Q4 2024 Teekay Corp Ltd & Teekay Tankers Ltd Earnings Call
Before we begin I would like to direct all participants to our website at www Dot Teekay dot com, where you'll find a copy of the Teekay group's fourth quarter and annual 2024 earnings presentation.
Kenneth will review this presentation during today's conference call.
Please allow me to remind you that our discussion today contains forward looking statements actual results may differ materially from results projected by those forward looking statements additional information concerning factors that could cause actual results to materially differ from those in the forward looking statements is contained in the Teekay Corporation and Teekay tankers fourth.
Quarter and annual 2024 earnings releases and the Teekay group earnings presentation available on our website.
Speaker Change: I'll now turn the call over to Kenneth Fed Teekay Corporation, and Teekay tankers, President and CEO to begin.
Thank you Hello, everyone and thank you very much for joining us today.
Speaker Change: Group's fourth quarter and annual 2024 earnings conference call joining.
Brody Speers: Joining me on the call today for the Q&A session Brody Speers Teekay Corporation's line. She can tango CFO, Ryan Hamilton, All VP finance corporate development and Christian Waldegrave director of research.
Speaker Change: Starting on slide three of the presentation, we will cover Teekay tankers recent highlights.
Brody Speers: <unk> reported adjusted net income of $52 million or $1.50.
Speaker Change: Push here in the fourth quarter and for the full.
Speaker Change: 24, adjusted net income of $355 million $10.31 per share.
Speaker Change: Despite softer than expected spot rates towards the end of the year the company still generated $69 million and free cash flow in the fourth quarter and $416 million for the year.
Speaker Change: In the last few weeks as part of our opportunistic approach to ongoing fleet management. We sold two 2009 built Suezmax is and one 2006 built.
Speaker Change: So for a combined $96 million two of these vessels have already been delivered to the buyers was a third is expected to be delivered by mid March upon completion of its current voyage.
Speaker Change: Including the previously announced two vessels were sold during Q4, we have sold a total of five 2005 2009 build vessels for combined proceeds of $160 million, resulting in expected book gains on sales of nearly $60 million.
Speaker Change: I'm pleased to report that just today, we list the topics I'm signed an M. A way to acquire Martin a lot through tanker, which we expect to close in the second quarter.
Speaker Change: These sales and purchase a part of our ongoing management of fleet renewal plan, where we naturally sell older vessels and acquire more marketing science overtime when the opportunity was right.
Speaker Change: In addition, we have now completed Tnk's expectation about the Teekay, Australia business and the transfer of all of the remaining management services companies not previously owned by TNK.
Speaker Change: Transactions transformed tickets and goes into a fully integrated shipping company and the sole operating platform within the Teekay group.
Speaker Change: We also made a passive investment in optimal shipping corporation will be down five 1% of the company historically that Teekay has had investments in adjacent sectors small medium sized fruit sanger business, including some exposure to the a mall sector in the past.
Speaker Change: We believe that this investment represents good value in the product sector.
Looking at our first quarter today's spot rates all rates booked to date are slightly below fourth quarter levels, but remain volatile and trending upwards based on the latest Blackstone for both spot rates.
Speaker Change: Although these rates are down from historical highs from 'twenty to 'twenty three 'twenty four current rates are well above all seats free cash flow break even levels, meaning teekay tankers continues to generate substantial free cash flow and earnings in the current market environment.
Speaker Change: Discuss the drivers of the market in subsequent slides.
Speaker Change: Lastly, teekay tankers declared the quarterly dividend of 25 cents per share payable in March and for the full year, we havent paid $3 per share in dividends.
Speaker Change: Moving to slide four we look at recent developments in the spot market.
Speaker Change: We Chinese oil demand during the latter part of the year weighed on the VLCC market, which in turn had a dampening effect of Suezmax and aframax spot rates, while seasonal weather delays failed to give any of that sort of the tanker market during the winter months.
Speaker Change: We're still above long term average levels and well about tnk's free cash.
Speaker Change: Cash flow breakeven of approximately $14300 per day.
Speaker Change: Average Q1 to date spot tanker rates are slightly below fourth quarter levels, but I've been trending upwards in recent weeks.
Speaker Change: Precision all the do small U S sanctions on 100 and phase three tango servicing the Russian oil trade as increased rate volatility, particularly in the larger crude tanker asset classes as the placements shipping capacity was booked well transporting oil China and India.
