Q3 2024 New Fortress Energy Inc Earnings Call
Please stand by.
Speaker Change: Information on forward looking statements and non-GAAP measures with that let me hand, it over to our chairman and CEO of <unk>.
Speaker Change: Oh, great. Thanks, Matt and thanks, everyone for dialing in so as usual, we will referred to the desk as we flipped through here, but let's start at the beginning so page three first with the quarterly financial results.
Speaker Change: Q3, adjusted EBITDA of $176 million that was basically right on top of what we forecast year last summer from.
Speaker Change: When operational standpoint, the quarter was a very placid, one so we are.
Speaker Change: Continued operationalize LNG.
Speaker Change: Operations, So I'll talk about that in a minute we sold their first full cargo was sold and transport in Europe, we obtained the non FTA.
Permits in Labor day, which allowed US to then ship to non FTA countries of course, it looks like that band is likely to be lifted.
Speaker Change: Presidential election, but there was a it was a good milestone for us.
Speaker Change: You know, we are reducing our guidance for the fourth quarter modestly due to some maintenance that we've taken here. So we're going to have lower volumes in LNG. The unit is back up and is running well now we've been.
Speaker Change: Working on optimizing production, but we're very very happy with the production of it and I'll talk about that in a second but that's good. We also are going to bring back.
<unk> already in place.
Speaker Change: Which has got some accounting implications, but it's nothing but positive from an operational standpoint from a business standpoint that Andrew was talking about that in a minute.
Speaker Change: The the claim from FEMA is something I get asked about all the time, we're continuing to have conversations with our western which is our contractor as well as what is the core on with FEMA and expect our as expected. We do think that the resolution of that is pending and is pause.
Speaker Change: We don't have anything specific to report on it obviously the impact of a FEMA settlement.
Speaker Change: In a quarter in the fourth quarter or first quarter it materially affect what our forecast would be and also to the extent that these new strategic options that we are pursuing and I'll talk about at some length come to bear or they can move things around so actually the ability to then forecast specifically away from operations is a little more complex just because these are such big.
Speaker Change: And large individual transactions.
Speaker Change: Notable events or slip to the following page Starwood fast L. F LNG private it maintenance events, we ran for 14 days.
Speaker Change: On an hourly basis of about 105% of nameplate capacity. So working extremely well. This is now the time Oh the processing to liquefy are these then sit down with the vendors and brainstorm about debottlenecking in operational changes that you can implement to increase production, we had a big meeting in Houston on Monday exactly on.
Speaker Change: So it went really well and our team is is quite positive that there's a number of short term additions that we can bring into it to add 3% to 5% to 10% of nameplate capacity and that is consistent with other people in the industry. This is just a natural process. We go through our first get up and running.
Speaker Change: At full nameplate second make those adjustments to allow you to enhance what youre doing so a very very good news. There. We're just completing our fourth cargo I believe this morning, you know one thing about the ex I've asked some questions. Yeah. The Penguin is about 170000 cubic meters of storage. The average ship that we're feeling on our run back and forth.
Speaker Change: With two Puerto Rico. It was about 135000 cubic meters that get that buffer provides us a tremendous amount of operational flexibility. So when there is weather. When there is a storm that has gone through and there are swells and do you have to maybe delay a day or here or there that 35000 cubic meters of buffering basically means that we expect to have.
Speaker Change: No downtime from an operational standpoint, as we load and thats been our that's been our experiences thus far so.
Speaker Change: All going well I'm going to plan, but F. LNG as moved squarely out of the the construction.
Speaker Change: As we enter the last stages of commissioning and now operationally, we're performing extremely well you know, Brazil I'm Gonna leave Andrew to talk about this but you know the the big construction continues the Bottomline smaller standpoint is on time on budget. The EPC is performing extremely well and there's a tremendous.
Speaker Change: <unk> B has the activity there, but I will I'll, let Andrew talk about that specifically lastly for US you know a big big function focus within the company has the corporate refinancing and capital formation that we did in the quarter and culminating with the signing of our agreements here. This morning to kind of finalize it but in simple terms. What we did is we re.
