Q1 2025 U.S. Energy Corp Earnings Call

Greetings and welcome to the U S Energy Corporation first quarter 2025 results conference call.

Operator: Greetings, and welcome to the U.S. Energy Corporation's first quarter 2025 results conference call. At this time, all participants are in a listen-only mode.

At this time all participants are in a listen only mode.

Operator: A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

A brief question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Mr. Mcguire, Vice President of Finance and strategy. Thank you. Sir you may begin thank you.

Mason McGuire: It is now my pleasure to introduce your host, Mason McGuire, Vice President of Finance and Strategy. Thank you, sir. You may begin.

Mason McGuire: Thank you, operator, and good morning, everyone. Welcome to US Energy Corp's first quarter 2025 results conference call. Ryan Smith, our Chief Executive Officer, will provide an overview of our operating results and discuss the company's strategic outlook, and our company's Chief Financial Officer, Mark Zajac, will give a more detailed overview of our financial results. Before this morning's market opening, US Enrgy issued a press release summarizing the operating and financial results for the quarter ended March 31, 2025. This press release together with the accompanying presentation materials are available in the investor relations section of our website at www.usenrgy.com.

Speaker Change: You operator, and good morning, everyone welcome to U S Energy Corp, 's first quarter 2025 results Conference call, Brian Smith, Our Chief Executive Officer will provide an overview of our operating results and discuss the company's strategic outlook and our Companys Chief Financial Officer, Martin Jackson will give a more detailed overview of our financial results.

Speaker Change: Before this morning's market opening U S energy issued a press release summarizing the operating and financial results for the quarter ended March 31, 2025. This press release together with the accompanying presentation materials are available in the Investor Relations section of our website at Www Dot U S NRG dot com.

Speaker Change: Today's discussion may contain forward looking statements about future business and financial expectations.

Mason McGuire: Today's discussion may contain forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties. including the risks described in our periodic reports filed with the Securities and Exchange Commission.

Speaker Change: <unk> results may differ significantly from those projected in today's forward looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission, except as required by law. We undertake no obligation to update our forward looking statements. Further. Please note that non-GAAP financial measures may be disclosed during this call.

Mason McGuire: Accept as required by law, we undertake no obligation to update our forward-looking Further, please note that non-GAAP financial measures may be disclosed during this call. A full reconciliation of GAAP to non-GAAP measurements are available in our latest quarterly earnings release and conference call presentation.

Speaker Change: A full reconciliation of GAAP to non-GAAP measurements are available in our latest quarterly earnings release and conference call presentation with that I'd like to turn the call over to Ryan Smith.

Ryan Smith: With that, I would like to turn the call over to Ryan. Good morning, everyone, and thank you for joining us today. I'm pleased to walk you through our first quarter results, highlight key milestones, and provide a strategic and operational update as we continue executing our growth plan. As we've discussed previously, US Energy's primary focus is the development of our Montana industrial gas project. We believe this platform is ideally positioned to meet growing market demand, support attractive economics, and deliver the scale necessary to drive relevance in the public market. While Montana's winter limits certain field activity, we have now launched the most significant phase of our initial development program.

Ryan Smith: Good morning, everyone and thank you for joining us today I'm pleased to walk you through our first quarter results highlight key milestones and provide a strategic and operational update as we continue executing our growth plan.

Ryan Smith: As we've discussed previously U S energy. His primary focus is the development of our Montana Industrial gas project. We believe this platform is ideally positioned to meet growing market demand support attractive economics and deliver the scale necessary to drive relevance in the public markets.

Ryan Smith: While montana's winter limits certain field activity, we have now launched the most significant phase of our initial development program. This includes workovers and flow testing of existing wells drilling two new development wells advancing our infrastructure planning to the point of final investment decision and making substantial progress in our carbon management initiatives.

