Q3 2023 Evolution Petroleum Corp Earnings Call
Good afternoon.
I'll come to the evolution petroleum fiscal third quarter 2023 earnings conference call.
At this time, all participants have been placed in a listen only mode and the floor will be opened for questions and comments after the presentation.
I will now turn the call over to your host Brendon.
Investor Relations manager. Please go ahead.
Thank you welcome to evolution petroleum fiscal third quarter earnings call I'm joined by Kelly Williams, President and Chief Executive Officer, Brian Stash, Senior Vice President and Chief Financial Officer, and Treasurer, and Mark <unk> Chief operating officer.
We released our third quarter financial results. After the market closed yesterday. Please refer to our earnings press release for additional information concerning these results you can access our earnings release and the Investor Relations section of our website. Please note that any statements and information provided in today's call speak only as of today's date May 10, 2023 and <unk>.
Time sensitive information may not be accurate at a later date.
She will contain forward looking statements of management's beliefs and assumptions based on currently available information. These forward looking statements are subject to the risks assumptions and uncertainties as described in our SEC filings.
Actual results may differ materially from those expected we undertake no obligation to update any forward looking statements.
During today's call, we may discuss certain non-GAAP financial measures, including adjusted EBITDA and adjusted net income. Please refer to reconciliations of these measures to comparable GAAP measures in our earnings release Kellie will begin today's call with a few opening comments followed by our operational results from C O O Mark and Brian <unk> our CFO .
Review, our third quarter financials before turning back over to Kelly for closing comments. After our prepared remarks, the management team will be available to answer any questions.
Reminder, this conference call is being recorded if you wish to listen to a webcast replay of today's call. It will be available on the Investor Relations section of our website with that I will turn the call over to Kelly.
Thanks, Brandy good afternoon, everyone and thank you for joining us for today's call.
Our results in the third quarter of fiscal 2023 were excellent and continued to demonstrate our diversified portfolio of long life low decline oil and natural gas as its ability to generate strong free cash flow even during periods of high commodity price volatility.
A couple of highlights from the quarter are we.
We reported record quarterly revenue of $36 9 million and record quarterly net income of 14 million or 41 cents per diluted share.
We returned cash of roughly 8 million to shareholders via cash dividends and share repurchases.
And we generated record adjusted EBITDA of $22 million, while maintaining a zero debt outstanding and building our cash reserves to $18 4 million.
We continue generating meaningful free cash flow from the acquisitions completed over the last couple of years to fund our strategic objectives of course, our ongoing success is a direct reflection of the hard work and accomplishments of our team I want to thank each and every member of the evolution team for their contributions and continued death.
<unk> to driving near and long term value for our shareholders.
During the third quarter, we paid a cash dividend of 12 per common share. This was 20% higher than the same period for fiscal 2022, which we view as a clear indicator of the growth and strength of our business.
Our board recently declared a cash dividend of 12 <unk> per share for fiscal Q4 payable on June 30th to shareholders of record on June 15th marking the payment of our 39th consecutive quarterly dividend and our fourth in a row at the 12 cents per share amount since the company began paying dividends.
In December 2013, we have returned approximately $98 4 million or $2.97 per share of capital to shareholders.
As we've discussed in the past there are very few small cap E&P companies that can say that they have consistently paid a dividend for that length of time throughout several tumultuous commodity price cycles.
We believe this reinforces the strategic view our board takes as we prudently grow the business through the targeted acquisition of solid long life and low decline assets that will continue to support our sustainable quarterly dividend for the immediate and long term.
In short maintaining and ultimately growing the payment of a quarterly cash dividend remains front and center for our board and management team.
I will now turn the call over to Mark to discuss operations.
Thanks, Kelly third quarter fiscal 2023 production of 7089 net BOE per day was down around 2% from 7250 net Boe per day for fiscal Q2 in large part due to the extended recovery gas production in the Barnett associated with the severe winter storm at the edge.
