Whiting Petroleum Corporation Common Stock (New)

Good morning. My name is Sarah, and I will be your conference facilitator today. Welcome to Whiting Petroleum's fourth quarter 2021 conference call. The call will be limited to 45 minutes, including Q&A. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star and the number two on your telephone keypad. Please limit your questions to one question and one follow-up. I will now turn the call over to Brandon Day, Whiting's Investor Relations Director.

Thank you, Sarah. Good morning, everyone. This is Brandon Day, Whiting's Investor Relations Director. Thank you for joining us to discuss Whiting's fourth quarter results for the period ended December 31, 2021. With me today is Whiting's CEO, Lynn Peterson, and our CFO, Jimmy Henderson. Also available to answer questions during the Q&A session will be our COO, Chip Reimer. Please be advised that our remarks today, including answers to your questions, include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those currently anticipated. Those include risks relating to commodity prices, competition, technology, environmental and regulatory compliance, midstream availability, and others described in our filings with the Securities and Exchange Commission, which are incorporated by reference. We disclaim any obligation to update these forward-looking statements. In addition, we may provide certain non-GAAP financial information on this call. The relevant definitions and GAAP reconciliations may be found in our earnings release, which can be found on our website in the investor relations section. Following the prepared remarks, we'll open the call to your questions. I would like to remind everyone that a replay of this audio webcast will be available via the company's investor relations page on our website. I'd now like to turn the call over to the CEO of Whiting Petroleum, Mr. Lynn Peterson. Thank you, Brandon. Good morning, everyone.

I appreciate you joining us for the call this morning. I want to keep all this in perspective in light of what's happening in the world stage. Above all else, we hope peace is restored as quickly as possible. You can refer to our 10-K we filed yesterday and our news release for detailed information, as well as reconciliations to non-GAAP measures. 2021 was a strong year. We exited the year with some momentum and expect to see another good year in 2022. We exceeded our guidance numbers. We paid off the balance of our revolver. We added inventory in our core areas. and we most recently took the first step towards a capital return plan by initiating our first-ever regular dividend. We're going to take a little different approach this morning from our previous calls, and I'm going to ask Jimmy Henderson, our CFO, to spend some time discussing our fourth quarter and full-year results. While we were assisted by a rising commodity price environment, our team did a great job executing our 2021 program, as well as the initiatives we set out at the beginning of the year. Once Jimmy concludes, I want to talk about our 2022 program, our return to capital approach for 2022, and clear up some questions that arose from our last news release. Jimmy, I'm going to turn it over to you for the financial results.

All right. Thanks, Len. And echo your thoughts on as our thoughts and prayers go out to Ukrainian people on news that we're all watching here and hope this piece is resolved quickly. Well, I hate to spout off a bunch of numbers that I know you all read in our filings already. I do want to highlight a few things, a few results that are really striking. In the fourth quarter of 2021, we had net income on a gap basis of $292 million or $7.34 per diluted share as compared to $198 million or $5 per share in the previous quarter. Adjusting for certain items but primarily the mark-to-market of our hedging transactions, we had adjusted net income of $168 million or $4.23 per diluted share in the fourth quarter as compared to $142 million or $357 per share for the previous quarter. Adjusted EBITDAX was $226 million compared to $201 million in the previous quarter. increased primarily due to the better commodity prices and a slight uptick in our oil production quarter over quarter. Our production on a barrels of oil equivalent basis remained relatively flat quarter over quarter, averaging 92.8,000 BOE per day compared to a third quarter production of 92.1,000 BOE per day. Oil production for the fourth quarter averaged 52.9 thousand barrels of oil per day, which is up slightly from 51.8 thousand barrels of oil in the third quarter. Oil differentials were considerably higher in the fourth quarter as overall basin production levels remain well within total takeaway capacity. As we move into 2022, our term commitment levels have decreased, resulting in more exposure to spot value premiums that we're seeing now. Our natural gas prices benefited in 2021 from a premium at our primary pricing point, the Ventura point, as compared to Henry Hub. And NGL prices continued to be strong in the fourth quarter at an average percentage of WTI oil of around 37%. Just for context, this compares to less than 20% that we were experiencing in the same quarter last year. As noted last quarter, the majority of our gathering and processing agreements are structured as fixed fee contracts and therefore receive a more pronounced benefit to our net realized price at current residue gas and NGL benchmark pricing. The company invested CapEx of about 66 million during the fourth quarter to bring 16 gross, 12 net wells onto production. and we drilled 17 gross 10.4 net operated wells. We ended the quarter with 34 gross 20.2 net drilled and uncompleted wells. We currently have two rigs running and one completion crew. Both of those drilling rigs are in the Saanich Field and our completion crews working in the Cassandra area. Lease operating expense was $62 million or $731 per BOE for the fourth quarter of 21. Note that LOE continues to be impacted by expensed workovers that we've talked about previously. Our cash G&A expenses were $12 million for the fourth quarter and for the year total about $39 million, averaging right around $1.16 per BOE. for 2021. We also disclosed our year-end approved reserves in our 10-K in our press release last night. We did see a dramatic increase year over year with the estimated total approved reserves totaling 326 million BOEs with a pre-tax PV10 value of 4.4 billion at year-end compared to 260 million BOE and $1.2 billion at the year-end 2020. Pricing under SEC rules increased by approximately $27 per barrel to $66.56 per barrel at December 31st, 2021, compared to December 31st, 2020. Gas increased to $3.60 per mm BTUs compared to $1.99 for the same two periods. Obviously, these price changes were the biggest factor in the year-over-year changes, but we also added 20.3 million BOE through the drill bit and 16 million BOE with acquisitions, which more than offset the decrease from selling our Colorado assets. Lastly, I'll point out that our approved developed properties accounted for roughly 80% of our total approved reserves. with approximately $3.6 billion in value. It's worth noting that this value is at SEC pricing of around $67 per barrel of oil as compared to spot prices today. With that, I'll turn this back over to Len and talk a little bit about where we're headed in 2022.

