Q2 2026 Pine Cliff Energy Ltd Earnings Call

August 13, 2026

Speaker #2: Thanks, Chris. Good morning, everybody. As we've done in the past, we're not going to bother to read the press release or kind of give kind of scripted answers.

Phil Hodge: Thanks, Kris. Good morning, everybody. As we have done in the past, we are not going to bother to read the press release or give scripted answers. We have had lots of questions, so thank you very much. A lot of the people that might be listening get our quarterly update that I do, and that has stimulated a bunch of different questions, more around the macro on natural gas and what is happening, and we are happy to address those. I think we will get to those pretty quick. I think just on a summary on the quarter, it was a case of natural gas prices being much better than last year, but still not at the level that we would like to see them at. I guess maybe we always want to see them higher. But I think a big reason for that is around the LNG.

Speaker #2: We've had lots of questions, so thank you very much. A lot of the people that might be listening get our quarterly update that I do, and that's stimulated a bunch of different questions or kind of more around the macro on natural gas and what's happening, and we're happy to address those.

Speaker #2: So, I think we'll get to those pretty quick. I think, just as a summary on the quarter—it was a case of natural gas prices being much better than last year, but still not at the level that we would like to see them at.

Speaker #2: I guess maybe we always want to see them higher, but I think a big reason for that is around the LNG. We've had LNG Canada on now for a year, but it's not been a consistent draw on the system.

Phil Hodge: I know we have had LNG Canada on now for a year, but it has not been a consistent draw on the system, and that was problematic in July and August, which is when storage levels started to rise again because the LNG Canada phase one was not at its full capacity. We are starting to see indications again that it is heading back to full capacity like it was in June when it set export records for Canada for LNG. So ideally, you are wanting to see a tanker leaving every couple of days out of LNG Canada phase one, and that has not been the case for the last six or seven weeks.

Speaker #2: And that's been—that was problematic in July and August, which is when storage levels started to rise again because LNG Canada Phase One wasn't at its full capacity.

Speaker #2: We're starting to see indications again that it's heading back to full capacity, like it was in June when it set export records for Canada for LNG.

Speaker #2: So ideally, you're wanting to see the tanker leaving every couple of days out of LNG Canada Phase One, and that hasn't been the case for the last six or seven weeks.

Speaker #2: But the two things we watch pretty closely are, we watch the draws coming out of the Willow Valley and the Sunset Creek. I don't want to get too technical, but for those of you who are interested, just send me an email afterwards and I'll send you the link.

Phil Hodge: But the two things we watch pretty closely is we watch the draws coming out of the Willow Valley and the Sunset Creek. I do not want to get too technical, but for those of you who are interested, just send me an email afterwards and I will send you the link. TC Energy has got a public website availability that you could actually see when Willow Valley is drawing. What that means is if Willow Valley has got gas flowing through it, then that means that they are drawing off the NOVA system, and therefore, natural gas is going to Kitimat, which is where the site for LNG Canada is. That is not always the case.

Phil Hodge: The two things we watch pretty closely is we watch the draws coming out of the Willow Valley and the Sunset Creek. I do not want to get too technical, but for those of you who are interested, just send me an email afterwards and I will send you the link. TC Energy has got a public website availability that you could actually see when Willow Valley is drawing. What that means is if Willow Valley has got gas flowing through it, then that means that they are drawing off the NOVA system, and therefore, natural gas is going to Kitimat, which is where the site for LNG Canada is. That is not always the case.

Speaker #2: The TC Energy has got a public website availability that you can actually see when Willow Valley is drawing. What that means is if Willow Valley has got gas flowing through it, then that means that they're drawing off the NOVA system.

Speaker #2: And therefore, natural gas is going to hit them at— which is where the site for LNG Canada is. That's not always the case. That's when it's at lower than full capacity or even lower than mid-capacity.

Phil Hodge: There's when it's at lower than full capacity or even lower than mid capacity, so if it's under 1 BCF a day of exports, they tend to just be using gas directly from the producers that own LNG Canada, and therefore not drawing gas off the system. We really watch that closely, because as they ramp up their capacity, they then start to draw off the system, and then that impacts the rest of the entire natural gas infrastructure because you're now pulling gas off that otherwise would be going into a crowded system and a crowded storage system. You can really see that if you look at the storage for the last summer, you really saw it in June, because in June, LNG Canada was at pretty much full capacity. So they were about 1.8 BCF a day, was what they were exporting.

Speaker #2: So if it's under a Bcf a day of exports, they tend to just be using gas directly from the producers that own LNG Canada, and therefore not drawing gas off the system.

Speaker #2: So we really watch that closely because as they ramp up their capacity, they then start to draw off the system. And then that impacts the rest of the entire natural gas infrastructure, because you're now pulling gas off that otherwise would be going into a crowded system and a crowded storage system.

Speaker #2: So you can really see that if you look at the storage for last summer, you really saw it in June. Because in June, LNG Canada was at pretty much full capacity.

Speaker #2: So they were almost, they were like, well, 1.8 Bcf a day was what they were exporting. And you saw that storage then started to drop.

Phil Hodge: And you saw that storage then started to drop. As longtime followers of the natural gas landscape know, storage is kind of the scoreboard as to what's happening between supply and demand. You do not want to see storage at its peak in the summer months, because then there's a risk that there'll be nowhere to put gas storage in the shoulder season, which is typically in that August to October period, which we're now into. Right now, it doesn't look like we're going to have a full storage, which is good. LNG Canada is now, as of in the last couple of days, Willow Valley started to show life again of gas pulling off, and so that's a good thing. So it's positive, which is why gas prices are well over CAD 1 higher at MCF in Western Canada than they were this time last year.

Speaker #2: And as you long-time followers of the natural gas landscape know, storage is kind of the scoreboard as to what's happening between supply and demand.

Speaker #2: And so you do not want to see storage at its peak in the summer months because then there's a risk that there'll be nowhere to put gas storage in the shoulder season, which is typically kind of in that August to October period, which we're now into.

Speaker #2: It does. Right now, it doesn't look like we're going to have full storage, which is good. LNG Canada is now, as of the last couple of days, Willow Valley started to show life again of gas pulling off.

Speaker #2: And so that's a good thing. So it's positive, which is why gas prices are well over a dollar higher per MCF in Western Canada than they were this time last year.

Speaker #2: So we're optimistic that things are turning the corner on that. As I've mentioned before in these webcasts and in interviews, that's 1.8 BCF a day up to 2 BCF a day.

