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spk02: Statements made by management during this call with respect to forecasts, estimates or other expectations regarding future events or which provide any information other than historical facts may constitute forward-looking statements within the meaning of the Private Securities Dictation Form Act of 1995. These forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors many of which the company is unable to predict or control that may cause the company's actual future results or performance to materially differ from any future results of performance expressed or implied by those statements. These risks and uncertainties include the risk factors disclosed by the company from time to time in its fillings with the SEC, including in the company's annual report on Form 10-K filed with the SEC on March 16, 2021. Furthermore, as we start this call, please also refer to the statement regarding forward-looking statements incorporated in the company's press release issued this morning, and please note that the contents of the company's conference call this morning is covered by those statements. During this conference call, management will make references to EBITDA, which is a non-GAAP financial measure. A reconciliation of the non-GAAP measure to this applicable GAAP measure can be found in the company's current earnings release a copy of which is located on the company's website, www.dawson3d.com. The call is scheduled for 30 minutes, and the company will not provide any guidance. I would now like to turn the call over to Stephen Jumper, Chairman, President, and CEO of Dawson Geophysical Company. Please go ahead, sir.
spk04: Well, thank you, Anya. Good morning, and welcome to Dawson Geophysical Company's first quarter 2021 earnings and operations call. As Anya said, my name is Steve Jumper, Chairman, President, and CEO of the company. Joining me on the call is Jim Bratta, Executive Vice President and Chief Financial Officer. Before we start the call, just a few things to cover. If you'd like to listen to a replay of today's call, it will be available via webcast by going to the Investor Relations section of the company's website at www.dawson3d.com. Information reported on this call speaks only of today, Thursday, May 13, 2021, and therefore you are advised that time-sensitive information may no longer be accurate as of the time of any replay listening. Turning to our preliminary first quarter ended March 31, 2021 financial results. For the first quarter ended March 31, 2021, the company reported revenues of $11.7 million, a decrease of approximately 70% compared to $39 million for the quarter ended March 31, 2020. For the first quarter of 21, the company reported a net loss of $5.2 million or $0.22 loss per share of common stock compared to net income of $1 million or $0.04 per share of common stock for the quarter ended March 31, 2020. The company reported negative EBITDA of $1.9 million for the quarter ended March 31, 2021, compared to EBITDA of $5.8 million for the quarter ended March 31, 2020. During the first quarter of 21, the company operated one seismic data acquisition crew in the United States with limited utilization and one crew in Canada. The near-term outlook for seismic data acquisition activity in the U.S. remains challenged, with its historically low levels of crew and bid activity. Based on currently available information, the company anticipates limited crew activity in the second quarter with up to one crew operating in the U.S. with periods of low utilization in the back half of 2021. Currently, the company does not have a crew deployed in the U.S. and the Canadian season concluded at the end of the first quarter. I will now turn controller to call over to Jim Bratta who will review the financial results. Then I will return for some final remarks and our outlook into the second quarter of 2021. Jim?
spk03: Thank you, Steve, and good morning. Revenues for the first quarter of 2021 were $11.7 million, a decrease of 70% compared to $39 million for the quarter ended March 31, 2020. As stated in our earnings release issued this morning, during the first quarter of 2021, The company operated one seismic data acquisition crew in the U.S. with limited utilization and one crew in Canada. Based on currently available information, the company anticipates limited crew activity in the second quarter with up to one crew operating in the U.S. with periods of low utilization in the back half of 2021. Cost of services in the first quarter of 2021 were $10.9 million. a decrease of 62% compared to 29 million in the same quarter of 2020. General and administrative expenses were 2.8 million in the first quarter of 2021, a decrease of 24% compared to 3.7 million in the first quarter of 2020. Depreciation and amortization expense in the first quarter of 2021 was 3.4 million. a decrease of 30% compared to $4.9 million in the same quarter of 2020. Net loss for the first quarter of 2021 was $5.2 million, or $0.22 loss per common share compared to net income of $1 million, or $0.04 per common share in the first quarter of 2020. EBITDA in the first quarter of 2021 was negative $1.9 million, compared to EBITDA 5.8 million in the same period of 2020. And EBITDA reconciliation was provided in our earnings release issued this morning. And now I'll highlight some balance sheet items. Our balance sheet continues to remain strong. As of March 31st, 2021, we had debt including obligations under financing leases of approximately 587,000. We had cash and short-term investments of 47 million. Our current ratio was 10.1 to 1. And working capital was approximately 49.7 million. And with that, I'll turn the call back to Steve for some comments on our operations. Well, thank you, Jim.
