Q2 2024 Trican Well Service Ltd Earnings Call
Thank you very much for joining us and good morning everyone. First, Scott Matson, our Chief Financial Officer, will give an overview of the quarterly results.
Bradley P. D. Fedora: We'll give an overview of the quarterly results, and then I will provide some comments with respect to the quarter, current operating conditions, and our outlook for the future. We'll then open up the call for questions. We have several members of our executive team here in the room and are available to answer any questions that anybody may have. I'll now turn the call back to Scott.
Speaker Change: will then open up the call for questions. We have several members of our executive team here in the room.
Scott E. Matson: So just before we begin, I'd like to remind everyone that this conference call may contain forward-looking statements and other information based on current expectations or results for the company. Certain material factors or assumptions that were applied in drawing conclusions or making projections are reflected in the forward-looking information section of our MD&A for Q2 2024. A number of business risks and uncertainties could cause actual results to differ materially from these forward-looking statements and our financial outlook. Please refer to our 2023 Annual Information Form for the year ended December 31, 2023 for a more complete description of the business risks and uncertainties facing Trican. This document is available on our website and on CDAR.
Speaker Change: A number of business risks and uncertainties could cause actual results to differ materially from these forward-looking statements and our financial outlook.
Speaker Change: Please refer to our 2023 Annual Information Form for the year ended December 31st, 2023 for a more complete description of business risks and uncertainties facing Trican. This document is available on our website and on CDART.
Scott E. Matson: During this call, we will refer to several common industry terms and use certain non-GAAP measures, which are more fully described in our Q2 2024 MD&A. Our quarterly results were released after the close of market last night and are available both on CDAR and our website. So with that, I'll do a brief summary of our results for the quarter; my comments will draw comparisons mostly to the second quarter of last year, but I'll also provide a bit of commentary about our quarterly activity and our expectations going forward. Trican's results for the quarter compared to last year's Q2 were generally stronger due to a busier and less severe spring breakup.
Speaker Change: During this call, we will refer to several common industry terms and use certain non- GAAP measures , which are more fully described in our Q2 2024 MD&A.
Speaker Change: Our quarterly results were released after close of market last night and are available both on CDAR and our website.
Speaker Change: So with that, I'll do a brief summary of our results for the quarter, my comments will draw comparisons mostly to the second quarter of last year, but I'll also provide a bit of commentary about our quarterly activity and our expectations going forward.
Speaker Change: Trican's results for the quarter compared to last year's Q2 were generally stronger due to a busier and less severe spring breakup.
Scott E. Matson: We saw an increase in operating activity compared to last year as some of our customers completed their programs that they had previously deferred from Q1 of 2024, and other customers accelerated some of their programs that were scheduled for the second half of 2024 in order to mitigate some of the potential water constraints, summer water constraints, and access concerns regarding seasonal forest fires. Revenues for the quarter were $211.8 million, with adjusted EBITDA of $40.7 million, or 19 Adjusted EBITDA for the quarter came in at $45.2 million, or 21% of revenues to arrive at EBITDA.
Speaker Change: We saw an increase in operating activity compared to last year as some of our customers completed their programs that they had previously deferred from Q1 of 2024.
Speaker Change: and other customers accelerated some of their programs that were scheduled for the second half of 2024 in order to mitigate some of the potential summer water constraints and access concerns regarding seasonal forest fires that they've experienced in prior years.
Revenues for the quarter were $211.8 million with adjusted EBITDA of $40.7 million or 19% of revenues, both up approximately 20% from last year.
Speaker Change: Adjusted EBITDAs for the quarter came in at $45.2 million or 21% of revenues.
Scott E. Matson: We add back the effects of cash settled share-based compensation recognized in the quarter to more clearly show the results of our operations and remove some of the financial noise associated with the changes in our share prices. We mark to market these items. On a consolidated basis, we continue to generate positive earnings, generating $16.2 million in the quarter, which translates to $0.08 per share, both on a basic and fully diluted basis. Trican generated free cash flow of $20.9 million during the quarter. Our definition of free cash flow is essentially EBITDA less non-discretionary cash expenditures, which include maintenance capital, interest, current tax, and cash settled stock-based comp.
to arrive at EBITDAS and we add back the effects of cash settled share based compensation recognized in the quarter to more clearly show the results of our operations and remove some of the financial noise associated with the changes in our share prices we mark to market these items.
Speaker Change: On a consolidated basis, we continue to generate positive earnings, generating $16.2 million in the quarter, which translates to $0.08 per share, both on a basic and fully diluted basis.
Speaker Change: Trican generated free cash flow of $20.9 million during the quarter. Our definition of free cash flow is essentially EBITDAs less non-discretionary cash expenditures which include maintenance capital, interest, current tax and cash settled stock-based comp.
Scott E. Matson: You can see more details on this in the Non-Gap Measures section of our MD&A. CapEx for the quarter totaled $25.9 million, split between maintenance capital of about $14 million and upgrade capital of $11.9 million. Our upgrade capital was dedicated mainly to the electrification of ancillary frack equipment and ongoing investments to maintain the productive capability of Trican's active equipment. The balance sheet remains in great shape. We exited the quarter with positive working capital of approximately $148.4 million, including cash of $36 million.
Speaker Change: You can see more details on this in the Non- GAAP measures section of our MD&A.
Speaker Change: CapEx for the quarter totaled $25.9 million.
Speaker Change: split between maintenance capital of about $14 million and upgrade capital of $11.9 million. Our upgrade capital was dedicated mainly to the electrification of ancillary frack equipment and ongoing investments to maintain the productive capability of Trican's active equipment.
The balance sheet remains in great shape. We exited the quarter with positive working capital of approximately $148.4 million, including cash of $36 million.
Scott E. Matson: And as anticipated, our cash position decreased compared to year-end, with some of the major factors as follows. Working capital decreased by $4.8 million as working capital unwound, combined with the effects of spring breakup on operating activity.
Speaker Change: And as anticipated, our cash position decreased compared to year-end.
with some of the major factors as follows. Working capital decreased by $4.8 million as working capital unwound, combined with the effects of spring breakup on operating activity.
Scott E. Matson: Tax payments were a combined $49.6 million, and I would note that $36.4 of that related to our 2023 tax bill that was outstanding, which we telegraphed throughout 2023. The remainder related to our ongoing installment program for 2024. NCIB funding was $43.8 million during the year, $27.2 million of that during the quarter.