Phil Hodge: We're optimistic that things are turning the corner on that. That's, as I've mentioned before in these webcasts and in interviews, that 1.8 BCF a day up to 2 BCF a day, that's a big, big number when our entire country only produces 19 BCF a day. We're talking about 10% of all of our production coming on or off on demand. That's going to make a material swing. That's something we're watching pretty closely. We had some questions about that. One of the things we had, another question was kind of just around our CapEx, because we just announced a CapEx increase. This is something that shouldn't be a surprise to our shareholders or people who've been following us.

Speaker #2: That's a big, big number when our entire country only produces 19 Bcf a day. So we're talking about 10% of all of our production coming on or off, on demand.

Speaker #2: That's going to make a material swing, so that's something we're watching pretty closely. We had some questions about that. One of the things we had another question on was just around our capex.

Speaker #2: Because we just announced a capex increase, this is something that shouldn't be a surprise to our shareholders or people that have been following us.

Speaker #2: With the Glockenite inventory that we picked up in the December '23 acquisition, we've been wanting to get after those well locations ever since we've owned those assets.

Phil Hodge: The Glauconite inventory that we picked up in the December 2023 acquisition, we've been wanting to get after those well locations ever since we've owned those assets, and that's been now two years. Prices were weak, and therefore, prices are weak. We're very highly correlated to AECO pricing, and therefore, our cash flow weakened with the lower AECO prices. We managed to drill the one well earlier this year. These wells are typically between CAD 8 million and CAD 9 million all in when you drill and you complete and you tie them in. We've got that one well, and I'll turn it over to Terry to talk about how it's doing. But we wanted to get another well done this fall. Luckily, our cash flow has improved this summer. As we talked about, AECO's been a little bit stronger.

Speaker #2: And that's been now two years. Now, prices were weak, and therefore prices are weak. We're very highly correlated to ACO pricing, and therefore our cash flow weakened with the lower ACO prices.

Speaker #2: We got we managed to drill the one well earlier this year. These wells are typically between 8 and 9 million dollars all in when you drill and you complete and you tie them in.

Speaker #2: And so we've got that one well, and I'll turn it over to Terry to talk about how it's doing. But we wanted to get another well done this fall, and luckily our cash flow has improved this summer, as we talked about.

Speaker #2: ACO has been a little bit stronger. WTI has definitely been stronger. With the Middle East crisis and war situation, we've seen that WTI rise, and that's had a big impact on us.

Phil Hodge: WTI's definitely been stronger with the Mid East crisis and war situation. We've seen WTI rise, and that's had a big impact on us. I know we're definitely thought of as a natural gas producer, as we should be, since about 80% of our production is natural gas. But in the last quarter, more than 50% of our revenue actually came from liquids. And a big part of that was the 423 well from the Glauconite. Maybe I'll pass it over to Terry to talk a little bit about the well results to date.

Speaker #2: I know we're definitely thought of as a natural gas producer, as we should be, since about 80% of our production is natural gas. But in the last quarter, more than 50% of our revenue actually came from liquids.

Speaker #2: And a big part of that was the 4-23 well from the Glock. So with that, I'll pass it over to Terry to talk a little bit about the well results today.

Speaker #3: Sure. Thanks, Phil. Appreciate it. Yeah, the 4-23 well came on in the middle of February, was cleaning up sort of towards the end of February.

Terry McNeill: Sure. Thanks, Phil. Appreciate it. Yeah, the 423 well came on in the middle of February. Was cleaning up sort of towards the end of February. It's been on pretty well continuously from March until right today, despite some third-party maintenance going on in the quarter. But we've had it on almost 100% of the time. From a financial perspective, from March until June, so over that four-month period, those are the latest financials we have, it's averaged 1,100 BOE a day. And it's pretty well flat month to month, and it's performing very, very well. It's in accordance with our type curve. It exceeds our engineering type curve. And I guess more importantly, it's 50% gas, 50% liquid. So the liquid exposure makes a considerable difference to Pine Cliff. And the volumes do too. It's pretty well 5% of our corporate production. So it's a good well. We're excited.

Speaker #3: It's been on pretty well continuously from March until right today. Despite some third-party maintenance going on in the quarter, but we've had it on almost 100% of the time.

Speaker #3: From a financial perspective, from March until June, so over that four-month period, those are the latest financial reports—that's the financials we have. It's averaged 1,100 BOE a day.

Speaker #3: And it's pretty well flat month to month, and it's performing very, very well. It's in accordance with our type curve and actually exceeds our engineering type curve.

Speaker #3: And I guess more importantly, it's 50% gas, 50% liquids. So the liquids exposure makes a considerable difference to Pine Cliff. And the volumes do, too.

Speaker #3: I mean, it's pretty well 5% of our corporate production. So it's a good well. We're excited; it's performing well, and we'd like to do more.

Terry McNeill: It's performing well. And we'd like to do more.

Speaker #2: Yeah. And that ties in that's a good segue, Terry. . Thanks. The we've got several questions here on kind of what does this what does our increased capex mean going forward?

Phil Hodge: Yeah, and that ties. That's a good segue, Terry. Thanks. We've got several questions here on kind of what does our increased CapEx mean going forward? And that's a very legitimate question, because our goal would be to continue to exploit the Glauconite well inventory, and frankly, our Pekisko well inventory as well. Let's not forget that we've got some really good drill locations in Pekisko. The Glauconite is about over 50% of that production that comes on is liquids. And so that is why the economics go around very strongly. And I would direct you to our presentation on our website at www.pinecliffenergy.com. You'll see kind of the economics of the wells and both from an internal rate of return and also from a payback standpoint.

Speaker #2: And that's a very legitimate question because we've got our goal would be to continue to exploit the Glockenite well inventory. And frankly, our Pakisko well inventory as well.

Speaker #2: Let's not forget that we've got some really good drill locations in Pakisko. The Glock is about over 50% of that production that comes on is liquids.

Speaker #2: And so that is why the economics score around very strongly. And you could feel it. I would direct you to our presentation on our website at www.pinecliffenergy.com.

Speaker #2: Then you'll see kind of the economics of the wells, both from an internal rate of return and also from a payback standpoint. I mean, at these prices, even with a weaker ACO price, and with WTI prices being in and around that $75 to $80 range, you've kind of got the NPV— in other words, the net present value— of each one of those well locations is kind of in that $8 to $10 million range.