spk04: As we all know, since the onset of the COVID-19 pandemic over a year ago, The seismic data acquisition market, not just in the U.S., but worldwide, along with other oil field services, remain challenged, particularly in the U.S. and Canada. While there are encouraging signs of recovery in certain oil field services, such as drilling and completion services, current demand for seismic-related services remains at very low levels. In recent months, oil prices have improved to over $60 per barrel range, as oil demand has increased with states beginning to further open businesses, air travel increasing, and the rollout of the COVID-19 vaccines. The U.S. rig count currently at 448 is steadily improving, as is the number of hydraulic fracturing crews. Based on currently available information that we've stated, we anticipate seismic data acquisition activity in the lower 48 to reach a low in the second quarter and into the third quarter of 2021, with slight improvement anticipated later in 2021. As we have stated in prior earnings releases, demand for seismic data acquisition in recent cycles lags behind the recovery and drilling and completion activity as exploration and production companies initially deploy capital into such services and work through their inventory of drillable projects. The same is true on the front side of a downturn as drilling and completion services are scaled back while currently active seismic related projects continue as seen in 2020 where our activity levels remained relatively high through the second quarter and into the third quarter after the onset of the COVID-19 pandemic. The timing of a return to an increase in demand for seismic services in 2021 is further delayed due to the depth of the most recent downturn, slow recovery of capital budget increases as oil prices remained depressed into 21, a larger than typical post downturn inventory of drilling prospects, and a slower recovery of rig count to work through the inventory backlog. During the latter part of 2018 and continuing into the first half of 2020, We successfully acquired multiple high-density large channel count projects in certain areas of the Fermion Basin. These fully processed data sets first became available to the industry in late 19 and continued coming to the industry in 2021. Early results of these data sets indicate substantially improved subsurface image quality compared to prior seismic data sets, examples of which are just beginning to become public. The increases in data quality and imagery are currently being utilized for improved well planning, geosteering of long lateral well bores, geohazard identifications and avoidance, enhanced reservoir definition, and rock property description between well data samples and strategic placement of disposal well locations. As the industry begins to recognize and appreciate the value of these high-density, large-candle-shout surveys, We believe demand for such surveys will improve. The company's state-of-the-art equipment base allows us to deploy multiple large channel crews when demand does improve. In our continuing response to these difficult times, we have significantly limited capital budget spending, reduced fixed and variable operating expenses, implemented a comprehensive equipment program in preparation for a rapid response to increase activity levels. In addition, we continue our commitment to our robust health, safety, and environmental program, ongoing relationships, product quality, and key personnel. The company made no capital expenditures during the first quarter of 21. As stated in our December 31, 2020 earnings release, the company's board of directors has approved an initial capital budget of $1 million for 2021. Excuse me. The company's balance sheet, as Jim stated, remains strong with $47 million of cash, restricted cash, and short-term investments, and $49.7 million of working capital as of March 31, 2021. The company is nearly debt-free with notes payable and finance leases of $587,000 as of March 31, 2021. In conclusion, while today's conditions in the seismic data acquisition market remains challenged, and are likely to remain so in the coming months, we are encouraged by the overall improvement in both the economy and the oil field service sector. Improvement in drilling and completion activities help set the stage for a successful recovery in the seismic data acquisition sector. I thank our hardworking employees, valued customers, and trusted shareholders as we work our way through these difficult conditions toward better times ahead. And with that, Anya, I believe we are ready to take questions.
