Q1 2025 Baytex Energy Corp Earnings Call
Speaker Change: Thank you for standing by. This is the conference operator. Welcome to the Baytex Energy Corp. 1st quarter, 2025, Financial and Operating Results Conference call.
Speaker Change: As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions.
Speaker Change: To join the question queue, you may press star then one on your telephone keypad.
Speaker Change: You may also submit questions in writing at any time using the form in the lower section of the webcast frame. Should you need assistance during the conference call, you may signal an operator by pressing the star key followed by zero.
Speaker Change: I would now like to turn the conference over to Brian Ector, Senior Vice President, Capital Markets and Investor Relations. Please go ahead.
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Speaker Change: Thank you, Dave. Good morning ladies and gentlemen and thank you for joining us to discuss our first quarter 2025 financial and operating results.
Speaker Change: Today I am joined by Eric Greger, our President and Chief Executive Officer, Chad Kalmakoff, our Chief Financial Officer, and Chad Lundberg, our Chief Operating Officer. While listening, please keep in mind that some of our remarks will contain overlooking statements within the meeting of applicable securities laws.
Speaker Change: I refer you to the advisories regarding forward-looking statements, oil and gas information, and non-GAAP financial and capital management measures in yesterday's press release. All dollar amounts referenced in our remarks are in Canadian dollars unless otherwise specified.
Speaker Change: and Bowling are prepared remarks. We will be taking questions from analysts. In addition, if you're listening in today via the webcast, you'll have the opportunity to submit an online question and time permitting, we will strive to answer your question. But that I would now like to turn the call over to Eric.
Eric Greager: Thanks, Brian . Good morning, everyone. Welcome to our first quarter, 2025 conference call.
Eric Greager: In the first quarter, we efficiently executed our exploration and development program, delivering results consistent with our full-year plan.
Eric Greager: Despite a challenging macroeconomic environment, we continue to generate free cash flow and deliver returns to shareholders.
The broader operating landscape remains complex.
Eric Greager: As global crude oil markets face macroeconomic uncertainty, concerns over tariffs, global trade tensions and OPEX recent decisions to increase supply.
Eric Greager: Benchmark WTI crisis have also softened recently trading in the US $55 to $60 per barrel range down from a high of $80 in early January .
Eric Greager: In response to these headwinds, we are focused on managing what's in our control.
Eric Greager: This includes focusing on safe and efficient operations and a disciplined approach to capital allocation.
Eric Greager: Yesterday, we outlined adjustments to our 2025 plan to enhance free cash flow and strengthen our balance sheet.
Eric Greager: R 2025 E&D Capital Budget is set at 1.2 to 1.3 billion.
Eric Greager: dollars and supports annual production of 148,000 to 152,000 BOE per day.
Eric Greager: In light of the current commodity price environment, we anticipate full-year CAPEX and production to trend toward the low end of these ranges.
Eric Greager: With these ranges, we expect to generate approximately $200 million of free cash in 2025, assuming $60 per barrel of WTI for the balance of the year.
Eric Greager: This represents an improvement over our original plan and highlights the resiliency of our business in this lower price environment.
Eric Greager: In addition, we are refining our shareholder return framework to prioritize the balance sheet.
Eric Greager: In the near term, we plan to allocate 100% of our free cash flow to debt repayment after funding our quarterly dividend
Eric Greager: Given the volatile pricing environment, we will maintain a prudent approach to shareholder returns, which has historically comprised
A mix of share buybacks and quarterly dividends.
Eric Greager: With that, I'll turn the call over to Chad Kalmakoff to discuss our financial results.
Chad Kalmakoff: Thanks, Eric. In the first quarter, 84% of our production was weighted toward crude oil and inputs. Reaffirming our position as one of the most oil-lovered companies in North American
Chad Kalmakoff: This leverages evident in our sensitivity to WTI prices, where every $5 per barrel change the impacts or annual adjusted funds flow by approximately 225 million on a non-aggressive basis.