Phil Hodge: At these prices, even with a weaker AECO price, with WTI prices being in and around that $75, $80 range, you've kind of got the NPV. In other words, the net present value of each one of those well locations is kind of that CAD 8 to 10 million range. We've got 37 net locations to get at. We're talking about CAD 300 to CAD 350 million of inventory that's just sitting there. This isn't high-risk inventory. This is inventory that's been very proven by a lot of well control in the area, and it's a very active area. It's definitely something that we want to get to a pace of development where we're drilling at least kind of two to four wells a year.

Speaker #2: And we've got 37 net locations to get at, so we're talking about $300 to $350 million of inventory that's just sitting there. And this isn't high-risk inventory.

Speaker #2: This is inventory that's been very proven by a lot of well control in the area. It's a very active area. So it's definitely something that we want to get to a pace of development where we're drilling at least kind of two to four wells a year.

Speaker #2: And it could be if in the proper pricing environment, maybe that gets accelerated even further. Or we throw in some Pakisko wells at the same time.

Phil Hodge: It could be, if in the proper pricing environment, maybe that gets accelerated even further or we throw in some Pekisko wells at the same time. At this level, we're not interested in issuing equity out at the current stock prices. We think things are going to get better on the AECO pricing for all the various reasons I set forth in the email that many of you would have got. We're looking to increase that pace of development. These wells pay out, depending on the commodity price, kind of in between that 12 and 15-month period. They're very quick paybacks, but they continue to pay. As Terry mentioned, the 423 well has been surprisingly resilient. It will show decline at some point, but it hasn't yet, even though it's been online for getting close to half a year.

Speaker #2: So it's we don't at this level, we're not interested in issuing equity out at the current stock prices. We think things are going to get better on the ACO pricing for the all the various reasons I set forth in the email that many of you would have got.

Speaker #2: So we're looking to increase that pace of development. These wells pay out, depending on the commodity price, in between that 12- and 15-month period.

Speaker #2: So they're very quick paybacks, but they continue to pay, as Terry mentioned. The 4-23 well has been surprisingly resilient. It will show decline at some point, but it hasn't yet.

Speaker #2: Even though it's been online for getting close to half a year. And then our 1/27, well, you may remember, was the well that we had when we first did the acquisition.

Phil Hodge: Our 127 well, you may remember, was the well that we had when we first did the acquisition. We didn't drill it, but it came with the acquisition, but it just had come online. It's now in a stage of paying itself again. It paid itself out for a second time. That's the attractiveness of these locations, and why we want to get after those. We got to do that prudently. We're not going to ramp up our debt to do it. We have to do this within our cash flow, and ideally, we'd like to probably even drill the second well this fall along with this Glauconite well. If prices were to swing in our favor, or if we were to do a transaction with We've had a lot of interest from people wanting to farm in on this area.

Speaker #2: We didn't drill it, but it came with the acquisition. It had just come online. It's now in a stage of paying itself again, like another—it paid itself out.

Speaker #2: It's now for the second time.

Speaker #3: So then that's the attractiveness of these locations, and why we want to get after those. But we have to do that prudently. We're not going to ramp up our debt to do it.

Speaker #3: We're not going to—we have to do this within our cash flow. And ideally, we'd probably like to even drill the second well this fall, along with this Glock well.

Speaker #3: And if prices were to swing in our favor, or if we were to do a transaction with— we've had a lot of interest from people wanting to farm in on this area. We're kind of reluctant to do that because we probably like the ownership position that we've established.

Phil Hodge: We're kind of reluctant to do that because we really like the ownership position that we've established. These are all things we look at all the time. There's different ways to finance, and have kind of an accelerated drill program, and we've considered, I think, just about every one of them. Initially, we got enough cash flow. The board of directors approved us drilling another well this fall. Our goal would be to drill several, again, that two to four range next year. If prices are stronger, then maybe we look at doing more. It is exciting because this is an area that really does deserve to have capital allocated towards it. You've heard us speak about capital allocation before.

Speaker #3: But these are all things we look at all the time. There are different ways to finance an accelerated drill program, and we've considered, I think, just about every one of them.

Speaker #3: So, initially, we got enough cash flow. The Board of Directors approved us drilling another well this fall. Our goal would be to drill several again, in that two to four range, next year.

Speaker #3: If prices are stronger, then maybe we look at doing more. So it is exciting, because this is an area that really does deserve to have capital allocated towards it.

Speaker #3: And then you've heard us speak about capital allocation before. I mean, we're very cognizant of the fact that our model lends itself to a free cash flow in rising commodity prices, especially on gas, but obviously also on oil.

Phil Hodge: We're very cognizant of the fact that our model lends itself to a free cash flow in rising commodity prices, especially on gas, but obviously also on oil. Having a low-cost OpEx, having low G&A, having the low decline rate, all of those things help you generate more free cash flow. In a rising commodity environment, we've got that cash flow we can deploy as we see fit. The dividend, we've kept the dividend going through this entire period. The CapEx, I think right now it makes more sense to allocate capital towards the drill program, and so that's what we've done for the remainder of the year.

Speaker #3: And so having a low-cost opex, having low G&A, having the low decline rate, all of those things help you generate more free cash flow.

Speaker #3: And so, in a rising commodity environment, we've got that cash flow we can deploy as we see fit. Now, the dividend— we've kept the dividend going through this entire period.

Speaker #3: We will be capex, I think, right now, it makes more sense to allocate capital towards the drill program. And so that's what we've done in the remainder of the year.

Speaker #3: One of the other questions we've got was around kind of the one of the concerns out there, I think, for natural gas producers is the impact of the El Nino effect, which is a weather pattern that is projected to have a warmer winter for this winter sorry, a warmer temperatures for this winter.

Phil Hodge: One of the other questions we've got was around one of the concerns out there, I think, for natural gas producers is the impact of the El Niño effect, which is a weather pattern that is projected to have warmer temperatures for this winter. Maybe I'll pass it over to Chris to chat about our hedging program.

Speaker #3: Maybe I'll pass it over to Chris to chat about our hedging program.

Speaker #4: Yeah, thanks, Phil. So, we continue to actively manage our hedge book with the view of reducing volatility in our price realizations. And I would say, as highlighted in the press release, I think you saw continued evidence of that in our Q2 results.

Kris Zack: Yeah. Thanks, Bill. We continue to actively manage our hedge book with the view of reducing volatility in our price realizations. I would say, as highlighted in the press release, I think you saw continued evidence of that in our Q2 results, noting that our hedge and diversification strategy delivered a realized gas price of CAD 2.38 per MCF in Q2. That was a 47% premium to AECO 5A price of CAD 1.62. We're pretty well hedged for the balance of the year. We're about 41% for the balance of 2026 at 3.16, which is well above the market, and so provides good cash flow support to the operations. While weather's hard to predict, it's certainly something that's considered in our thought process when we look and we think about our hedge program.