spk01: Thank you. So if you would like to ask a question, please signal by pressing star 1 on your telephone keypad.
spk02: And it has paused to give everyone an opportunity. Perfect. We start with our first question from Bruce Berger, Turnaround Capital. Your line is open. Please go ahead.
spk05: Hi, Steve. Hey, Bruce. Maybe you can explain to us why with so much rich seismic data already in place and in the hands of the oil companies, why they'll want to reshoot for images again. And the second question is how much surface area has not been shot in the United States with this technology? new seismic imaging that you spoke about in the press release that you think may want to be reshot?
spk04: Those are great questions. Let me address those the best I can, Bruce. I'm going to jump to the second one first. Ever since the industry has moved towards 3D imaging, data acquisition techniques. We have continued to answer these questions for the last nearly 30 years about how much has been shot today and how much is left to be acquired. And the answer is there continues to be a large amount pieces of acreage and land all through the country that is prospective that has not had, in many cases, a first round of 3D exploration, but even more so has not had some of the newer techniques applied to it. So over the last 30 years, we've seen channel counts on a crew move from 2,000 to 4,000 to 10,000 to 20, and now we're talking crew sizes of up to 50,000, which does two things. It enhances aerial coverage capacity as well as density at the same time. And so we believe that over time and historically, There are many basins that are prospective across the lower 48 into Canada that either need first round or potentially second round. Over that time frame, we have gone back into multiple areas several times and acquired new data sets with newer techniques, many of which we've talked about here. And so every time we've done that in the past, as a general rule, we have seen image quality and detail improve. In the past, we have also talked about in our conference calls over the years about concentration of activity. And we have, if you go back, You know, 10 years ago, the activity level was more robust in other basins around the lower 48. We began to see a contraction back into the Permian specifically several years ago at Southern Midland Basin. Then we moved into the Delaware. And now some of our focus, it tends to be more in the Northern Midland Basin and in the Central Basin platforms. And so really we have, in the last three years, we have acquired some very large surveys through the multi-client model that have been very intense with this new shooting geometry and techniques. And those data sets have taken some time. One of the issues our industry deals with is lag time on delivery of processed data. It's something that is being worked on and continues to improve, but it takes a while for these data sets to reach the market. And so we're just starting to see some of those data sets reach the market, which happen to coincide with where the most recent concentration of activity and rig count improvement occur. And so it is a very difficult environment right now, but we're seeing, you know, improvement and movement of activity, talk of movement of activity, you know, to the northern part of the Midland Basin, the Central Basin Platform. We've done quite a bit of work over the years in the Delaware Basin, for example, and it's a prime candidate for imagery improvement. And so... Well, to answer your question, we believe there's running room all across the lower 48 that's dependent upon E&P activity. And I think it is fair to say right now that we have, in the near term, we have some very active areas that have this new data set. We're not seeing the rig count coming back as quick as we typically have in a downturn. And so I think we're dealing with, in my opinion, a timing issue here as opposed to a value of the product issue.
spk05: Great. So you're thinking that, well, of course, we're seeing completions increase much more than the actual amount of drilling rigs. What do you think is a good correlation? Well, as drilling rig activity increases, what's the time lag between that increase and the demand for shooting, do you think?
