Q3 2024 Parex Resources Inc Earnings Call
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Thank you for standing by my name is Nova and I will be your conference operator today at this time I would like to welcome everyone to the Parex resources Q3, 'twenty 'twenty four operational and financial results Conference call. All lines have been placed on mute to prevent any background noise.
If you would like to after the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star one again, thank you.
Speaker Change: I would now like to turn the call over to Mike Kruchten Senior Vice President of capital markets and corporate planning.
Mike Kruchten: Good morning, everyone and welcome to Park <unk> third quarter, 2024 conference call and webcast.
Mike Kruchten: On the call with me today are our president and Chief Executive Officer, and Mark Bolton, Our interim Chief Financial Officer, Ken grandeur.
Mike Kruchten: <unk> operating officer, Eric Furlan.
Mike Kruchten: Please note that any.
Speaker Change: Anytime telephone participants on the call compressed star one to submit a question.
Speaker Change: As a reminder, this conference call includes forward looking statements as well as non-GAAP and other financial measures with the associated risks outlined in our news release, and MD&A, which can be found on our website or at SEDAR.
Speaker Change: SEDAR plus dossier.
Speaker Change: Note that all amounts discussed today are in U S dollars unless otherwise stated.
Speaker Change: I'll now turn the call over to Matt. Please go ahead.
Matt: Thank you, Mike and good morning, everyone.
Matt: While we have faced some challenges throughout the year centers are all are all go we are putting in the rear view mirror and focusing on optimizing performance across our portfolio.
Matt: The path forward and taking into account the lower corporate growth outlook.
Speaker Change: Uh huh.
Matt: Right no.
Matt: We are fully engaged on delivery reliability.
Matt: Continuing to decrease Capex, where it makes sense and barge or probably even lower risk development and exploitation opportunities with strong capital efficiency.
Speaker Change: Regardless of all of these priorities have armies of brokers.
Speaker Change: Production levels have been stable and within Muslim expectation.
Speaker Change: Well all of them.
Speaker Change: We saw mid point guidance from what you might have thought it would be.
Speaker Change: A day to 49 500000.
Speaker Change: Hum.
Speaker Change: Right.
Speaker Change: Representing an additional 2000 <unk> per day for the fourth quarter, including an allowance for social disruption.
Speaker Change: In conjunction.
Speaker Change: Our conservative focus has involved with an updated all kept the guidance as well leading to a projected higher funds flow well I'm sure.
Speaker Change: Millions of dollars at the midpoint of guidance range.
Speaker Change: Following lease up expectations I'm encouraged by our performance.
Speaker Change: Recent drilling results.
Speaker Change: Having four mm 125, I would now ask Eric.
Speaker Change: Additional details on our race.
Speaker Change: Performance. Please go ahead Erik.
Erik: Thanks, a lot.
Erik: In Q3, 2024 production averaged 47569 BOE per day, which was the result of higher downtime natural decline and a railcar underperformance at our T. Soca assets, Hello, only 34, and cabot's sterile production stabilize natural decline rates on an annual basis in line with previous.
Erik: [noise] budgeting. This stability is supported by continued focus on waterflood progressing our polymer implementation of Cabo sterile and the significant efforts from our team to manage production rates where possible.
Speaker Change: Hello, a 32 based off the first successful step out well, we've now drilled two more follow up appraisal wells. The latest wall on stream is producing roughly 2000 barrels per day gross which is a positive result.
Speaker Change: Based on success to date, and our mapping we spud a horizontal well that is targeting the upper zone.
Speaker Change: This should allow us to maximize reservoir contact following the horizontal well considered drilling future locations, while optimizing the wells drilled to date.
Speaker Change: I can talk shows our latest well came online late in the quarter with strong results. The wallet is producing roughly 5000 boe's per day gross which has resulted in the gas processing facility operating at full capacity, leading us to evaluate the facility when thinking about our 2025 plan.
Speaker Change: Moving forward on the block, we have an exploration commitment well that we need to complete which we expect to spud in the coming weeks.
Speaker Change: Turning to our Biggie exploration, we're continuing to progress the <unk> prospect that block 142, while it's now at roughly 17750 feet, we're expecting to have preliminary results by year end.
Speaker Change: Knowing our successful operational cycle.