End of Q T.
Looking at our third quarter results in more detail net production at Jonah field for Q3 was 1844 BOE per day with an average gas price of $20.31 per Mcf for the quarter. The Jonah field as our most recent acquisition and we remain pleased with its performance.
Similar to other assets the field is highlighted by long life and low decline reserves that generate significant cash flow.
In addition, the asset base provides access to attractive western markets.
Third quarter net production in the Williston Basin was up 16% relative to last quarter at 567 Boe per day of which approximately 76% was oil the Williston basin oil production was impacted by the winter storm during Q2, which has been restored in Q3 during the quarter we <unk>.
Dissipated in a vertical Bakken re completion and are waiting results. We continue to work closely with our operator and high grading opportunities in the field such as expense Workovers additional re completions and sidetrack drilling opportunities.
Q3, net production for Barnett shale was 3156 Boe per day.
Of which approximately 76% was natural gas.
As mentioned previously production was lower due to the effects of the severe winter storm production was down by 4.5% relative to last quarter net.
Net production for Q3 at Hamilton down was essentially flat at 400 Boe per day.
We continued to support the operator merit energy in their efforts to restore production.
<unk> water injection locations and volumes and execute on other targeted projects, both maintenance and improvement.
Third quarter net production at Delhi field was essentially flat at approximately 1111 BOE per day, we continue to work with our operator to perform conformance workovers and upgrades to the facilities.
With that I will turn it over to Ryan to discuss our financial highlights.
Thanks Mark.
As mentioned earlier, please refer to yesterday's earnings release for additional information concerning our third quarter results. My comments today will primarily focus on financial highlights and comparative results between fiscal Q3 and Q2.
A key highlight of the third quarter was our continued strong generation of cash flow, including adjusted EBITDA of $22 million.
This was $34.42 on a per BOE basis, which was an increase from the second quarter. We have now generated $55 4 million and adjusted EBITDA for fiscal 2023 year to date as.
As Kelly discussed during the third quarter, we continued to fund our operations development capital expenditures cash dividends and share repurchases out of operating cash flow, while also maintaining zero debt.
Supported by our continued strong operational and cash flow outlook, we paid a dividend of <unk> 12 per share in the third quarter and declared a dividend of <unk> 12 per share for fiscal Q4 payable on June 30th to shareholders of record as of June 15th our cash dividend program has been and will continue to be a tough.
<unk> priority as we clearly recognized the strategic importance of returning value to our shareholders.
During the third quarter, we maintained our debt free balance sheet and ended the quarter with cash and cash equivalents of $18 4 million and working capital of $10 7 million.
The result was increased liquidity of $68 4 million.
Up 85% since June 30th 2022.
This is direct result of our targeted and immediately accretive acquisitions over the past couple of years as well as our continued focus on cost control. We are ideally positioned for the continued execution of targeted future growth opportunities that meet our strategic vision.
In May we entered into the 10th amendment to our credit facility and extended the maturity date to April 2026, and also replace LIBOR as a benchmark interest rate with software.
All of the existing terms remains substantially the same now looking at the third quarter financials in more detail. Our total revenue of $36 9 million was up 9% from last quarter due to a combination of factors, including higher natural gas revenues due to a 34% increase in realized pricing partially offset.
Set by a 5% decrease in daily production increase NGL revenue due to a 10% higher realized pricing. This was offset by lower oil revenue associated with a 10% decrease in realized pricing.
The result was an average realized price per Boe increase of 14% to $55.79 lease.
Lease operating expenses decreased 10% sequentially to $13 6 million in the third quarter.
On a per BOE basis lease operating expenses were $21 26 for the third quarter compared to $22 55 in the second quarter.
Primarily contributing to the decrease in LOE were lower cost of the Barnett shale.