Speaker Change: Tax payments were a combined $49.6 million, and I would note that $36.4 of that related to our 2023 tax bill that was outstanding, which we telegraphed throughout 2023. The remainder related to our ongoing installment program for 2024.
Speaker Change: NCIB funding was $43.8 million during the year, $27.2 million in that during the quarter. And our dividend payment was $18.3 million in the year, $9 million for this quarter.
Scott E. Matson: And our dividend payment was $18.3 million for the year, $9 million for this quarter. With respect to our return of capital strategy, we repurchased and cancelled 6.2 million shares under our NCI-B program in the quarter, and subsequent to Q2 of 2024, we've purchased back and cancelled an additional 2.4 million shares and continue to be active with our buyback program as we move towards its renewal in October. As noted in our press release, the Board of Directors approved a dividend of $0.045 per share, reflecting approximately $8.6 million in aggregate payment to shareholders.
Speaker Change: With respect to our return of capital strategy, we repurchased and cancelled 6.2 million shares under our NCI-B program in the quarter.
Speaker Change: and subsequent to Q2 of 2024, we've purchased back and cancelled an additional 2.4 million shares and continue to be active with our buyback program as we move towards its renewal in October .
Speaker Change: As noted in our press release, the Board of Directors approved a dividend of $0.045 per share, reflecting approximately $8.6 million in aggregate payment to shareholders.
Scott E. Matson: Distribution is scheduled to be made on September 30th, 2024 to shareholders of record as of the close of business on September 13th, 2024. And I would note that those dividends are designated as eligible dividends for Canadian income tax purposes. So with that, I'll turn things back to Brad. Okay, thanks.
Speaker Change: Distribution is scheduled to be made on September 30, 2024 to shareholders of record as of the close of business on September 13, 2024. And I would note that those dividends are designated as eligible dividends for Canadian income tax purposes.
Bradley P. D. Fedora: My comments will include the quarter and then current and forward-looking observations and will be quite similar to our last conference call as not a whole lot has changed since May. Overall, Q2 went better than expected. We continue to be pleasantly surprised that our customers continue to level load their programs throughout the year. I actually expect our past experiences with Q2 breakup to be a thing of the past, and I think it's reasonable to expect that in the future, the second quarter will generate positive earnings in our industry, which is a refreshing change, and then we'll, in exchange, see more of a slowdown at the end of Q4 in and around Christmas. As always, there were lots of weather and spring thaw delays throughout the quarter, but nothing that wasn't typical, and overall, like I said, the quarter went very well.
Speaker Change: So with that, I'll turn things back to Brad.
Brad: Okay, thanks. My comments will include the quarter and then current and forward-looking observations and will be quite similar to our last conference call as not a whole lot has changed since May. Overall, Q2 went better than expected. We continue to be pleasantly surprised that our customers continue to level load their programs throughout the year.
Speaker Change: I actually expect there are past experiences with Q2 breakup.
Speaker Change: is a thing of the past and I think it's reasonable to expect that in the future the second quarter will generate positive earnings in our industry which is a refreshing change and then in exchange we'll see more of a slowdown.
Speaker Change: at the end of Q4 in and around Christmas.
Speaker Change: As always, there was lots of weather and spring thaw delays throughout the quarter, but nothing that wasn't typical. And overall, like I said, the quarter went very well. Certain of our customers moved.
Bradley P. D. Fedora: Certain of our customers moved Q3 work forward into Q2 to avoid potential water restriction issues that are just the result of ongoing drought conditions in Western Canada, and so that was a significant help to our quarter, but this will come at a cost to our Q3 results. So if work does move around from quarter to quarter, that's nothing to be concerned about. FRAC revenue was up 30% year over year, and EBITDA in that division was up over 50%, so a very successful quarter for our FRAC division.
Brad: Q3 work forward into Q2.
Brad: to avoid potential water restriction issues that are just the result of ongoing drought conditions in Western Canada.
Speaker Change: Significant help to our quarter, but this will come at a cost.
Speaker Change: To our Q3 results. So if work does move around from quarter to quarter, that's nothing to be concerned about.
Speaker Change: FRAC revenue was up 30% year-over-year And EBITDA in that division was up over 50% so a very successful quarter in our FRAC division
Bradley P. D. Fedora: In general, I would say cost inflation has basically stopped or is very muted. In fact, there are pockets of where we're starting to see some of our costs actually decrease. So that's a welcome change to the past few years and that helps offset a lot of the pricing pressure that we've been experiencing over the last six. We're still operating seven frack crews. We commissioned our fifth tier four fleet earlier in the year, which was designed to operate in the Duvernay in the high pressure areas of the Montney.
Speaker Change: In general, I would say cost inflation has basically stopped, or is very muted in fact. There are pockets of, there are areas where we're starting to see some of our costs actually decrease. So that's a welcome change to the past few years and that helps with.
Speaker Change: Offset a lot of the pricing pressure that we've been experiencing over the last six months.
Speaker Change: We are still operating seven frack crews. We commissioned our fifth Tier 4 fleet earlier in the year, which was designed to operate in the Duvernay and the high-pressure areas of the Montney. I think we still are taking a very disciplined approach to the basin.
Bradley P. D. Fedora: You know, we still are taking a very disciplined approach to the basin, and we are operating about 60 percent of our total horsepower. And compared to our competitors that are running full blast, you know, we continue to take a disciplined approach to the industry, and we will bring back equipment as required and at a time when we think we can generate return on all of the hours that it's operating.
Speaker Change: We are operating about 60% of our total horsepower compared to our competitors that are running full blast. We continue to take a disciplined approach to the industry and we will bring back equipment as needed.
Speaker Change: as required and at a time when we think we can generate return on all of the hours that it's operating.
Bradley P. D. Fedora: Our fracturing operations continue to be almost exclusively focused in the Montney, Duvernay, and Deep Basin, and I don't expect there will be a lot of changes there in the next few years. The cement division is continuing to operate at high utilization and is generating great results. Q2 was another good quarter for that division.
Speaker Change: Our fracturing operations continue to be almost exclusively focused in the Montney, Duvernay and Deep Basin and I don't expect there will be a lot of changes there in the next few years.
Speaker Change: The cement division
Speaker Change: It's continuing to operate with high utilization and is generating great results. Q2 was another good quarter for that division and it's an indication of our expertise in our leading market position in that service line.
Bradley P. D. Fedora: It's an indication of our expertise in our leading market position in that service line. I think we generated 4% higher revenue and 10% higher EBITDA in Q2 of this year versus 2023. And that's just really a result of the quarter being more active in the industry as a whole, especially in June. We continue to look at expanding our cement division, market share throughout the basin, and back into some of the areas that we've previously had to vacate just due to manpower issues.