Kristopher Zack: Yeah. Thanks, Bill. We continue to actively manage our hedge book with the view of reducing volatility in our price realizations. I would say, as highlighted in the press release, I think you saw continued evidence of that in our Q2 results, noting that our hedge and diversification strategy delivered a realized gas price of CAD 2.38 per MCF in Q2. That was a 47% premium to AECO 5A price of CAD 1.62. We're pretty well hedged for the balance of the year. We're about 41% for the balance of 2026 at 3.16, which is well above the market, and so provides good cash flow support to the operations. While weather's hard to predict, it's certainly something that's considered in our thought process when we look and we think about our hedge program.

Speaker #4: Noting that our hedge and diversification strategy delivered a realized gas price of $2.38 per Mcf in Q2. That was a 47% premium to the AECO 5A price of $1.62.

Speaker #4: And we're pretty well hedged for the balance of the year. We're about 41% hedged for the balance of 2026 at $3.16, which is well above the market.

Speaker #4: And so it provides good cash flow support to our operations. While weather is hard to predict, it's certainly something that's considered in our thought process when we look at and think about our hedge program.

Speaker #4: If you look at Q4 through Q1, our gas, our average hedge is about 36% of our production, and around $3.10. So again, we've got a very good start on the winter, but we'll continue to potentially look to add more hedges where it makes sense going forward.

Kris Zack: If you look at Q4 through Q1, our average hedge is about 36% of our production at around 3.10. Again, we've got a very good start on the winter, but we'll continue to potentially look to add more hedges where it makes sense on the go-forward.

Kristopher Zack: If you look at Q4 through Q1, our average hedge is about 36% of our production at around 3.10. Again, we've got a very good start on the winter, but we'll continue to potentially look to add more hedges where it makes sense on the go-forward.

Speaker #3: Thanks, Chris. Another question we had was around the kind of the makeup of these Glock wells from a liquids perspective. And one of the questions I got last night was how much wetter are these?

Phil Hodge: Thanks, Chris. Another question we had was around the makeup of these Glauconite wells from a liquids perspective. One of the questions I got last night was, how much wetter are these? In other words, what is the NGL component of the wells? Maybe I will flip that back over to Terry to discuss.

Speaker #3: In other words, what is the NGL's component of the wells? Maybe I'll flip that back over to Terry to discuss.

Speaker #2: Sure, thanks. With regards to the wetness of a location, I mean, it will vary from location to location. It gets a little bit drier as you go west.

Terry McNeill: Sure, thanks. With regards to the wetness of a location, it will vary from location to location. It gets a little bit drier as you go west from east. Our concentrated land position, we are still trying to vet it out a little bit, but I do not think it is going to change appreciably across our land base. I think we will be fairly consistent on liquid production, on our future wells as we are in our existing wells. From a condensate versus NGL makeup, initially, the wells are about 20% to 25% condensate and NGL on the total BOE, and that will taper down over time. The condensate value will come down over time, but initially, of the 1,100, we are about 20% to 25% condensate. It is condensate, not oil.

Speaker #2: From east, so with our concentrated land position—we're still trying to vet it out a little bit—but I don't think it's going to change appreciably across our land base.

Speaker #2: So I think we'll be fairly consistent on liquid production on our future wells as we are in our existing well. From a condensate versus NGL makeup, initially, the wells are about 20% to 25% condensate and NGL on the total BOE.

Speaker #2: And that'll taper down over time, so the condensate value will come down over time. But initially, it'll be 1,100. We're about 20 to 25% condensate.

Speaker #2: And it is condensate, not oil.

Speaker #3: Thanks, Terry. I think those who have been following our story for some time will recognize the fact that, as these wells come on, each time they come on, it has an impact on, obviously, our liquids.

Phil Hodge: Thanks, Terry. I think those who have been following our story for some time will recognize the fact that as these wells come on, each time they come on, it has an impact on obviously our liquids. We have gone from, at one point, Pine Cliff was 96% natural gas weighted. With the acquisitions that we have done over the last few years, starting in 2019, we did each of our, the Alphabo, Apogee, Certus acquisitions, all kind of have added more liquids exposure. Clearly this drilling inventory is definitely liquids exposure, with the majority of it. Because of where AECO is at, it actually is even from a revenue and from a cash flow standpoint, it is even more than just the percentage of the volume. Punches well above its weight because of where WTI is these days.

Speaker #3: And so, we've gone from, at one point, Pine Cliff was 96% natural gas weighted. And with the acquisitions that we've done over the last few years—starting in 2019, we did each of our Alpha Bow, Apogee, and Certus acquisitions—all have kind of added more liquids exposure.

Speaker #3: And clearly, this drilling inventory is definitely liquid exposure, with the majority of it. And because of where ACO’s at, it actually is, even from a revenue and from a cash flow standpoint, it's even more than just the percentage of the volume.

Speaker #3: Punch is well above its weight because of where WTI is these days. And for some of you who may not be aware, WTI is very highly correlated to the condensate price.

Phil Hodge: As for some of you who may not be aware, WTI is very highly correlated to the condensate price that Terry mentioned. Quite often, condensate is actually even higher than WTI. When you have got the lower Canadian dollar like we do right now at CAD 1.39, that even has a greater impact on kind of what the Canadian dollar impact onto our balance sheet is. A few more questions here. One of the questions was asking us. I will just read it. It says that we have done 16 transactions in 14 years, and we have not issued equity in nine years. That is accurate. With the Shell-ARC deal, LNG Canada Phase 2 momentum and CAD 22 billion of infrastructure announced in Q2, is the M&A environment starting to look interesting again, or does the current strip suggest sellers are holding off?

Speaker #3: That Terry mentioned. So quite often, condensate is actually even higher than WTI. When you've got the lower Canadian dollar, like we do right now at $1.39, that even has a greater impact on what the Canadian dollar impact onto our balance sheet is.

Speaker #3: A few more questions here. One of the questions was, and I'll just read it: It says that we've done 16 transactions in 14 years, and we haven't issued equity in 9 years.

Speaker #3: That's accurate. With the Shell Arc Steel LNG Canophase 2 momentum and $22 billion of infrastructure announced in Q2, is the M&A environment starting to look interesting again, or does the current strip suggest sellers are holding off?