The costs were partially offset by higher production taxes associated with higher natural gas prices at Jonah field also contributing to the decrease was reduced C. O two cost at Delhi field associated with a decrease in crude oil prices from the prior quarter. As a reminder, our C. O two cost of Delhi field are directly impacted by the price of.
Oil therefore, lower oil prices resulted in lower C O two costs.
General and administrative expenses were $2 3 million for the third quarter versus $2 6 million for Q2.
Decrease was primarily associated with lower consulting and audit fees.
Net income for the third quarter was 14 million or <unk> 41 per diluted share versus $10 4 million or 31 cents per diluted share in the second quarter. Adjusted net income for the quarter was $14 1 million or <unk> 42 cents per diluted share compared to $9 6 million or 28 cents per diluted share in the prior quarter.
During the third quarter, we invested $2 3 million in development and maintenance capital expenditures for fiscal 'twenty to 'twenty. Three we continue to expect total development capital expenditures of 6 million to $7 million. This estimate includes upgrades to the Delhi field Central facility Workovers at Hamilton Dome field.
Barnett shale and the Jonah field and a vertical re completion in the Williston basin.
We expect capital spending on our existing properties will continue to be met from cash flows from operations and current working capital of course, our spending outlook may change, depending on conversations with our operating partners commodity pricing and other considerations.
During the quarter, we repurchased $3 $9 million worth of common shares under our <unk> one plan.
I will now turn the call back over to Kelly for his closing remarks.
Thanks, Ryan we continue to benefit from the targeted acquisitions, we have completed over the past few years as a result, we enjoy a larger and more geographically diverse asset base and commodity mix. This provides us with a solid platform for significant cash flow generation that we will continue to use.
To support and enhance our well established shareholder capital return program.
Our shareholders expect a consistent and meaningful cash return on their investment and we remain committed to maintaining and as appropriate increasing our dividend payout over time.
Another component of our capital return strategy is the share repurchase program, we put in place and began making purchases on after the end of the second fiscal quarter. This provides us the optionality to opportunistically repurchase our shares from time to time through open market transactions privately negotiated transaction.
<unk> or by other means in accordance with federal Securities laws.
As in the past, we will maintain a conservative balance sheet and remain disciplined in our management of capital as we fully recognized the cyclicality of our business our ongoing commitment to remaining fiscally prudent is evidenced by our zero debt balance and meaningful cash reserves at quarters end.
As a result, we are well positioned to execute on targeted high rate of return and immediately accretive growth opportunities as appropriate.
We will pursue initiatives designed to maximize total shareholder return by optimizing the value of every dollar we invest on a risk adjusted basis, depending on where we are in the cycle. Our approach of building a targeted asset base of oil and natural gas reserves capable of supporting cash payments to shareholders has.
Served us well over the past decade.
And we will continue to benefit our shareholders for many years to come.
As we've discussed in the past, we will closely evaluate and only execute on targeted acquisition opportunities that provide long life production and strategically enhance our base of assets.
And do not result in any material dilution.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If youre using a speakerphone please pick up your handset before pressing the keys and to withdraw your question. Please press Star then two.
Yeah.
At this time, we will take our first question, which will come from Donovan Schafer with Northland Capital markets. Please go ahead with your question.
Hey, guys. Thanks for taking the questions.
I wanted to start with so so getting looking at the production numbers in the Williston you saw a nice bounce back there from the reversal of the weather impacts and then it looks like this quarter. The barnett's had a similar kind of impact.
You know in the in this quarter's result, so for next quarter is it kind of a nature, where we could see some kind of a bounce back in the production there similar to what we saw from the Williston This quarter or is there something kind of more fundamentally different between the two.
First of all Donovan. Thank you very much for calling I really appreciate it.
Look it was more as we mentioned last quarter at the end of the quarter. There was a winter storm, which affected the Barnett and it didn't just come back immediately so.
You should see a bit of a recovery just due to that but look at the fields decline I don't know Mark do you want to take it from here.
Yeah, well Donald.