Speaker Change: We financed and extend it out a 100% of the 2025 corporate debt.
Speaker Change: Two thirds of the 2020 sensors into a single class and extended the vast majority of the revolver to 2027.
Speaker Change: This.
Speaker Change: Lastly, we also completed a $400 million equity raise that I actually personally participated in a significant amount of investment are back in October as well. What this has done is it basically has had.
Speaker Change: We added significant liquidity to the company and also has extended debt maturities that now allows for us to really pursue the next series of things I'm going to talk about here in a very ordinary course of events. So that's great. It was done very collaboratively with our you know our bondholders and our banks are blessed to have a very very professional and broad based.
Speaker Change: Lenders that worked with us well.
Speaker Change: And now it sets the stage for us to focus on the strategic goals that we outlined the other day, but before I get to that let me turn over the rest of the updates to Andrew Andrew.
Andrew: Hey, too nice to talk to everybody again I'm on page five just talking about the Brazil construction update so a positive update this quarter. So the two which is our 630 megawatt combined cycle plant is just at 80% complete.
Speaker Change: So really good milestone for us there and you see the pictures on the bottom left we've got a real power plant on site and we have almost 2000 people on site last month.
Speaker Change: You know a ton of activity going on sort of in the final stages of the electromechanical Assembly everything is on site and that was just a matter of kind of all the work getting done.
Speaker Change: Our forecast for this is casuals commencing in second half of 2025 and that's the that's a firm date in great EPC agreement, Mitsubishi and Toyota to tell as well so.
Speaker Change: So everything on track itself the two for the moment and you know really good progress over the last quarter.
Speaker Change: Our approach of certain project, which you remember we acquired <unk>.
Speaker Change: Signed to acquire in December and then I think announced in January of this year.
Speaker Change: Moves that two decided by Karena and is under construction today, we made a lot of progress. There. We're actually ahead of schedule. So we plan on being 15% complete at this point and we're actually achieving 25% complete so had great activity if you see that.
Speaker Change: Pictures on the bottom right you can see there in the top of the four different pads for the large gas turbines and then the big clearance at the bottom is for the substation.
Speaker Change: Mitsubishi is making great progress on the turbines as well so that progress that practice is really coming together faster than expected.
Speaker Change: And right now we're ahead of schedule. So it's a very positive update on our construction in Brazil.
Speaker Change: For the quarter back to U S.
Speaker Change: So if over the page in Nicaragua.
Speaker Change: The last of the terminals that we expect to go operational.
Speaker Change: Our expectation is still in Q1, the $300 million, Jeremy what power plant, 100% complete the Jedi in the FSU is 95% complete.
Speaker Change: We expect that.
Speaker Change: That should be completed here in the next month or two the pipeline as you can see has been dredged is being put in place. So just the remaining works really include finalizing the jetty and then connecting the pipelines and the terminals the power plant and we expect to put the freeze our MSR you will go in there when it gets out of the dry dock here at the end of this year. So.
Speaker Change: So very very very very good update from that standpoint, So now flipping to the next section to answer on the strategic update let's start with the AR on the.
Speaker Change: Page and this is this is a quotes from the words that we put out in our 8-K a couple of years a couple of days ago. So on October <unk> 2024, New fortress energy announced a series of financing transactions with the final closing are intended to increase the company's liquidity and financial flexibility as we just referred to and Andy will talk about that in a little bit more detail.
Speaker Change: And further in some of these goals. The company has begun to work to identify strategic partners for one or more of our primary businesses, including projects in Brazil, Puerto Rico, Jamaica, Mexico, Nicaragua F. LNG, one contact the company expects to explore with the chip with potential strategic partners financings commercial ventures or asset sales that are intended to enhance the company's liquidity and.
Speaker Change: Financial flexibility that's the 18th.