Ryan Smith: This includes workovers and flow testing of existing wells, drilling two new development wells, advancing our infrastructure planning to the point of final investment decision, and making substantial progress in our carbon management initiative. I'll touch on each area individually. Starting with upstream development, in Q4 2024, we drilled our first industrial gas well. Since then, we've been analyzing the results to refine our development approach. In January, we acquired 24,000 net acres in what we believe is the core of the Keven Dome structure, along with an existing well showing significant concentrations of non-hydrocarbon helium. We're currently drilling two back-to-back wells targeting the helium and CO2-rich DUPRO formation, with each well budgeted at approximately $1.2 million.

Ryan Smith: I'll touch on each area individually starting with the upstream development in Q4 2024, we drilled our first industrial gas well. Since then we've been analyzing the results to refine our development approach in January we acquired 24000 net acres in what we believe is the core of the Cuban dome structure, along with an existing well showing significant.

Ryan Smith: <unk> of non hydrocarbon helium.

Ryan Smith: We're currently drilling two back to back wells targeting the helium and C. O two rich do grow formation with each well budgeted at approximately $1.2 million. We anticipate these wells will validate the scale and quality of our resource with one expected to be designated as a class II ingestion well for permanent storage.

Ryan Smith: We anticipate these wells will validate the scale and quality of our resource, with one expected to be designated as a Class II injection well for permanent CO2 storage. It's important to emphasize the uniqueness of our upstream Keven Dome position. Most U.S. helium production today is tied to hydrocarbons. In contrast, our project is based on a non-hydrocarbon gas stream, giving it a significantly lower environmental footprint. That distinction represents a competitive advantage, especially as sustainability continues to be a differentiating market factor. Turning to infrastructure, upon completing our initial development program in June, we will begin construction of our processing plant at Keven Dome.

Ryan Smith: It's important to emphasize the uniqueness of our upstream keeping don't position most U S. Helium production today is tied to hydrocarbons. In contrast, our project is based on a non hydrocarbon gas stream, giving at a significantly lower environmental footprint that distinction represents a competitive advantage, especially as sustainability continues to be a dip.

Ryan Smith: J D market factor.

Ryan Smith: Turning to infrastructure upon completing our initial development program in June we will begin construction of our processing plant at key even though this facility will separate upstream gas into helium and C. O two streams and it is expected to process approximately 17 million cubic feet of raw gas per day comprised of approximately 80% to 85% C O.

Ryan Smith: This facility will separate upstream gas into helium and CO2 streams and is expected to process approximately 17 million cubic feet of raw gas per day, comprised of approximately 80 to 85 percent CO2 and half a percent to one percent helium. The estimated $15 million plant is expected to be completed in roughly 40 weeks and funded through our current balance sheet and modest strategic use of debt. Beyond our own needs, we've seen opportunities to provide infrastructure solutions to undercapitalized producers in the region. By controlling the majority of the basin's gaseous helium supply, we believe we are well positioned to unlock multiple sources of value.

Ryan Smith: Two and half a percent to one per cent helium.

Ryan Smith: Estimated $15 million plant is expected to be completed in roughly 40 weeks and funded through our current balance sheet and modest strategic use of debt.

Ryan Smith: Beyond our own needs, we see opportunities to provide infrastructure solutions to undercapitalized producers in the region by controlling the majority of the basins gaseous helium supply. We believe we are well positioned to unlock multiple sources of value.

Ryan Smith: Lastly, I would like to touch on U.S. Energy's carbon management front. U.S. Energy controls one of the largest known CO2 deposits in the United States. To monetize the helium within this gas stream, we must process it and permanently sequester the CO2. Fortunately, the Keven Dome's geology is exceptionally well suited for carbon storage. We already hold multiple class 2 injection permits and expect to receive more this upcoming June. Recently, we completed successful injection tests at two disposal wells, injecting around 17 million cubic feet per day. Once our processing plant is operational, we anticipate sequestering approximately 250,000 metric tons of CO2 in.

Ryan Smith: Lastly, I would like to touch on U S. Energy's carbon management front U S energy controls one of the largest known C O two deposits in the United States the.