spk04: Well, it is very difficult for me to put a timeline on these things, Bruce, and I don't want to get out ahead of myself, but I think there's a couple of things there. that are important that we need to talk about here and we've kind of alluded to in the press release. The first is, I'm not sure anybody really knows what the drilled uncompleted number really is. How many actual ducts are out there that have been drilled and just sitting on completion? So in today's world, it is not uncommon for a completion activity to move at a little bit more rapid pace than drilling activity. So the second thing is while we're seeing some recovery in rig count, and I would add that there certainly continues to be pressure on all oil field services, not just us, but all oil field services are under pressure these days. But we're seeing a slower ramp up in rig count coming out of a down cycle than we've seen in the past. And that is further complicating issues for us. And so I don't see that changing in the near term, honestly, to a great degree. I think we're seeing the E&P companies in Q1 results are coming out with pretty strong Free cash flow numbers, we're seeing more and more companies issuing one-time special dividends. There's a focus on shareholder return that's out there. And so I would anticipate that to move through for the next few quarters. The indicators that we would look for would be continued improvement in rig count, movement into new basins. For example, it's encouraging that we're seeing some activity in the central basin platform, along the shelf edge in the central basin platform. We'll continue to see some movement, I think, back into the Delaware basin. And I think we're starting to see people talk about some things down in the Eagleford. So I think there's a variety of things that we'll continue to look for and communicate with our shareholders as they materialize, but I don't think there's any one specific thing that I can point to and say that's the thing we've got to watch, because I think it's a combination. We really haven't seen a whole lot of adjustment in capital budgets on behalf of the ENPs. We'll see what happens when we get to mid-year and later. you know, we're not seeing a dramatic increase in rig count. We're seeing improvement, but I'm encouraged. I think we'll see some of those begin to materialize in the back half of the year.
spk05: Well, it's interesting your comments about ducts because I often liken it to, you know, a retailer manufacturer. You go through your inventory and eventually you have to replenish it, right? So they don't have to drill, but they're basically running through their inventories. So it's just the I guess what you're saying, it's not a question of if, but when for your services.
spk04: Well, that's what I believe. That's been what history has shown. It's difficult to describe the depth of this last downturn that we've been through. It hasn't been just a supply issue. It hasn't been just a demand issue. It's been a complete shutdown. So when you think about the downturn that we went through in 2020, for us in the back half of the year that's bled into 21, but for other oil field service companies, it really began in late Q1 of 20. We went from a greatly reduced activity to almost zero. I mean, groups that were running multiple rigs in the teens went to zero. And so we basically went through a full year, or nine months at least, of really very, very limited activity happening anywhere. On top of that, we've had quite a bit of M&A activity on the ENP side, which has taken up resources to complete those transactions. So it's been a, you know, a very difficult, unique situation that we've not experienced before, I'll admit. But history has said, and I think we'll continue to say, that seismic data continues to bring value, particularly if you're looking to optimize drilling and completion results. And I think we're seeing that. I'm highly, highly confident that our E&P customer base for the most part, are using seismic data to achieve those objectives. And I don't think that will change. And I think, in fact, it could improve over time as our technology gets better. We get more information and better integration to well data.
spk05: Great. Thanks. Just one other question. Could you just explain why you enacted the poison pill for one year?
spk04: Well, a couple of things there, Bruce, and I appreciate the question. I would preface this by saying Dawson Geophysical has had a shareholder's rights plan in the past. We had one in 1999 that was a 10-year plan that we renewed in 2009. and it went away with the merger with TGC. So a shareholder's rights plan is something that we have had in the past. We had contemplated the plan for quite some time, going back the early part of last year. We began to see some improvement in the stock price through late 20 and into early 21, and then we've seen clearly a little bit of a reversal in that, And so we revisited the shareholders' rights plan concept and believe that with the advice of professional services providers that we went with a pretty basic plan, a pretty standard plan with pretty standard terms and conditions in there just to protect all of our shareholders. You know, it's something we'll revisit over time, but that's really the impetus for us putting that plan into place.
spk05: Okay, thanks.
spk01: And we go ahead with our next question from Scott Bundy, Morse and Cabot. Please go ahead, your line is open.
spk07: Steve, in your 30 years and this very cyclical industry, where do you put this cycle versus prior cycles?
