eric Scheller, our COO, to discuss our fourth quarter operating highlights.

Speaker 5: Thanks, everyone. Good morning, everyone. USA Conferishing's operational results continued to strengthen throughout 2022, resulting in record-setting forth quarter revenues that were and continued to be supported by a greater than 90 percent utilized fleet.

Speaker 5: Our full year 2022 results were built year over year improvements to revenues and gross profit margins that were achieved through our Discipline Contract portfolio restart approach that affords us pricing flexibility to continue securing market-based rates from our services.

Speaker 5: The heavy listing accomplished from March 2022, capital planning, and third-party contracting activity positions up, to satisfy increased market demand for compression services, while protecting our cash flow during volatile and inflationary periods.

Speaker 5: So 2023, we continue to see an improvement market backdrop that has gained momentum since the back half of 2022.

Speaker 5: Given current, breakeven WTI prices, we expect commodity prices for a main supportive of future production growth, which will drive increased demand for natural gas compression services.

Speaker 5: We believe that the oil and gas industries discipline capital and investment approach that focuses on free cash flow generation.

Speaker 5: and returns based investing, it underpins the existing tightness in energy markets and will contribute significantly to continued market tightness into the foreseeable future.

Speaker 5: We also believe that the transition from a hydrocarbon-based energy world to a renewable-based energy world will take decades longer than anticipated, and the financial costs of such a transition remain prohibitive to most global societies.

Speaker 5: until there is a massive shift in cost efficiency and efficacy of deployable, scalable, renewable-based solutions.

Speaker 5: Natural gas compression will remain in demand, consistent with EIA forecast for increased levels of natural gas production into 2050.

Speaker 5: Now admittedly the outlook for U.S. spot metro gas prices trended lower.

Speaker 5: As domestic gas production is expected to hit record levels in 2023 growing by more than two BCF per day to average over 100 BCF per day for 2023.

Speaker 5: Bear in mind that when USA compression was formed in 1998, US dry gas production was roughly 1.5 of the current 2023 forecast.

Speaker 5: And the shale revolution of the early 2000s is the major contributor to the robust increase in domestic natural gas production. And, consistent with Eric's messaging regarding production decline and reservoir pressures, many years of empirical evidence confirm that continued production leads to lower producing pressures.

Speaker 5: which in turn requires an exponential increase in the demand for compression services to produce the same volumes of oil and natural gas.

Speaker 5: Growth and Shell production is also created meaningful incremental demands from our existing customers and has allowed us to pick up additional strategic accounts to expand our market share throughout our area's operation.

Speaker 5: All the while maintaining a balance and credit were the bulk of business.

Speaker 5: Increased demand for compression is fueled our contributing climate sleep utilization rates that improved throughout 2022, culminating in an exit utilization rate of approximately 92%.

Speaker 5: Pill and the skin back a bit on utilization, we see a heavy dose of highly desirable Caterpillar 3600 class machines that are approximately 97% utilized and Caterpillar 3500 series units that are over 95% utilized.

Speaker 5: We expect overall fleet utilization to increase and sustain itself with commodity prices remaining supportive. Capital appointments by competitors continue to lag, existing equipment availability continues to remain stressed, and contract pricing and tenor improve, particularly for large horsepower units.

Speaker 5: that our fleet features. Existing market tightness for compression assets provides us tremendous flexibility to lock in attractive service rates or remain flexible enough to opportunistically high-grade returns.

Speaker 5: For example, the year ended December 31, 2021, approximately 33% of our compression services on a revenue basis provided on a month-to-month basis.

Speaker 5: For the year ended December 31, 2022, approximately 29% of our compression services on a revenue basis were provided on a month-to-month basis.

Speaker 5: The decline in month-to-month contracts is indicative of the demand for our services and our ability to monetize the value of our fleet.

Speaker 5: with attractive rate contracts that feature improved tenors and result in attractive returns based and durable cash flows. We are realizing improved contract terms in the deployment of our idle unit as well as from contract renewal of currently deployed unit.