Ryan Smith: To monetize the helium within this gas stream, we must process it and permanently sequester the C O two.

Ryan Smith: Fortunately the keeping domes geology is exceptionally well suited for carbon storage.

Ryan Smith: We already hold multiple class two injection permits and expect to receive more this upcoming June.

Ryan Smith: Recently, we completed successful injection tests' at two disposal wells injecting around 17 million cubic feet per day.

Ryan Smith: Once our processing plant is operational we anticipate sequestering approximately 250000 metric tons of C O two annually.

Ryan Smith: We've begun drafting our Monitoring, Reporting, and Verification, or MRV, plan and expect to submit it to the EPA in July. Additionally, and in the near term, we also plan to evaluate merchant CO2 sales, particularly given the coastal supply shortage. We're highly optimistic about what lies ahead. This asset represents a transformational opportunity for US Energy and positions us as a first mover in the industrial gas sector with a resource and geographic location that cannot be replicated. Our strategy is focused on building a full-cycle platform from production and processing to long-term carbon storage while maintaining a disciplined capital allocation approach.

Ryan Smith: We've begun drafting our monitoring reporting and verification or MRV plan and expect to submit it to the EPA in July. Additionally.

Ryan Smith: Additionally, and in the near term, we also plan to evaluate merchants to sales, particularly given the coastal supply shortages.

Ryan Smith: We're highly optimistic about what lies ahead. This asset represents a transformational opportunity for U S energy and positions us as a first mover in the industrial gas sector with a resource and geographic location that cannot be replicated.

Ryan Smith: Our strategy is focused on building a full cycle platform from production and processing to long term carbon storage, while maintaining a disciplined capital allocation approach.

Ryan Smith: The data we've collected to date supports a highly economic development path, both at the wellhead and infrastructure level. Our capital plan remains measured and achievable with initial phases funded by our strong balance sheet and supported by a thoughtful capital strategy. Turning briefly to our legacy oil and gas assets, as you know, commodity prices have pulled back materially this year, which has affected earnings across the sector, including ours. While these assets are no longer our core focus, they still carry meaningful value. Following our successful monetization program in 2024, which helped eliminate debt and build a substantial cash position, we remain opportunistic in pursuing value-maximizing divestitures of non-core oil and gas assets.

Ryan Smith: Data we've collected to date supports a highly economic development path, both at the wellhead and infrastructure levels.

Our capital plan remains measured and achievable with initial phases funded by our strong balance sheet and supported by a thoughtful capital strategy.

Ryan Smith: Turning briefly to our legacy oil and gas assets as you know commodity prices have pulled back materially this year, which has affected earnings across the sector, including ours. While these assets are no longer our core focus they still carry meaningful value. Following our successful monetization program in 2024, which helped eliminate that and build it.

Ryan Smith: <unk> cash position, we remain opportunistic in pursuing value maximizing divestitures of non core oil and gas assets.

Ryan Smith: As we move through 2025, we will continue to execute a disciplined strategy investing in our core Montana project, while monetizing legacy hydrocarbon assets where appropriate.

Ryan Smith: As we move through 2025, we will continue to execute a disciplined strategy, investing in our core Montana project while monetizing legacy hydrocarbon assets where appropriate. This approach will establish 2025 as a pivotable year in US Energy's transformation, underpinned by access to non-dilutive or low-dilutive capital, a key differentiator in today's market. We believe US Energy stands apart as we have a scalable, economically attractive development platform backed by legacy assets that hold meaningful value with minimal reinvestment. This enables us to reinvest in the high return industrial gas opportunities while insulating the business from commodity price volatility. On the capital return front, we remain committed to shareholder value creation, and so far in 2025, we've repurchased approximately 832,000 shares, representing roughly 2.5% of our outstanding float.

Ryan Smith: This approach will establish 2025 as a pivotal year and U S energy transformation underpinned by access to non dilutive or low dilutive capital a key differentiator in today's market.