Speaker Change: The issue a couple of days ago, which I think there's a clear job of laying out what our focus in from a delay perspective, what I would what I would I think about this is that what we are focused on in simple terms is we believe that the sum of the parts of our businesses.
Speaker Change: <unk> are worth significantly more than the current debt and equity levels of the company.
Speaker Change: And so our focus therefore is to close that gap by focusing on individual assets that can be capitalized, bringing partners kind of etc, too to realize that value the.
Speaker Change: The characteristics of our businesses for the most part are number one they are fully constructed or in the case of Brazil will be shortly.
Speaker Change: Therefore have very little if any construction risks, they're operating assets with many long term committed customers number two they need a little or no capex.
Speaker Change: And so the cash flows that they generate which are significant from operations essentially go straight to the bottom line number three they have LNG supply to match the customers. So essentially when you match the supply and the demand.
Speaker Change: Remove commodity exposure and what is left is simply unmatched business between inflows of product outflows.
Speaker Change: Gas and power to customers and then just a long term.
Speaker Change: Contracting between both.
Speaker Change: The supply and the demand and it becomes a religious appear infrastructure.
Speaker Change: And lastly, they have visible unclear growth prospects, that's only a fraction of the capacity of the asset itself is utilized these characteristics in sum total are basically the holy Grail of infrastructure investments no construction risk or little significant cash flow with very very long term commitments no capex. So there's there's no <unk>.
Speaker Change: <unk> capital go straight to the bottom line long operational histories without incidents and no commodity exposure. So that's that's broadly speaking is the description of our of our assets when you flip to page number nine.
Speaker Change: We believe that there is significant value in all of the businesses. We've chosen to highlight these three is the most developed the most significant in size, but we're very positive and constructive on the value of all of them and believe that once added together this sum of the parts.
Speaker Change: Quite substantially greater than the current valuation of our debt and equity.
Speaker Change: These three assets, Brazil, Jamaica, and the combination in Puerto Rico and <unk>.
Speaker Change: <unk> one <unk>.
Speaker Change: Have the characteristics, which I just went through their long term supply specifically match with a long term customer uptake, which mitigates the commodity exposure the projects again with the exception of the their final construction.
Speaker Change: Brazil, but on the other two projects are completed and our operational and require little or no additional capex and they have very significant value add in terms of material growth opportunities.
Speaker Change: Each of these are unique assets, but there's a lot of similarities we've invested billions of dollars in building these and taken many years in doing so roughly 10 years in the making and Jamaica seven years, and Puerto Rico five years in Brazil. So the investments that we've made have resulted in these terrific assets and now we think we're very well positioned to go talk to investors.
Speaker Change: Different options for them. So let's look at the page number 10.
Speaker Change: Kind of going from left to right. The the Puerto Rico and LNG assets are the perfect downstream complement astrium compliment to each other as ethylene as you wanted is now operational and possibly <unk> two they each have a significant independent died because obviously, we live in a world where there's still a significant difference between.
Speaker Change: The price of creating LNG and what the market will pay for it but they have far more value in our estimation. When you combine them with the downstream needs of San Juan We have a Jones act exemption that allows us to bring the are that they.
Speaker Change: Gas.
Speaker Change: Straight from one side the other today in Puerto Rico, we have this ADT btu.
Speaker Change: Meanwhile, gas contract that is a that is partially utilized but we're very very optimistic that that's going to change and grow substantially but even today.
Speaker Change: 70, plus TVT market. There is nine customers LNG supply 20 years. The contract duration is four years, but we think that there's a there's a good chance that that will change over time. The total owned and managed power capacity across the complex is 9000 megawatts. So it's a huge market, which we have obviously a very significant presence and now we have the supply to match that.
Speaker Change: Jamaica, which is our oldest and most mature asset 30 cubic use volumes 25 customers, who have supply matched against it for 20 years average contract duration 17 years on tower and managed capacity of 330 megawatts right.
Speaker Change: They're very long term and very very stable and significantly as is.