Speaker Change: In addition, Atlanta based crude oil has been attractively priced when compared to the middle East on crude in recent weeks, which has opened the arbitrage for the long haul movement of oil from the Atlantic Basin to Asia.
Speaker Change: This has been positive thoughts on mild demand in the near term, particularly for VLCC and Suezmax tankers.
Speaker Change: Turning to slide five we look at some of the geopolitical events that are currently unfolding, which seems to change day by day and they'll likely more questions than answers on how things will progress over the course of this year.
Speaker Change: As highlighted by the slide an unusually large number of factors this year, which could influence the direction of the tanker market.
Speaker Change: I won't go into every single point in detail, but it's worth highlighting three of the key factors, which we believe could impact the tanker market.
Speaker Change: Pending on how they unfold in the coming weeks and months.
Speaker Change: Firstly, the right highlights the current conflicts in Ukraine, and the middle East starting with a water claim the situation has become extremely dynamic in recent weeks, while we do not know how events will unfold. We will continue to unfold in the future. We do know that there could be wide ranging consequences for both tanker ton mile demand in the future.
Shadow fleet of ships are currently servicing Russian oil exports should a peace agreement be reached.
Speaker Change: In the meantime, we can envision scenarios, whereby sanctions against Russia, either tightened illusion, depending on how discussions between the various bodies developed first.
Speaker Change: And while we understand that the use planning a new round of sanctions next week, which will work.
Speaker Change: Which will include another 73 ships being added to the sanctions against these sanctions could further impact russias ability to export oil as evidenced by the last round of sanctions in January whereas logistical constraints that AGM.
Speaker Change: China has a source replacement barrels from the middle East and Atlantic Basin on non sanctioned vessels to make up for the shortfall in Russia on supply.
Speaker Change: In the Middle East the reason ceasefire between Israel and Havas has led to the who is the group in Yemen pledging to stop attacks on shipping.
Speaker Change: Hey, you mentioned when you resolve them the resumption of Tango transit through the rest of the region, which depending on how things unfold could impact seaborne trade patterns and reduced tanker ton mile demand. However, the situation is fragile and for the time being we expect that owners like Teekay and cowboy interest will continue to stay away from the region until there's more certainty.
Speaker Change: Around the safety of cruise vessels and cargoes.
Speaker Change: Secondly, the yellow highlights the impact of sanctions on crude oil exports from Russia, Iran, and Venezuela as well as the feed off ships servicing them I've already touched on the situation with regards to Russia, but another key development. This year is the return of the United States maximal Chrysler campaign on Iran. It's a rich.
Speaker Change: Hughes Iranian.
Speaker Change: Or are they exposed to zero in.
Speaker Change: In 2020 bordering handle crude oil exports average, one and a half million barrels per day, the majority of which went to China.
Speaker Change: Top of sanctions on Iranian crude oil exports could therefore, the China to import oil from all those sources via the compliant fleet, which would be positive for tanker demand.
Speaker Change: Finally, the blue highlights the potential impact of tariffs on oil trade flows in early February the U S announced 25% tariffs on imports from Mexico, and Canada with a lower 10% tariffs on Canadian energy, though the implementation of these tariffs were was suspended for 30 days should be.
Speaker Change: Tariffs come into force, we could see Canada, and Mexico looking to divert some of their crude exports away from the U S through all the regions such as Europe, and Asia, while the U S. Refiners may have some find replacement barrels from further a field both of which would be positive for tanker ton mile demand.
Speaker Change: Regarding Canadian exports, we know what the plans to commence nighttime loading from the Trans Mountain pipeline terminal in Vancouver later, this year, which would allow.
Speaker Change: It's our goal to reach 28 to 30, Aframax cargoes per month compared to 22 to 24 at prices.
Speaker Change: It is difficult to predict 2025 impacts, but your political uncertainty and changes so seaborne oil trade patterns, usually increased tanker market volatility and supply chain inefficiencies.
Speaker Change: Turning to slide six we look at the underlying tanker demand and supply backs as which we believe continue to support a balanced market notwithstanding the geopolitical events that I just touched on.
Speaker Change: Starting with Sanger demand drivers global oil consumption is projected to grow by one 3 million barrels per day and 20 to 25 virtually all of this demand growth is being driven by nano always not.
Speaker Change: Always a D countries.
Speaker Change: Countries led by Asia Global oil supply is also set to grow with production from non OPEC plus countries set to increase by one and a half million barrels per day in 'twenty to 'twenty five led by the United States, Brazil, Norway, Canada and Guyana.