Ryan Smith: We believe U S energy stands apart as we have a scalable economically attractive development platform backed by legacy assets that hold many meaningful value with minimal reinvestment.

Ryan Smith: This enables us to reinvest into high return industrial gas opportunities, while insulating the business from commodity price volatility.

Ryan Smith: On the capital return front, we remain committed to shareholder value creation and so far in 2025, we repurchased approximately 832000 shares representing roughly 2.5% of our outstanding float. In addition management has continued to increase its ownership, reflecting our strong conviction that our shares remain undervalued.

Ryan Smith: In addition, management has continued to increase its ownership, reflecting our strong conviction that our shares remain undervalued and represent a compelling use of our capital. In closing, US Energy is emerging as a differentiated, growth-oriented, non-hydrocarbon industrial gas company with operational exposure across upstream production, infrastructure, and carbon management. Our strong financial position, clean capital structure, and access to internally generated cash flow provide a foundation that many of our peers lack. As we continue to execute on our strategy, we believe we are unlocking a scalable and high-margin growth platform that will create lasting shareholder value.

Ryan Smith: And represent a compelling use of our capital.

Ryan Smith: In closing U S synergies emerging as a differentiated growth oriented non hydrocarbon industrial gas company with operational exposure across upstream production infrastructure and carbon management, our strong financial position clean capital structure and access to internally generated cash flow provide a foundation that many of our peers lack.

Ryan Smith: As we continue to execute on our strategy. We believe we are unlocking a scalable and high margin growth platform that will create lasting shareholder value.

Speaker Change: With that I'll now turn the call over to our CFO, Mark say, Jack who will provide an update on our financial results for the quarter.

Mark Zajac: With that, I'll now turn the call over to our CFO, Mark Zajac, who will provide an update on our financial results for the quarter. Thank you, Ryan. Hello, everyone. Let's delve into the financial details for the first quarter of 2025. Our operating results reflect the cumulative impact of our divestiture since the fourth quarter of 2023. Revenue was approximately $2.2 million, down from $5.4 million in the same quarter last year, reflecting the impact of divestitures in the second half of 2024. Oil comprised over 80% of the revenue this quarter, reflecting our focus on optimizing our remaining oil assets.

Speaker Change: Thank you Ryan Hello, everyone, let's delve into the financial details for the first quarter of 2025.

Speaker Change: Our operating results reflect the cumulative impact of our divestitures since the fourth quarter of 2023.

Speaker Change: Revenue was approximately $2 $2 million down from $5 4 million in the same quarter last year, reflecting the impact of divestitures in the second half of 2024.

Speaker Change: Oil comprised over 80% of the revenue this quarter, reflecting our focus on optimizing our remaining oil assets.

Mark Zajac: Our lease operating expense for the quarter was $1.6 million, or $34.23 at BOE, compared to $3.2 million, or $29.02 per BOE in the same quarter last year. The overall decrease reflects our divestiture since the first quarter of last year, and on a BOE basis, the increase is a function of our assets remaining in our portfolio.

Speaker Change: Our lease operating expense for the quarter was $1 $6 million or $34 23, a boe compared to $3 $2 million or $29 <unk> per Boe in the same quarter last year.

The overall decrease reflects our divestitures since the first quarter last year and on a BOE basis. The increase is a function of our assets remaining in our portfolio.

Mark Zajac: cash, general and administrative expense. $1.9 million for the first quarter of 2025 and included approximately $0.3 million for discrete costs such as transaction costs and contractor utilization to integrate our acquired assets. Normalized quarterly general administrative costs are expected to be approximately $1.6 million or an 18% reduction from the same period last year. As for our balance sheet, as of March 31, 2025, there was no debt outstanding on our $20 million revolving credit facility, and our cash position stood at over $10.5 million, reflecting the net cash proceeds of $10.3 million generated from our successful equity offering during the first quarter.

