Q4 2024 Evolution Petroleum Corp Earnings Call
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[inaudible] The New Year's Day, The New Year's Day, [inaudible]
Speaker Change: Good morning and welcome to the Evolution Controlium 4th Quarter and this 2 year 2024 an Israeli conference call.
Speaker Change: All participants will be in listen only mode. Should you need assistance, please follow Conference Specialist by pressing the star key followed by ZERO.
Speaker Change: After today's presentation, there will be an opportunity to ask questions. So ask a question, you may press stars and one on your telephone keypad. Two other questions, please press stars and two. Please note today's event is being recorded.
Brandi Hudson: I would now like to turn a conference over to Brandi Hudson, and Best of Relations Manager. Please go ahead. Thank you. Welcome to Evolution Petroleum, the School Q4, 2024 earnings call. I'm joined by Kelly Loyd, President and Chief Executive Officer, Mark Bunch.
Kelly Loyd: Chief Operating Officer, and Ryan Stash Senior Vice President, Chief Financial Officer, and Treasurer.
Speaker Change: We released our fiscal fourth quarter in full year 2024 financial results after the market closed yesterday. Please refer to our earnings press release for additional information containing these results. You can access our earnings release in the investor section of our website.
Speaker Change: Please note that any statements and information provided in today's call speak only as of today's date September 11, 2024, and any time sensitive information may not be accurate at a later date.
Speaker Change: Our discussion today 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.
Speaker Change: We undertake no obligation to update any forward-booking statement.
Speaker Change: During today's call, we may discuss certain non-gap financial measures, including adjusted EBITDA. Reconciliation of these measures to the closest comparable gap measures can be found in our earnings release.
Speaker Change: Kelly will begin today's call with opening comments, Mark will provide an update on our properties and plans they relate to our ongoing strategy of maximizing shareholder returns and Ryan will provide a brief overview of our fiscal quarter highlights.
Speaker Change: After I prepare remarks, the management team will be available to answer any questions. As a 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 section of our website. With that, I will turn the call over to Kelly.
Speaker Change: Thanks for watching!
Kelly Loyd: Thank you, Brandi and good morning, everyone.
Kelly Loyd: Following our record year of natural gas production in revenue in fiscal 2023, this fiscal year has proven that adaptability is key.
Kelly Loyd: In the face of volatile natural gas prices this year, we understood the importance of balancing our portfolio while simultaneously positioning ourselves for future growth.
Kelly Loyd: As a result, we generated record, liquids, revenue and production for this fiscal year.
Kelly Loyd: and part driven by two transformative transactions with scoop stack and Shaveru that added 6.6 million barrels of oil equivalent of proof reserves with the majority of the locations yet to be booked.
Kelly Loyd: With these transactions, we expect fiscal year 25 liquids production to be very strong and bolster our cash flow for years to come.
Kelly Loyd: Building upon our multi-year track record of executing strategic investments for the benefits of our shareholders.
Kelly Loyd: I'd like to start today's call by highlighting key operational achievements for fiscal 2024.
Kelly Loyd: This year, we significantly expanded our drilling inventory, adding over 300 locations in the scoop stack regions, 80 plus locations that Shavaroo, as well as three initial drilling sites within Test Site 5 at Delhigh.
Kelly Loyd: Our efforts in the Scoot stack in Shavaroo are especially noteworthy, as we believe both assets provide us with exposure to highly economic and durable locations.
Speaker Change: We've participated in 22 wells at Scoobstack. Many of which are performing well above our initial expectations, generating both higher returns and stronger production than our original type curves predicted.
Speaker Change: Similarly, in Shabbard Roof, we drilled our first three horizontal sand address wells with early results exceeding our estimates.
Speaker Change: These wells are a testament to our strategic focus on efficient, high-return, gross opportunities.
Speaker Change: At Delheight, we have initiated development of test site 5 in collaboration with XO and Mobile, aiming to drill the first of an initial 3 wells by calendar year-end.