Speaker #3: I think my own view is we're going to continue to see consolidation. And so the reference there is for those who aren't watching really closely: Shell, which is obviously one of the largest oil and gas producers in the world, just recently announced an acquisition of ARC Resources, which is a West Canada—it's a $22 billion company.

Phil Hodge: I think my own view is we are going to continue to see consolidation. The reference there is, for those who are not watching really closely, Shell, which is obviously one of the largest oil and gas producers in the world, just recently announced an acquisition of ARC Resources, which was Canada's. It was a CAD 22 billion company, very heavily weighted towards natural gas and to condensate. I personally took that as a positive signal that foreign investors that can put capital anywhere they want in the world were making significant investments into Western Canada and saw this environment as finally an environment that they could come back and deploy capital to. That has not been the case for 10 years. We saw a lot of US and international groups leaving the country from an investment standpoint.

Speaker #3: Very heavily weighted towards natural gas and to condensate. I personally took that as a positive signal that foreign investors that can put capital anywhere they want in the world were making significant investments into Western Canada.

Speaker #3: And saw this environment as finally an environment that they could come back and deploy capital to. And that's not been the case for 10 years.

Speaker #3: We saw a lot of US and international groups leaving the country from an investment standpoint. Now we're seeing a lot more interest of coming back to Canada.

Phil Hodge: Now we are seeing a lot more interest of coming back to Canada, and I think that goes as a testament to the governments, both at the federal level and at the provincial level, welcoming back that foreign direct investment. We really, as a country, we really do need that foreign direct investment. We cannot get the projects that we are talking about building, the pipelines across the country, the LNG facilities. All of these things need a tremendous amount of capital, frankly, more capital than our country has. So it is nice to see the foreign direct investment returning, and I think that one project, bringing it back down to a level for the juniors and for the intermediates in the space. The reality is that it has changed a lot in the last. I have been at Pine Cliff now for 15 years.

Speaker #3: And I think that goes to the testament to the governments, both at the federal level and at the provincial level, welcoming back that foreign direct investment.

Speaker #3: And we really, as a country, we really do need that foreign direct investment. We can't get the projects that we're talking about—building the pipelines across the country, the LNG facilities—all of these things need a tremendous amount of capital.

Speaker #3: Frankly, more capital than our country has. So it's nice to see the foreign direct investment returning. And I think that one project is bringing it back down to a more level field for the juniors and for the intermediates in the space.

Speaker #3: The reality is that it's changed a lot in the last—I've been at Pine Cliff now for 15 years. There was a lot more junior capital, energy pools available.

Phil Hodge: There was a lot more junior capital energy pools available. When I first started, I remember you would go to different cities to do marketing and you would have a tremendous amount of interest, and you would have days of meetings with different groups. The reality is that that is not the case anymore. So you have got a smaller number of pure energy investors. You have a lot more generalist investors. They, I believe, will come back to the natural gas and to the energy space when they see the return of capital being deployed and the free cash flow that is being generated. That has already started. I think that everybody's balance sheets are in much better shape. There is a lot less companies in the sector, and I do not think that trend is going to stop.

Speaker #3: When I first started, I remember you’d go to different cities to do marketing, and you would have a tremendous amount of interest, and you would have days of meetings with different groups.

Speaker #3: The reality is that that is not the case anymore. So, you've got a smaller number of pure energy investors, and you have a lot more generalist investors.

Speaker #3: And they, I believe, will come back to the natural gas and to the energy space when they see the return of capital being deployed and the free cash flow that's being generated.

Speaker #3: And that's already started. I think that everybody's balance sheets are in much better shape. There's a lot fewer companies in the sector.

Speaker #3: And I don't think that trend is going to stop. Part of it is as a junior company — and we're 20,000 BOE per day — that, 10 years ago, would have been considered a decent sized intermediate.

Phil Hodge: Part of it is, as a junior company, and we are 20,000 BOE a day. 10 years ago, that would have been considered a decent-sized intermediate. Now we are the junior, smaller compared to the rest of the market. There are companies obviously smaller than us, but there are not a lot in the public domain that are smaller. Your regulatory costs, your just cost of doing business has gone up. That is just the reality. So we continually look for assets that make sense or acquisitions or mergers that would make sense to us as shareholders. That has been the constant theme ever since we have started Pine Cliff, is it is all about how do we make the shares more valuable? If a transaction has the potential to make our shares more valuable, then we are definitely interested in it.

Speaker #3: Now, where would we be? Junior—a smaller company compared to the rest of the market. There are companies obviously smaller than us, but there aren’t a lot in the public domain that are smaller.

Speaker #3: And your regulatory costs, your just cost of doing business, has gone up. That's just the reality. And so we continually look for assets that make sense, or acquisitions or mergers that would make sense to us as shareholders.

Speaker #3: And that's—I mean, that's been the constant theme ever since we've started Pine Cliff: it's all about what can—how do we make the shares more valuable?

Speaker #3: And if a transaction has the potential to make that make our shares more valuable, then we're definitely interested in it. We haven't done a transaction of a material transaction now in a couple of years, but that's not from lack of looking.

Phil Hodge: We haven't done a material transaction now in a couple of years, but that's not from lack of looking. I think when you get this volatility in commodity prices, it does make transactions more difficult. Like I said, we've done a lot of transactions and our team has been involved at different places that they've worked and a tremendous amount of transactions. You almost need a little bit of stability in commodity prices to help get transactions across the board, because it's really difficult right now. For instance, on the oil price, when we've had this huge, fairly big, significant run-up in oil prices, how do you value the assets? Do you use today's price of $83, or do you use next year's price where it's under 70? There's that spread that needs to be negotiated. Natural gas is a bit more consistent.

Speaker #3: I think when you get this volatility in commodity prices, it does make transactions more difficult. Like I said, we've done a lot of transactions, and our team has been involved in them at different places that they've worked.

Speaker #3: And a tremendous amount of transactions. You almost need a little bit of stability in commodity prices to help get transactions across the board, because it's really difficult right now.

Speaker #3: For instance, on the oil price, when we've had this huge, fairly big, significant run-up in oil prices, what do you use for—how do you value the assets? Do you use today's price of $83, or do you use next year's price, where it's under $70?

Speaker #3: And that's—so there's that spread that needs to be kind of negotiated. Natural gas is a bit more consistent. I mean, I think on Western Canadian gas, it's a contango.