Good to talk to you.
Yeah.
The Barnett units makes a lot of water. So what happens when you shut in large areas or even.
And sometimes even smaller areas as the water kind of built up on the wells just takes a while to get them on loaded they come back its just slower than a lot of other types of production I think Kelly's spot on and what the deal is you should you should see an adjustment upward, but you know there's always other things that can go on in the oil and gas field.
Yeah, I'm I'm familiar with that my first job out of college as in the Marcellus.
While the rig.
Fluid would build up to the shut in for a while putting hydrostatic pressure and then you know the.
The gas that's flowing and you go round of the swab rig so okay.
Sense.
And then for natural gas prices.
Fantastic and Jonah north of $20, an Mcf this quarter.
I think it was like $11 last quarter and I think we might have gone over this before but you know so there's sort of a lag there, but correct me if I'm wrong, but there's sort of a lag in timing.
And or maybe it's like a first day of the month pricing or something because we think of it was.
November December when pricing really blew out unless I'm just forgetting that it was also a crazy in January so why why the higher natural gas price in China this quarter versus last quarter.
Sure Ryan once you talk about that I'm sure yes.
Yeah, So Dom and good Kentucky as well if you call. Yeah, we did talk about that last quarter and so we sell our gas a bit Jonah probably a little more than half of what we sell on what we call insight for our first month pricing.
And so.
What really happened in this quarter as the price spiked at the end of December during December and the end of December which bumped up that first month pricing for January .
Which really benefited there obviously for quite a bit in January and then honestly it stayed pretty high throughout January and didn't even start coming down until maybe February and more in March. So yes. There is a little I wouldn't call. It a lag necessarily because we do book, we do know what we're going to get and we booked revenue in that month, but we do sell most of our or more of our production.
More than half on first of month pricing, so that what was happening at least in January for that for this past quarter.
Okay and then.
You know being on other calls a lot of people are talking about you know, what's the future for natural gas pricing or the outlook for natural gas pricing sort of go nationally.
Or something you know some people really focused even and on Europe , but yeah of course, you guys stand out a bit because of this great west coast exposure. So.
Yeah things have changed a bit I think most recently I just thought it was supposed to hit down this weekend in the northwest, but they don't run a lot of AC. So I don't know if that creates a lot of electricity burn and then yeah, you had flooding in outages and all this stuff because that also raised the reservoir levels right. So.
Hey, if you get an extremely hot summer on the one hand that could raise natural gas prices west of the Rockies because of peak your plants operating but then again on the flip side. The hydroelectric reservoirs should be higher I'm. Just curious if you have any kind of special perspective or anything.
You're watching in terms of where natural gas prices west of the Rockies might go or to the hubs for yourself.
Sure.
I'll say this they there isn't a lot of storage in.
In the western markets.
I'm one of the bigger natural gas storage facilities, they had they shut down.
So I think it leaves us.
In a position where you can continue to see some of these more weather driven events create more volatility.
I think we are we can't predict what they're going to be but we were happy to be exposed to these largely sort of uncorrelated.
In volatile markets relative to Henry hub.
So.
Yeah, it's difficult, but I think there's a real opportunity that this could continue at.
From time to time are getting natural gas as you know is a much more regionalized, many market sort of deal flow versus oil and we feel like it could happen at any place we sell our natural gas memories, where it's supposed to be an el Nino coming up right. So that can mean, a a hot you know some.
In the South East, where the bulk of electrical demand driven from natural gas is in this country. So.
Point is Donovan.
We do think that these kind of price you know weather driven pricing events will continue I'm not exactly sure how they'll play out play out but were intense.
Intentionally happily exposed to them.
Okay. So you can't predict the weather, but you feel good about the exposure.
Yeah, but.
I think you know what I mean, we want to make sure that we were exposed to markets that we felt could be uncorrelated and could see some outside of defense.
Right.