Speaker Change: As we have stated throughout this fiscal year, following ex-son's acquisition of DINberry, we believe their priorities for the asset are well aligned with evolutions.
Speaker Change: This initial development further validates our expectations.
Speaker Change: I'm also pleased to announce that Delhigh has been certified as a carbon capture utilization and storage site for enhanced oil recovery, which we believe will drive further benefits to evolution.
Speaker Change: All said, in fiscal 2024, we generated 86 million of revenue, 4 million of net income, and 30 million of adjusted EBITDA. Meanwhile, our discipline to capital allocation approach has allowed us to remain within our targeted leverage ratios with no incremental delusion.
Speaker Change: Despite executing key strategic investments during the year.
Speaker Change: All of this was accomplished while facing the lowest natural gas price environment we've seen since the COVID-19 pandemic.
Speaker Change: Consequently, generating cash flow remains a core tenet of our strategy as it supports evolutions continued return of capital to shareholders via dividends.
Speaker Change: We are very proud to have consistently paid dividends for over a decade. In this quarter, I'm pleased to announce that we will pay another 12-cent dividend in September marking our 44th consecutive quarterly dividend payment.
Speaker Change: As I have often stated, our dividend strategy is supported by our diverse, low-to-coin assets that require minimal capex.
Speaker Change: The diversification of our portfolio and low maintenance requirements of our assets provides us with the confidence in sustaining our dividend program for years to come, even in the face of fluctuating commodity prices.
Speaker Change: And with the recent editions of Scoopstack and Chevrooo, we have further extended the runway for our dividend program.
Speaker Change: As we look to the future, our focus remains on creating long-term value for our shareholders.
Speaker Change: We are committed to maximizing total shareholder returns through efficient, diligent capital management and deployment.
Speaker Change: for a current asset base, our strategy is simple.
Speaker Change: Intinue expanding in high-return regions, focus on discipline, cost management, and ensure that every decision we make supports our dividend program. We have built a strong portfolio of assets that balance oil and natural gas production positioning us well for various market conditions.
Speaker Change: We will also continue to evaluate additional M&A opportunities as well as investment within our current asset base to drive further organic growth.
Speaker Change: We've proven that we can execute on both fronts and we will continue to pursue what is best for our shareholders.
Speaker Change: I want to thank our team for their hardworking dedication and, of course, thank all of you, our shareholders for your continued support.
Speaker Change: We're excited about the future of evolution petroleum and believe we're a well-position to deliver sustainable growth and strong returns in the years to come.
Speaker Change: With that, I'll turn the call over to our COO. Mark Bunch to review our operations in more detail. Mark?
Mark Bunch: Thank you Kelly, and good morning everyone. I will focus my remarks on key operational highlights from the quarter, and encourage listeners to review our earnings press release and following for additional details across our asset base.
Mark Bunch: During the quarter, our operators turned in line three gross wells in Scoobstack with 10 additional gross wells currently in progress, and as of today, seven of these 10 wells are currently producing. Additionally, we have agreed to participate in three gross...
Mark Bunch: New Horizontal Wells across the acreage from the effect of date through June 30th, 22 gross wells were converted to approved, developed producing. Overall, actual production has exceeded our original forecast of production at the time of acquisition by approximately 20%.
Mark Bunch: In the Shavaroo oil field, we drilled and completed three wells that were turned in line on February 1st.
Mark Bunch: While the Wells cost more than expected to drill into plea due to unusually high fluid losses, we're quite happy with the results, the EURs are approximately 20% higher than our original expectations.
Mark Bunch: If this goes 2025, we plan to participate for our full 50% working interest share in four horrors on the well locations in drawing block T. These operations are expected to begin in early fiscal Q2 2025.
Mark Bunch: We have preliminarily agreed to six additional horse-on-a-well locations in Dr. Bloc 3 that are estimated to begin in fiscal Q4 2025. We also purchased Dr. Bloc's 4 and 5 in advance, bringing the total number of
Speaker Change: We expect to systematically participate in future development blocks, future net acreage costs are fixed at $36,000 per additional horizontal will.