Speaker Change: I think we generated 4% higher revenue and 10% higher EBITDA in Q2 of this year versus 2023. And that's just really a result of the quarter being more active in the industry as a whole, especially in June .
Speaker Change: We hold about a 50% market share in the Montagne, can be as high as 80% in the Deep Basin and we continue to look at expanding our cement division.
Speaker Change: Market share throughout the basin and back into some of the areas that
Bradley P. D. Fedora: A lot of the manpower problems that we've had with this division the last few years have really been mitigated here in the last year or two, and we can start to look to expand this division as we're able to add qualified staff. We continue to invest in technology and equipment and look at new blends for the different parts of the basin. We continue to expect that this division will perform very well in the future.
Speaker Change: You know, we've previously had to vacate just due to manpower issues.
Speaker Change: You know, a lot of the manpower problems that we've had with this division in the last few years have really been mitigated here in the last year or two, and we can start starting to look to expand this division as we're able to add qualified staff.
Speaker Change: We continue to invest in technology and equipment.
Speaker Change: and look at new blends for the different parts of the basin. And we continue to expect this division will perform very well in the future. On the coil tubing side, we're making good progress in the coil tubing division. We've been focused on growing our market share. We continue to operate only seven coil crews.
Bradley P. D. Fedora: On the coil tubing side, we're making good progress in the coil tubing division. We've been focused on growing our market share. We continue to operate only seven coil crews, so there's lots of room for growth here. We did grow our revenue by about 18% year over year, but we're still struggling with profitability given the scale of this business. We need to really grow the number of units that we're operating in order to realize the profitability potential of that division.
Speaker Change: So there's lots of room for growth here.
Speaker Change: But we did grow our revenue about 18% year over year, but we're still struggling with profitability given the scale of this business. We need to really grow the number of units that we're operating in order to realize the profitability potential of that division.
Bradley P. D. Fedora: We have good field margins, but overall, the scale is just not high enough to offset some of the fixed costs that are associated with operating coils throughout the basin and providing different coil sizes to our customers in any areas that they may want.
Speaker Change: We have good field margins, but overall, the scale is just not high enough to offset some of the fixed costs that are associated with operating coil throughout the basin, providing different coil sizes to our customers in any areas that they may want.
Bradley P. D. Fedora: We expect that this will be generating attractive financial returns within the next year. We're looking forward to our strategic partnership with ACOS, which is a specialized tool company, and that should also help grow our market share in the oilier sections of the basin, particularly where there are multilateral well designs, and this is a re-entry tool that we are going to be using to go back into these wells to evaluate and hopefully increase production from some of these shallower oil wells. This is a market we're not currently active in at all, so it's all additive to this division. We're essentially at a deflection point in the coil division.
Speaker Change: But we expect that this will be generating attractive financial returns within the next year.
Speaker Change: We're looking forward to our, I think we have discussed this in the past, we're looking forward to the start of our strategic partnership with ACOS.
Speaker Change: which is a specialized tool company.
Speaker Change: and that should also help grow our market share.
Speaker Change: in the oilier sections of the basin, particularly where there's multilateral well designs. And this is a re-entry tool that we are going to be using to go back into these wells to evaluate and hopefully increase production from some of these shallower oil wells.
Speaker Change: And this is a market we're not currently active in at all, so it's all additive to this division. You know, we're essentially at a deflection point in the coil division. If we can add a few more units, we can significantly increase our profitability.
Bradley P. D. Fedora: If we can add a few more units, we can significantly increase our profitability. I'll look to the second half of 2024. We expect the second half to remain busy, especially given where we are with natural gas prices year to date. You know, the financial discipline that's been displayed by our customers the last few years has really shown in the reduction of volatility that we've had from quarter to quarter and year to year.
Bradley P. D. Fedora: And with customers only spending about 50% of cash flow, it gives them a really good buffer to sort of look through these temporary commodity price dips or, you know, weak periods of weakness, and they continue to operate, I would say, on a very level, thoughtful basis. And so we expect this year to be maybe not quite as strong as last year, just due to gas prices, but we still expect the second half of this year to be busy. It just moves to a different month or a different quarter.
Speaker Change: I'll look to the second half of 2024. We expect the second half to remain busy, especially given where we are with natural gas prices year-to-date.
Speaker Change: The financial discipline that's been displayed by our customers the last few years is really showing in the reduction of volatility that we've had from quarter to quarter and year to year.
Speaker Change: And with customers only spending about 50% of cash flow, it gives them a really good buffer to sort of look through these temporary commodity price dips or, you know, periods of weakness and they continue to operate, I would say, on a very level-loaded, thoughtful basis.
Speaker Change: And so we expect this year to be maybe not as quite as strong as last year just due to gas prices, but we still expect the second half of this year to be busy.
Speaker Change: You know, we will continue to monitor the forest fire activity and the drought conditions.
Speaker Change: And this really hasn't played out nearly to the extent that we thought it might even a few months ago.
Speaker Change: You know, the water issues were basically restricted to certain areas of the basin. You know, we do have active forest fires this summer, as we have in the past few years, which can push work around. You know, we may have to abandon certain areas for a short period of time, but the work doesn't go away. It just moves to a different month or a different quarter.
Bradley P. D. Fedora: And we'll just continue to monitor and make sure that our staff is safe and that we're not getting in the way of forest fire fighting activities. But generally, it's just a waiting game. And as the summer comes to an end, we'll get back to normal. The Tier 4 fleet that we activated earlier this year is very well suited for these missions. High pressure, low emissions, small footprint on location.
Speaker Change: And we'll just continue to monitor and make sure that our staff is safe and that we're not getting in the way of forest fire fighting activities, but generally it's just a waiting game and as the summer comes to an end we'll get back to normal.
Speaker Change: Fortunately, the strip for natural gas for this winter, Interoak 2025, is still at economic levels.
Speaker Change: So we're not expecting, you know, we're not expecting this natural gas price weakness to last forever.
Speaker Change: And as a result, you know, with the gas prices, as always happens, we do experience some pricing pressure, but it really hasn't been terribly significant. And we expect to continue to generate good operating results going forward. MOTNE will be the focus of our operations.
Speaker Change: The DuVernay is building momentum.
Speaker Change: It's very fracturing intensive, and I'll talk a little bit about that again.