Yeah, No I mean, the results the results clearly show the strength the strategy so.
Kudos there.
Okay. So my last question pardon.
Part of me hate asking this question because basically talking about capital allocation and of course like this as part of what your job is as you are in these positions and it's even more so the case of non op with a non op business model as you know.
You're kind of everyday thinking about capital allocation and so you can't just commit to something and tell me if something and then be beholden to that you guys need that flexibility indeed return driven but it would be good to just get any kind of an update on your thinking in terms of you talked about the you know you have the dividend is an option.
That's something you know theres always the potential that you have.
It is it is something within your power and the board's approval, where you could raise the dividend, but you know you also want to keep that as a base thing then you have the buybacks to kind of risks around yachts and return money to shareholders that way and then of course, there's acquisitions and M&A and with all the price volatility.
Well, perhaps there are some opportunities have opened up so maybe you're seeing.
Looking at more opportunities considering things.
Or maybe there's not much that's come across your desk I don't know so just kind of curious if we can get an update.
Current state of affairs, how things are looking to you guys.
Sure and when you hit the nail on the head I mean, it's a highly dynamic situation.
Constantly changing and I you know, we're always evaluating marketed deals we are leveraging our contacts disorder source negotiated deals and we're looking to grow our company and we.
We think that we can continue our track record of accretive acquisitions.
And in this lower price environment. It has may be shaken a few things around we're starting to see a little bit more on the deal front.
But as I mentioned last time.
Having our balance sheet as pristine as it is.
And the nature of our assets being long life and low decline.
We have the financial security to wait for a deal we don't have to do something were not in that position.
No deal better than a bad deal, but I will say this like deal flow is starting to pick up a little bit compared to the final three months of the calendar 'twenty two.
We're just starting to get a little bit more evolution, that's kind of deals crossing our desk.
The bid ask obviously look we haven't done anything or so.
I would say the bid ask is still a little off.
But we're getting there and I think there's some exciting opportunities out there and we're going to keep pushing for them. So.
Okay, great. Thanks, guys well congrats on the quarter I'll take the rest of my questions offline.
Thanks, Tom really appreciate it.
And our next question will come from John White with Roth Capital. Please go ahead with your question.
Thank you operator, and good afternoon everybody.
Hi, John Thank you John .
Yeah, let me start by offering my congratulations to Mr bunch on on his appointment.
Glad to see that.
Thanks, John .
Sure.
Yeah, I know you don't put out guidance and your a non operator.
And I'm not trying to pin you down to a lot of specific numbers, but.
Could you just kind of talk about what you're seeing and what you're thinking about capex for the remainder of the year I saw you pushed two of your Williston wells too.
To to a later in the year.
I just want to talk about.
About what what might be gone unfolding over the rest of the year.
Sure. So it's.
It's a multi part question a I assume you're talking about foundation as a company and then we can get into more specifics.
On the on Capex at Williston.
So yes, I don't know, if you noticed or not but during in the press release.
Announced our Capex guidance.
I think we reduced it for full year to six to seven and it had been six and a half the nine five.
And there'll be certain reasons said I'll, let mark go and do for maybe maybe why that moved down I will say on the Delhi front, we still have the rest of the helix to heat exchanger coming in correct. That's correct that's still fully on the books.
And then look I'll, let mark take over because I really want him to say some things about the Williston base. Okay. So John .
Thanks for the question by the way and it really the the reason the sidetrack.
Sidetracked got pushed out into 2024 is because there is the permitting process in North Dakota is really really slow and foundation has done a great job trying to get permits and get things pushed through.
Basically they're the kind of the the.
And yes, he kind of went on holiday while the legislature wasn't session. So nothing was passed and so really that's the total cause of pushing things out and nothing to represent what we think of the of the bird bear locations at all we're actually really excited about.
Finishing that up and getting starting it out and one of them. So.
Did that answer your question about the Bert there and then on the debt.