Speaker Change: Well it's the basic production and increased during the fiscal quarter due to a full quarter of natural gas and NGL cells from the one of grassland systems.
Speaker Change: which came back online during the prior quarter.
Speaker Change: At Del High, production was affected during the quarter by field wide power at ages for seven days, combined with downtime from one of the CO2 recycle compressors in May, which reduced CO2 injection volumes for most of the quarter.
Speaker Change: Okay.
Speaker Change: The compressor was replaced and full CO2 recycling resumed in July.
Speaker Change: The CO2 Purchase Pipeline was taken offline for preventative maintenance at the end of February 2024 and remained down throughout this quarter. The operator anticipates resuming CO2 purchases in early second quarter of fiscal 2025.
Speaker Change: All said, our fiscal fourth quarter production was up 11% year over year to 7,209 net DOE per day, with a low increase in 20% natural gas at 5% and NGLs at 17% compared to a year ago quarter.
Speaker Change: Our strong drilling results in the contribution of acquisitions more than offset natural gas price declines and downtime related to maintenance.
Speaker Change: With that, I will turn the call over to our CFO, Ryan Stash, to review our financials and more detail. Ryan?
Ryan Stash: Thank you, Mark and good morning everyone. As Brandi mentioned earlier, we released our earnings yesterday, which contains more information on our results.
Speaker Change: My comments will focus mainly on the highlight to the fiscal fourth quarter.
Ryan Stash: In fiscal Q4, we had total revenues of $21.2 million, up 17% year over year. The improvement was driven largely by an increase in oil and natural gas liquids revenue, partially offset by lower natural gas revenue driven by historically low pricing.
Ryan Stash: Net income for the fourth quarter increased to 1.2 million compared to the year-go quarter. An adjusted EBITDA increased 12% to 8 million. Primarily due to increased revenue and reduced operating cost.
Ryan Stash: Casulo from Operations also increased materially to 8 million for the quarter compared to cash used to 400,000 in the year ago period.
Ryan Stash: Overall, our financial results demonstrated the resilience and diversification of our asset base.
Ryan Stash: As Kelly mentioned earlier, this year we faced the lowest natural gas pricing environment since the COVID-19 pandemic. However, we continue to generate another quarter and a year of positive cash flow from operations while maintaining our multi-year quarterly dividend.
Speaker Change: I'm in development side, we spent 2.5 million in CapEx primarily related to the development and the scoop stack in Chavaroo fields.
Speaker Change: We ended the quarter with 6.4 million in cash on hand and barrings of 39.5 million on our credit facility.
Speaker Change: During the quarter, we received cash payments totaling $5 million, related to purchase price reductions from the scoop stack properties. For neck cash laws received during the period between the effective date of November 1, 2023, and the closing date.
Speaker Change: We continue to add hedges in order to comply with the terms of our credit facility.
Speaker Change: Our goal for our hedging program will continue to be to reduce downside commodity price risk while maintaining the maximum amount of upside available. As such, we will continue to monitor the market and may add additional opportunistic hedges.
Speaker Change: With respect to shareholder return, the Board of Directors declared a cash dividend of 12 cents per share of common stuff on September 9, 2024.
Speaker Change: which will be paid on September 30, 2024.
Speaker Change: This will mark the 44th consecutive quarterly cash dividend and the 9th consecutive dividend at the current price level. Today, evolution has returned approximately 118.4 million or $3.57 per share back to shareholders and common stock dividends.
Speaker Change: I'll hand it back over to Kelly now for closing comments.
Kelly Loyd: Thanks, Ryan.
Kelly Loyd: and sum it up.
Speaker Change: 54 was a year of investment for evolution.
Speaker Change: The reality is that we don't control cyclical commodity prices.
Speaker Change: We contended with a challenging macro environment for natural gas in 2024.