Speaker Change: Given that these sources of oil are mostly in the Atlantic basin, while oil demand growth is focused on Asia. We expect an increase in long haul crude oil movements from west to east, which should boost tangled ton mile demand.
Speaker Change: Okay. Pos group could also provides additional seaborne transportation volumes should based on winding the voluntary supportive supply costs from April 20 to 25 on the was consistent with our most recently announced plan.
Speaker Change: Turning to face supply midsized tanker fleet growth is expected to remain relatively low in the medium term as shown by the chart on the bottom right slide the current size of the tanker order book is relatively similar so the fleet of older Tangos, turning H <unk> during the same time period with 370 mid <unk>.
Speaker Change: <unk> tangles currently on order for delivery through 2028, compared with 312 existing.
Speaker Change: Mid sized tankers that was for 20 over the same timeframe. In addition, there are 301 midsize tangos, what's off already over the age of 20, the majority of which operate as part of the Seattle fleet servicing sanctioned trades and which are facing increased scrutiny from U S and European authorities.
Speaker Change: In sum assuming no scrapping we could have over six on that mid sized tankers or approximately 30% of the fleet over the age of 20 years old in three Years' time, which is unprecedented and for comparison at the end of 'twenty to 'twenty. One there were around 115 midsize tangos over the age of 20.
Speaker Change: This illustrates the scale of the excess fleet supply that could be phased out should trade normalize.
Speaker Change: While it is difficult to predict what will ultimately happen with the Shadow fleet and it is uncertain. When we may see an all chicken vessel recycling, we believe that with a manageable order book a lack of available shipyard capacity until 2028.
Speaker Change: Hangup leak, which is currently the oldest in well over 20 years tanker fleet growth will remain at low levels over the next three years.
In sum, while there are a wide range of potential outcomes from the various current issues impacting global trade security and energy.
Speaker Change: We remain encouraged by the underlying tanker supply and demand fundamentals, which we believe pointing towards a balanced tanker market over the medium term.
Speaker Change: Turning to slide seven we highlight our teekay tankers is well positioned for any market conditions.
Speaker Change: With our higher operating leverage and a low free cash flow breakeven at $14300 per day, we can generate significant cash flow in almost any market conditions. So emphasize every $5000 an increase in spot rates above our breakeven produces $2 15 per share of annual free cash flow.
Speaker Change: Over 5% on a free cash flow yield basis, combined with our strong balance sheet, we've built optionality and capacity to maximize shareholder value in any market outcome without over I know, we are now available to take questions.
Speaker Change: Thank you Pierre have dialed in via the telephone number they can ask a question. Please take all by pressing star one on your telephone keypad.
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Jon Chapell: We have made to our first question from Jon Chapell with Evercore ISI.
Speaker Change: Thank you good morning.
Jon Chapell: Kenneth you touched on it briefly in your introduction, but if you could just provide a little bit more insight on the Ardmore investment I'm just seems a little curious given it's a part of the tanker sector that teekay hasn't really been involved in much in the past.
Speaker Change: It's cheap so as TNK and it's also just a lot less liquid than P and K as in investments concern. So maybe explain the thought process behind that and also how you looked at that investment needs to be buying back your own shares.
Speaker Change: Yeah. Thanks, Tim Good morning kind of expect without question.
Speaker Change: Hey, I just want to emphasize that.
Speaker Change: Our number one priority is obviously, all I'll call fleets and alcohol business at Teekay with a fleet renewal, which let's hope we get a chance to so discuss as well.
Speaker Change: But the the investment here is all that straightened really away from from what we've done in the past as you'll remember we've always had some somebody bought exposure. We haven't had for some time, we looked around the market was off for some time and when it took a big dip last year towards the end we are we.
Speaker Change: We both off mall was just very good value and we made a very small investment as you can see in that company relative to our asset base here and it was always meant to be small we just there was opportunistic and it was a financial investment.
Speaker Change: And then what happened was as you saw last week <unk> announced that they are that bought back 4% of all of their shares and that kind of falls into the five 1%, but I just want to emphasize it's a small investment we think it's good value.
Speaker Change: What do you have a bit of investment here I think it keeps us focused on the on the adjacent sectors and in a different manner.
Speaker Change: Okay.
Speaker Change: And then as my follow up.
Speaker Change: Announced this morning, I'm, the new well or two that you're purchasing that youre going to get in the second quarter.
Speaker Change: Still selling at a quicker pace than you're replacing which I think makes sense in this asset value environment. So you know kind of a similar question. How do you think about the continued pace of renewal buying versus selling and then also in the last two years in the first quarter, you've had special dividends I would think.