Thanks, Jimmy. There were a lot of numbers there, so I appreciate that. Again, thanks to our entire team for the great efforts during the year. Divesting of our Colorado properties combined with adding meaningful inventory through our acquisition work, will pay great dividends in future years. And we should really start to see the benefits accruing at the end of 2022 and moving into 2023 with our development plan. The board and management understands the importance of returning capital to shareholders. We have had much engagement throughout the last year by our board, and we are excited to lay out our plans as we go through the year. As such, the Board approved a quarterly dividend of 25 cents per share that will be paid beginning in March, which was only the first step of our capital return program. Our Board wants to be very thoughtful and measured in developing a plan. To that end, we have had multiple discussions of stock buybacks and fixed and variable dividends. And I am completely comfortable in saying our Board of Directors is going in this direction. and we would expect to lay out additional information that would place the company in the fairway of what we are seeing from return of capital from our peers. When we look out over the next four years and consider a $70 price environment for WTI crude, we see our company generating pre-cash flow in an amount approximately the same as our current market cap. I know we live in a world of instant gratification, Again, I will state that our Board of Directors is aligned with our shareholders and we will methodically develop and return a capital plan that should please our shareholders. And I want to shift and outline how we thought about our 2022 capital plan and production profile. Looking ahead, we will have a slightly higher activity level. We will have larger working interest in the wells drilled and completed in our Standish Field due to the acquisitions. We anticipate an increased level of non-operated activity, and we have built in inflationary factors that we are currently experiencing and anticipate throughout the year. Our supply chain team has done a great job of locking in many of the big ticket items for the first half of 2022. However, we are less protected in the back half of the year. We estimate the inflationary pressure to the program to be in the low double digit percentages, but the high end of our guidance has contingency for higher inflation should that become an issue. Turning to our production profile, we have shifted some production from the first half of the year and into the second half due to the drilling and completion activities on a five-well pad mentioned in our previous release. We had to rig down on the pad in January, and we'll be moving back in in March. This delay, combined with our current activity in the Standish Field, create somewhat of a hockey stick, moderating our overall 22 production, but creating impressive growth as we exit the year and move into 23, which should benefit with a sharp increase in production. In February, we announced the acquisition of non-operated assets in our standard field. We negotiated these transactions in the fall of 21 in a lower price environment, and we believe they add significant shareholder value. We have been able to hedge production from these acquisitions at a much higher WTI pricing. The acquired interest included wells currently on production, wells that have already been drilled and are awaiting completion in 22, as well as significant interest in wells scheduled on our 22 and 23 drilling programs. This is a field that we understand very well and have a high confidence in the well economics. supporting our belief that these are highly accretive transactions with excellent risk-adjusted returns. We're starting 22 in an incredibly strong financial position, and I expect to have attractive cash flow from operations during the year. With our current hedges in place and using the $70 price for WTI and $4 for gas, we model over $900 million in EBITDA, resulting in over $500 million of adjusted free cash flow. which demonstrates that we can continue to grow our return of capital program while also continue to pursue acquisition opportunities that will compete with our current profile. By investing in Whiting, we think shareholders can really have it all. And with that, I'll turn it back to Sarah. Thank you.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. As a reminder, please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. Our first question comes from Leo Mariani with KeyBank. Please go ahead.