Speaker Change: A chance to grow materially and then lastly, the Brazil complex that you can always to Andrew to talk about but in the north you have a massive combination of terminal baseload customer with Norsk Hydro two two gigawatts of power, it's an island of activity and one of the most.
Speaker Change: Environmentally sensitive parts of the world with huge long term half day, yes.
Speaker Change: So what is the plan the Gulf for US simply is to deleverage the company and by doing so greatly simplify for investors.
Speaker Change: That the merits of the assets that we own the refinance gives us an ability to do this in a thoughtful and measured manner.
Speaker Change: The key elements of that refinance is that to the extent that we use asset sales, we can pay off debt without penalty. So this resulted in effectively a very flexible capital structure to the extent that we pursue asset sales, which is what we're going to do you can also organically.
Speaker Change: Deleverage.
Speaker Change: By simply making more money than it costs you to pay the bills, which is.
Speaker Change: Of course, the base case for the asset sales can greatly.
Speaker Change: To accelerate this process and thats why its warehouses.
Speaker Change: The form of the strategic transactions could be a number of different forms it could be equity sales of J D is that can be partnerships or outright sales of all our portions of these businesses. We've hired advisers on a few of these and expect a very very busy few months as we go forward on this Florida on us Fortunately electricity had access to it as perhaps.
Speaker Change: The hottest topic in the world.
Speaker Change: Internationally and domestically as well and the only commodity that cannot be purchased as I said before his time, we've invested the time decades of time in these assets and expect that we'll have a lot of.
Speaker Change: Interesting things to talk about as we move ahead, so that I will turn it over to you.
Speaker Change: Andrew will talk about turnover, yes, thanks, Joe as a follow up to that we just tried to provide a steady.
Speaker Change: Jamaica business so on page 12.
Speaker Change: Just a reminder, and if he really started in Jamaica with the <unk> terminal.
Speaker Change: In 2015.
Speaker Change: Which was completed in 2016, we then built our CHP plant in 2017, and then construct to the old Harbour terminal just west of Kingston and in 2018.
Speaker Change: I would argue was finished in 2019 and then we would see O D. On the power plant in 2020, the map on the left really.
Speaker Change: Gotta oriented to our business in Jamaica.
Speaker Change: The Montego Bay terminal is critical because it supplies the bogue power plant as.
Speaker Change: As well as serves our 21 different small scale customers, which are most of the large industrial customers in Jamaica. The old Harbour terminal is directly connected by pipeline to the.
Speaker Change: <unk> CHP plant, which we own just about 150 megawatts that supplies electricity to Jamaica public service and then also suffice deemed at the gym uncle alumina refinery.
Speaker Change: And then it's also connected by pipeline to the old Harbour power plant, which is owned by Jamaica public service to really we.
Speaker Change: One in supply three of the major power plants on the island, we supply out of our Montego Bay terminal.
Speaker Change: Basically the 21 largest industrial customers on the island with LNG and you can see the key metrics on the bottom right.
Speaker Change: Traditionally we've provided about 30 <unk> year, we have 23 plus customers.
Speaker Change: We started.
Speaker Change: All of our long term agreements were initially 20 years and.
Speaker Change: There are about 17 years remaining generally now.
Speaker Change: And they have the.
Speaker Change: Two components, one is a fixed capacity payment and the other is a volumetric payment for the gas that has about an 85% take or pay on the volumes every year I mentioned 17 years average remaining contract duration, we own the 150 megawatts come on.
Speaker Change: Heat and power plant at Clarendon and overall, we account for about 65% of the electricity supply in Jamaica flipping to page 13, and just gives you.
Speaker Change: Better sense for our operations. So today, we basically base out of the old Harbour terminal just west of Kingston, We run a shuttle vessel from there up to our Montego Bay terminal about once a week to keep the storage at Montego Bay supplied we've received larger international LNG deliveries.
Speaker Change: The old Harbour terminal and then we supply gas by pipeline to the three power plants I mentioned.