The rest of the step we should have like at Delhi, we should have the.
Heat exchanger, which will improve operations out there allow us to be able to stay up and running during really coal faces of the in the winter time. It also help us in the hot times in the summer and be able to inject more C. O T and it also should lower operating costs. We're real excited about getting that put in that it would be.
Installed by the end of this month.
And.
I think everything else is trying to remember if there's anything else we knit.
Did we push.
A recompete.
Yeah, we did we did push a recompete Bakken in the Williston too and that was the same issue was a permitting issue getting it getting the permit through and that that was actually even sillier because it permits re completions are fairly simple so.
So really it's kind of a.
Regulatory problem.
Okay I appreciate the recap there and the additional detail and I'll pass it back to the operator.
Alright. Thank you John always appreciate you, calling in and keeping us on our toes.
And our next question will come from Bruce Brown with Brown Capital Management. Please go ahead with your questions.
Hey, Thank you.
It was it was a well performed quarter given the impediments, whether impediments you had in a couple of fields. I. Just was curious as number of shares you repurchased I'm assuming it was around 600000.
Yes.
That's right. So I will put it out in our Q a little over 600000 shares we repurchased for just a little over $6 per share on average.
After the program throughout this quarter.
No that's.
Oh, well that's good.
I think that.
If you look at the current strip today and also what the Jonah field Nat gas.
Pricing is.
Currently even though I know it.
You have the first of the month for a lot of that gas pricing et cetera, what would your what would that do to your your cash flow.
Assuming those prices are maintained for.
The rest of the quarter have you have you run that yet or can you just give me a fresh some idea.
So.
Pricing today on the.
Uh huh.
The.
Pipeline is coming off of old Paul has come back much more in line with with Henry hub.
As it typically does during the shoulder season.
Yeah. So.
Again, that's today, we're sitting here in May.
April .
There was a differential I got to be a little careful I don't want to give any kind of guidance. So.
These are they're hard to find to be honest with you almost have to have a subscription to platts to get the pricing but.
It is.
Well I don't know if semi publicly.
We'll see what the pricing coming off those pipelines are.
Listen it.
Youre not getting 20 Bucks an mcf it will definitely affect your cash flow I can say that about that.
Yes, yes.
We think it is probably going to be somewhere around Henry hub, we would think for kind of this quarter roughly so.
Obviously year to date.
During $2020 to wherever Henry hub shakes out at the end of this quarter.
On the gas side.
Alright, I hear you so.
It sounds like the cash flow.
The cash flow for the current quarter.
We'll be possibly a little bit less than than then.
The one just reported.
Yes.
You said, possibly I'll say, yes.
[laughter] okay. Thanks. Thank.
Thank you yeah. Thank you Bruce.
And our next question will come from John Bair with ascend wealth advisors. Please go ahead with your questions.
Good afternoon gentlemen.
Welcome Martin.
Doing great Nice Sunny day up here.
I'm going to ask John .
Uh Huh, John White question in a kind of a different way and that is.
What have you.
What is your sense from the operators as to.
Proposal <unk>.
Tivoli that might potentially increase the need for capex spending.
In the in the current quarter, but say over the next six to.
At 12 months and I realize some of that is probably going to be dependent upon.
Commodity prices, but but just generally speaking what what what's your sense there.
Sure I'm going to let Mark take this.
Well, yes, as Kelly said you know we.
We talked to our operators all the time and.
We kind of look at it.
Digital acquisitions development occurred assets dividend payments share repurchases Kelly at the whole thing because we're trying to get the best risk reward for the company.
And just to say it helps our investors out and we're always melding that in with what the operators are telling us and you know.
Currently we just look at all of these opportunities and one of the biggest deals as you know we're getting we're pushing forward like the bird bear activity, which side tracks at the Williston Basin and.
They kind of rise to the to the to the top of the heap it at.
And our current position.
<unk>.