Given the cash balance today, the proceeds that you're raising from.
Speaker Change: These vessel sales.
Speaker Change: And even stronger position.
Speaker Change: On the other hand, the market's a bit more uncertain. So a lot in there but kind of pace.
Speaker Change: Pace of replacement and in capital allocation within that.
Speaker Change: Yeah, Great Great question, obviously, what we're spending all our time.
Speaker Change: Discussing.
And making decisions around here.
Speaker Change: I'd say on the fleet renewal you ryzen as I commented on in the in the remarks and the Q&A at last quarter, we were looking at selling some or all the vessels and we're looking at buying.
Speaker Change: Some some newer vessels and that's all part of being an operating company, obviously and the renewal of our fleet as you would know we've been sweating our assets are heavily over the past three years and I think that's been great. We've always had been running off the shipyards that are using now is there is a pretty good time to start leaning in.
Speaker Change: Correctly, pointing out that we are selling.
Speaker Change: More vessels than we're buying up to now.
Speaker Change: If you look at it in shipyards, where we are actually buying more shipyards that we're selling so I think it just speaks to how we're trying to manage where we are in the cycle in the at the end and.
Speaker Change: At the same time trying to renew the fleet here. So we're leaning in.
Speaker Change: So your second question on capital allocation.
Speaker Change: It's clear we are in a very strong position when we.
Speaker Change: When we embarked on this cycle a couple of years ago. Here. We are we always had a stated objective that we want to rebuild our financial strength and financial flexibility yet at Teekay.
Speaker Change: I think everybody anybody looking at our balance sheet can say that the that's what we've done and we're pretty excited about that.
Speaker Change: What he needs to do in a cyclical business that is capital intensive.
Speaker Change: I think the next couple of years are going to be interesting. So so clearly for people that have the capital to make investments are I think we are at a position where we can hopefully.
Speaker Change: Make some investment so that's going to create some good long term shareholder value.
Speaker Change: And then that brings you to the question that you're asking around special dividends, which is always part.
Speaker Change: All of the capital allocation plan that says you know we're not the company out there that's paying out all of our earnings and we've been very clear on that from the beginning.
Speaker Change: We have a fixed dividend, which with relative to cap this quarter and the once a year. We have the discussion with the board whether there was a special dividend coming in and that's that's on the agenda for this meeting that's coming up soon.
Speaker Change: Okay. Thanks for the thoughts guys.
Speaker Change: Yeah.
Speaker Change: Thanks.
Speaker Change: Well go next to Omar <unk> with Jefferies.
Speaker Change: Thank you hi kind of the game.
A couple from my side, maybe just first kind of a follow up to John's question.
Speaker Change: Related question.
Speaker Change: Just kind of on the last topic, obviously, you're flushed with cash.
Speaker Change: No debt plenty of liquidity and the cash is coming in much faster that youre able to deploy it maybe just kind of bigger picture on how you think TNK from here.
Speaker Change: The do you see the platform maybe evolving in terms of.
Speaker Change: The Ardmore stake, perhaps is not a one off and that you have.
Speaker Change: Your operating tanker fleet, you've got the green business with Teekay, Australia do.
Speaker Change: Think that youre going to have a growing portfolio approach, perhaps where you're taking stakes in other equity and that sort of a an avenue of exposure to the sector.
Speaker Change: Without having to put capital to work physically.
Speaker Change: Yeah, No I don't I think I just want to emphasize that more investment is really small in a wall.
Speaker Change: So our capital allocation plan here.
Speaker Change: Number one priority is obviously looking after our all coffee we are an operating company that we are a.
Speaker Change: Keen to deploy capital in a manner, where we invest in our in all of our operating platform, which as you know is fully integrated with technical management and all the commercial management. So we're looking to add assets that we are where we can bring value to those assets by putting them on our platform and that's obviously.
Speaker Change: By investing in all the company. So so so I just wanted to be very clear on that that's our number one priority.
As you pointed out so it was a it's a we are generating cash faster than we're able to deploy it I would say it's.
Speaker Change: It's not a problem to deploy cash I think it's a is it may be hard to keep patients in the <unk> patient in a market like we were in but we are in.
Speaker Change: We've been through a lot of cycles over the past 50 years as a company that many of us have been through <unk> been through a few cycles. So I think we know that the b patient, sometimes pays all set oh, but that's exactly what we're doing here. So I don't think it's a matter of that we can.