Speaker Change: With that I'd invite Cantor. Please go ahead.
Cantor: Thanks, Eric overall, despite lower production from the prior quarter, we had a strong result, when it comes to funds flow as well as our ability to generate a high level of free funds flow with a revised more capital program.
Speaker Change: Flow provided by operations was $152 million.
Speaker Change: Supported by a Brent price of $79 per barrel as well as significant reductions in current taxes.
Speaker Change: Specifically the reduction in current taxes as it related to multiple factors, including reduced corporate production lower global oil prices as well as movement within the Colombian income Surtax spans the company had previously accrued for 15% surtax, but given the depreciation of the oil price in 2020.
Speaker Change: As well as strict or.
Speaker Change: For the remainder of the year, we are now and anticipate that the 10% surtax band will be applicable to the company's 2020 for Colombian tax payable.
Speaker Change: Capital expenditures for the quarter were 82 million this was lower than forecast due to slower pace of work into patches as well as the deferral of the huge prospect at been won.
Speaker Change: For the fourth quarter, we expect capital to be between 85 and $100 million with bias to the lower end depending on activity levels.
Speaker Change: Free funds flow for the quarter was $69 million, which was used for return of capital through share repurchases and the regular dividend as well as we repaid $20 million of bank debt.
Speaker Change: With financial flexibility at period end, we had a working capital surplus of $38 million and a cash level of $147 million.
Speaker Change: I will pass it over to <unk> for final remarks.
Speaker Change: Thank you Ken.
Speaker Change: In the shorter term I'm excited about the emerging results from all of you on this.
Speaker Change: Two program as.
Speaker Change: That's one.
Speaker Change: But we should be reaching the total depth on our first footprint.
Speaker Change: The rest of it was on mute.
Speaker Change: Additionally, the production stability and performance, we have seen from our key assets.
Speaker Change: Therefore, there are certain capacitors.
Speaker Change: Incursion.
Speaker Change: As we think about 2025, our focus is suddenly not achievable budget that centers on lower development expertise opportunities our strong capital efficiency.
Speaker Change: This should drive higher level of certainty.
Speaker Change: And third with the delivery of a more predictable outcome for us.
Speaker Change: Yes.
Speaker Change: Look forward to releasing that information to the market.
Speaker Change: This upcoming January.
Speaker Change: To close I want to say that we acknowledge the challenges to date. The terex team is committed to improving results.
Speaker Change: Thank our employees shareholders and partners for their ongoing support.
Speaker Change: This concludes our formal remarks, I would now like to turn the call back to the operator to start the Q&A session.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: At this time I would like to remind everyone.
Speaker Change: In order to ask a question press Star then the number one on your telephone keypad.
Speaker Change: We will pause for just a moment you can pile the Q&A roster.
Speaker Change: Your first question comes from the line of Jeremy <unk> with BMO capital markets.
Jeremy <unk>: Thanks, guys I've got a couple of questions here for you I'll start with some high level guidance than that is there any timeframe. When you may be looking to provide more clarity for the dividend between 25 crushed guidance just as you've seen some stability in some of your kind of core areas here.
Jeremy <unk>: The second question is just with the Asheville teen issues.
Jeremy <unk>: Have you made any progress in finding some potential solvent share that could resolve that and then just lastly, with the royalties.
Speaker Change: Just with the successful sidetrack.
Speaker Change: And you're continuing to move along this path.
Speaker Change: Should we start to think that this well could have some higher chance of success here I guess is the best way to phrase it.
Speaker Change: Hey, good morning, Jeremy Thanks, Thanks for asking the questions.
Speaker Change: I'll open up with the guidance on 'twenty five.
Speaker Change: Obviously, you know where.
Speaker Change: We're happy to see the production stabilize and you saw that through the October production again that were released.
Speaker Change: We're really monitoring how we're producing through Q4 and that really will enable us to set up our.
Speaker Change: Our guidance for 2025, we will be released not in in January and that will also have more contacts about our return of capital and we've approved the dividend for.
Speaker Change: For the fourth quarter and will be also talking about how that will progress through 2025, as we see how the year is unfolding.
Speaker Change: Throw in is going to talk about our branches and our railcar sure. Thanks, Mike.
Speaker Change: In our railcar Jeremy So we are completing your alka 81, well.