Bradley P. D. Fedora: because our customers are excited from the results of this play, both in the Southern and in the K-Bob areas.
Speaker Change: You know, we've been very active. The well results have been great.
Speaker Change: We expect this to be a growing source of demand for our services. The DuVernay currently represents a very small percentage of production and activity in Western Canada. I think it's less than 5%. We think that our fracturing technology, particularly the last...
Speaker Change: Tier 4 fleet that we activated earlier this year is very well suited for these plays. High pressure, low emissions, small footprint on location.
Bradley P. D. Fedora: On the corporate strategy side, our priorities have not changed. We want to build a resilient, sustainable, differentiated company and invest in high growth. Profitable opportunities to ensure that we continue to generate returns for our shareholders. And we want to provide a consistent return of capital to our shareholders as well through dividends. And even though it may be slower than expected for the next few quarters, we're still very bullish on the industry in Canada.
Speaker Change: On the corporate strategy side, our priorities have not changed. We want to build a resilient, sustainable, differentiated company, invest in high growth.
Speaker Change: profitable opportunities to ensure that we continue to generate returns for our shareholders, and we want to provide a consistent return of capital to our shareholders as well through the dividend.
Speaker Change: And even though it may be slower than expected for the next few quarters, we're still very bullish on the industry in Canada. We view Western Canada as an attractive basin to develop and grow our business. As everybody knows, the LNG export, potential LNG export capacity continues to build momentum.
Bradley P. D. Fedora: We view Western Canada as an attractive basin to develop and grow our business. As everybody knows, the LNG export, potential LNG export capacity, continues to build momentum, and you've seen that in the rate count, even though we've had... Weak natural gas prices for the last sort of six to nine months. You really haven't seen a whole lot of change in the rate count.
Speaker Change: and you've seen that in the rate count even though we've had...
Speaker Change: Weak natural gas prices for the last sort of six to nine months, you really haven't seen a whole lot of change to the rate counts. In fact, it's essentially flat year over year. We still believe that, you know, Canada is going to play a very important role in providing the world with
Bradley P. D. Fedora: In fact, it's essentially flat year over year. We still believe that, you know, Canada is going to play a very important role in providing the world with cleaner, more sustainable energy. Demand is growing from places like, you know, the Asia part of the world. We expect our LNG, our LNG facilities will continue to grow, and will become an important part of the equation for many parts of the world when they're thinking about how to get clean, reliable energy. You know, we expect that LNG drilling will stay active. You know, it's been active now for the last sort of year or two.
Speaker Change: you know, cleaner, more sustainable energy growing, you know, the demand is growing from places like, you know, the Asia, you know, the Asia part of the world, we expected our LNG, our LNG facilities will continue to grow.
Speaker Change: and will become an important part of the equation for many parts of the world when they're thinking about how to get clean, reliable energy.
Speaker Change: We expect that LNG drilling will stay active. It's been active now for the last year or two. We're expecting the first carbos of LNG to leave the west coast late this year, early next year, and that provides a great foundation of activity that this basin has never really had. LNG phase one represents.
Bradley P. D. Fedora: We're expecting the first cargoes of LNG to leave the West Coast late this year or early next year, and that will provide a great foundation of activity that this basin has never really had. LNG phase one represents about 11 percent demand growth for Canadian natural gas, and phase two doubles that capacity, team on the oil side. TMX expansion is now operational. You know, I think it will get to maximum capacity in the next sort of 18 months. But it's, you know, for the first time now, we have more of an outlet for our oil, reducing differentials and expected price volatility of Canadian oil prices. So everything is coming together nicely.
Speaker Change: About 11% demand growth for Canadian natural gas and phase 2 doubles that capacity.
Speaker Change: On the oil side, TMX expansion is now operational. I think it will get to maximum capacity in the next sort of 18 months.
Speaker Change: But it's, you know, for the first time now we have more of an outlet.
Speaker Change: for our oil reducing differentials and expected price volatility of Canadian oil prices, so.
Bradley P. D. Fedora: Our customers are still only spending about 50% of their free cash flow on drilling and completions, and their balance sheets are in great shape. And so is ours. We've maintained a clean balance sheet for the last few years as we've executed our strategic plan, and we'll take advantage of any investment opportunities that we find that will provide a superior return. On the logistics side, we've discussed this for the last few years, and we think logistics is growing in importance, and we think it will play an ever-increasing role in operating efficiency and profitability, in particular in our fracturing operations.
Speaker Change: Everything is coming together nicely. Our customers are still only spending about 50% of their free cash flow on drilling and completions and their balance sheets are in great shape, great shape. And so is ours. You know, we've maintained a clean balance sheet for the last few years.
Speaker Change: As we've executed our strategic plan and will take advantage of any investment opportunities that we find that will provide superior returns.
Speaker Change: On the SAM logistics side, we've discussed this for the last few years, that we think logistics is growing in its importance and we think it will play an ever increasing role in operating efficiency and profitability, in particular in our fracturing operations.
Bradley P. D. Fedora: On July 25th, we made a press release that we'd entered into a strategic partnership with SOURCE to develop a sand transloading facility in northeast BC, which will service the Montney Plate, which is the source gas for LNG. And this partnership will benefit Trican from both a strategic and a cost perspective. Most of the sand we currently use in northeast BC in the Montney is moved by truck from terminals in Grand Prairie, resulting in an 8 to 12 hour round trip trucking time for each of these sand loads.
Speaker Change: We on the July 25th, we made a press release that we'd entered into a strategic partnership with Source.
Speaker Change: to develop a sand transloading facility in northeast B.C. which will service
Bradley P. D. Fedora: The Montney Plate, which is the source gas for LNG.
Speaker Change: And this partnership will benefit Trican from both a strategic and a cost perspective.
Speaker Change: You know, most of the sand we currently use in Northeast BC in the Montagne is moved by truck from terminals in Grand Prairie, resulting in a 8 to 12 hour round trip trucking time.
Bradley P. D. Fedora: You know, this new facility will allow the sand to be picked up or will allow it to be railed to northeast BC to a town called Taylor. It will allow us to pick up the sand significantly closer to our customer sites, cutting our trucking time by as much as 50%. And because the trucking times are reduced, it allows us to use more of our internal trucking resources and less third-party resources, allowing us to keep that margin that we earn on our in our trucking division.
Speaker Change: For each of these sand loads, you know, this new facility will allow the sand to be picked up or will allow it to be railed to northeast BC to a town called Taylor, will allow us to pick up the sand significantly closer to our customer sites, cutting our trucking time by as much as 50%.