Speaker Change: and we responded to this by making key moves to diversify our portfolio and position ourselves to drive record levels of liquid revenue and production in fiscal 2024 and beyond.
Speaker Change: With that, I'll turn it over to the operator to begin the Q&A session. Thank you very much.
Speaker Change: [inaudible]
Speaker Change: Thank you. We will now begin the question and answer session. If you're asking a question, you may press star of the 100 telephone keypad. If you're using a speaker phone, we ask you please pick up your handset before pressing the keys.
Speaker Change: If at any time your question has been addressed and would like to withdraw your question, please press star then too.
Speaker Change: Today's first question comes from Donovan Shaffer with Northland Capital. Please go ahead.
Donovan Shaffer: Hey guys, thanks for taking the question. First I want to ask about the test site 5
Donovan Shaffer: with Exxon Mobile that you guys are starting, so can you just remind this?
Speaker Change: You know, where that is in the Dal High field, you know, I think, no manclature is looking at different sources sometimes varies and so, you know, with some SPD papers and things that talks about like phases one, two, three.
Speaker Change: and four and so forth and you know here we're talking test site five is this.
Speaker Change: You know, it's just kind of down in the southwest.
Speaker Change: and dips or is it up towards northeast like on the other side of the town that's there? Or is this going back to recover the area that was isolated with the water curtain just helping me kind of place where this is?
Speaker Change: Sure, hey Donovan this Kelly. I'm gonna let Mark get into more detail on that, but
Speaker Change: Quickly, just a couple of things. I apologize for my voice, I've been a little bit under the weather here, so if I sound funny, that's why, and just second, real quickly.
Speaker Change: On this 9-11 anniversary, I just want to acknowledge the actions of the brave men and women in those hours, most years after the tragic event.
Speaker Change: Howard makes us, you know, as Americans all feel proud. So look with that, Donovan, I'm going to let Mark go ahead and answer this for you.
Mark Bunch: Hey, Donovan, good to hear from you and good question.
Speaker Change: Probably doesn't need to be evaded for everybody. Okay, so the test pack five is towards the eastern side of the current development, but it's actually really west of the city of Delhigh, or that excuse me, the town side of Delhigh.
Mark Bunch: and so it's...
Mark Bunch: So it's just an extension of...
Mark Bunch: Further towards Delheil.
Mark Bunch: George the town of Delphi. So not, I don't know, that's just like a whole new phase, but more of an incremental broadening of kind of what existing phases have already been developed. That's correct. It's just packing on. It's just packing on to the current development.
Speaker Change: Okay, okay. And then, are there any new developments on or conversations around expanding into more phases? Because I think, you know, those are the things that could be the real kind of big.
Speaker Change: and material changes and with the CO2 certified for carbon capture.
Speaker Change: and sequestration are those kind of bigger real needle, mover potential things moving forward or are they...
Speaker Change: Further down in the queue in terms of just even having a conversation with you, I think.
Speaker Change: They're the latter, further down in the queue, and basically they're still more running room, even potentially in the area that we're talking about, it's test-type 5. I mean, so it's not like what we're...
Speaker Change: Well, we're talking about right now as a last thing to be. I mean, a lot of pins upon how the production works out for the wells that are planned to be drilled.
Speaker Change: Okay, and then... Yeah, pretty, say don't, just a little more, previously, your test side 5 was a...
Speaker Change: It was a full CO2 flood project with a whole bunch of cat access associated with it.
Speaker Change: What they've discovered and what they believe for now is that there has been CO2 that's sort of migrated over there. And the most efficient, most cost effective, highest return-way to do it is to just go ahead and drill producers over there. So we're going to start off with that and then see how many more become from the results on that.
Speaker Change: Okay, so high-return stuff, what I'm talking about, real.
Speaker Change: and then make sense. The still focusing on dial-highs, you know, production was down, material, and now in the quarter, you know, like 20%.