Chad Kalmakoff: In the current pricing environment, our hedging program is proving effective in mitigating revenue volatility caused by fluctuations in the money prices.
Chad Kalmakoff: For the balance of 2025, we have asked approximately 45% of our net crude oil exposure using two weight haulers with an average for price of $60 per barrel.
Chad Kalmakoff: Due to the timing of capital expenditures, our free cash flow was typically weighted to the second half of the year.
Chad Kalmakoff: We were pleased to generate 53 million in pre-cashable in the first quarter. Of this, we returned 30 million to shareholders through the repurchase of 3.7 million common shares and the payment of our quarterly cash dividend of 2.25 cents per share. Black comparison, we generated no pre-cash flow in the first quarter of last year.
Chad Kalmakoff: Over the past seven quarters, we have returned a total of 580 million shareholders. We've repurchased approximately 11% of our outstanding or shares of standing and pay total dividends of $127 million.
Chad Kalmakoff: Strengthening our balance sheet remains the top priority. Our pace of debt repayment reflects both the brief casual generation and the impact of the fading U.S. dollar exchange rate fluctuations, which affect the translation where U.S. dollar did not meet its debt.
Chad Kalmakoff: As of March 31, 2025, our net net was $2.4 billion, representing a 10% reduction over the last 12 months.
Chad Kalmakoff: On a US dollar basis, our net debt decreased by approximately 15%.
Chad Kalmakoff: We have significant financial flexibility supported by both substantial credit capacity and strong long-term note maturity schedule. Our credit facilities total US 1.1 billion, approximately 1.5 billion and are less than 20% drawn and mature in May of 2028.
Chad Kalmakoff: Importantly, these are not worry-based facilities that do not require annual or semi-annual reviews. Additionally, our earliest note maturity is until April 2003.
Speaker Change: Let me now turn the call over to Chad Lundberg to discuss our operating results
Speaker Change: Thanks, Chad. We're pleased with the results of our first quarter program, delivering production of 144,200 B.O.E. per day, which is a 2% increase in production per share, compared to Q1 2024.
Speaker Change: Well, first-quarter production was slightly lower year over year due to weather-related disruptions and the corroborate thermal disposition. We remain on track with our full-year plan.
Speaker Change: Exploration and Development Expenditures totaled $405 million, Consistence with Guidance, and
Speaker Change: In the Eagle Ford, our development program largely focused on the black oil to condensate windows of our acreage, where we brought 16 wells on stream, including 12 operated.
Speaker Change: For 2025, we are targeting a 7% improvement in operated drilling and completion costs per completed lateral foot compared to 2024.
Speaker Change: in our Canadian Light Oil Business Unit. We are excited about our Pemana DuVernay development.
Speaker Change: Two of the three pads have been drilled, totaling six wells, including our longest wells in the play at more than 24,000 feet, total measured depth, and 13,500 feet of lateral length.
Speaker Change: Completion Operations, Commence, mid-April, and we expect to bring these wells on stream during the second and third quarters.
Speaker Change: In the Viking 42 wells were brought on stream in the first quarter.
Speaker Change: and our heavy oil business unit, Peevine, continue to deliver top well results.
Thank you.
Speaker Change: We brought on stream 12 Clearwater Wells at Pevine, four wells at Peace River, and 12 wells across the broader Madville Group in Lloyd Minster.
Speaker Change: As we progress to the year, our operating teams will continue to focus on safe and efficient development across our portfolio.
Eric Greager: With that, I will turn the call back to Eric for his closing remarks.
Thanks, Chad.
Eric Greager: Despite ongoing market volatility and uncertainty, our business remained resilient. We have a strong portfolio of assets in the Eagleford and in Western Canada, supported by robust financial flexibility and well-structured debt maturity profile.
Eric Greager: At yesterday's annual general meeting, we were encouraged by the strong shareholder support. However, despite solid operating performance, we recognize that this is not reflected in the value of our stock.
Eric Greager: We are not satisfied, and addressing this fact remains a key priority.