Speaker Change: One of which we own and the two others are owned by J P S and we supply them.
Speaker Change: Gas into a long term agreement and then Oliver Montego Bay terminals, where we run our trucking business to the 'twenty, one industrial customers I mentioned.
Speaker Change: On page 14, just a few investment highlights on how to think about our business in Jamaica. So we have really long term offtake. So 17 years average remaining contract duration.
Speaker Change: Public service has been a great partner to us and we've had an extremely productive relationship.
Speaker Change: Even kind of going through.
Speaker Change: Difficult economic times like during Covid.
Speaker Change: We've had a.
Speaker Change:
Speaker Change: Great business relationship with them and your ability to continue to grow and do more.
Speaker Change: As you guys might know Jamaica public service is actually owned by Marubeni, and Korea East West tower as well as the government of Jamaica.
Speaker Change: We have an investment grade LNG supply so we generally supply Jamaica through a long term delivered contract with shell.
Speaker Change: I think the bulk of the difference was the conversion of either the Aguirre or the Mayaguez power plant. Is that the right way to think about that? And then can you give an update on the status of those power plant conversions?
Speaker Change: conversions and new gas-fired power, you know, be needed, which we think, literally from the beginning, the first minute of the first day, you can get a transcript of her speech, but it actually couldn't have been more consistent, more positive, with what we think it is. We think that there are...
You know, a number of very, very simple and obvious
Speaker Change: , , The first of which will be these mega gems which we think will be turned on here in the next couple of days you have Al .
Speaker Change: diesel, and they basically end up costing Puerto Ricans significant amounts of money on burning diesel versus natural gas. I think that with the new administration, you're going to get a renewed focus on that. The conversions of those, we think, are actually quite straightforward. You know, when you look at Puerto Rico, broadly speaking, I think it is one of the largest
and Chris. Bye. Bye. Bye. Bye.
and Mark. Thank you. Thank you.
Speaker Change: diesel to gas changeovers anywhere we're aware of, it could save them literally billions of dollars on an ongoing basis. So there couldn't be a stronger business case for it. And I think that in the next 60, 90, 120 days, you're likely to see a significant amount of activity out of there. And these numbers then will kind of reflect that. The 53 TBTUs is only the base case of what is there at this moment and does not at all reflect what we think that the market opportunity is likely to be in the coming months.
[inaudible]
Great, I appreciate you taking my question. Thank you.
Speaker Change: The next question is from Craig Shear with Two E Brothers.
Hi, thanks for taking the questions.
Speaker Change: After the next coming quarters of rejiggering, has that long-term focus changed, and could you see
finally achieving stable recurring modelable operations by maybe 2026.
The basic plan in any of these markets is...
Speaker Change: the same, which is to go in there, provide gas and power.
Speaker Change: to people that need it. There's obviously big deficits of access to gas, big deficits of access to power.
In Brazil, we built a small power plant in Mexico.
Speaker Change: But really, what you're left with is incredibly simple in each and every case. It's basically...
Speaker Change: A discreet supply of gas into the country, a discreet downstream demand from customers, no commodity risk.
Speaker Change: It's a hundred plus million dollars of long-term income. There's nothing small about a hundred million dollars for 17 years. So, we think that these things are worth...
Speaker Change: Far, far more as infrastructure investments than they're being rated right now. And we're going to go out and test the market for that. And we feel really good about it. And I think that selling one or two assets...
Speaker Change: You could literally end up in a place where you've paid off all your corporate debt and you're in a very, very different place as a company. Even selling one would re-rate it. So this is not a spurious exercise or one which we hope to try out. We are quite confident that we're going to get great interest in these assets. There's a variety of different things we could do, and we'll go pursue them and stay tuned. So that's the basic plan.
[inaudible]
Speaker Change: understood and as far as the value to others and what your long-term plan is for retained assets.
Speaker Change: Do you see the Trump election victory possibly, you know, creating a new renaissance of US, you know, liquefaction contracting?