Speaker Change: Cash general and administrative expense was $1 $9 million for the first quarter of 2025 and included approximately <unk> $3 million for discrete costs, such as transaction costs and contractor utilization to integrate our acquired assets.

Speaker Change: Normalized quarterly general and administrative costs are expected to be approximately $1 6 million or an 18% reduction from the same period last year.

Speaker Change: As for our balance sheet as of March 31, 2025, there was no debt outstanding on our $20 million revolving credit facility and our cash position stood at over 10.5 million, reflecting the net cash proceeds of $10 $3 million generated from our successful equity offering during the first quarter.

Mark Zajac: We also are in talks to renew and extend our credit agreement, which we expect to be completed in the second quarter of 2025. In terms of a shift in CapEx, during the first quarter we closed on a Montana acquisition and spent $2.1 million acquiring acreage, as well as an industrial gas well with production potential adjacent to our recently acquired WaveTech acreage. Overall, our operating performance and financial results reflect our recent divestitures, as well as the company's new initiative. We continue to maintain balance sheet discipline and integrity, and my objective continues to be to ensure that the company's reporting process maintains a high standard of excellence, and we feel confident in our ability to support the growth initiatives we currently have underway.

We also are in talks to renew and extend our credit agreement, which we expect to be completed in the second quarter of 2025.

Speaker Change: In terms of a shift in capex during the first quarter, we closed on our Montana acquisition and spent $2 1 million acquiring acreage as well as an industrial gas well with production potential adjacent to our recently acquired weight take acreage overall.

Speaker Change: Overall, our operating performance and financial results reflect our recent divestitures as well as the Companys new initiatives, we continue to maintain balance sheet discipline integrity and my objective continues to be to ensure that the company is reporting process maintains a high standard of excellence and we feel confident in our ability to support the growth initiatives. We currently have underway.

Mark Zajac: Thank you for your participation this morning.

Speaker Change: Thank you for your participation. This morning, we are now ready to take your questions.

Operator: We are now ready to take your. Thank you.

Speaker Change: Thank you we will now be conducting a question and answer session.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tome will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you.

Speaker Change: I would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue.

Speaker Change: You May press Star two if you would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: Please while we poll for questions.

Speaker Change: Thank you. Our first question comes from the line of Tom Kerr with Zacks small cap research. Please proceed with your question.

Tom Kerr: Our first question comes from the line of Tom Kerr with Zach's Small Cap Research. Please proceed with your question. Good morning, guys.

Tom Kerr: Good morning, guys.

Speaker Change: Hey, good morning, Tom.

Ryan Smith: The cost of the processing plant, I believe that was higher than expectations, was there complications or higher cost factors involved? So, no, there wasn't. I guess the whole time is we've looked at all the infrastructure build-out and then, you know, the wells that are going to supply that plant and what we think the production of those wells is going to be. It's always kind of been a moving target. So, I'm going to be talking about the size of the plant, what we think the production is going to be, and kind of what is that key economic fulcrum of the plant.

Speaker Change: The cost of the processing plant I believe that was higher than expectations.

Speaker Change: What's your complications or higher how factors involved.

Speaker Change: Yeah.

Speaker Change: So no there wasn't I guess the whole time as we've.

Speaker Change: <unk> looked at all the infrastructure build out and then.

Speaker Change: The wells that are going to supply that plant and what we think the production of those wells is going to be it's always kind of been.

Speaker Change: A moving target.

Speaker Change: Size of the plant what we think the production is going to be and kind of what is that key economic fulcrum of.

Speaker Change: Processing dollars rate of return.

Ryan Smith: Processing Dollars, Rate of Return. CO2 that we process and then CO2 that we believe that we can inject. As I know you know this, but. As many, many parts go into that plant, it's not like a one-size-fit-all type of cost. There's different kind of compressors, different kind of horsepower requirements, different kind of power requirements, etc. And now that we've kind of moved forward our project with a very high degree of confidence on what all those inputs are going to be, that $17 million-a-day type of plant kind of checks all of those boxes for. There's some lead time on some of those parts, so I think that that CapEx number is is fair.