Eric Greager: The steps outlined today, reducing capital spending, enhancing pre-cash flow, and accelerating debt repayment, help demonstrate our commitment to creating long-term value.
Eric Greager: Looking ahead, we remain focused on disciplined execution and ensuring that Baytex is well positioned to navigate current challenges while delivering sustainable returns over the
Dave will rate open the call for analyst questions.
Chad Kalmakoff, Chad Lundberg, Brian Ector
We will now begin the analyst question and answer session.
Eric Greager: To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request to submit your question in writing, please use the form in the lower right section of the webcast frame. If you are using a speakerphone, please pick up your handset before pressing the keys. [inaudible]
Speaker Change: To withdraw your question, please press star and then to. Our first question comes from Menno Hulshof with TD Cowan. Please go ahead.
Menno Holshoff: Good morning, everyone, and thanks for taking my question. I'll start with the obvious one related to Cap Exxif. If oil were to fall to $50, how much could you realistically?
Menno Holshoff: Pull from the $1.2 billion budget before production declines start to set in and which assets would be that the first to have capital pulled and I suppose on a on a related note, what is your current corporate decline rate. Thank you.
Menno Holshoff: Okay, so Menno, I'm going to take the CapEx question first, you know, in light of WTI trading, you know, in this kind of mid-50s range recently.
Menno Holshoff: We're monitoring the situation, but we have lots of flex in our capital.
Thank you. Thank you.
Menno Holshoff: You know, some of which we have exercised with this kind of move to the low-end to capital guidance, which will result in a move to the low-end to production guidance.
Menno Holshoff: But much of which we still have a lot of flexibility
Menno Holshoff: Let me give you an example and purely an example because it's not in our plan.
Menno Holshoff: But we're in the process now of drilling our third three well pad in Duvernay, and we're in the process of completing the first pad in Duvernay and as an example of the kind of flex.
Menno Holshoff: We could duck those DuVernay Wells and carry them later into the year.
Menno Holshoff: or even out of the year as Dr. Inventory for a future opportunity.
Menno Holshoff: That's the nature of it, but those sorts of things exist.
Menno Holshoff: across our eagle bird as well. And so, you know, I think the flex in the Catholics remains. We've talked about this in the past.
Heads book through 2025 also continues to support the business.
Menno Holshoff: and I would say just as a corollary to this particular line, I would point out that the capex we've removed so far from the program has come primarily out of the couple of pads out of the Eagle Ferdinand five wells out of the biking.
Mano: Let me kick it back to you, Menno, to see if that closes out the question. I think you had a question around decline rate as well, corporate decline rate.
Mano: Yeah, I lost it, I lost it, I lost it, we chatted, I think it was in the low 30s.
Does that sound about right still?
Yeah, the corporate decline rate sits right at about 35 five.
Okay.
Mano: Terrific. And then, since you touched on the on the duvernay, maybe maybe I'll take my next question there it sounds like everything is moving in the right direction in terms of drilling activity well results as you indicated there's there's quite a bit of flex in that program but can you maybe just speak to where things generally stand in terms of the build out of. [inaudible]
Mano: Infrastructure, Egress, Water Licensing, all of those sorts of things to support your growth plan. I mean, it's a volatile market, as you talked about Eric, maybe we're back to $65 next week, who knows. But maybe you could just kind of walk us through the broader plan there. Thank you.
Sure. Sure. Thanks, Mano. We are building...
the required infrastructure as we go. And we're using a...
You know
Mano: Central Production Facility Approach, so kind of think hub-and-spoke approach. So the Central Production Facilities
Mano: We'll be built out through the development program early on, and then as we continue to develop around those CPS, those incremental paths will be tied into the central production facilities.
Mano: So the later wells will benefit from taking advantage of available capacity in the CVS as that capacity comes.
Facilities in conjunction with the three well-pads. [inaudible]
Mano: They told built-in that the facilities, the incremental facilities capital is all built into the current plan.