Speaker Change: And that because the trucking times are reduced, it allows us to use more of our internal trucking resources and less third-party resources, allowing us to keep that margin that we earn in our trucking division.
Bradley P. D. Fedora: And Kurt Locus and Jim Ruecken have done a great job building our internal trucking division, and we continue to expect more good things coming from that. We've grown that division now from about 60 to about 80 trucks in the year to date, which has been a big help to improving profitability in our logistics system. You know, this is really important when you think about what's happening from a frack intensity perspective because anytime you can take six hours of logistics time out of the equation, you're drastically increasing reliability, especially in the winter months, and it's a big advantage to our customers to have that transload facility in northeast B.C.
Speaker Change: and Kurt Locus and Jim Ruecken have done a great job.
Speaker Change: Building our internal trucking division and we continue to expect more good things coming from that. We've grown that division now from about 60 to about 80 trucks in the year to date, which has been a big help to improving profitability in our logistics system.
Speaker Change: This is really important when you think about what's happening from a frack intensity perspective.
Speaker Change: The strategic value of being able to have sand in Northeast B.C. when you've seen sand volumes grow as much as they have in the past few years on a per well, on a per stage basis, you know, even two years ago.
Speaker Change: The Basin was only utilizing about 6 million tons of sand and now we're well over 8 million tons this year. Some of these wells that we've discussed previously are using 50 to 100 rail cars of sand. So any time you can take 6 hours of...
Speaker Change: Logistics time out of the equation, you know you're drastically increasing reliability especially in the winter months and it's a big advantage to to our customers to have to have that translobe facility in Northeast BC.
Bradley P. D. Fedora: On the equipment side, we continue to differentiate ourselves, you know, further reviving our low emissions fleet and working towards our 100% natural gas fuelled operations goal. We're the only company in Canada right now that's using electric equipment, and it's been very well received.
Speaker Change: On the equipment side, we continue to differentiate ourselves.
Speaker Change: You know, further reviving our low emissions fleet and working towards our 100% natural gas fuelled operations goal. We're the only company in Canada right now that's using electric equipment.
Bradley P. D. Fedora: We've added our electric storage system, which is basically, you know, a battery system for redundancy on location. The electric ancillary equipment with the tier 4 pumps, we're now getting substitution rates as high as 85% on location with natural gas versus diesel. The price differential between natural gas on an energy equivalent basis compared to diesel is significant. You know, natural gas is very abundant in Canada, it burns cleaner, and on an energy-equivalent basis, it is about a tenth of the price.
Speaker Change: It's been very well received, we've added our electric storage system which is basically a battery system for redundancy on location.
Speaker Change: It's working flawlessly and it provides a great and lowers total energy consumption on location. We're very happy with the performance of the equipment from an R&M perspective. You know, the two sets of electric equipment we have today of...
Speaker Change: have now had, you know, a few hundred thousand tons of sand put through them.
Speaker Change: With great reliability, the R&M is down considerably when we compare it to conventional equipment.
Speaker Change: And we expect to activate our third set of electric equipment this fall when you combine the electric ancillary equipment with the Tier 4 pumps.
Speaker Change: You know, we're now getting substitution rates as high as 85% on location with natural gas versus diesel.
Speaker Change: The price differential between natural gas on an energy equivalent basis compared to diesel is significant. Natural gas is very abundant in Canada, it burns cleaner, and on an energy equivalent basis is about a tenth of the price.
Bradley P. D. Fedora: So we expect that the industry will trend towards 100% natural gas fueled operations, and we view ourselves as a leader from an equipment perspective in western Canada. I'll finish up with just some comments on investments in return of capital. We continue to generate significant free cash flow, and we maintain a clean balance sheet. We do subscribe to a diversified return on capital strategy through a combination of the base level dividend and the NCIB that we've been active in over the last few years.
Speaker Change: So we expect that the industry will trend towards 100% natural gas fueled operations and we view ourselves as a leader from an equipment perspective in Western Canada.
Speaker Change: I'll finish up with just some comments on...
Speaker Change: on Investments in Return of Capital, we continue to generate significant free cash flow and we maintain a clean balance sheet. We do subscribe to a diversified return of capital strategy through a combination of the base level dividend and the NCIB that we've been active in over the last few years. But as an oil field services company, we do experience some
Bradley P. D. Fedora: As an oil field services company, we do experience some swings in our working capital and cash balance. As a result, we've had some comments that our cash balances have been high at times and that it's not an efficient way to operate our company. Between CapEx dividends, the transload investment, and the NCIB, we expect to spend more than 100% of our free cash flow this year. In fact, we expect to outspend our operating cash flow by about $80 million. However, we did start the year with a balance of $88 million in cash, so we should finish the 2024 fiscal year essentially cash neutral. We do ask for some patience.
Speaker Change: swings in our working capital and cash balance.
Speaker Change: And as a result, you know, we've had some comments that our cash balances have been, you know, high at times and that, you know, it's not an efficient way to operate our company, but between CapEx, dividends, the transload investment, the NCIB,
Speaker Change: We expect to spend more than 100% of our free cash flow this year.
Speaker Change: In fact, we expect to outspend our operating cash flow by about $80 million. However, you know, we did start the year with a balance of $88 million of cash, so we should finish 2024 fiscal year essentially cash neutral. So, you know, we do ask for some patience. You do see some...
Bradley P. D. Fedora: You do see some swings in our cash balance from quarter to quarter and year to year, but it all makes sense in the long term. We're not afraid to temporarily dip into our bank lines when we find attractive investment opportunities, but we will evaluate that in the context of our other investment opportunities. You know we're always looking for the best possible returns for our shareholders, and we'll allocate capital accordingly, and today you know that has included buying our own shares, but we are seeing more organic growth opportunities that we may be pursuing in the future.
Speaker Change: Some swings in our cash balance from quarter to quarter and year to year, but it all makes sense in the long term. You know, we're not afraid to temporarily dip into our bank lines when we find attractive investment opportunities.
Speaker Change: We will continue to be active in our NCIB program at the right price. In the second quarter of this year we purchased 6.2 million shares and since the quarter end we have purchased an additional 2.4 million shares. We hope to complete our program by early October this year.
Speaker Change: When you look at the last 12 months' spend on the NCIB, it's close to $100 million. So we'll continue to spend capital on our NCIB, but we will evaluate that in the context of our other investment opportunities.