Speaker Change: At this moment and we also have a plan stimulation. The first one on your Alco 15, well.
Speaker Change: As we said before we can explain some of the operational some of the production performance from farm to sell and so we are trying stimulation technique and that that will be happening again in the next few weeks on in Iran tests.
Speaker Change: The recent drilling is going quite well, we are just about casing point likely close to it this morning.
Speaker Change: And at that point relocation of law and drill ahead into the perspective zones.
Speaker Change: And so.
Speaker Change: As we've indicated that will be before year end.
Speaker Change: As far as commenting on what we're seeing in the while I would say, while it's coming in like we expected.
Speaker Change: We really don't know anything until we drill about the prospective zones.
Speaker Change: Yeah. Thanks, guys.
Speaker Change: So next question comes from the line of Alejandro Demichelis with Jefferies.
Alejandro DeMichelis: Yes. Good morning, guys. Thank you very much for taking the question.
Speaker Change: Okay.
Alejandro DeMichelis: Completely understand you're going to provide more guidance for <unk>, but could you give us some kind of indications of how you're seeing your base production I don't know 34 in terms of those horizontal wells how much kind of you know the.
Speaker Change: Decline, we should expect from <unk> 34 over the next kind of couple of years.
Speaker Change: Yeah as far as as block 34, I know, there's been some variability does shift but overall the major assets in Socal are following our long term.
Speaker Change: Our long term declines on our long term expectations. So we don't have any any major changes there.
Speaker Change: Obviously, it's harder to predict on a on that.
Speaker Change: On a week to week or month to month basis quarter to quarter even.
Speaker Change: But overall it is following our plan.
Speaker Change: Looking at EUR Vindicating cabinet sterile, we have the polymer expansion.
Speaker Change: Plans for 2025, and our partner on block 34 is looking at the same. So you know the strategy and <unk> 34 in Solta is too.
Speaker Change: Just to try to stabilize and lower the decline as much as you can go.
Speaker Change: Going forward.
Speaker Change: The other comment I will have some of the clients.
Speaker Change: This year.
Speaker Change: Some of the sharp declines are associated not with the major assets in soccer, but in some of the horizontal drilling that we've been doing in the Mirador reservoir. Those walls are very prolific and theyre very economic but they do have higher declines in the wells that can go from 3000 barrels a day.
Speaker Change: Under a thousand barrels a day within a year.
Speaker Change: Very very prolific but that is part of the declining and we had a couple of follow up horizontal associated.
Speaker Change: Place that decline overall of all the major asset is performing like we expected.
Speaker Change: Okay.
Speaker Change: And in terms of cash flow generation, because youre talking about bringing U R.
Speaker Change: Kind of a capex activities in Q4 will that also impact some of the cash flow generation that you get from that.
Speaker Change: For the most part.
Speaker Change: So we're finishing up the development of course, the next big project would be the polymer the thing with the polymers is not a huge amount of capital upfront the upfront capital investment is relatively moderate and it's actually the cost of the polymer overtime.
Speaker Change: That really adds.
Speaker Change: It's the big cost components now the nice part about that is.
Speaker Change: We support the polymer and see how it works we've proven that it works in caliber sterile and we've proven that there is no operational issues with injecting polymer to these reservoirs at these depths.
Speaker Change: And so from that perspective, it's a pay as you go kind of investment and as long as you keep seeing the returns you keep injecting so.
Speaker Change: It's not a big amount of risk capital.
Speaker Change: And if it performs like it does in Canada, Sara we see a strong economic bet. So so in our mind.
Speaker Change: The soca assets are will be at Costco for years to come because the main investments was to build the infrastructure for waterflood.
Speaker Change: Related to <unk>.
Speaker Change: <unk>.
Speaker Change: These are mostly behind us.
Speaker Change: Grades and pieces here and there and reduce the scripts.
Speaker Change: Gibbs for injection.
Speaker Change: But.
Speaker Change: Overall.
Speaker Change: They are very cash flow positive.
Speaker Change: They are the assets that do understand together with capacitors, our capability to build a sustainable business.
Speaker Change: Okay. That's great. Thank you.
Speaker Change: Your next question comes from the line of Chris Jones with Haywood Securities.