Mano: and it's really the kind of pace that allows us to invest in the facilities, capital, tie-ins and additional infrastructure along the way together with our new partnership with Gibson, in which we announced a quarter or so ago.
Terrific. Thanks, Eric. I will turn it back.
Thanks, Menno.
Speaker Change: And the next question comes from Dennis Fong with CIDC World Markets. Please go ahead.
Dennis Fong: Hi, good morning and thanks for taking my questions. My first one maybe draws off of a little bit of that discussion around the hedging program.
Dennis Fong: I understand that you're about 45% hedged at least for a portion or the majority of 2025.
Dennis Fong: Can you talk towards some of your end goals around your commodity risk management program? What are you specifically targeting around sustainability? Would you be interested in hedging more? Do you feel comfortable about today's level? And I've got a second question as well.
Dennis Fong: Okay, yeah let me let me take that one first so I don't so I don't cut off your opportunity to ask the second Dennis. The hedging has always been structured to be anchored to the balance sheet and the asset base of the portfolio.
Dennis Fong: And what I mean when I say that is a $60 floor that we put in a simple two-way collar structure is meant to kick in and begin contributing hedge benefits.
When
We began to consider cutting capital from…
Dennis Fong: The projects that would have been funded at a higher price, so really to do exactly what we're demonstrating now in this price environment in the 50s, we have hedge revenues. Thank you.
Dennis Fong: and those give us time and blunt or mitigate the sharpest impacts of the falling price file, give us time to make the capex changes necessary while the portfolio is still strong.
Dennis Fong: The 45% is anchored to the balance sheet, essentially what we said was, you know, as long as leverage remains above one turn.
Dennis Fong: We will maintain kind of 40 to 50% leverage on, sorry, 40 to 50% hedging on our net crew.
Dennis Fong: Total, you know, total accurate production. We also have gas edges and basis edges and things like that that are available for review but for the sake of illustration.
Dennis Fong: The point is we stay at 45% through 2025 and that protects us at 60. So it's both anchored to the balance sheet and anchored to the quality of the assets.
Dennis Fong: In terms of going out in 2026 or hedging at higher floors, we would like to do both.
Dennis Fong: The difficulty is always, when you take a higher floor, you have to accept a lower ceiling in this two-way collar structure that's fundamental, of course. The other problem is because T.I. has been drifting down into the right for a period of time.
Dennis Fong: and a lot of the price action when it hasn't been drifting down has been in the very short period of contract.
Dennis Fong: There hasn't been a very good opportunity for us to extend this $60 floor out into 2026. We get an opportunity, we'll absolutely take it according to our hedge structure.
Speaker Change: Great. Great. Appreciate that color and context there. My second question is just really around, I guess, around the balance sheet. And from your prepared remarks, we frankly agree on
Speaker Change: Not really having any concerns around debt maturity, but can you talk about like and understanding that one of the inputs is obviously commodity price but can you talk towards the inputs around your decision to shift?
Speaker Change: 100% of accessory cash flow after the dividend towards debt repayment. Is this purely commodity driven? Is there like a debt level that you're focused on before you kind of re kind of think about shifting back towards share buybacks and repurchases?
Yeah, thank you.
Speaker Change: You know, one of the things that we consider important in the discussion around the dividend is, you know, we recognize how important the dividend is to our shareholders and we remain committed to maintaining the quarterly dividend.
Speaker Change: we consider the share repurchasing plan more of a discretionary plan and when prices fall and appear to be appear to be weak you know in the near term forward price structure
It seems like that discretionary shift away from share buybacks.
Speaker Change: and in favor of continued debt reduction and, of course, funding the dividend.
Speaker Change: seemed like the prudent thing for us to do. So while that repayment is our near-term priority, our shareholder return framework continues to include the dividends and when it's appropriate share by-backs, we just thought at this moment in time.
Speaker Change: It was more appropriate to focus on funding the dividend and focusing on debt reduction. So we'll continue to carefully monitor the market conditions and provide updates along the way. Okay, but we wanted to focus on-
Speaker Change: You know, on, on de-laboring for long-term shareholder value creation, staying disciplined on how we allocate Cabo, which I've talked about a little bit earlier.