Speaker Change: Perhaps spurring the market saturation, the moderating long-term pricing that really dramatically adds value to the downstream infrastructure you've built towards the end of the decade.
Speaker Change: We still can perform. I mean, prices are high, but they're not ridiculously high right now. So you can still basically provide people gas and power, and they can afford it. But obviously, to the extent that you had a more normalized forward curve, as you do right now in the end of the decade, that's just good for the customers, and that's good for these downstream assets. I mean, our capacity utilization across the portfolio is around 20 percent.
Speaker Change: And so what it means is we've invested billions of dollars building this, decades building them and whatnot, and you still have a lot of capacity to go. So a lower price, commodity price would definitely encourage more consumption and it would be beneficial to us. So I do think that, and you know, look, we
Speaker Change: We're not experts on the political landscape, but it certainly seems like the ban on the LNG exports is very likely to be eased. And if rates are more normalized, there's a vibrant economy, there's probably more LNG to be produced, which is net-net a good thing for the market and for us.
The next question is from Chris Robertson with Deutsche Bank.
This is T.J.
Speaker Change: This has been a presentation of the U.S. Department of State.
Speaker Change: Hey, welcome, good morning everybody. I just wanted to ask a question here with regards to the current FSRU market and how the company's thinking about some sub-chartering opportunities, especially as it relates to the Eskimo. I guess where do you guys see the best market opportunities right now globally and how should we be thinking about that in terms of a potential uplift to EBITDA going forward?
Thank you.
Speaker Change: There's still a real premium placed on the FSRU market because there's a lot of need for re-gas capacity and it takes time and money to build new ones.
Speaker Change: We have one short-term charter that's coming off that we think is at a material discount to what the market value is that would be a big
Speaker Change: We think that there is a substantial amount of uplift from a number of those assets, FSRUs being
The top of the list and
Speaker Change: You know, we want to report on things that have happened rather than forecast about things that could happen, but we think the differences are material. So we did, you know, the one, you know, big, you know, charter into Amshaven, I guess a couple of years ago. You know, the Eskimo is another one that's on the list, but there should be some good activity to report on, you know, hopefully in the very near term.
I appreciate it. I'll turn it over. Thank you.
The next question is from Martin Malloy with Johnson Rice.
Martin Malloy: Good morning. Thank you for taking my questions. I wanted to ask first about free cash flow looking forward to next year.
2025, and then given your
Your CapEx, $70 million net CapEx on slide 24 here.
Should we be looking for...
North of a billion dollars.
Hey Marty, it's Chris. I think, you know, we...
Speaker Change: The way you read that prior slide is absolutely correct. So we do have EBITDA less the maintenance CapEx and kind of unfunded CapEx of about $70 million next year. So we keep talking about free cash flow. It's important to say you have CapEx. So definitional free cash will still be negative, but you have the financings.
Speaker Change: that will support the bulk of the CapEx spend. So I agree that the way to think about it is, as we put on the prior slide, give it to less the unfunded CapEx, less obviously debt, service, and taxes. And so using that methodology, I would expect that to be positive in 2025.
Okay.
Speaker Change: and then there wasn't any discussion around data centers on on the call yet could you maybe give us an update there?
Speaker Change: Sure, you know, we have a ton going on in terms of the asset that we own in YLUCING. We've had a number of conversations with a variety of different tenants for it, one of which I think is a very good fit for us, and we're working on it. I've not updated on it simply because we don't have a definitive agreement in hand. We're optimistic we could have one in the very short term, and the one thing I would
Speaker Change: sentiment and interest in island power, so kind of off-the-grid power to supplement people's access to the grid, has grown, you know, exponentially over the next last, you know, 6 to 12 months. And it's a hot, hot topic. I mean, this recent ruling by FERC on the Amazon situation at Talon, I think adds to that. You know, we think that the abilities we have as a company to provide
Speaker Change: Power in a relatively short period of time, it's highly reliable and cost-effective.