Chris Jones: Hey, Thanks for taking my question just on potential M&A and farm in opportunities can you.
Chris Jones: Provided a detailed thoughts on M&A, obviously, you guys executed the deal with agricultural in the foothills, but are you looking at other opportunities out there.
Chris Jones: And I know this question Hasnt been asked in a while but I'm going to ask it here is there appetite to potentially look outside of Colombia.
Chris Jones: And then just sort of high level, what is the rationale behind the potential M&A strategy. If there is one.
Speaker Change: So I was going to start by your second question, we're not going outside Colombia, we believe in the.
Speaker Change: Yes.
Speaker Change: We're currently assessing the potential of the asset in Colombia, we have reuse running room there.
Speaker Change: On the first question.
Speaker Change: We have seen in the last six months more assets on offer.
Speaker Change: Columbia, specifically from the perpetual than what we've seen with 12 years.
Speaker Change: These are assets.
Speaker Change: Richard has been.
Speaker Change: Proposing for farm ins, where you pay as you go.
Speaker Change: Gary you don't pay upfront.
Speaker Change: And we'll deliver.
Speaker Change: But obviously the returns are.
Speaker Change: And at the right levels.
Speaker Change:
Speaker Change: Pirates have looked carefully at the asset.
Speaker Change: We are focusing in particular on two types of assets either ones.
Speaker Change: Sundar surgery and the symptom.
Speaker Change: The lower risk high return exploration opportunities, but the biggest focuses will be also the assets that we have no.
Speaker Change: No were looking to high predictability inventory.
Speaker Change: Insurers waterflood explore exploitation.
Speaker Change: But virtually with us.
Speaker Change: Long running room in and.
Speaker Change: And have visibility on how we maintain.
Speaker Change: More of this production growth for years to come onto the biggest footprint of sites come so.
Speaker Change: The answer is yes, we are looking.
Speaker Change: Something we've been living with digital and we'll hope something good comes out of it.
Speaker Change: Thank you I'll hand it over.
Speaker Change: Your next question comes from the line of Kevin Fischbeck with Scotia Bank.
Kevin Fischbeck: Thanks for taking my question are you able to comment on how much the opex guidance increase was from lower production volumes versus higher costs and also how do you see opex trending beyond 2024.
Speaker Change: Sure. Thanks, Phil.
Speaker Change: So <unk>.
Speaker Change: Obviously.
Speaker Change: <unk>.
Speaker Change: We're roughly about 10% down on production quarter to quarter. So that has an impact on the on the OE.
Speaker Change: Unit cost so that's it the other part of it was the <unk>.
Speaker Change: Part of it is we did have a very intensive Q3 workover bottom we had a lot of wells go down it happens looking back over the last few years. If you do get the odd quarter. The odd months do you have a lot of downtime so that definitely added.
Speaker Change: So I think the well service costs and well service empower our two biggest opex components.
Speaker Change: It was a bit exaggerated here in the last quarter and should normalize into Q4.
Speaker Change: And then the impact obviously will remain until we can show Gulf the game and dilute our fixed Opex is mostly opex is fixed so going into Q4, I would expect more normal workover costs.
Speaker Change: And similar impact.
Speaker Change: Perfect. Thank you very much.
Speaker Change: The next question comes from the line.
Speaker Change: <unk> with Bloomberg intelligence.
Speaker Change: Hi, Thank you for taking my questions.
Speaker Change: I have one on the financial framework.
Speaker Change: Looking at your free cash flow for the nine months. It appears to be that you're already theory T O or 'twenty to 'twenty four guidance.
Speaker Change: Does that mean, you don't expect any more for your cash flow in the upcoming quarter or is there any more upside in there.
Speaker Change: Thanks for the question.
Speaker Change: I guess as far as the full year 2020 for our.
Speaker Change: Our dividend and Capex will be fully funded.
Speaker Change: In Q4, we may have a bit of a timing issue.
Speaker Change: It's just between <unk> and <unk>.
Speaker Change: Capex.
Speaker Change: And to and our dividend payments, but on the full year 2020 for dividend and capital will be fully funded.
Speaker Change: <unk>.
Speaker Change: Right now we have $147 million in cash.
Speaker Change: Thank you, yes, and maybe on the capital allocation, so to say or.
Speaker Change: Dividend payout remains fully funded.