Phil Hodge: I think on Western Canadian Gas, it's contango. In other words, prices are higher in the future. We think that strips probably being conservative. We think that gas prices are going to be probably stronger than what current strip is at. But that's our view and we hope to be able to add more assets. In the meantime, we'll grow organically. When we've got the kind of inventory that we are fortunate enough to have, that's a great place to allocate capital to. Hopefully that answers that. Did get a question about data centers in a couple of different capacities. One is an update on where we are and then just generally what's the impact that it could have on Western Canada. We watch this very closely and we've had a lot of conversations with a lot of different groups, and it's not just data centers.

Speaker #3: In other words, prices are higher in the future. We think that strip is probably being conservative. We think that gas prices are going to be probably stronger than what the current strip is at.

Speaker #3: But that's our view, and we hope to be able to add more assets. In the meantime, we'll grow organically. When we've got the kind of inventory that we are fortunate enough to have, that's a great place to allocate capital to.

Speaker #3: So hopefully that answers that. I did get a question about data centers in a couple of different capacities. One is an update on where we are, and then just generally, what's the impact that it could have on Western Canada.

Speaker #3: We've watched this very closely, and we've had a lot of conversations with a lot of different groups. And it's not just data centers.

Speaker #3: It also includes the cryptocurrency mining space because that's still very active and still what we kind of think of, simply as turning gas into power.

Phil Hodge: It also includes the cryptocurrency mining space because that's still very active and still. We kind of think of it simply as turning gas into power. How they use that power, it can be used for different applications. What trend we are seeing, there's definitely, and I mentioned this in my quarterly email, is we're seeing a real push to go to distributed generation. What I mean by that is where these power generation sites are not connected to the grid, and they're going to be set up very close to where their energy source is. In the case of Alberta, that's going to be natural gas. There's the odd case where these data centers are being set up near nuclear, or around the globe, where they're quite often attached to coal.

Speaker #3: And how they use that power—it can be used for different applications. What trend we are seeing, and I mentioned this in my quarterly email, is we're seeing a real push to go to distributed generation.

Speaker #3: And what I mean by that is, where these power generation sites are not connected to the grid, and they're going to be set up very close to where their energy source is.

Speaker #3: In the case of Alberta, that's going to be natural gas. There's the odd case where these data centers are being set up near nuclear, or, in areas around the globe, they're quite often attached to coal.

Speaker #3: But in North America, the reality is that every time we add more demand for electricity, we're increasing the demand for natural gas.

Phil Hodge: In North America, the reality is that every time that we add more demand for electricity, we're increasing the demand for natural gas. There's a statistic that I often use when I talk to people in the US, and they don't realize that 43% of all of their electricity in the United States comes from natural gas. Second place is nuclear and coal, each in around that 16% to 18% level. So it's pretty significant. This goes to the same argument around electric vehicles. If you're going to be a shift towards electric vehicles, which with this rise in WTI and oil pricing, that's become a topic again, is what's going to happen with all the electric vehicles. Again, that's great, but you're going to need more electricity, and so the power grid's going to come under pressure.

Speaker #3: That is statistic that I often use when we when I talk to people in the US is they and they don't realize that 43% of all of their electricity in the United States comes from natural gas.

Speaker #3: And second place is nuclear and coal, each at around that 16 to 18% level. So it's pretty significant. And this goes to the same argument around electric vehicles.

Speaker #3: If there's going to be a shift towards electric vehicles—which, with this rise in WTI and oil pricing, has become a topic again—the question is what's going to happen with all electric vehicles.

Speaker #3: Again, that's great, but you're going to need more electricity. And so the power grid is going to be going to come under pressure. And what we have seen in just about every jurisdiction is that almost nobody's got extra power.

Phil Hodge: What we have seen in just about every jurisdiction is that almost nobody has got extra power. The grids have been kind of maintained at a level for decades, and now you are seeing this power surge and electricity demand surge, and the grids are having to deal with it. That is where you are getting a lot of pushback from a lot of areas and jurisdictions around data centers because they are worried about their power bills going up. That is a legitimate concern. Which is, again, why there is a real trend towards people defining distributed power generation. There was a big announcement up in the Edmonton area. The biggest data center that will be built in Canada. So close to a gigawatt size. They are building right beside it a huge natural gas power facility.

Speaker #3: The grids have been kind of maintained at a level for decades, and now you're seeing this power surge and electricity demand surge, and the grids are having to deal with it.

Speaker #3: That's where you're getting a lot of pushback from a lot of areas and jurisdictions around data centers, because they're worried about their power bills going up.

Speaker #3: And that's a legitimate concern, which again, why there's a real trend towards people finding distributed power generation. And so there was a big announcement up in the Edmonton area the biggest data center that will be built in Canada close to a gigawatt size.

Speaker #3: But they're building right beside it a huge natural gas power facility. And so you see different projections as to how much natural gas demand might be impacted by the data centers.

Phil Hodge: You see different projections as to how much natural gas demand might be impacted by the data centers. I have seen numbers, kind of that 3 to 8 BCF a day. That is a North American number. Just to give everybody context, I mentioned the 19 BCF a day is what the natural gas supply is in Western Canada, essentially. It is about 107 right now, BCF a day in the US. There are the two big demand sources besides the power grid that is really the LNG, and then how many data centers are actually going to get built. These projects just take on an immense amount of power demand, and therefore, if they are going to try to stay away from the grid, they are going to need a lot more natural gas. It has the potential to be pretty significant.

Speaker #3: I've seen numbers like kind of in that 3 to 8 Bcf a day range. That's a North American number. Just to give everybody context, I mentioned that 19 Bcf a day is what the natural gas supply is in Western Canada.

Speaker #3: Canada essentially. It's about 107 right now BCF a day in the US. But there's the two big demand sources besides the power grid that is really the LNG and then what these how many data centers are actually going to get built.

Speaker #3: And these projections take on an immense amount of power demand. Therefore, if they're going to try to stay away from the grid, they're going to need a lot more natural gas.

Speaker #3: And so, that’s it—it has the potential to be pretty significant. Here in Alberta, I think it could be probably more like 1 to 2 Bcf a day.

Phil Hodge: Here in Alberta, I think it could be probably more like a 1 to 2 BCF a day, maybe as high as 3 BCF a day, depending on Alberta's government has come out and said that they want to attract CAD 100 billion of data center investment into the province. That is a big number. It is very real. We have multiple sites that we think would be very attractive to data center groups. We announced the one data center transaction. They continue to tell us that they are very close to getting financing. We are very hopeful that they will get the financing and that we can move forward with the permitting of that site. We also are talking to multiple groups about other sites and what we might be able to do. So it is not a tomorrow impact on natural gas prices in Western Canada.