Speaker 5: Current contract negotiations for existing units with existing customers spend around a 30-month average renewal tenor. New equipment deployments are attracting contract tenors that exceed 60 months and at rates that are higher than our historic per horsepower rate.

Speaker 5: We expect contract service rates to continue increasing as readily available equipment become scarce, and customers opt for service certainty with longer term contracts that are executed at attractive rates.

Speaker 5: Our improved comeback tenders and service rates are supported further by our long-term customer relationships, where all but one of our top 20 customers has been a customer for more than five years, with several having been USA compression customers for more than 20 years.

Speaker 5: Our relationships also extend up to supply chain where USA compression was able to navigate the supply chain debacle of 2022 in terms of securing delivery slots for new units.

Speaker 5: Our established and key relationships with packages and component providers allow us to gain visibility into deliveries with the ability to affect and anticipate final package deliveries to customers.

Speaker 5: So we expect to remain on track to deploy and contract our new large horsepower unit orders in 2023, which will add approximately 165,000 as much thought after horsepower throughout 2023 under multi-year contracts.

Speaker 5: Now while there were many reasons for our go forward optimism, 2022 did present some challenges.

Speaker 5: We saw marked increases in the prices of fuel, fluids, and labor. Although our contract-based adjustments allowed us to mitigate cost inflation,

Speaker 5: We did see modic decoins in margins resulting from input cost inflation that preceded the date that we were able to invoke contract rate adjustment.

Speaker 5: Notwithstanding, the USA compression generally has been able to offset meaningful inflationary costs, and we expect inflationary pressures to obey eventually.

Speaker 5: and our adjusted grace margins to remain at or near the historic levels, normalizing around 58%.

Speaker 5: 2022 also witnessed moderated demands for large horsepower electric compression and limitations of the existing electrical grid and a lack of availability of variable frequency drives personific.

Speaker 5: Nevertheless, we have continued to commercialize dual drive technology with customers interested in continued production supply while maintaining optionality on compression driver choice.

Speaker 5: We've needed our field-proved and dual-drive initiative, which makes a lot of financial sense for our customers that stand the benefit from low operating expenses, increased reliability 99% runtime, substantially lower greenhouse gas emissions, and the mitigation of interconnection.

Speaker 5: ways. As our deployed dual-drod units continue to demonstrate their expected operational performance, reliability, and flexibility, we anticipate fielding additional indications of interest from cut-immers that are seeking to deploy this cost-efficient and more environmentally friendly solution to compressing natural gas.

Speaker 5: Consistent with our views on the transition to a remutable based energy world, we believe the migration to a wide-scale compression electrification will be a multi-decade effort and will evolve alongside improvements to the electric grid and further demonstration of the dual-to-value proposition of real-iability and redundancy of the natural gas backup driver.

Speaker 5: with the advantage of electricity as the prime power source.

Speaker 5: We expected adoption of dual drive technology will be incremental and USA compression remains poised to convert its large horsepower fleet to dual drive quickly, methodically and cost effectively as the market for this technology evolves.

Speaker 5: To close, we expect our 2023 results to reflect the benefits of our 2022 directed efforts to increase utilization, expand our fleet through strategic capital investments that are consistent with the growing demand for compression services, and improve contract prices and tenders.

Speaker 5: With that, I'll turn the call over to Mike Pearl, our CFO , to discuss fourth quarter financial results.

Speaker 6: Thanks, Eric, and good morning. Today we reported our fourth quarter results, which featured record quarterly revenue and quarter of recorder increases in adjusted evita and distribution coverage, which increased by more than 10% on a sequential quarter basis to 1.18 times.

Speaker 6: Our fourth quarter results are attributable to our continued commitment to improve fleet utilization and price discovery for newly contracted units. Our fourth quarter utilization exit rate increased by nearly 1 percent on a sequential quarter basis while our quarterly average revenue per revenue generating horsepower improved to an all-time high of $17.81.