Speaker Change: The remainder cash do you see yourself using gets for the.
Speaker Change: The repayment of debt or are you comfortable with the 30 million on your balance sheet and preferring to use the excess cash for share buybacks.
Speaker Change: Yes, we plan to continue the share buyback.
Speaker Change: And and any excess over that will be will go to debt repayment.
Speaker Change: There is.
Speaker Change: There will be probably potential nominal nominal.
Speaker Change: Alright.
Speaker Change: Over the next quarter or two.
Speaker Change: Yeah.
Speaker Change: Just last one from me on.
Speaker Change: Operationally on you're honest with hills.
Speaker Change: Could you perhaps comment on the timeline for rates and the resource potential you're expecting.
Speaker Change: And in case of successful exploration do you expect it to potentially replace the CRO that was originally expected from the our orca.
Speaker Change: So so.
Speaker Change: In terms of the.
Speaker Change: Around this was right now.
Speaker Change: The timeline for this first one would be probably in the next.
Speaker Change: For the full year and we're putting the last case important before drilling into the <unk> zone.
Speaker Change: Still a high risk exploration projects.
Speaker Change: One in five chance roughly when we announce it so that we're in.
Speaker Change: Not counting on it to replace those.
Speaker Change: Any future growth as upside, but it is very significant upside if it does work out.
Speaker Change: We received everything we were hoping for some broker.
Speaker Change: We are doing in terms of replacing our Alka is the work we're doing in terms of.
Speaker Change: Existing assets in terms of expectation.
Speaker Change: Small E and.
Speaker Change: And polymer as well as some of the opportunities ex petrol are offering considering seriously as a bridge the longer term for the foothills and we're talking here 26, plus.
Speaker Change: With.
Speaker Change: But there does seem to give us disproportionate growth.
Speaker Change: Okay.
Speaker Change: In my mind are out costs supposed to be that Briggs until that moment and now we are looking at the options I just mentioned, Switzerland upgrades.
Speaker Change: These purchases and photos are extremely.
Speaker Change: Sizable.
Speaker Change: So kind of opportunities companies our size loan, we don't get the chance to touch and the <unk>.
Speaker Change: The other was with targeted in the foothills beyond Iris is a much higher probability of success.
Speaker Change: They are much less risky. This one was the one that opened the door to the foothills for US now it gives them the tools in order to reach the bigger prizes lower risk loans.
Speaker Change: Let's say I'm definitely crossing my fingers for every well we drill.
Speaker Change: Thank you.
Speaker Change: For me.
Speaker Change: Again, if you would like to ask a question press star one on your telephone keypad.
Speaker Change: Your next question comes from Conor Schroeder with shareholder.
Speaker Change: Conor your line might be on mute.
Conor Schroeder: Yes, I was on mute.
Conor Schroeder: Thank you for taking my question today. My question today is in a boat is about your guidance for free funds.
Conor Schroeder: Originally in January you guys had it pegged at around $220 million and then with the operational guidance updated went down to about 170 million with the with the new earnings release. Its look like it's looking like it's back up to $220 million now with reduced capital expenditures.
Conor Schroeder: Is that going to sustain.
Speaker Change: Not only the dividend and the buybacks, but also give enough money.
Speaker Change: Money as well to invest back into the business and two.
Speaker Change: Okay. Thanks.
Speaker Change: If more injections need to be done or any more issues come up will there be enough to service those capital expenditures and will there be enough to service the buybacks and my other question is is historically you guys have been on a rate of about buying back around 10% of your company.
Speaker Change: This year, it's not as high so I'm just curious what your allocation is looking like for for buybacks for the fourth quarter and if your assets are selling for very cheap or are you guys willing to ramp up the buybacks in order to reward shareholders.
Speaker Change: Let me start by answering the first question.
Speaker Change: What you probably are seeing right now.
Speaker Change: A more conservative view on how we deploy capex.
Speaker Change: When we were in the high <unk>, we had the number of prolific but high decline wells that we're trying to compensate for.
Speaker Change: Couple that you're aiming for growth at 7%, 8% a year.
Speaker Change: With this.
Speaker Change: View right now is to say how can we have a stable production.
Speaker Change: At a reasonable amount of capital efficiency.