Speaker Change: It's deployed I think it's a matter of being patient.
Speaker Change: Okay. Yeah. Thank you and then just.
Speaker Change: One quick follow up just on that note.
Speaker Change: State your comment of you haven't taken a sub 5% stake, but by virtue of the buyback you've now had to file the <unk> Gee do I take it that this is just as you say, it's a small opportunistic holding with no plans, perhaps with wanting to increase the size of that position.
Speaker Change: Yeah, that's why I had a fellow CEO calls yesterday, we traveled about it but they vacated so that those good value there as well and it wasn't really all falls so yeah, you're right.
Speaker Change: Okay, Alright, and then if I could just ask a question about the market and you referenced this in your presentation, just all the sanction discussion and how potentially Theres 73 ships coming on and distinction next week I think you said from the EU just I guess in general given your significant kind of market presence within the Aframax is.
Speaker Change: The 150, or so tankers that were sanctioned in January but by the U S.
Speaker Change: There's all kinds of uncertainty as to how long distinctions may cold, but just wanted to get a sense from you given your active participation in this space have you seen an effect or an impact of the sanctions yet on the aframax market and then.
Speaker Change: How do you see it affecting things if those get lifted.
Speaker Change: Yeah, Hi, Matt I think we have seen an impact from the sanctions that were placed on January 10th mm.
Speaker Change: Of those ships that was sanctioned it was over 150 tank cars and the majority of those we're serving the Russian far east trade out of Kozmino.
Speaker Change: And in the weeks following that we've suddenly seen a.
Speaker Change: Difficulties in Russia, getting that all of that would cause me know into China, and we've also seen our India as well having too.
Speaker Change: Look at alternative sources. So if you look at what's happened in the market over the past months.
Speaker Change: We are seeing a bit of a drop in Russian exports in the Chinese and Indian buyers are having to look for alternative sources of crude said, we've seen an increase in volumes from the middle East, but I will say from West Africa and other parts of the Atlantic.
Speaker Change: To make up for the shortfall here.
Speaker Change: Which is why we've seen some volatility on the VLCC side in particular.
Speaker Change: Which is then helping out the suezmax is a little bit as well. So you had the OPEC sanctions they are having an impact.
Speaker Change: As you said, we don't know what the future is some payer whether theyre going to get more sanctions or or relaxation on sanctions and but it's kind of said in his remarks, well this sense.
Speaker Change: Suddenly he does create volatility when you have changes.
Speaker Change: Changes to trade patterns disruptions.
Speaker Change: It all speaks to volatility so we are seeing a bit of an impact in the freight market that.
Speaker Change: As you said very difficult to sort of project forward. How this is going to evolve in the coming months.
Speaker Change: Good. Thanks, Thanks Christian I appreciate the color there and kind of think you as well I'll turn it over.
Speaker Change: Thanks Al.
Speaker Change: We'll go next to Ken <unk> with Bank of America.
Speaker Change: Hey, great good morning.
Speaker Change: If I guess talking about the rates right. So we had a 24 and 28000.
Speaker Change: <unk> thousand dollars per day for the Suezmax Aframax at with just about two thirds and just over half of the quarterly days booked that that's down a bit from the fourth quarter, but yet we're talking about more sanctions, having a positive impact seasonally colder weather increasing power needs. So is the additional capacity, creating the the.
Bigger overhang, what's what's driving what what's your your thoughts on what's driving the rate pressure on rates near term here.
Speaker Change: Yeah, I mean for sure we I think.
Speaker Change: Suezmax is though as a weaker finish two to 'twenty 'twenty four and a weaker start.
Speaker Change: 20 to 25, and I think what we're seeing now is an awfully if suddenly this week are the the VIX service is.
Speaker Change: Is is significantly stronger than the than what we average so they what's what's driving that is we've talked about in the prepared remarks. So it came as a.
Speaker Change: This is really the whereas the east arbitrage that says moving off on the Vlccs, that's been moving up and then some replacement barrels that that's really beginning to kick in now as you recall the sanction vessels that was a bit of a delay on that than they needed to do offload and then that was scrambling for cargo.
Speaker Change: And that's driving it so so we just see more cargo demand in that direction.
Speaker Change: Okay.
Speaker Change: And then if.
Speaker Change: If we think about you know I guess, the delays and the tariffs and some of the delays that have gone on.
Speaker Change: If we start getting towards a point of of peace in between Russia, Ukraine.