Speaker Change: Quarter of a quarter and I understand, you know, that's because there were no, there were no CFT injections, recycling itself was scaled back quite a bit.
Speaker Change: So I guess it's like at a basic level, just for orienting ourselves with everything, all the different moving pieces, they're a delhye. You know, would you expect?
Speaker Change: That's it, would you expect that number to be up quarter of a quarter in the next quarter or will stay down or essentially go lower?
Speaker Change: and as a fall related to that, if you're not injecting CO2 volumes, I don't know, you know, I think fiscal second quarter, as soon as said that would.
Speaker Change: Operators said that would pick up again and the recycling lines were down.
Speaker Change: Is that mean you're...
Speaker Change: Like on a net base, it's actually taking CO2 out of the reservoir and is that causing a material drop and in reservoir pressure, would that cause any issues in terms of like carbon capture superstations, and can you be like a penalty or a fine or anything for that?
Speaker Change: Okay, so, answer your question on whenever there's one, the recycling is all the way back up to...
Speaker Change: to full levels.
Speaker Change: and yes it's still less than if we were normally buying CO2. So when you start to buy CO2 we'll get that back up. We do expect that the production will be up going forward. We kind of look at it as like last quarter.
Speaker Change: Desert really fit the trend because of the seat because we weren't injecting quite a bit of CO2 that we normally do. And in the last time we saw CO2 outage on the, we weren't buying purchased CO2.
Speaker Change: We brought this stuff back on with CO2 purchases, it was actually a...
Speaker Change: with significant flattening of the decline.
Speaker Change: and so we feel like that you look back like the previous quarter and kind of work your way from there would be more realistic.
Speaker Change: As far as like what actually happened reservoir-wise, you know, I don't know that they have any particular hard data, but I suspect that we did have, we were creating some research in the reservoir. I don't believe that meant that we were, you know.
Speaker Change: Producing Extracia 2, because one of the things that the operator did was to selectively shut down wells that were high sea of 2 users, and therefore that that way we kind of minimize the effect of reducing injections. So that's kind of a...
Speaker Change: That might be kind of a long way to answer your question, but I think you should probably look back to the quarter before last, to get an idea of where to start once the CO2 injections are fully back up.
Speaker Change: Yeah, just in the game.
Speaker Change: Just a further that, Donovan, so Mark Creckman, if I'm wrong, I think there are three compressors in the recycled plant and one of them was down. There's four, there's actually four, one of them was down.
Speaker Change: Okay, we're still injecting recycled CO2, just not at the rate that we want to. And then as he said, the purchase line was down still as we expected earlier due to.
Speaker Change: Okay, and then...
Speaker Change: As just my last question, could we get any, is there any more clarity or clarification on how the...
Speaker Change: Credits from, you know, an optimistic frustration, certification, you know, how that would be monetized, you know, in what way for you guys and the timeline on that.
Speaker Change: We have here.
Speaker Change: Go ahead Kelly.
Speaker Change: Okay, so we're still, we're still talking about it still working on it. We don't have an exact time line for when answer a gen XCO2 will.
Speaker Change: Began to be in Jacket, so we still have some time there but it's still some more working on it.
Speaker Change: Okay, thanks guys. I'll take the rest of my questions off on.
Speaker Change: Thank you, and our next question for the next one from John White, everyone's capital. Please go ahead.
Speaker Change: Good morning everybody and congratulations on our nice quarter.
John White: Thanks John. Thanks John.
John White: Really like seeing all the drilling activities.
Speaker Change: During fiscal fourth quarter and planned activity going forward, I want to give some more details on the scoop stack of the 10 recent wells. Are there one or two operators that are dominating that activity?
Speaker Change: Or is it a more diversified list of operators?
Speaker Change: Yeah, we have really one operator that's really maybe two that are kind of dominating it, but not after that. There's probably I think doing about half the will.
Speaker Change: and we will be there.
Speaker Change: Candace and Camina.