Speaker Change: We're always looking for the best possible returns for our shareholders and we'll allocate capital accordingly. And today, you know, that has included buying our own shares. But we are seeing more organic growth opportunities that we may be pursuing in the future.
Bradley P. D. Fedora: And I'll just close off with our dividend. And as Scott mentioned, we did have a dividend price or dividend increase early this year. And we expect that at the end of this year, we will review the results of our NCIB, and we may make adjustments to our quarterly dividend, with the target of being we want to spend approximately $35 million a year in aggregate dividends. And we'll just sort of adjust our per share numbers accordingly to make sure we maintain the [inaudible] So I think I'll stop there and we'll go to questions.
Speaker Change: and I'll just close off with
Speaker Change: Our dividend, and I think Scott had mentioned, we did have a dividend price, or dividend increase early this year, and we expect that.
Scott: At the end of this year, we will review the results from our NCIB and we may make adjustments to our quarterly dividend with the target of being, we want to spend approximately $35 million a year in aggregate dividend.
Speaker Change: Dividends and we'll just sort of adjust our per share numbers accordingly to make sure we maintain those levels
Speaker Change: So, I think I'll stop there and we'll go to questions.
Operator: We will now begin the question and answer session. To join the question queue, you may press character 1 on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your questions, please press start and choose. We'll pause for a moment as callers join the queue. The first question comes from Aaron MacNeil from T.J. Cowan. Please go ahead.
Speaker Change: We will now begin the question and answer session. To join the question queue, you may press character 1 on your telephone keypad. You will hear tones acknowledging your request.
Speaker Change: If you're using a speakerphone, please pick up your handset before pressing any key.
Speaker Change: To withdraw your question, please press star then choose.
Speaker Change: We'll pause for a moment as callers join the queue.
Operator: The first question comes from Aaron MacNeil from T.J. Cowan. Please go ahead.
Aaron MacNeil: Good morning guys, thanks for taking my questions. Brad, you mentioned that the second half of the year will be down year over year. I guess I'm just wondering, you know, how you think that the trend of activity will play out. And I guess I'm wondering, you know, if Q3 is going to be weaker? And then do you see a sort of a pickup in Q4 into the winter drilling season? Or do you see sort of a more typical seasonal pattern where budgets get exhausted, and things slow down towards the end
Aaron MacNeil: Good morning guys, thanks for taking my questions.
Speaker Change: Brad, you mentioned, you know, the second half of the year will be down year-over-year. I guess I'm just wondering, you know, how do you think the trend of activity will play out? And I guess I'm wondering, you know, is Q3 going to be weaker?
Speaker Change: Do you see sort of a pickup in Q4 into the winter drilling season, or do you see sort of a more typical seasonal pattern where budgets get exhausted and things like that?
Bradley P. D. Fedora: No, I do think it will be more typical. Adjustments, I guess, to account for things, you know, you've had some. Projects get pushed around for water availability or temporary restrictions due to fires, etc. And so you may see work get sort of pushed from Q3 into Q4. We are hearing some rumblings that some work from Q1 of 2025 could be pulled back into Q4. So I think it will be the typical seasonal pattern, with some minor tweaks just due to water, fires, and individual companies moving capital around, but I don't think that will have a significant impact on it. I think going forward, I think we're going to continue to see strong Q2s and then a drift off in December, which is great for our industry and the people that work here.
Speaker Change: as things slow down toward
Speaker Change: into the holidays.
Speaker Change: No, I do think it'll be more typical. I mean, with some...
Speaker Change: adjustments, I guess, to account for things, you know, you've had some
Speaker Change: Projects get pushed around for water availability or temporary...
Speaker Change: restrictions due to fires, etc. And so you may see work get sort of pushed from Q3 into Q4. We are hearing some rumblings that some work from Q1 of 2025 could be pulled back into Q4. So I think it will be the typical seasonal pattern.
Speaker Change: with some minor tweaks just due to water, fires, and...
Speaker Change: you know, individual companies moving capital around, but I don't think that will have a significant impact on it.
Bradley P. D. Fedora: I think, you know, going forward, I think we're going to continue to see strong Q2s and then a drift off in December , which is, you know, great for our industry and the people that work here. You know, it's a welcome change to the activity timing.
Bradley P. D. Fedora: Okay, makes sense. I guess more importantly, what's the sort of 2025 upside scenario from your perspective? And then, you know, more specifically, like, do you think you need an eighth frack fleet or a sixth frack fleet conversion? You know, with LNG Canada on the doorstep.
Speaker Change: Okay, makes sense. I guess more importantly...
Speaker Change: What's sort of the 2025 upside scenario from your perspective, and then, you know, more specifically, like, do you think you need an eighth frack fleet or a sixth frack fleet conversion, you know, with LNG Canada on the doorstep, you know?
Bradley P. D. Fedora: Yeah, I think all of those assumptions are reasonable.
Operator: Please see the complete disclaimer at https://sites.google.com/policies/[inaudible]
Speaker Change: Yeah, I think both of those assumptions are very reasonable.
Speaker Change: And what do you think the time, potential timeline for that would look like?
Bradley P. D. Fedora: Well, the lead time on equipment is still fairly significant. You know, we have the equipment that we have, or so in advance. And we're always looking at that every day. And certainly, I know I think your instincts are correct. It doesn't take a lot of increase in activity in Canada for us to require more equipment in the field, and you know we fully expect that if fracturing gear gets added to the western basin here, we will be the beneficiary of that, and we are the natural provider of additional equipment, but as you know, we are very disciplined. We will not put out equipment unless we get a return on every single hour that it's operating.
Speaker Change: Well the lead time on equipment is still fairly significant.
Speaker Change: We have the equipment that we have.
Speaker Change: Part to the side is fully operational
Speaker Change: You know, it's not sort of theoretical spreads that require.
Speaker Change: a significant capital.
Speaker Change: investment and a bunch of maintenance work. You know, we can take equipment off the fence and put it into the field as quickly as we can staff it.
Speaker Change: There won't be any delays there. If you want to convert equipment to Tier 4 or any other technology, you know, you do have to start thinking about that six months or so in advance. And we're always looking at that every day. And certainly, I know I think your instincts are correct, it doesn't take...
Speaker Change: much increase in activity in Canada for us to require
Speaker Change: More equipment in the field and you know, we fully expect that if Fracturing gear gets added to the Western Basin here that we will be there We will be the beneficiary of that and we are the natural
Speaker Change: We are the natural provider of additional equipment, but as you know, we are very disciplined. We will not put out equipment unless we get a return on every single hour that it is operating.