Speaker 6: Pricing improvements are driven by continued CPI process collators for currently contracted services and by demand driven rate increases from month to month and longer term newly contracted compression services.

Speaker 6: Adjuster grows margin percentage decline by 1.6% during the fourth quarter, has increased prices for vehicle fuel, compressor fleet lubrication fluids, and labor continued to frontrun the timing of contract-based CPI and market-based rate adjustments.

Speaker 6: We are beginning to see some of the data in fuel and lubricant costs that wage inflation continues to process. Over time, we expect inflationary pressures to lessen and we expect our margins to normalize at or near our historic averages.

Speaker 6: Our total fleet horsepower at the end of the quarter remains flat to the previous quarter at approximately 3.7 million horsepower. However, our quarter over quarter revenue generating horsepower increased by over 2%.

Speaker 6: Fourth quarter 2022 expansion capital spending was $46.1 million, and our maintenance capital expenditures were $3.7 million.

Speaker 6: Expansion capital spending primarily consisted of reconfiguration and make ready of idle units, the delivery of four new large horsepower units, and the procurement of compression station components. Our maintenance capital spending decreased on a sub-onchocorder basis, now understanding our approved fleet utilization.

Speaker 6: Fourth quarter 2022 net income was 8.4 million. Operating income was 46.7 million. Net cash provided by operating activities was 82.1 million. And cash interest expense net was 36.2 million. Interest expense increased by approximately 3 million on a sequential quarter basis.

Speaker 6: as a result of higher interest rates applicable to outstanding borrowings at our floating rate credit facility.

Speaker 6: During the fourth quarter, we also achieved another sequential decline in our bank covenant leverage ratio, which decreased to 4.76 times. We remain committed to improving our leverage metrics further and believe that improving market conditions, operational and contract pricing improvement.

Speaker 6: and continued capital discipline will allow us to continue reducing our leverage while delivering predictable, reliable, and durable returns for all stakeholders.

Speaker 6: We have issued our full year 2023 guidance operational improvements capital efficiency and pricing power enabled by increasing demand underpinned our expectations to deliver improved year-over-year financial results. We expect adjusted EBITDA between 490 and 510 million.

Speaker 6: and distributive cash flow between 260 and 280 million. Finally, we expect to file our floor 10K with the SEC as early as this afternoon. And with that, I will turn the call back to Eric Long for concluding remarks.

Speaker 4: Thanks Mike. We closed out 2022 with exceptional optimism given our fourth core results and what we are seeing in terms of future demand and pricing for natural gas compression services.

Speaker 4: We look forward to delivery and deployment of new large horsepower units throughout 2023, and we will remain focused on improving our fleet utilization as market conditions permit.

Speaker 4: On February 3rd, we paid out our 40th quarter of consecutive distribution payments.

Speaker 4: The distribution was flat to the previous quarter's distribution at 52.5 cents per unit.

Speaker 4: In 2023, we will continue to work toward reducing our leverage while providing meaningful returns to all stakeholders.

Speaker 4: Improvements to fleet utilization, contract tenors, and contract pricing, position USA compression for future optionality in terms of further capital investment, debt reduction, and changes to distribution policy.

Speaker 4: USA compression will continue delivering best in class compression services to its customers, maintaining capital discipline, and focusing on driving improved financial performance. To conclude, we are extremely pleased with our fourth quarter results, highlighted by record quarterly revenues.

Speaker 4: and quarter-ever quarter improvements in utilization, financial results, distribution coverage, and leverage metrics.

Speaker 4: We look forward to discussing our first quarter 2023 results with you in a few months time. And with that, we will open the call to questions.

Speaker 2: Thank you. As a reminder to ask a question, please press star, followed by the number one on your telephone keypad. To withdraw your question, please press star one again. We'll pause for just a moment to compile the Q&A roster.

Speaker 2: Our first question will come from T.D. Shultz from RBC Capital Markets. Please go ahead, your line is open.

Speaker 3: Great, thanks. Good morning. I think just first thinking about volatility in natural gas prices, Eric, you walk through how you all are fairly insulated. And I assume the EBITDA guidance considers the near term spot price on natural gas. But how?