Speaker Change: Okay, yeah, you've mentioned that before. In generally, I'm sorry, I'm sorry, I missed both. The last one was Continental, Canvas and Continental. Yeah, yeah, Continental.
Speaker Change: Generally, what formations are being completed?
Speaker Change: Woodford.
Speaker Change: And Lift.
Speaker Change: The usual set set set, correct.
Speaker Change: and they're all horse on a well.
Speaker Change: Yes, and you and we have a couple of springer wells too.
Speaker Change: Thanks for the detail.
Speaker Change: 4-4 at Shopper Group, you're getting it 4-4's on a well going.
Speaker Change: And they're going to start in fiscal $2.25 and that is the same as calendar $4.2024 correct? That's correct.
Speaker Change: Okay.
Speaker Change: and then looks like a lot of things that they all have gotten cleaned up.
Speaker Change: So congratulations on that.
Speaker Change: and I'll thank you.
Speaker Change: All right.
Speaker Change: Thanks for taking my questions and I'll pass the call back.
Joe: Thank you, Joe.
Joe: Thank you and as a reminder please press star then one to ask a question. All right, next question to make us some Jeff Robertson with Water Car Research, please go ahead.
Jeff Robertson: Thank you for your good morning.
Speaker Change: Mark Ewell's had overall LOE was down about 10% in the year fourth quarter from year third. There was some pretty big quarter to quarter fluctuations. Can you talk about...
Speaker Change: Hello, we in Chavaroo, which was up quite a bit from the fourth quarter and also Hello, we in the Willstone Basin, which was down quite a bit, and I'm wondering whether or not that changed in Delhy just reflects the lack of purchase of CO2 and whether or not that would.
Speaker Change: Police for that field that will return to a more normal level.
Speaker Change: Beginning in a second fiscal quarter, I'm just trying to think about how your elevation look for the year compared to what you were doing a year ago.
Speaker Change: Okay, y'all can answer that. So let's answer Del High question first. You're actually correct. The main changing of topics there was the fact that we weren't buying COT because the purchase line was down. It's shabby-ree that what looked like an issue on that is really more just getting things going to be initially lined out for production. You know how this when you first bring on.
Speaker Change: Bunch of Wells like that, like we did, there's cost kind of bounce around a lot. We also early on had an issue where we had to shift, we lost some production for about three or four weeks.
Speaker Change: and then we got it back on and so we have lower production making the dollars for the OE probably look a little bit high.
Speaker Change: and then at Williston, the work over rates are dramatically down and I'd like to credit the operator on that because they've done a really good job of picking it from whom we bought it.
Speaker Change: There's a lot of things that needed to be done to be fixed and I think now going forward we're going to see typically on average a lot less well-work needed to be done, and they also we expect with the electrification projects that they're doing in the Wilson we expect that to be a reduction in L.O.E. as well.
Speaker Change: Thank you.
Speaker Change: Marker Ryan, can you talk about where you think L.O.E. will average in fiscal 25?
Speaker Change: Yeah, so I think to your point, I think we're going to see Delhi kind of return to more store goals and so.
Speaker Change: You know, just kind of looking at, you know, the last.
Speaker Change: Kind of our last quarter, we average around $20,000 barrel, something with a year ago period, so I would assume something that would probably be more in that more in that area of $20,000 barrel, plus or minus going forward with a steady state.
Speaker Change: and then on Capitol, Ryan with the well with drilling activity set to resume in the second fiscal quarter of.
Ryan Stash: 25 and then again in the fourth fiscal quarter of 25 I assume that will cause just a little bit of lumpiness and capital spending but deep can you
Speaker Change: Share an estimate of where you think spending for the full fiscal year will line out.
Deep: Sure, so right now we have kind of a range of 12.5 to 14.5 million.
Speaker Change: for Fiscal Year 25, and that does include, you know, obviously the Chevrodo drilling is something that we have more control over right to that includes kind of the four wells we've talked about, you know, drilling completing and starting really the next.
Speaker Change: Development Block, depending on timing that could slip in the following fiscal year.