Bradley P. D. Fedora: It's sort of insinuated that labor friction has been reduced. Yeah, I think I think in the industry as a whole, the labor constraints have definitely been reduced. And I think that's a result of the fact that the industry has been operating at a fairly level load, has been fairly level loaded from year to year and quarter to quarter, and that is a huge appeal to people wanting to come into the industry.
Speaker Change: You sort of insinuated that labor friction had been reduced.
Speaker Change: Did I interpret that?
Speaker Change: Yeah, I think the industry as a whole, the labour constraints have definitely been reduced. I think that's a result of the fact that the industry has been operating at a fairly level loaded.
Speaker Change: or has been, you know, fairly level-loaded from year-to-year and quarter-to-quarter. And that is a huge appeal to people wanting to come into the industry. You know, on the oil field services side, the biggest...
Bradley P. D. Fedora: You know, on the oil field services side, the biggest... the hurdle that we face is the earnings volatility that we would have from quarter to quarter and year to year.
Speaker Change: hurdle that we face is the earnings volatility.
Bradley P. D. Fedora: And so I think people are sort of watching their neighbors get up and go to work every day in all four quarters. And there's been no talk of layoffs anywhere in the industry, other maybe than the odd spot here and there. And that's a big change. It wasn't that long ago that there would be layoffs every spring, a lot of changes from quarter to quarter and year to year. So this is more, you know, this is more in line with what people want from a financial planning perspective.
Speaker Change: that we would have from quarter to quarter and year to year. And so I think people are are sort of watching their neighbor get up and go to work every day in all four quarters. And there's been no talk of layoffs anywhere in the industry. You know, they're maybe in the odd spot here and there.
Speaker Change: And that's a big change, you know, it wasn't that long ago that...
Speaker Change: There'd be layoffs every spring, you know, a lot of changes from quarter to quarter and year to year. So this is more, you know, this is more in line with what people want from a financial planning perspective and it's helped tremendously, I think. You know, our turnover is...
Bradley P. D. Fedora: And it's helped tremendously. I think, you know, our turnover is very, very low. We've never seen turnover levels this low before. You know, in the FRAC division, our turnover is less than 5%. Historically, you would expect it to be at about 20%. I'm talking about voluntary turnover from the staff, so I think it's a good indication that earning stability and predictability are very helpful in attracting people to the industry
Bradley P. D. Fedora: Very, very low. We've never seen turnover levels this low before. You know, in the FRAC division, our turnover is less than 5%.
Speaker Change: Historically, you would expect it to be at about 20%. I'm talking about voluntary turnover from the staff. I think it's a good indication that earning stability and predictability is very helpful in attracting people to the industry.
Aaron MacNeil: Makes sense. Thanks, Brad. I'll turn it back.
Speaker Change: Thanks, Brad. I'll turn it back.
Josef I. Schachter: The next question comes from Josef Schachter from Schachter Energy Research. Please go ahead.
Speaker Change: The next question comes from Josef Schachter from Schachter Energy Research. Please go ahead.
Josef I. Schachter: Good morning Brad and Scott and the team. I have two questions. Given how tight, you know, and the fact that you have the remaining, you know, equipment on the side for fracking, is there any concern about operators in the States, given how weak things are, bringing equipment into Canada?
Josef I. Schachter: Good morning Brad and Scott and the team. I have two questions.
Josef I. Schachter: Given how tight, you know, and the fact that you have the remaining, you know, equipment on the side for fracking, is there any concern about the operators in the States, given how weak things are, bringing up equipment into Canada?
Bradley P. D. Fedora: Yeah, it's always a concern and has been for as long as I've been in the industry, which is... 25 years or so, and you do see equipment come and go. There's no doubt about it.
Speaker Change: Yeah, it's always a concern and has been for as long as I've been in the industry, which is 25 years or so. And you do see equipment come and go, there's no doubt about it. I would say...
Bradley P. D. Fedora: The one thing that is working for us is, you know, the two big players in Canada are Halliburton and Liberty. And, you know, from what we understand, and I certainly cannot speak for them, but their U.S. operations are more profitable than their Canadian operations. And so that, I mean, that's always helpful. But I do think the LNG opportunity in Canada for the drillers and the frackers is so significant that I think everybody is looking at it, and you know we expect to compete based on quality of service and quality of our technology, and we're happy to do so, and we're happy to compete against anybody that you know wants to come to Canada.
Josef I. Schachter: The one thing that is working for us is
Josef I. Schachter: You know, the two big players in Canada are Halliburton and Liberty.
Josef I. Schachter: And you know, from what we understand, and I certainly cannot speak for them, but is their U.S. operations are more profitable than their Canadian operations, and so that, I mean, that's always helpful. But I do think...
Josef I. Schachter: The LNG opportunity in Canada for the drillers and the frackers is so significant that I think everybody is looking at it.
Speaker Change: We expect to compete based on quality of service and quality of our technology and we're happy to do so and we're happy to compete against anybody that wants to come to Canada.
Josef I. Schachter: And my second question is, can you give us a little more light on the source energy deal with the rail and the new facility? Are you guys each going to keep your own customers, and the benefit to you, as you said, is rail versus trucking? And what happens if there are new customers? Do you guys compete against each other? Is there any understanding there, just to get an idea of, you know, what might happen in the future?
Speaker Change: Tumor
Speaker Change: And my second question is, can you give us a little more light on the source energy deal with the rail and the new facility? Are you guys each going to keep your own customers and the benefit to you, as you said, is rail versus trucking? And what happens if there's new customers? Do you guys compete against each other? Is there any understanding there, just to get an idea of what might happen in the future?
Bradley P. D. Fedora: I won't get into the details of the commercial specifics of it, but suffice it to say that industry in general is going to benefit from this investment. We would rather be on the inside working through the process than on the outside looking in.
Speaker Change: Sure, I mean, I won't get into the details of the commercial specifics of it, but suffice it to say, I mean, industry in general is going to benefit from this investment and, you know, we would rather be on the inside working through the process than on the outside looking in.
Bradley P. D. Fedora: One of the positives about working with a partner like Source is that they're an integrated supplier, so they have the SAN supply as well as the transload facility and expertise. So, I mean, you would think that, you know, they're bringing that expertise and the operational logistical capabilities to the table to get the sand into BC closer. And we're partnering in there. We're going to benefit from, you know, picking up sand in a closer vicinity and being able to use more of our own trucks. And, you know, together, this will benefit the industry overall.