spk04: Oh, boy, it's by far the deepest. You know, I came into this industry, and I didn't know it, but I came in on a down cycle. But I don't, you know, in the past we've dealt with – an oversupply issue related to OPEC movement, or we've had a demand issue related to economic conditions. This was a multi-headed monster, so to speak. There were several things that came into play on this one. Not only did we have a supply issue with supply levels not just in the U.S., but worldwide, we had COVID-related complete demand destruction that, at the end of the day, probably wasn't as deep as anticipated, but it was very, very deep. In conjunction with that, we've had an overhang for the last several years of just overall energy investor apathy, so to speak, with a demand for returns, particularly at the E&P side. That appears to be correcting itself with recent results. The supply issue clearly looks like it's going to correct itself. I don't know when U.S. supply will get back to pre-pandemic levels, but at the current rig count, it's not going to happened real soon. And obviously demands beginning to pick up for oil. And we can talk about political things around that as well and social aspects as well. But, you know, if I had to rate them, I would put this one at one and I would put the early 80s somewhere around, you know, maybe third place and there's not a second. But this for for our industry and with all the things that came together in particular, and it hasn't been just unique to our company, it is all across the industry and worldwide. Now, it is encouraging that we're starting to see signs of improvement in the international markets with regard to seismic data activity. I think we're starting to see improvements in the marine world, offshore world, and so You know, those are always positive signs as well. So we're seeing some things that are pointing the right direction, but, man, we're coming out of a deep hole there, Scott.
spk07: Steve, from your point of view, we all know OPEC capacity will eventually get absorbed, but the lack of investment that has gone on, have you witnessed this severe lack of investment? In the past, maybe going back to the 80s?
spk04: You're talking about in the U.S. or worldwide?
spk07: Well, U.S. in particular, but maybe even worldwide. I'm really just trying to get your sense of there ultimately appears to me to be a cost associated with this significant lack of investment and with the focus on free cash flow. In your view, does that ultimately bite, assuming a world that gets back to normal?
spk04: Well, I appreciate the question, Scott. I'm by no mean a broad energy expert. I'm just a seismic guy. But our company and our shareholder and our – And employees obviously work very closely with what our E&P customers are doing, and we follow them very, very closely. I think there's been a, particularly on the international side, I think, and marine, I think there's been a serious underinvestment over time, particularly in the last 10 or 15 years. I think in the lower 48, I think, and we've said this for some time, I think there, this is just my opinion, I think we're headed for improved investment that will be done more prudently with better science and technology maybe around it, and I think there'll be more prudent investment going forward. There's been obviously a lot of capital been put towards the energy sector in the last five to 10 years. But I think when you look going forward, I would anticipate increased but more prudent investment. So I do think there is an investment hole worldwide that not just in ENP but in services and even in midstream that I think there's a day coming that those investments will have to be increased and it's our hope that they'll be done prudently and if they're done prudently with utilizing good technology and science that should be good for the seismic sector, not just us but worldwide.
spk05: Thank you.
spk01: And we have one last question from John Portrax from Research Investments.
spk02: Your line is open. Please go ahead.
spk09: Hello, Stephen Jumper. Thank you very much. First of all, I noticed your revenues actually for the quarter were up compared to the last quarter. I think you've done very well there. Thank you very much. I've noticed that what you have to do here is deal with the fact of the downsize of the of your staff, but then still be able to come and be able to respond as, as your clients come back in and ask for work. How has that been going? My sense is that you really have a sense and feeling for your people and making them adjust to the changes and that when business recovers, you'll still have a good crew available. How is that going for you?
spk04: Oh, great question, Jay. And, uh, I appreciate it. Um, that's been a very difficult thing, not just for us as a company, but I think through the seismic sector as a whole and in general oil field services. I think we've done, we've had a tremendous number of cutbacks in the last year plus. We've worked really diligently at reducing the our cost structure. At the same time, I think we're doing the best we possibly can to maintain the right resources in terms of personnel, equipment, and capital to react accordingly. The recovery in my opinion, is not going to be like in past years where you're going to have to get to eight, nine, ten crews to do well. If we can get to two large channel count crews, for example, as we did in the first half of 2020, we can do pretty well and much improved. And so the crew count bar is not as high as it once was. Now, with those crews, they carry significant channel count increase. But we've worked really, really hard in the last couple of years at understanding what a large crew looks like, how it operates, and how to improve that efficiency. And so even in the last six or nine months, we've been in an up-and-down phase, and we've been able, even with COVID in place and COVID protocols, our staff, who's done a great job, have been able to respond quickly and efficiently, not just from an operational efficiency standpoint, but from a financial efficiency standpoint. And so, you know, we watch that very, very closely. There's no question we've lost some good people. but I think we're trying to manage this thing the best we can, understanding that we need to reduce cash burn the best we can at the same time, be able to respond to our E&P customers' needs and on behalf of our shareholders. So I hope that answers your question. I would just like to take this opportunity to comment that I'm really proud of our group. They've responded very, very well through this whole situation. Attitudes are strong. They're good. They're positive. And so we're working hard to maintain that ability to respond in a lot of different areas in a lot of different ways. And I applaud our group for doing the work that they've done.