Speaker #3: Maybe it's as high as 3 BCF a day, depending on—I mean, Alberta's government has come out and said that they want to attract $100 billion of data center investment into the province.

Speaker #3: That's a big number, and like I said, it is very real. We have multiple sites that we think would be very attractive to data center groups.

Speaker #3: We announced the one data center transaction. They continue to tell us that they're very close to getting financing. We are very hopeful that they'll get the financing and that we can move forward with the permitting.

Speaker #3: Of that site. But we also are talking to multiple groups about other sites and what we might be able to do. So it's kind of a—it is not a tomorrow impact on natural gas prices in Western Canada.

Speaker #3: I think we'll start to see the impact of it probably starting next year, with some of these projects that have already started to break ground and get built.

Phil Hodge: I think we will start to see the impact of it probably starting next year. Some of these projects have already started to break ground and get built. But I think you are really going to see it more in kind of 2028, 2029. Which is interesting, because that timeframe is the exact same time that you are going to start to see more LNG demand. One of the questions that we got here was, is the phase II of LNG Canada built into the AECO price? I would say no, I don't think it is. So phase II, for those of you who are not familiar with the project, LNG Canada is in Kitimat, BC. There are four trains today in phase I, and their plan is to do another four trains in phase II. Each phase is about 2 BCF a day of exports.

Speaker #3: But I think you're really going to see it more in kind of '28, '29. Which is interesting because that timeframe is the exact same time that you're going to start to see more LNG demand.

Speaker #3: One of the questions was that we got here was, was is the phase two of LNG Canada built into the ACO price? And I would say no, I don't think it is because so phase two for those of you who aren't familiar with the project, LNG Canada is in Kinamat, BC, they have four they have two trains that for there's four trains today in phase one and their plan is to do another four trains in phase two.

Speaker #3: Each phase is about 2 BCF a day of exports. So they've got Phase One, which started exporting on July 1st of last year, and it's been ramping up—quite sporadically—but in June it was at the highest we've ever seen it before.

Phil Hodge: Phase one started exporting on 1 July of last year, and it has been ramping up. It has been quite sporadic, but in June it was at the highest we have ever seen it before. Then, like I say, July and August, it fell off again. It looks like it is ramping back up for this fall, which is fantastic. The second phase, they have already started work on it, construction on adding compression to that pipeline facility. It is important to know that they do not need to build a new pipeline for phase 2. The pipeline that has been built, the Gateway Project, already has the capacity of about 5 BCF a day. They can add another LNG facility or another phase to that without having to do anything but add compression.

Speaker #3: And then, like I said, July and August it fell off again. And it looks like it's ramping back up for this fall, which is fantastic.

Speaker #3: The second phase, they've already started work on it—construction on the pipelines, or, sorry, on adding compression to that pipeline facility. It's important to know that they don't need to build a new pipeline for phase two.

Speaker #3: The pipeline that's been built, the Gateway Project, already has the capacity of about 5 Bcf a day. So, they can add another LNG facility or another train—or, sorry, another phase to that—without having to do anything but add compression.

Speaker #3: So even though they haven't announced that their Phase Two has gone to positive FID, which is final investment decision, the work has already started.

Phil Hodge: Even though they have not announced that their phase 2 has gone positive FID, which is Final Investment Decision, the work has already started. That is very positive. We expect that we will hear a positive final investment decision on that project this year. That is what the indication has been as we head into the back half of the year here. The Salisma project is another project that is expected to go positive final investment decision, and that is another 2 BCF a day. You will see in my email, the projects that are now being talked about would take Canada to over 7 BCF a day of exports in LNG by the end of the decade. 7 BCF a day, again, keep coming back to that same number, on 19 BCF a day is a tremendous amount, an incredible high percentage of our total production.

Speaker #3: So that's very positive. We expected that, and we're hearing positive indications about a final investment decision on that project this year. That's what the indication has been as we head into the back half of the year here.

Speaker #3: And then we also — the Solisma project is another project that is expected to go to positive final investment decision. And that's another 2 Bcf a day.

Speaker #3: And you'll see in my newsletter—or, sorry, my email—the projects that are now being talked about would take Canada to over 7 BCF a day of exports in LNG by the end of the decade.

Speaker #3: Seven BCF a day—again, we keep coming back to that same number. On 19 BCF a day, it's a tremendous amount—an incredibly high percentage of our total production.

Speaker #3: So, as you add more and more demand, you're going to need that supply. And it's not that we don't have the gas in the ground.

Phil Hodge: As you add more and more demand, you are going to need that supply. It is not that we do not have the gas in the ground. The question is at what price do we bring the gas out of the ground? Our view is that it is setting up quite positively for natural gas in the next few years as all these major projects come on, in addition to the data center demand that is going to be coming on during that same timeframe. Hopefully that is a good update on that. Another question we had is what percentage of US LNG export is relative to their production? US LNG growth is really one of the greatest industrial stories of our time. In 2016, the United States exported zero LNG. Today, they are the world's largest LNG exporter. It has been an incredible growth.

Speaker #3: The question is, at what price do we bring the gas out of the ground? And so our view is that it's setting up quite positively for natural gas in the next few years, as all these major projects come on.

Speaker #3: In addition to the data center demand that's going to be coming on during that same time frame. So, hopefully that's a good update on that.

Speaker #3: Another question we had is on what percentage of U.S. LNG export is relative to their production? The U.S. LNG growth is really one of the greatest industrial stories of our time.

Speaker #3: I mean, in 2016, the United States exported zero LNG. Today, it's the world's largest LNG exporter. So it's been an incredible growth. And that number has been as high as 20 Bcf a day.

Phil Hodge: That number is around. They have been as high as 20 BCF a day. They have got some maintenance projects going on right now, and I think Freeport has had some operational issues. I think they are around today about 18 BCF a day of exports. Then, as I mentioned before, they are about 107 BCF a day of production. Now, keep in mind, though, not only do they have the LNG exports, which is in that 18 to 20 BCF a day, and that number is going to over 35 BCF a day. So almost double in the next five years. By the time we exit into 2030, because we are talking about that LNG being over 35 BCF a day. In addition, they export about 6 to 8 BCF a day to Mexico every day by pipeline, which is about the same number that they bring in from Canada.

Speaker #3: They've got some maintenance projects going on right now, and I think three ports had some operational issues. I think they're around today, about 18 Bcf a day of exports.

Speaker #3: And then, as I mentioned before, they're at about 107 Bcf a day of production. Now, keep in mind though, not only do they have the LNG exports, which are in that 18 to 20 Bcf a day range, but that number is going to over 35 Bcf a day.