Speaker Change: C O two that we process and then C. O two that we believe that we can inject and.

Speaker Change: As I know you know this but.

Speaker Change: As many many parts go into.

Speaker Change: That plant, it's not like a one size fits all type of costs, there's different kind of compressors different kind of horsepower requirements different kind of power requirements et cetera and.

Speaker Change: Now that we've kind of move forward our project with a very high degree of confidence on what all of those inputs are going to be.

Speaker Change: That 17 million a day.

Speaker Change: Type of type of plant kind of checks all those boxes for US there is some lead time on some of those parts. So I think that.

Speaker Change: That capex number.

Speaker Change: Is it fair I think I think it's conservative I think that.

Ryan Smith: I think I think it's conservative. I think that That is a full sticker price with what we know right here and now. Are there ways that price could come down on some of these incremental parts that go into that plant? There is, and we'll work on that. So, I think that there's some. Possibility for that number to come in a little bit lower than that 15, but I think that's a number that we're comfortable with budgeting for right now. All right, sounds good.

Speaker Change: That is a a full sticker price with what we know right here and now are there ways that price that can come down on some of these incremental parts that go into that plant that there is and we'll work on that.

Speaker Change: Think that there's there are some.

Speaker Change: Uh huh.

Speaker Change: Possibility for that number to come in a little bit lower than that 15, but I think that's a number that we're comfortable with budgeting for right now.

Speaker Change: Alright sounds good and then the completion, we're still looking at the first quarter with 2026 could it be bleed into the second quarter of 2026.

Ryan Smith: And then the completion, we're still looking at the first quarter of 2026. Could it be bleed into the second quarter of 2026? I think it's a weather thing, really, when it gets on there. I mean... When I was, you know, counting my weeks on my calendar from when we plan on starting, I think it came out to a March type of date. So it could be the end of the very first quarter. It could be the very beginning of the second quarter. I think right now, just, you know. Some in the air modeling, we're using April 1st just as a clean date, but you know, there could be a two or three week swag there kind of either way.

Speaker Change: I think it's a weather thing really on when it when it gets on there I mean.

Speaker Change: When I was counting my weeks on my calendar from when we plan on starting I think it came out to a March type of date so.

Speaker Change: It could it could be the end of the very first quarter. It could be the very beginning of the second quarter.

Speaker Change:

I think right now just you know.

Speaker Change: Some of the air modeling, we're using April 1st just as a clean date, but there could be a two or three weeks swag, there kind of either way.

Tom Kerr: Got it.

Speaker Change: Okay. One last question can you kind of give us some big picture update on the helium markets are healing and markets.

Tom Kerr: Okay, one last question.

Ryan Smith: Can you kind of give us a big picture update on the helium markets or helium end markets, pricing, demand, contract terms, or anything significant change in that area? But I don't think a whole I don't think a whole lot has changed in terms of a few parts of that question. I mean, the end user base is, is the same. You know, you have all types of different industries, I would say, you know, the largest and the biggest growth forecast industry is. semiconductors and chips. And, you know, that's, that's the one that's exponentially going forward. The more we move those over here as well, you know, in a way, the helium markets are kind of a long dated.

Speaker Change: Pricing demand contract terms or anything significant change in that area.

So I don't think a whole I don't think a whole lot has changed in terms of a few parts to that question I mean, the end user base as is the same.

Speaker Change: You have all types of different industries, I would say the largest and the biggest growth forecasts industry.

Speaker Change: Is <unk>.

Speaker Change: Semiconductors and chips and that's that's the one that's exponentially going forward the more we move those over here as well.

Speaker Change: In a way the helium markets are kind of.

Speaker Change: Our long dated.