spk09: And that's important to recognize those people. And the other thing is how are you getting a sense from your customers? Are they starting to reallocate money towards Seismic? Are they talking with you? Do you get a sense that they're wanting to sit down and talk with you about what they could do and how they could use your Seismic crews to getting better data? Are they open to talking and sharing ideas?
spk04: Well, that's a great question. And just let me answer it this way. One, there's multiple ways for us to judge the market. Those are contracts in hand, which we've outlined here based on what we say is going to happen in Q2. You know, that's pretty lean right now. Two is bid activity. Bid activity is pretty slow, as we mentioned in the press release. But there is some bid activity. And the third thing is industry conversation. And, you know, we're having conversations, and there are certainly – groups within E&P companies, particularly on the G&G geology and geophysical side, that have concepts and ideas and thoughts of things that they would like to get done in 21 and into 22. And what you hear in those conversations is, we think we would like to have this. We think we would need it. We'll just see what the budget looks like over time. in the back half of the year. Specifically, capital being allocated towards seismic data acquisition, I think ENPs are very quiet about their capital budgets right now. I think in the past, we would be notified that XYZ was going to spend ABC in seismic data in the next coming year. For the last few years, we've not had that guidance, but I think right now each project has to stand on its own from a budgetary and fiscal standpoint, given the climate that we're in. Yes, we're going to have a very difficult second quarter and probably into the third. Bid activity is slightly improving maybe. There is some talk or bids that are out there. They're pretty lean at this point, but then we're starting to have some conversation and some chatter. That makes my crystal ball be as cloudy as it is, but that's kind of where we are, Jay.
spk09: You are seeing some relative changes in positive nature, but really nothing that's going to convert into contracts in, in, in the immediate, but it's, it's sort of, they're talking, at least they're talking about what they want to do and looking at those budgets.
spk04: Yeah, I think that's right. I think, you know, we'll, we'll, we'll learn a lot more in the back half, starting in the back half of 21 when, when, when, We'll see how much budget adjustment there is at mid-year. We'll see if we go to the back half of the year looking at budget exhaustion or if we're going to be looking at budget improvement. At this point, I just don't have a clear answer for you, but I remain optimistic for the long-term prospects.
spk09: Very good. at least they're talking about it, doing something, but haven't definitely made it concrete. Congratulations. Thank you for being out there trying to get that business. Thank you, Jake. Have a great quarter.
spk01: And we have two more questions. We go ahead with Steve from Placois. Your line is open. Please go ahead.
spk08: Hi, Steve. When you and I spoke last time, we had talked about the possibility of at least senior management perhaps being offered salary reductions and shares in place of salary. And my thought behind that was obviously to have management get greater ownership while reducing our cash burn. You don't have to make it mandatory, but I think that if you offered folks 25, 50% of their salary in stock, they may just like that. And then it would probably bring us back to the first caller's question about the poison pill, perhaps obviating the need for But let me just stick to that issue of would you consider offering and even for yourself taking a salary reduction and then taking shares because I would like your interest as an owner to be lined up with mine.