Speaker Change: We do point out in parts of our investor debt that we're sort of differentiating between kind of near-term and long-term. In the long-term plan, we absolutely believe that share buybacks have the place.
Speaker Change: In a short run in the near term, we think this is the most prudent use.
Speaker Change: Thanks Eric, I really appreciate that that color as well, I'll turn it back [inaudible]
Appreciate it, Dennis. Thank you.
Greg Party: And the next question comes from Greg Pardy with RBC Capital Markets. Please go ahead. Yeah, thanks. Good morning. Maybe to build off that a little bit.
Greg Party: Eric, could you speak to just what the quarterly cadence looks like in terms of CAPEX and maybe equivalent production over the year or the balance of the year?
Yeah, good morning, Greg.
Greg Party: We're looking at, so let's just, let's just anchor on Q1, it's in the rear of your mirror, but let's start with that on CapEx, 405 million, Q2, we're, we're looking at about 375 million and Q2, Q3 is a little lighter at 275 million, and then the balance comes in at Q4.
Greg Party: And that should result in a production profile that's, you know, about 147 in Q2,000 BOE a day.
Greg Party: Q3 would be all from there, around 151,000 BOE a day, and then Q4 drifting down just a little bit, 250,000 BOE a day. Of course there are air bars on all of these, Greg, but that's kind of the way we're thinking about the current CAFX and production profiles.
Greg Party: Okay, thanks, and maybe related, I know that the thinking is, you know, second half is where more of the de-leveraging occurs. Perhaps a question for Chad, but, you know, what are your expectations maybe if you run it futures now, or whatever your internal best estimates are in terms of where you think your net debt level would land towards the end of the year, like this roughly.
Uh, yeah, thanks, Greg. I think-
Speaker Change: You know, if you said $60 for the rest of the year, that's around $200 million of breed cash total. Obviously we have $15 million in the rear-view year.
Speaker Change: That would be taking roughly a hundred million off of the death, thou [inaudible]
Speaker Change: The other fact is we actually run forward on the FX, which the Canadian dollar to strength in relative to US dollar, on a Canadian dollar basis that will impact at the end of the year, but we don't have the top one for the deck, but...
Speaker Change: You know, 50 million of free cash, Q1, another 150 at 60. We'll fund the dividend after that, which is another 50, so 100 million off of debt,
Speaker Change: This concludes the question and the answer session from the phone lines. I'd like to turn the conference back to Brian Ector for any questions received online.
Speaker Change: All right, thanks. See if I have had a number of questions come in. A number are related to the shareholder return framework, the debt reduction plan, and a couple of comments on just shared vice performance. I'm going to summarize a few for the team here. And I've been Chad Kalmakoff or CFO . I'm going to ask you this first question.
Speaker Change: As part of the debt reduction plan, a couple of people here on the webcast have noted that where are bonds are trading in the open market, maybe in the price and context of where they are trading in, and would have purchased in the bonds be part of a debt reduction strategy.
Speaker Change: Yeah, thanks, Brian . I think I don't know where the bonds are trading today. I think they definitely have traded down here below par over the last.
Speaker Change: You know, a few weeks here with the commodity price weakness Yes.
Speaker Change: As we talk in the prepare remarks, we have ample equity on the credit facility over a billion dollars here at Quarter End.
Speaker Change: You know, so I think we always want to try to balance between prepable debt and fixed term debt. I think the prepable debt is for sure a lower point cycle here, so I think.
Speaker Change: You know, reperture in the bonds over time with always part of the plan. I think it is, you know, today may present more of an opportunity than it had in the past as well. So definitely something more considerate. Thanks, Chad. Eric, the. Thank you.
Eric Greager: We've talked a little bit on this with the prepared remarks and with the analysts, but with the current weakness in WTI and we've no to words trading.
What are the additional levers that Baytex can pull?