We work with each of the operators closely and they all you know we value that relationship with them and we have a bunch of good operators that we work with them and in the Wilson.
Foundation is one of them and that's really I guess, all I can really tell you is that you know we're constantly looking for for things that add value like sidetrack and the bird bear and also re completions.
That.
Of existing well bores.
Okay. So so evaluation of a property's hasn't.
Uncovered some some.
New perspectives are different horizons, or whatnot that they might want to.
I'll give a.
Attempt to develop those.
So it's pretty much steady as we go kind of thing is that is that kind of a way to look at it.
I'd argue that the bird bear is probably kind of an extension of kind of a newer idea it's an existing zelle.
Zone that people that produce before but you know I think we have kind of a new way of going about doing it and there is some opportunity there so.
I like to think that that has legs, but we'll have to just see what happens.
Okay.
And in those.
Sorry, just if you think about a field by field. So the Barnett shale I don't think we expect honestly to see much different than we've seen historically in fact, the workovers may be a little lighter since they put a lot of the wells already the Jonah field, it's been pretty steady as well so really what we're talking about that Mark mentioned is really a lot of it's in the Williston, where there's some potential for.
Our capex that we're sorting out.
Okay.
Yes, absolutely.
And listen.
<unk> field.
It has.
We think it has plenty of potential we think theres. Some some economic projects that can happen there and we think our we think our operator.
Denver is doing an excellent job of working through all of this and hopefully we come up with a plan there.
Allow us to spend some capital.
We're working together with them on all that too so.
Well speaking of Danbury, I'm curious as to whether there's any progress on on the C O two utilization and getting it categorized as green.
Green use or whether you're able to.
Get some industrial gas into that.
That's been produced that.
It could be used for C O two injections or any any new.
So we will shed light on that.
Again, and I hate to use the same thing I told you last time, it's still it's still a little early but I will say this we have confirmed that work is being done to progressing towards that end goal.
And not just by us so.
I'm optimistic and I'm positive and we have a a timeline in mind.
We should get some news going forward, so, but it's a little too early to say anything definitive.
Alright.
We also progress go slow thanks.
Thanks for taking my questions take care.
Yeah, John Thank you really appreciate it.
And again, if you have a question you May press Star then one to join the queue.
Our next question here will come from Jeff Robertson with water Tower Research. Please go ahead with your question. Thanks.
Thanks, Good afternoon.
Mark a question on just on the asset base now that you all have had an apples to apples asset base for a handful of quarters.
Can you just talk about the natural decline you see in the production base.
As we think about fiscal 'twenty, four and whether or not there's a.
On acquisition.
And whether there's not an acquisition whether thats assuming no acquisitions.
Okay, all right yeah, Yeah, Yeah, sorry, I misunderstood what your question was.
I think in like in some of the assets, we saw actually bump up last year because the prices are high. So we were they were doing a lot of extra work to get extra things on I think we'll we're going to be seeing now now that prices are more normalized that the decline will be back.
Typically what <unk> seen with evolution, which is still a relatively very flat sub 10% decline.
And that's.
That's what I would expect for the for the company as a whole.
So that's that's an annual decline rate yes.
Yes.
Okay.
It's not daily.
Yeah.
Okay. Thank you.
Yeah, Thanks, Jeff I really appreciate it.
Just to follow up with what Mark said.
We think things are sort of back in line, we have 20, plus year reserve life as a company.
And our declines are.
I mean at least relative to the rest of this world really flat and we're very proud to have that so.
And this concludes our question and answer session today.
I would like to turn the conference back over to Mr. Kelly Loyd try any closing remarks.
Thank you.
And thanks again to everyone for taking the time to listen.
And we really do appreciate you all participating in today's call as always please feel free to contact us. If you have any additional questions. We appreciate your continued support and look forward to updating you on our ongoing efforts when we report our fourth quarter and fiscal 2023 results in September .
Thanks again.
The conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect your lines.