Speaker 3: could lower prices impact your level of growth capital spend in 2023. What do you expect to spend right now? How quickly can you turn that on or off and how are these recent prices and potentially impacting customer decisions on activity levels and spending on things like compression? Thanks.

Speaker 4: Very question, TJ. You know, the first thing when we looked at 2023, we contemplated basically...

Speaker 4: Diminimists, if any, growth cap acts in dry gas basins. Everything is associated gas, a lot in the Permian Delaware to a lesser degree, a little bit down in the Eagle Ferdinand, some stuff up in the mid-con, and all of which tend to be oily plays. We follow incremental activity. We've seen, you know, recount the climbing up.

Speaker 4: expanded in with the other shale developments that you've seen outside of the Marcellus proper. That area has been from a new growth activity relatively slow for a few years because you don't have enough pipeline takeaway capacity. So folks that have firm transportation in the area continue to offset decline.

Speaker 4: not contemplating growth in the dry gas areas. I think that is held to be true. And when you look at the spot prices for crude oil, you look at the bottlenecks you've got with takeaway capacity for natural gas. The basis differentials pretty low on gas prices coming out of the premium and the Delaware.

Speaker 4: People want to be ESG compliant. People want to make some spreads on some of the liquids, the propanes and butanes, etc., that are coming out. So bottom line is no change in our outlook for 2023. Our demand signals are extremely strong, and in fact, to the extent that the supply chain would allow for even more.

Speaker 4: compression horsepower, the demand is there. So I think we're all in a unique spot that those of us that have financial resources can continue to promulgate growth cap X. And again, TJ, we don't see any impact coming out of the drag gas side for us in 2023 and well on into 2024 as well.

Speaker 3: Okay, great. And then at your guidance level, you're getting more financial flexibility. What's your target debt leverage before we should be asking about things like distribution growth and buybacks? And then...

Speaker 3: Also, what is the expectation with conversion or redemption on the preferred? Yeah, to be telling the honest, this is my thanks for the question, TJ. I wouldn't put 5x in point.

Speaker 6: any sort of like near-term concern. In terms of leverage, you know, we're training towards the target, the initial target of four times, and we have a pretty good, pretty good...

Speaker 6: You know, crystal ball in terms of how we're going to get there. So I wouldn't dial in any sort of line in the sand in terms of distribution changes relative to hitting certain leverage targets. We're comfortable with seeking for 4.5, then the four, and then going there under if we can.

Speaker 6: but keeping distribution changes in the back of our mind at all times.

Speaker 6: distribution changes in the back of our mind at all times. And then on the the preferred.

Speaker 7: Yes.

Speaker 6: What is their question?

Speaker 3: Oh, I'm just, is there an expectation on conversion or redemption?

Speaker 6: Well, that's going to be up to EIG in terms of their optionality. And so we really can't comment with respect to what their motivations are relative to, you know, the terms that they've prepared.

Speaker 8: Okay. Thank you.

Speaker 2: Our next question comes from Robert Mosca from Mizuho Securities. Please go ahead. Your line is open. Your line is open.

Speaker 9: Hi, thanks everyone. So I'm just hoping that we can get an update maybe the latest on some of your new orders. I think there were 64 that were previously disclosed that would kind of be put into services here. Are you guys eyeing any potential additions beyond that?

Speaker 5: Okay, this is Eric Schiller. Thanks for the question. I think we're always in contact with our customers. We're looking at the market command. Eric's talked about.

Speaker 5: Moving up and down, depending on the signals right now, I think we're comfortable with what we have on the book.

Speaker 9: Okay, great. And are you guys providing ketx guidance? I didn't hear a number of reference, but maybe if you could frame how should you think about it directionally compared to 22? Yeah, so this is Mike. I would, we're gonna file our 10k today, and I would look in the MDNA. Okay.

Speaker 6: Section 2 for what we talk about in terms of grid capots.