Thanks, Brian .
Eric Greager: You know, the business is designed to weather periods of low oil prices.
Eric Greager: We talked about the hedge book, we talked about the liquidity and the strong duration of both the term notes but also the 2028 facility and access of a billion dollars of liquidity.
Eric Greager: and we're designed to stay resilient even when the macroeconomic environment is challenging as it is today.
Eric Greager: and so we remain committed to maintaining shareholder returns. We're focused on balancing capital allocation, which we've discussed. And we're focused on long term sustainability.
Eric Greager: The levers, enhancing operational flexibility and focusing on things we control I mentioned before. This is key to operators.
Eric Greager: Maintaining Capital Discipline Prioritizing Our Highest Returning Projects Across Our Portfolio. And we've demonstrated, you know, I mentioned where the 50 million came out between the midpoint of our prior guidance and the current bottom end guidance.
Eric Greager: Given the current commodity price environment, we expect full-year capital expenditures to come in at the low end, and that reflects.
Eric Greager: the discipline capital allocation and where we're born now. Suspending the buyback to preserve cash and prioritized that repayment again, a lever.
and the hedge program, which…
Eric Greager: You know, now with the backwardation taken out of the forward structure [inaudible]
Eric Greager: Hopefully, price improvements may give us an opportunity to extend that, we'll be watching.
Long Duration
Eric Greager: You know, liquidity in the credit facility, those give us a lot of defensiveness and a lot of opportunity over time. We have a lot of flexibility in our plans in both sides of the border and in all plays. And we are not at all afraid to exercise that flexibility when the adjustments become necessary. And we'll tell you as soon as we're prepared to make those changes.
Speaker Change: Some comments around would increase the dividend through word share over those others around in this pricey environment would you consider cutting the dividend?
Speaker Change: What are your thoughts around the dividend? Yeah, I mentioned earlier just how important the dividend is to our shareholders and we remain committed to maintaining the quarterly dividends [inaudible]
Speaker Change: That said, it's a complex and challenging environment, the board and management, we talk all the time, we're continuously evaluating the options.
Speaker Change: and we are committed to making the right decisions for the long term.
Speaker Change: So, debt repayment as the near term priority, buybacks have been suspended in the near term.
Speaker Change: The dividend is very important to us and we remain focused on ensuring that it is funded and our focus remains on on de-laboring. Thank you, Eric Schultz.
Speaker Change: I think that covers it. I might have repeated myself in that answer from an earlier commentary. But I think it's worth reiterating. Okay, thanks Eric. I want to shift a little bit. We have one operational related question coming in on the webcast. And this would be for Chad, Chad Lundberg, our chief operating officer. We had talked. Thank you very much.
Speaker Change: Several quarters ago about some more clear water discoveries that notably the morning bill, just north of Edmonton, as well as what we're being up at a p-line and so Chad maybe can you just provide an update on on this development plan what we've done today to and what we're seeing with the results.
Speaker Change: in your career, paying out in, you know, certain oil price environments in weeks, you know, today in months, so we continue to run to, to raise up in the p-vine.
Speaker Change: As you know late last year, we made a swap into incremental lands just on the north side of our position. So we're pretty excited about that and thinking about how we start to capitalize it. We also have the WESCAT assets that we picked up last year.
Speaker Change: We developed another four wells in the play, are excited about the results we're seeing but more particularly we put
Speaker Change: A program of Stratwells and into the property through Q1 and there's nothing really to say about it yet, they take time.
Speaker Change: to really piece through and understand what they're telling us but we really do see those as key along with the production results to unlocking the value there. And then I think Brian Yasuo, the Rex or the PV down in the Mooreville area.
Speaker Change: We brought another five wells on stream this year. Some of those were drilled in Q4, the good bulk of them were.
Speaker Change: Continuing to see strong results there, as per the current capital plan.
Speaker Change: We don't go back until likely next year in the 2026 of course pending oil prices based on the economics though you know if we were to catch a tailwind on oil it's hard to think about about that right now in the current environment.