Ryan Smith: link to semiconductors on. on pricing. It's remained steady. It's come down a little bit from the the super peak of a couple of years ago. I think what we're seeing right now in the market for gaseous helium is around, you know, I think on the low end $400 per MCF. In terms of offtake agreements that are currently out in the market, I think liquefied helium, as it's a more specified use in the medical world, in the chip world, goes for a much higher price, sometimes 2 to 3x that. We model, of course, that lower gaseous number.

Speaker Change: Linked to.

Speaker Change: Semiconductors on.

On pricing.

Speaker Change: It's remained steady it's come down a little bit from the Super peak of a couple of years ago I think what we're seeing right now in the market for gaseous helium is around I think on the low end $400 per Mcf.

Speaker Change: In terms of offtake agreements that are currently out in the market.

Speaker Change: I think liquefied helium as it's a more.

Speaker Change: Specified use in the medical World.

Speaker Change: And the chip World goes for a much higher price sometimes.

Speaker Change: Two two to three X that we model of course that that lower.

Speaker Change: Gaseous number and then on the length of offtake.

Ryan Smith: And then on the length of offtake, it ranges. The most typical that I see now is kind of a two to a five-year number.

It ranges.

Speaker Change: The most typical that I see now is kind of a two to a five year number.

Speaker Change: Some people would be willing to go to like a 10 year type of number which I don't think we're interested in just because.

Ryan Smith: Some people would be willing to go to like a ten-year type of number, which I don't think we're interested in, just because... If you look back at helium prices, the one thing that screams off the graph is that there's huge spikes in price. seems like every 18 months or less. So as we start looking at these agreements, I think, you know, that baseline number per MCF is... The number that we model to now, I think there's upside to that number. And then on an expected offtake, you know, I would like to keep them. It's much shorter, rather than longer, for optionality.

If you look back at helium prices. The one thing that screams off the graph is that theres huge spikes in price it.

Speaker Change: It seems like every 18 months or less.

Speaker Change: As we start.

Speaker Change: Looking at these agreements I think that that.

Speaker Change: Line number.

Speaker Change: Per Mcf.

Speaker Change: Is the number that we model, who now I think there's upside to that number and then an unexpected offtake I would like to keep them.

Speaker Change: The order rather than longer for Optionality and the fact that these industries are not going to stop using this it's only going to keep growing.

Tom Kerr: And the fact that these industries are not going to stop using this, it's only going to keep growing. So again, I think right right now we see about $400 per MCF and you know, two to five year offtake agreements that are ample out there in the market. Great. Thanks for the update. I'll get back in queue.

Speaker Change: <unk>.

Speaker Change: So again I think right now we see about $400 per Mcf and two to five year off take agreements that are ample out there in the market.

Speaker Change: Great Thanks for that and I'll get back in queue.

Speaker Change: We have reached the end of the question and answer session I would now turn the floor back over to management for closing remarks.

Operator: We have reached the end of the question and answer session.

Ryan Smith: I would now turn the floor back over to management for closing remarks. Yeah, thank you all for joining us this morning. We're excited about what we're working on. We've extremely de-risked our project year to date. Our existing development program that we started a few weeks ago and are continuing today through early June is going in the expected direction that we plan for, that we hope for, really setting the stage for us to launch and grow this initiative and reach scale within the next 12 months from where we are now. So, we're very excited about what we're working on and look forward to giving more updates as we continue to progress forward.

Speaker Change: Yes. Thank you all for joining us. This morning, we're excited about what we're working on.

Speaker Change: Extremely de risked our project year to date.

Speaker Change: Our existing development program that we started a few weeks ago and are continuing today through early June.

Speaker Change: Boeing and the expected direction that we planned for it that we hope for.

Speaker Change: Really setting the stage for us to.

Speaker Change: Launch and grow this initiative and reach scale with it.

Speaker Change: Within the next 12 months from where we are now so we're very excited about what we're working on it.

Speaker Change: And look forward to giving more updates as we continue to progress forward.

Speaker Change: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.

Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.