Speaker 9: Okay, and maybe just one last follow up. You know, I think in your 23 guidance, the whole point, you kind of referenced.

Speaker 9: Working capital adjustments that could cause casual from operation to deviate from other cash proxies I'm just wondering if there's anything particular that you're expecting this year or is that just kind of a normal course disclosure It's absolutely normal course. There's there's no way to predict it. Eves inflows of work in capital. Therefore we don't

Speaker 6: They're guiding that direction, but it's not they have fair enough. Yeah.

Speaker 10: All right, thanks a lot everyone.

Speaker 2: Thank you. As a reminder to ask a question, please press star. Follow up at the number one on your telephone keypad.

Speaker 2: Our next question comes from Selman Akyl from Steeple. Please go ahead. Your line is open.

Speaker 11: Thank you. Good morning. A couple quick ones.

Speaker 11: You talked a little bit about gross margin and I think sequentially it was lower but I'm just sort of thinking about next year and the guidance you've put out there. Can you talk a little bit about your assumptions on that? I mean I'm hearing pricing coming through but still having some...

Speaker 4: some inflationary pressures as well. So just sort of wondering what's embedded in your guidance for that. Yeah, some of this is Eric Long. It was just kind of hit at a high level. Yeah, we saw what a point point to happen of degradation in gross margin. And in the scheme of looking at the magnitude of our gross margin, is that to me is kind of almost round off error.

Speaker 4: We're seeing some soft, and I'm not going to say softening, the trajectory is starting to stabilize on some of the bigger ticket items. We've seen softness in both gasoline prices, which constitute a pretty large component of some of our variable expenses. We're seeing...

to do a pretty good job of literally matching inflationary pressures with our revenue inflation and in fact actually outpacing it. So I think.

Looking into 2024, you're not going to see material deviations one way or the other. Materially up, materially down. I think it's something that our guys manage on a day-to-day week-to-week quarter to quarter basis to try to make sure that we're able to capture efficiencies and productivity and try to minimize any of these.

You guys showed nice improvement in terms of your month contracting against on a year-over-year basis. Can you say where you, but perhaps you could end up 2023 at as we looked at it?

Hey, someone that's showing up. You know, we've made tremendous efforts in month to month. We continue to like to see that go down. I like the nice table, cash flow that goes as long as that continues. And as low as I can get it, that's where I'd like to go.

Okay. And then last one, in terms of electric compression, can you just say how much horsepower you got dedicated to that? Now I know it's still a long, long road to significant numbers, but just curious where you ended up at. Yeah, we have very little pure just electric compression.

You know, we talk about our dual drive, which allows us to run electric or natural gas. We continue to work with inbound requests from customers who are exploring the concept. We've actually deployed multiple units out in the field under longer term contracts.

And I think our commentary in our earnings script along the lines of, you know, this is going to be an evolutionary development. This is not something that's going to happen overnight. It's going to be driven by regulatory or tax implications. You know, I think people are starting to figure out that.

green ain't necessarily cheap and green ain't necessarily reliable so to speak. So we remain optimistic longer term on the optionality. It provides USA to the ESG storing. The grid is completely inadequate to be able to handle the size and type of electric compression which our customers are focused in on.

that they don't have sufficient capacity to provide even small horsepower, let alone bit horsepower, let alone on any scale and scope. The magnitude of the improvements that are needed to enhance the grid, bolster the grid, the timeline to require to get there are astronomical. We've seen no move by our current regime to...

speed up the permitting process, so it's one thing to talk about. Yeah, there's money available to bolster the grid or build transmission and distribution lines, but without any form of regulatory and permitting improvements, that's still a pipe dream. So don't think it's there for the short term.

So it's one thing to talk about. Yeah, there's money available to bolster the grid or build transmission and distribution lines, but without any form of regulatory and permitting improvements, that's still a pipe dream. So don't think it's there for the short term. Okay. Thank you.

We have no further questions. This will conclude today's conference call. Thank you for your participation. You may now disconnect.