Speaker Change: It would certainly be a spot that we could think about capitalizing sooner than next year.
Speaker Change: So, Brian , I think, you know, the other one I didn't touch on, it just the Waseka, half the point out, you know, we're continuing to develop some of the farm and acreage that we've entered into the last couple of years.
Speaker Change: and, again, 2025 is more of a focused development program with 24 really setting the table for how we're developing up in that Northeast portion of Alberta right now.
Speaker Change: Perfect, thanks Chad. And one more little question to the operations and this ties back to the Eagle Ferd being a comment or to let an update on sort of refract initiatives and opportunities that we're seeing down in the Eagle Ferd.
Yeah, I'm in brief for Oxford, I continue to be excited about.
Speaker Change: As we've talked to the past, we've put two into the ground over the past two years now with strong results.
Speaker Change: Two more are being executed on now. Actually, we just finished fracking one through Q1. It's on stream looking strong, too early to really talk results. It's been a matter of days.
Speaker Change: and then the second one actually right now, as we speak, is the Fract Pumps are just schooling up to start fracking it.
Speaker Change: Allocating Capital II, it is really further delineate and understand it. So I guess, you know, to wrap that up, hoping in the next quarter results to be able to maybe talk a little bit more about these two refracts we've put online.
Eric Greager: Okay, thanks, Chad. Eric, we have time for a couple more questions.
Eric Greager: One relate to asset sales, would Baytex or asset sales, let's put it this way, our asset sales on the table is part of our strategy to deliver or improve share price performance. Thanks, Brian .
Eric Greager: We regularly review the portfolio and we ensure in these reviews that we're focusing on the assets that deliver the most value.
Eric Greager: The reviews include evaluating our capital structure, optimizing capital allocation, efficiency opportunities that we may not have seen or may not have yet capitalized on.
Eric Greager: So while we're not in a position to comment on the plans specifically, the decision will be guided by discipline, Dalabit, evaluation, as I mentioned earlier and.
Eric Greager: All the auctions are intended to ensure alignment with strategic priorities and will keep this conversation alive.
Eric Greager: as it's focused on our long-term goal. So continue to listen.
Eric Greager: Continue to focus on long-term shareholder value creation and any decisions that were made with regard to this will be focused on delivering sustainable long-term value shareholders.
Eric Greager: Thanks, Eric. And the last question, there were a couple of coming in just around.
Eric Greager: the share price performance, the market not recognizing the value that we believe the company has in the share price.
Eric Greager: What steps are you taking to address your underperformance of the shares, say, for over the, you know, what we've seen over the last year?
Eric Greager: Yeah, thanks Brian . We share the frustration regarding the share price performance and we don't think and I've said this before but I'll just reiterate it. We do not believe it's an accurate reflection of the quality of the business.
Eric Greager: and we don't think it's an accurate reflection of the long-term value creation potential of business. So we're taking thoughtful and proactive measures I spoke about the evaluations earlier to address this.
Eric Greager: including guiding our capital program to the low end of the range. We think that's prudent.
Eric Greager: It's very early in this kind of ensuing price war, but…
Eric Greager: We made that step, and also made the return of capital step regarding spending in the near-term of our care by Vax.
Eric Greager: So we're focusing on prioritizing pre-cash flow or prioritizing debt repayment.
Eric Greager: and we're prioritizing strengthening the current financial position of the business, which
Eric Greager: In terms of liquidity and duration is already quite strong. We have a lot of flexibility in our capital plans. We've been structured to weather these.
Eric Greager: and we're ready to make further adjustments in capital allocation and we're appropriate. So, we're focused on remaining, you know, focused on managing the remaining factors that we can control and delivering long-term value.
That's great. Thank you, Eric.
Eric Greager: and that does I think wrap up the webcast portion of the Q&A today. So I think as we reach the end of today's call, I would like to thank everyone for participating and with that thank you operator and thanks to everyone participating in the first quarter conference call. Have a great day.
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