You there, Leo?

Yes, hello. Sorry. So, look, Whiting obviously had, you know, strong production here in the fourth quarter, you know, came in, you know, above guide. I was hoping you could maybe provide a little color around what drove the good fourth quarter here on production.

You know, I think we continue to see good performance from our wells, and I'll let Chip jump in here as well. But, you know, the team is trying some different things on completion. I think we're seeing some benefits to this. Chip?

Yeah, I appreciate it, Lynn. Yeah, especially in our Saanich field, our lacy little field areas we've seen. We're going in there. We're doing some re-stims right next to the wells that we are stimulating the new ones, and we're starting to see some impact. And so we're seeing, you know, wedge production higher than our original curves, and also our base production staying up there.

Okay. And I guess just in terms of maybe, you know, some of those new simulations, are you all planning on kind of repeating a lot of that here? I assume in 2022, is this pretty broadly applicable, you know, across the entire basin? Is it more just in Saanich? What can you kind of tell us about that?

Yeah, Leo, it's a little early to say. We're seeing that impact. I'd like to wait for a quarter or two, but we're pleased what we've seen so far, and we'll see where it goes from here.

Okay. Maybe can you just talk about the M&A environment, you know, a little bit? Obviously, you guys have done, you know, a few smaller deals over the past, you know, several months, which in your wheelhouse. Are you seeing other type of bolt-on opportunities out there, or perhaps maybe there's some some bigger deals that you're eyeing here, you know, in the Bakken?

Yeah, Leo, clearly we're watching everything, looking at as many things as possible. I think you also, we've got a backdrop of a pretty aggressive rise in commodity prices, and I think it's made it a bit challenging. People are enjoying their cash flow. They're seeing off these properties. So, you know, we also want to make sure we don't buy on the high end here and watch oil drop over time. So, We're being cautious, but we're looking at everything we can.

Okay. Thanks, guys.

Yeah, thanks.

Our next question comes from Neil Dingman with Truist. Please go ahead.

Morning, all. First question on DIFs, kind of a twofer here. Just wondering, could you talk about how you're thinking about maybe for Jimmy first, just speak to the delta on the spot DIFs this year versus 21? Are you still guiding to that? three or four off versus I think it was about $4.21. You know, I think you mentioned more exposure to spot this year, and, you know, I think spot's now in a pretty good place. I'm just wondering on that. And to tuck into that, I know there was some dappled news. I don't doubt that has any impact near term, but I'm just also wondering how you're thinking about any of this dappled news down the line on the desk.

Yeah, thanks, Neil. I'll start and I'll turn it over to Joanne to correct anything that I say wrong. But, you know, look at 21 over compared to 22. I mean, if you remember, 21, we started off the year with concerns about DAPL, and there was kind of effective deaths coming in the year. And, you know, the guidance that we gave was trying to take that into consideration, and it certainly got better as we moved through the year as things kind of normalized and production levels stayed relatively consistent and within the total transportation requirements. capacity. And Joanne, maybe I'll let you talk a little bit more about what you see on the macro side as well as DAPL.

Sure. Yeah. And just a little bit more detail on 2021. I mean, we had a mixture of various term-length deals utilizing term transportation on alternative pipelines, along with supply commitments into rail markets. And really, it was to strategically align with our crude gathering service provider system connectivity to specifically protect or larger producing areas. And as you think about how that case unfolded in the timing, we really did layer in from Q4 of 20 all through up until, you know, right in front of the May decision. And so from there, moving forward into 2022, most of the deals that acted as a physical hedge against an uncertain dapple outcome had rolled off. And what remains is a combination of term into various markets, with more of a concentration on spot volume relative to last year is what we've indicated. And so with the recent decision of the U.S. Supreme Court denying Dakota access petition to appeal the lower court decision, basically reaffirming that the EIS will stand. And so we shift ahead and expect a draft version of that here in the next few weeks with the official timing still projected for September. But we're actually wondering if that timing will slip because you take into account how contentious this issue is and the expectation that the numerous comments that will be filed will need to be addressed and taken into consideration before the EIS is finalized. We can easily see it slipping out past that date. At the end of the day, if you're thinking, you know, where we stand on the balance of this year, you know, we look at it as the Army Corps of Engineers had the opportunity to go down a different road and they chose not to. And as we factor in the macro outlook, especially in light of the most recent news, along with an existing pipeline with continuous operations, we're cautiously optimistic on a favorable outcome. And if anything, that guided range that we gave, I mean, maybe we could see, you know, some slight improvement to that.