Speaker Change: One of the positives about working with a partner like Source is that they're an integrated supplier so they have the SAN supply as well as the transload facility and expertise.
Speaker Change: So, I mean, you would think about it.
Speaker Change: They're bringing that expertise and the operational logistical capabilities to the table to get the sand into BC closer. And we're partnering in there. We're going to benefit from picking up sand in a closer proximity and being able to use more of our own trucks.
Josef I. Schachter: Do you guys use source for sand at this time?
Josef I. Schachter: And, you know, together, this will benefit the industry overall.
Bradley P. D. Fedora: We do. We would be a fairly significant customer for most of the sand suppliers throughout Western Canada, for sure. And maybe just kind of a final point on that, one of the big benefits from a Trican perspective is that if you're a large customer in northeastern BC and you want security of supply of your sand coming in, you can, we can provide that right through this facility, so we would have significant guaranteed supply on the ground from that facility where our other competitors would not be able to offer that. Cooper, thanks for the call on that one
Speaker Change: Do you guys use source for sand at this time?
Speaker Change: We do. We would be a fairly significant customer for...
Speaker Change: most of the sand suppliers throughout Western Canada for sure. Maybe just kind of a final point on that, one of the big benefits from a Trican perspective is that if you're a large customer in northeastern BC and you want security of supply of your sand coming in,
Bradley P. D. Fedora: We can provide that right through this facility, so we would have significant guaranteed supply on the ground from that facility where our other competitors would not be able to offer that.
Josef I. Schachter: Super. Thanks for the call, Aaron. I very much appreciate that. Thank you very much. You bet.
Speaker Change: Super. Thanks for the call, Earl. I much appreciate that. Thank you very much. You bet.
Operator: Once again, if you have a question, please press star then 1. The next question comes from John Gibson from BMO Capital Markets. Please go ahead.
Speaker Change: Once again if you have a question please press star then 1. The next question comes from John Gibson from BMO Capital Markets. Please go ahead.
John Gibson: Morning all, I was wondering if you could expand on the pricing discussions. I mean, we've been in balance here for a few quarters, and Q125 looks to be fairly active. Are you starting to have more positive discussions around pricing, or is it still pretty subdued?
John Gibson: Morning all. I was wondering if you could expand on pricing discussions. I mean we've been in balance here for a few quarters it seems and Q125 looks to be fairly active. Are you starting to have more positive discussions around pricing or is it still pretty subdued?
Bradley P. D. Fedora: Uh, you know, we are maybe a little different than most in that we've had our customer list, our core customer list, you know, our top 10-15 customers for years. And so we tend to take a more long-term view as to sort of... Some of our competitors are maybe..., you know, more jostling from quarter to quarter with an ever-changing customer list.
Speaker Change: Uh, you know, we are maybe a little different than most in that...
Speaker Change: We've had our customer list, our core customer list, our top 10-15 customers for years.
Speaker Change: And so we tend to take a more long-term approach.
Speaker Change: View of pricing and our discussions with their customers are
Speaker Change: tweaks. And I think everybody sort of understands the direction of the industry and that things are likely to be tweaked up, not down next year. But you know, generally, our pricing discussions are always fairly subdued just due to the long term relationships that are
Speaker Change: of our customer base. So, you know, we're maybe not sort of the best person to or the best company to ask as to sort of spot pricing where, you know,
Speaker Change: Some of our competitors are maybe more jostling from quarter to quarter with an ever-changing customer list.
John Gibson: Okay, that's fair. And also, for me, I mean, you mentioned the 35 million in aggregate dividends. Evaluation is starting to move up there. And you talked about the NCIB being somewhat price dependent. Wondering if you could also reach that level given where your shares are at, as well as the free cash flow generating capabilities of the business, or is that number going to be pretty static going forward?
Speaker Change: Okay, that's fair. And also for me, I mean, you mentioned the $35 million in aggregate dividends, your valuation is starting to move up there, and you talked about the MCIB being somewhat price dependent. I'm wondering if you could alter this level.
Speaker Change: Given where your shares are at, as well as the free cash flow generating capabilities of the business, or is that number going to be pretty static going forward?
John Gibson: I'm sorry, John , I missed the second part.
Speaker Change: Just wondering if that $35 million in aggregate dividends you target will be static or just depending if your shares stay at these levels, your valuation stays kind of here, you could slow the MCIB a bit?
Speaker Change: Well, you know, I'm a shareholder. I would hope the industry would support higher...
Speaker Change: aggregate dividend, you know, annual payments like every other shareholder, you know, and so we look at everything in the context of
Speaker Change: sort of the next five years and how we view it.
Speaker Change: So, right now, I would say that's fairly, you know, that level is fairly static, but
Speaker Change: Hey, you know, it's uh...
Speaker Change: There's 6-7 BCF a day of potential LNG facilities.
Speaker Change: You know, that could change everything with, you know, we get more, more positive FIDs.
Speaker Change: Great, and agreed on all fronts, I'll turn it back, thanks. Thank you.
John Gibson: Sorry, John, I missed the second part.
John Gibson: This concludes the question and answer session. I would like to turn the conference back over to Mr. Fedora for any closing remarks.
John Gibson: Just wondering if that $35 million in aggregate dividends you target will be static or, you know, depending on whether your shares stay at these levels, your valuation stays kind of here, you could slow the MCIB a bit?
Bradley P. D. Fedora: Well, you know, I'm a shareholder. I would hope the industry would support higher aggregate dividends, you know, annual payments like every other shareholder, you know, and so we look at everything in the context of sort of the next five years and how we view it. So right now, I would say that's fairly, you know, that level is fairly static, but, Hey, you know, there's what, six, seven BCF a day of potential LNG facilities. That could change everything with, you know, we get more positive FIDs.
John Gibson: Great and agreed on all fronts. I'll turn it back. Thanks.
Bradley P. D. Fedora: Okay, thanks everyone for joining. We appreciate your interest in our company. We will be available for the rest of the day. For any questions that you may have, please just call us directly and we'd be happy to help you. Thanks again.
Operator: This concludes the question and answer session. I would like to turn the conference back over to Mr. Fedora for any closing remarks.
Bradley P. D. Fedora: Okay, thanks everyone for joining us. We appreciate your interest in our company.
Bradley P. D. Fedora: We will be available for the rest of the day. For any questions that you may have, please just call us directly, and we'd be happy to help you. Thanks again.
Operator: This concludes today's conference call. You may disconnect your line. Thank you for participating and have a pleasant day.
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