Speaker Change: The other big piece of that obviously is Scoop Stack. We've had conversations with the operators and a lot of them have been fairly forthcoming with their drilling plans, so we are basing our budget based on what they've told us. But as you know, that's dynamic and if pricing continues to be soft, I might expect that to trend towards a lower end, right? You don't have as much visibility on the Scoop Stack.
Speaker Change: And if I can slip one more in, um, heard.
Speaker Change: With respect to acquisitions and where the ballot sheet is today, can you talk about how you think about funding?
Speaker Change: and Acquisition.
Speaker Change: Yes, so...
Speaker Change: Which will give us additional additional liquidity right. So I think we could certainly go up on a debt basis to expand sort of the credit facility. There and then really the other option, obviously would be equity in the marketplace and we would look to do that if we were to find a deal that was really accretive right. If we have a deal that makes.
Speaker Change: Sense for the shareholders and we feel is very accretive that's always something that we could look to do as well. So I think it'd probably be a combination depending on the size of the deal and the expansion of the borrowing base and potentially looking to look to raise equity if it if it really looks accretive.
Speaker Change: Thank you I'll get back into queue.
Speaker Change: Yeah.
Speaker Change: Thank you and our next question today comes from Bruce Brown Brown capital. Please go ahead.
Speaker Change: Thank you Fellows just wanted to check in with you on central where almost all the way through the first fiscal quarter.
Bruce Brown: The ABL has been reduced from what it was at the end of June.
Speaker Change: Yeah, So like I said, so the the way our borrowing base works is you know, it's $50 million, which has a borrowing base, which is which we haven't done our fall redetermination, yet, but we have no reason to believe that it would be any different the other number that's in there.
Speaker Change: What we called sort of margin collateral value and with that is is really determines how much we have to hedge and that's been around the last redetermination was right around $100 million, just a little under and we will look at that number obviously coming up here in October, but again that doesn't affect our liquidity. That's just more along the lines of sort of hedging covenants going forward.
Speaker Change: What I was curious as to what extent.
Speaker Change: <unk> all been reduced since your June 30.
Speaker Change: Number.
Speaker Change: It hasn't at this point.
Speaker Change: Well, we don't like them.
Speaker Change: We don't we don't expect the borrowing base to go down below 50.
Speaker Change: Right, but yeah. The outstanding part has not been reduced sorry, I was misunderstanding. So yeah. So we put out you'll see in our yeah, we'll file our 10-K here this.
Speaker Change: This week here and you can see in our press release, we put out we did pay down $3 million. So we went from 42, 5% to 39 and a half at the end of the year at the end of our fiscal year.
Right I was asking what is it currently.
Speaker Change: It's currently still to say.
Well, it's still the same okay got it thanks.
Speaker Change: I appreciate it sure.
Speaker Change: Sure.
Speaker Change: Thank you and our next question is a follow up from John Wiley and Roth Capital. Please go ahead.
Speaker Change #100: I don't have a question, but Kelly I just wanted to say I appreciated your comments on the anniversary of the 911 terrorist attack that was well done.
Oh, Thanks, John it's a yeah.
Speaker Change #101: Yeah, like I said to her wisdom of the responders the men and women at.
Speaker Change #102: I Dunno, it's moving to me and I felt it was important to say something.
Kelly Loyd: It was well done thank you.
Joe: Yeah. Thank you Joe.
Speaker Change #103: Thank you and this concludes our question and answer session I would like to turn the conference back over to the management team for any closing remarks.
Speaker Change #103: We just want to thank you all for taking your time in.
Speaker Change #104: Being with us on the call and as always we appreciate your if if you have any more questions don't hesitate to contact us. Thank you.
Speaker Change #105: Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.
Speaker Change #105: [music].
Speaker Change #105: Yeah.
Speaker Change #105: Yeah.
Speaker Change #105: Okay.
Speaker Change #105: Okay.
Speaker Change #105: [music].