spk04: I understand the question. I will say this, that all across the board there have been significant salary reductions in the company at various levels that have been done in the last year. And many of those certainly have been from the Section 16 officers have been filed. Management ownership is something that we talk about. I will tell you this, that we are aligned with our shareholders and we understand what we're trying to get done. I do hear your comments and appreciate them and will certainly relay them to the right people at the board level.
spk08: Let me ask you this. The part that I'm not understanding, and for me as a shareholder, I understand to a degree, not as well as you do, the business cycle of oil and E&P, and then even what we do. You understand it even deeper. So we've got a share price that's roughly around our cash, and we're managing our cash burn probably as best we can. But what I don't get is why sitting in your position, the suggestion I just made doesn't get a, yeah, great, I'd love to own more shares here. I am normally restricted from buying stock. So if I could get $50,000, $100,000 in shares right now, I'd be sitting in the catbird seat. So putting aside the, well, consider it, appreciate it, and the rest, I'm not following why this isn't something that you personally are jumping at, saying, that sounds great. I'd love to do that.
spk04: Well, I... Steve, that's a little bit difficult question for me to answer here on this call. And so, you know, I do think the board does consider management ownership positions, and I'll just tell you that we will continue to have those conversations.
spk08: All righty.
spk03: Thanks.
spk01: And we go ahead with our next question from Michael Murphy, Gates City Capital Management. Your line is open.
spk06: Hi, Steve and Jim. Good morning. Yeah, I think we'd reiterate that it would be with the prior caller, it'd be nice to see management and the board take a bigger ownership stake in the company at these price levels and at this point in the cycle. But the question, I guess, stemming on Jay's question, specifically with the multi-client customers that you have can you talk about what how those conversations have gone and what you think would need to happen for them to be more active in seismic acquisition going forward thanks great question Mike and I appreciate your comment as well and and I appreciate all of our shareholders comments and questions by the way
spk04: that's what we're here for is to hear those questions and hear those comments and react accordingly. So I appreciate these calls, and I appreciate the one-on-one calls. The multi-client guys have ideas, and several of them have things they would like to do, but they're kind of dealing with the same thing we're dealing with, and that is how much funding they're getting from E&P companies. and at this point in the cycle, how much capital they're willing to put into a project. And so, you know, a multi-client project, and I am not in the multi-client business, so I'm not proclaiming to fully understand their model, but as I understand it, they will do risk assessments on a project and make a determination of how much underwriting they need to start the project. And when times are difficult and spending are light, as they have been in the E&P world for the last 12 months or greater, certainly in the last six months, as that spending is light, then their underwriting levels drop, and then they have to assess whether they want to, the timing of which they want to put capital into a project. And so when you're dealing with multi-client folks, And they're great customers of ours and we've been very active with them for a long time and work closely with them. They're having to deal with both external funding and internal funding and getting that right mix to get a project to go. And so when we talk about the multi-client world and some of their conversations, You know, there are projects that are out there that have been talked about, looked about, but then maybe they're a signature or two away from getting that project going. So it's kind of a cascaded effect to a certain degree with the multi-client guys.
spk08: Okay, thanks. And thanks for the hard work during your tough time.
spk04: Thanks, Mike.
spk01: It appears there are no further questions at this time.
spk04: Well, I would first like to thank everybody for joining in on the call. Obviously we're in tough times here. I appreciate the great questions and the commentary that we had on this call. As we have mentioned in our press release, we anticipate Q2 to be very, very difficult. But we see things on the horizon that are encouraging with rig count improving and free cash flow generation, the number of completion crews going back to work, and some of the conversations we're having, particularly seeing seismic activity pick up in other parts of the world and the marine world. So we are encouraged. We thank our shareholders for their continued trust I really want to have a shout out to our employee base for the hard work and the difficult things that they've dealt with. As always, thank and appreciate our wonderful client base. We'll continue to work as hard as we can in these difficult times and we'll continue to try to make the right decisions that we see most prudent for our shareholders and our employees both. We'll continue Again, thank you for your time, and we'll have another conversation after our Q2 report. Thank you very much.
spk01: And this concludes today's call. Thank you for your participation. You may not disconnect.
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