Speaker Change: is an extraordinary benefit for us. And we're just very focused on this first site because it's something we control in the process of filing for permits to allow us to build power, get water, build data centers, et cetera. And I think that the economic model for it is a compelling one. And I think when we have our first
Speaker Change: You know, in the hand contract, we'll talk about it with folks, but we think it is not only a very attractive stand-alone investment, but a perspective that could be a real model for a number of others to follow. So more on that to come, and hopefully, you know, by the time we have another update here, we'll have something great to talk about.
The next question is from Wade Suki with Capital One.
Wade Suki: Good morning, everyone. Thank you for taking my questions. Just first, a logistical question, if I may.
Speaker Change: kind of for the ship watchers out there. I know you all mentioned the, I think it was the BW Pavilion was headed to Puerto Rico. It seems to have stopped in Jamaica and the Virgin Islands. Kind of help explain, if you don't mind, kind of a logistic side of things and how to sort of read through some of the movements you might see on Bloomberg or whatever other services we're using here.
Speaker Change: Well, I think that the ship watching is going to be a pretty boring sport for the FLNG asset in Puerto Rico because we expect over time that turns into basically a bucket brigade of just simply taking ship loads of LNG from Puerto Rico, from Altamira and taking it to Puerto Rico. So there's that. Obviously, you know, there are adjustments that you make when you need to move, you know, cargoes around to service customer demand. In some cases, you have to discharge a heel if it's, you know, U.S. gas and not able to go to Puerto Rico. There's a variety of small things that happen, but the basic logistics path that we expect over time is ships being filled in.
Speaker Change: it becomes more and more and more productive and reliable and in service, those logistics become easier and easier to keep track of.
Speaker Change: Understood, appreciate that. And just kind of going forward, safe to assume, you know, maybe a cargo every couple of two, three weeks, something like that. Is that on target?
Speaker Change: Yeah, I think about 20 days-ish, right? 18 to 20 days is about what full capacity is. Like I said, we had a really good production run.
Speaker Change: 14 days consecutively running at 105%, you know, with no breaks. We took a downturn, you know, a maintenance cycle to replace a valve that had been getting – that needed to be swapped out and fixed. That just came back online, so we're back producing now. And our expectation now is that given the performance that we have seen thus far and the reliability of it, we have, you know, really high hopes that that now only improves and we add a little bit more production over time and it just runs. And that would be the cycle. And this last, you know, the nuance that I kind of –
Speaker Change: I've gotten this question from a number of different people, what do you do when there's wave activity or swells and you have trouble loading? This difference between the 170,000 and the 135,000 in terms of the capacity gives you kind of four or five days of window on either side of it, which is a tremendous amount of flexibility to move in and kind of load and do one for the other. So that's where the logistics path for this is such a simple one and one that is highly reliable, which we feel is exactly what we designed it for, but it's working really well.
Speaker Change: Awesome. Thank you. Appreciate it. If I could squeeze one more in.
Speaker Change: Just on SG&A, obviously a little uptick here. Can you help kind of parse that out for us and then maybe maybe help us think about the path forward on SG&A?
Thank you.
Speaker Change: Yeah, I would say like the focus on core SG&A is down three consecutive quarters. Overall, SG&A had a lot of non-cash items in it this quarter, and also some expenses related to the transactions that we're undertaking, and that's why we have kind of the transactional or integration costs separated out. But overall, when I look into 2025, I would expect it to be close to the $25 million or so in core SG&A, and a small bit, you know, $5 to $10 million of cash, and then any non-cash costs would run through the T&I stuff.
Awesome. Thank you all so much. Appreciate it.
Speaker Change: There are no further questions at this time. I will turn the conference back to Wes Edens for any additional or closing remarks.
Wes Edens: That's great. Well, thanks for your participation and your interest in the company and the call this morning. We look forward to updating you on this in the near term. Thank you. Have a good day.
Speaker Change: This concludes today's call. Thank you for your participation. You may now disconnect.