Speaker #3: So, almost double in the next five years. So by the time we exit into 2030, they're talking about LNG being over 35 Bcf a day.

Phil Hodge: By the time we exit into 2030, because we are talking about that LNG being over 35 BCF a day. In addition, they export about 6 to 8 BCF a day to Mexico every day by pipeline, which is about the same number that they bring in from Canada.

Speaker #3: In addition, they export about 6 to 8 BCF a day to Mexico every day by pipeline, which is about the same amount that they bring in from Canada.

Speaker #3: So in Canada, at times, half of our production goes to the U.S. by pipeline. And we've—so it's an incredible amount of investment that's gone into that Gulf area, which is where the exports come out of.

Phil Hodge: In Canada, at times, half of our production goes to the US by pipeline. It is an incredible amount of investment that has gone into that Gulf area, which is where the exports come out of. The big advantage for Western Canada is that our shipping time to Asia, and Asia is the biggest importer of LNG in the world, and that includes Japan, China, Taiwan, and South Korea. We are about a 10-day shipping as opposed to 24 days out of the Gulf. Canada has got a really advantage for sending gas off the West Coast, so much so that even Mexico, which is an importer of natural gas, is building LNG facilities to take advantage of that same shipping advantage or timing being off the West Coast. It is an exciting area.

Speaker #3: The big advantage for Western Canada is that our shipping time to Asia—and Asia is the biggest importer of LNG in the world. That includes Japan, China, Taiwan, and South Korea.

Speaker #3: We're about a 10-day shipping, as opposed to 24 days out of the Gulf. So, Canada's got a real advantage for sending gas off the West Coast.

Speaker #3: So much so that even Mexico, which is an importer of natural gas, is building LNG facilities to take advantage of that same shipping advantage or timing, being off the West Coast.

Speaker #3: So, it is—it's an exciting area. There's been incredible growth—one of the biggest growth areas, from an industrial standpoint, in any industry.

Phil Hodge: It has been incredible growth, one of the biggest growth areas from an industrial standpoint in any industry in North America, and it is not slowing down. It is picking up speed. You can see right now, there is no reason why that is going to slow down given the shortage of LNG and the high prices elsewhere in the world. We have talked about the North American prices. Today, AECO is like CAD 1.60, roughly. I would say the NYMEX, which is the US natural gas price, is a little under CAD 3. In Asia and in Europe, over CAD 20 an Mcf for the exact same molecules. That arbitrage, the only way that arbitrage gets closed is by more LNG facilities being built in North America to export gas.

Speaker #3: In North America—and it's not slowing down. I mean, it is picking up speed. And you can see right now, there's no reason why that's going to slow down, given the shortage of LNG and the high prices elsewhere in the world.

Speaker #3: We've talked about the North American prices. Today, ACO is around $1.60, roughly. I'd say the NYMEX, which is the US natural gas price, is a little under $3.

Speaker #3: In Asia and in Europe, it's over $20 per MCF for the exact same molecules. So that arbitrage—the only way that arbitrage gets closed is by more LNG facilities being built in North America to export gas.

Speaker #3: So again, we think that's a positive because we believe that what will happen is that the international prices will come down to a more sustainable level for them, which is good because you don't want them to go into alternatives.

Phil Hodge: Again, we think that is a positive because we believe that what will happen is that the international prices will come down to a more sustainable level for them, which is good because you do not want them going to alternatives. You want them to continue to use a clean source, natural gas, especially in Asian communities where if they are going to go to coal, the carbon emissions are substantially 30% higher. If that price comes down, so it makes their economies go around better. It also, at the same time, it should be pulling up our pricing. Therefore, the arbitrage price, you see difference usually between CAD 6 and CAD 8 is kind of the expected price of what it costs for liquefaction and transportation. We did have a question about carbon tax. Maybe I will pass that over to Terry.

Speaker #3: You want them to continue to use a clean source, natural gas—especially in the Asian communities, where if they're going to go to coal, the carbon emissions are substantially, about 30%, higher.

Speaker #3: And if that price comes down, it makes their economies go around better. Also, at the same time, it should be pulling up our pricing.

Speaker #3: And therefore, there's the arbitrage price you see. The difference, usually between six and eight dollars, is kind of the expected price of what it costs for liquefaction and transportation.

Speaker #3: We did have a question about the carbon tax. Maybe I'll pass that over to Terry.

Speaker #2: Sure. The question was the impact of carbon tax on Pine Cliff going forward. And the short answer is we don't expect any impact from carbon taxes, as we are classified as a small emitter.

Terry McNeill: Sure. The question was the impact of carbon tax on Pine Cliff Energy going forward. The short answer is we do not expect any impact on carbon taxes. We are classified as a small emitter, and under the current regulations, we are not subject to carbon tax going forward. As long as the feds do not reinstate federal fuel tax. At that time, we potentially would be impacted, but that is not anticipated at this point in time. Going forward, we have made no allowances for carbon tax as we are not taxable under that program right now.

Speaker #2: And under the current regulations, we are not subject to carbon tax going forward. So, as long as the feds don't reinstate the federal fuel tax, at that time, we potentially would be impacted.

Speaker #2: But that's not anticipated at this point in time. So, going forward, we've made no allowances for carbon tax, as we are not taxable under that program right now.

Speaker #1: Thanks, Terry. And thank you to everybody for all the great questions. We really appreciate that. It makes these webcasts a lot more interesting for us, and hopefully also for you, as opposed to just reading our press release.

Phil Hodge: Thanks, Terry. Thank you to everybody for all the great questions. We really appreciate that. It makes these webcasts a lot more interesting for us and hopefully also for you, as opposed to just reading our press release. You know you can reach us at any time, so if there is any further questions that you want answered, you want to talk to any one of us, just reach out. We are happy to chat with you. We continue to believe that we have positioned ourselves well going into this winter and into 2027. We are looking forward to drilling another Glauconite well. Until next quarter, thank you very much. Thanks for those of you that are shareholders. Thank you very much for your support. We very much appreciate it. Have a good day.

Speaker #1: You know you can reach us at any time. So, if there are any further questions that you want answered, or if you want to talk to any one of us, just reach out.

Speaker #1: We're happy to chat with you. We continue to believe that we've positioned ourselves well going into this winter and into 2027. We're looking forward to drilling another Gulf well.

Speaker #1: And so, until next quarter, thank you very much. Thanks to those of you who are shareholders. Thank you very much for your support. We very much appreciate it.