Speaker Change: And that's going to take some time to develop the same thing in the middle East with the Hood. These.
Speaker Change: You know what what's your thought on how that pans out you know what.
Speaker Change: What shifts you see first how quick I guess based on historical experience.
Speaker Change: Yeah, I think that's what we're in unprecedented territory. We are we haven't really as I think back historically had this situation before as I say, it's if we just don't get the medium sized tankers.
What really stands out is that before the invasion. We just had over just over 100 ships that were over 20 years old.
Speaker Change: And then they were typically trading.
Speaker Change: With charterers that that didn't have the typical age restriction than they were typically lifting cargoes from from countries, where you had to various degrees of sanction Doyle.
Speaker Change: I'll close the what what the the wall created was this demand for additional vessels to FES. So, let's say that that trade and as we pointed out that fleet has now grown up.
Speaker Change: Well the fetus is larger but the number of vessels over 20 today is over 300 vessels right. So let's call. It just in three years from the hundreds. So it's a 300 basically because nothing has been scrapped and walk where you. Then also saying is that if that continues the sanctions.
Speaker Change: Even though you could argue that the.
Speaker Change: The parallel feature is as maybe being becoming saturated but then you have another round of sanction vessels at all.
Speaker Change: Taking place and then there's demand for more vessels at sanction.
Speaker Change: Sanction that can carry the oil so as long as that persist.
Speaker Change: I think there is a demand for the older tangos. So if nothing happens and we didnt scrapping any vessels and in that category as we pointed out we will actually be a same type of vessels.
Speaker Change: With 20, and Theres nothing in history that that kind of tells us what how quickly that can unfold.
Speaker Change: I think what we can say is that if the trade normalizes and what we all are subjected to and kind of the regulatory side I mean, we do see the the age restrictions that especially yet that's why zsibrita starts kicking in in some cases with some charterers, even even earlier than that.
Speaker Change: So there is a lot of vessels here that's.
Speaker Change: That I think will either be operating with very low utilization or will it be pop somewhere all will stop going to the scrap yards.
Speaker Change: At what pace that that's going to happen and I think that's the million dollar question I don't think it's the right question to ask but.
Speaker Change: I'm afraid we don't have the answer at all.
Speaker Change: I appreciate that that's true that's an awful lot compared to normal. So maybe just two quick ones just to wrap up the seasonality that you normally see.
Speaker Change: In in through <unk> into <unk>, maybe could you just remind us of that and then.
Speaker Change: You mentioned the vessel purchase are you seeing a lot of you know us.
Speaker Change: Especially with that much overcapacity potentially hitting and what that could do to rates are you seeing more books come across your desk in terms of a vessel sale opportunities.
Speaker Change: Yeah. Good question. So first of all just on where we see the rates I think we kind of touched on it and we when we looked at it technically when you come into Q4 and go out of Q1, you kind of have a race that they start low go up and then there's not coming down as you get into Q2.
Speaker Change: There's these past two quarters, we've kind of seen the inverse of that I would say so a little bit on your thoughts about the group had unusual years than in the past the past couple of years, but that's that's kind of where where rates have been growing. So we're definitely the it looks like removing stronger insecure Xu.
But it's kind of the inverse of what we sold last year and they in terms of obviously P opportunities as I, Yeah market has come down on vessel, which is also why we're beginning to lean in a bit as we as we said, it's a job and as we talked about on the last quarter, we kind of see ourselves.
Maybe selling a little bit faster than we're buying but we have fleet replenishment that we haven't we haven't done a lot in recent years.
Speaker Change: We're seeing prices come into kind of a ZIP code that we're beginning to like again.
Speaker Change: So that's why we required 111.
Speaker Change: Today, and we'll continue to look for opportunities as and when people have.
Speaker Change: We have had for them.
Speaker Change: A couple of good years as most tanker owners have had and some of those have had different provinces.
Speaker Change: As we continue to say I mean, we're an operating company we liked what episodes in scale in the market. So we will obviously be focused on trying to renew the same we'll do that at a very measured pace there.
Speaker Change: Very helpful. I appreciate the thoughts thanks, guys.
Bridget: Thanks Bridget.
Speaker Change: And that will conclude the Q&A portion of today's call I will now turn the call back to the company for any additional or closing remark.
Speaker Change: Thank you very much Paul as long as my Angel I'll call today, we look forward to reporting back to Mexico, Laura. Thank you have a good day.
Speaker Change: Thank you, ladies and gentlemen that will conclude today's call you may now disconnect.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: [music].