Speaker Change: Lower capex much lower capex.
Speaker Change: Couple of years.
Speaker Change: That enable us.
Speaker Change: Two one.
Speaker Change: Has that stable delivery of returns to shareholders, but also invest in the future like it's too early for us to announce the budget for next year, but typically we spend roughly half I would say our expenditure.
Speaker Change: <unk>.
Speaker Change: Enabling future growth.
Speaker Change: Zooming in on the top side and the other half.
Speaker Change: Close towards savings production with it.
Speaker Change: These levels, where most of the production comes from stable.
Speaker Change: Waterflood assets in mountain view are healthy.
Speaker Change: Would you require less.
Speaker Change: That's basically per barrel investment too.
Speaker Change: To compensate for the decline.
Speaker Change: On the capital allocation, maybe I'll, let Mike answer.
Speaker Change: Hi, Carter.
Mike Kruchten: Good point in previous years, we would buy back the full 10% of our floats with the share buyback program. As you have seen we've moved to more of a balanced approach with return of capital have been a very strong dividend payment and complementing that with a share buyback program.
Speaker Change: That really.
Speaker Change: Gets us to returning 33% of our funds flow from operations and a share buyback program is really a lever as prices and production moves we can adjust that accordingly this year.
Speaker Change: Sure.
Speaker Change: We're still active in the share buyback, we think it provides value given our valuation.
Speaker Change: And we plan to continue to do that and use that as a lever as we go forward with the dividend has been the main anchor in the return of capital.
Speaker Change: Awesome and my I got one more question. My last question is for you guys.
Speaker Change: Last year.
Speaker Change: With the dividend.
Speaker Change: You guys. After the buybacks ended up paying out less this year after increasing it going forward with that 33% payout ratio and the buybacks do you see like consistent dividend increases of around maybe 10% a year for the foreseeable future do you have a dividend hike increase that you guys are maybe Todd.
Speaker Change: We're getting for each year.
Speaker Change: Yes, obviously the dividends under <unk>.
Speaker Change: Constant discussion at the board level and reviewed improved.
Speaker Change: We're basically at a 12% yield right now so.
Speaker Change: Although not prudent to be thinking about significant dividend increases at this level.
Speaker Change: But it is something that we review all the time.
Speaker Change: And we think it is a key component of our total return to shareholders.
Speaker Change: We're not going to increase the dividend.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: I was just I was just curious I know, it's one of your Guy's core values is the buybacks and I know you guys have increased the dividends more in the future. So I was just kind of curious if you guys were planning on.
Speaker Change: Staying out like the same dividend rate or if you guys are planning on cutting back on the buybacks and ramping up the dividends or staying back on the dividends and ramping up the buyback into buybacks do you provide really good value right now that's what I guess I was trying to.
Speaker Change: Right now we are.
Speaker Change: Maintain like that you'll see the announcement for this quarter, we maintained the dividend constant and buybacks become.
Speaker Change: Swing, while we are strengthening the balance sheets in a yearly basis, where we added nearly $20 million as an industry. So as these three components.
Speaker Change: And as Mike said, it's all depends.
Speaker Change: Board approved this particular quarter I would say the oil prices lot to do with it goes to 100 Bucks or buybacks club.
Speaker Change: Okay.
Speaker Change: And I.
Speaker Change: I think the last question that I can maybe think of as well as I know that you guys had a delay on one of your wells for a social issue, but it was pretty much ready to go do you guys have any updates on that well and that social issue and if that's been kind of worked around her.
Speaker Change: Sure I think that while youre, referring to is one of our big E exploration walls that were excited about the Heathrow prospect and there has been some some social challenges.
Speaker Change: Entering the area and so that wala's been pushed to 2025, we still expect to grow it and are working.
Speaker Change: You know in a very collaborative fashion with the communities to try to reach an agreement and move that project forward. It is ready to drill.
Speaker Change: So once we get that approval, we will be moving the rig.
Speaker Change: Awesome sounds great guys, you've answered all my questions.
Speaker Change: Yes.
Speaker Change: I will now turn the call back over to Mike for closing remarks.
Speaker Change: Sure.
Mike Kruchten: Thank you very much for joining us today.
Speaker Change: Have any questions feel free to contact us personally and Rx and have a great day. Thank you.
Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
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