We should have given her a proper introduction. It's Joanne Stockton, our Vice President of Commercial here providing.

Thanks for the details. And then just one follow-up, maybe, Jimmy, also for you. You guys have had some outstanding return of capital that, you know, to me doesn't appear the markets fully appreciate. I'm just wondering, can you speak to potential additional return of capital that you all are seeing for your land?

Well, You know, we announced the dividend earlier this quarter, and that's the first step. And I think it's pretty obvious when you look at our cash flow, free cash flow generation, that there's more to come. I think we spoke to that quite a bit in the prepared script. You know, as we've talked about consistently over the last year, it's always been our intent to do this very methodically and thoughtfully and consistently. It goes one step at a time, so we've done that. We've paid down our debt to zero. We've been able to do an acquisition, which we'll pay off very quickly. Now we've announced a dividend, and there's more to come on that front. We've been very consistent in laying out with our shareholders.

Very good. Thank you all. Look forward to it.

You bet, Neil. Just to reiterate, our board is completely aligned with us on this week. We just really wanted to do it one step at a time, as Jimmy said there.

So it's all kind of – Yeah, that makes the most sense. I'm glad you're sort of walking before running on this. That makes a lot of sense. Thanks, Len.

Thank you.

Our next question comes from Michael Seil with Staple. Please go ahead.

Hey, good morning, everybody. Maybe just staying on that last topic in terms of return of capital – Lynn, you said you're having a lot of conversations with the board. Everybody's aligned. I don't want you to try and front-run what the board might decide is the best avenue, but I guess in looking at share buybacks, just how do you think about that from a high level versus where your stock is today and the opportunity to continue to – to do these bolt-on acquisitions. How do you view the opportunity set there?

Yeah, good morning, Mike. Good to hear you. You know, I think stock buybacks is probably going to be our next step here. You know, we've talked long and hard about it. Clearly, after we put our last announcement out, I wish I had it in place. So, I mean, it would have worked out pretty well. So, you know, we just, we see a lot of noise in the investment world today. And, you know, we talked to our our shareholders, both long, long onlys and value and everybody, we get a different message for everybody. You know, some people want us to reinvest in properties, someone has to pay dividends, someone has to buy our stock back. You know, so we're looking at all these things. And again, we just laid out the fixed dividend as our starting point here. I think the next step would clearly be stock buyback announcement. And then I think, you know, you're seeing more of the variable dividends. I still think we've got more work to do on that one. But I think all these make sense in conjunction with you're seeing the pre-cash flow that we're generating here. I mean, you know, you're seeing companies pay back 40%, 50%, 60% in some cases. You know, if we can get into that range, I think we'll be very competitive with our peers out there. So I'm excited what we've got to go ahead. I mean, again, people want it today. They don't want to wait. I get it. But at the same time, I think I have a lot of respect for our position, our board's take on this, and we're excited to lay it out as we go through the year.

That's helpful. Sounds good. And I know you've steered clear of quarterly guidance in the past, but just wanted to see if you could give us any sense, maybe from a high level, the expected completion cadence through the year. Should we just anticipate kind of flat production throughout the year, or is there going to be any? variability given the the cadence of completions.

Again, that was kind of the purpose of the comments or I think you're going to see a kind of a slow first half of the year with really ratcheting up as we exit the year. And a lot of the due to the comment I made earlier about the firewall pad that we've been delayed on a little bit. But so I think that was kind of the disappointment when we put out our news that people didn't see the production overall. And I was just moderated a little bit by this. pause or slowness on our five-wheel pad. But I think as we exit out the year, the numbers get pretty significant. You got anything you want to add, Chip?

Yeah. No, Lynn, you're exactly right. So our till count is a little bit light on the first half, and we're pretty strong in the back half of the year. You'll see that in the back half of the year on production.

Great. Thank you, guys. Yeah, thanks, Mike.

Our next question comes from Scott Henold with RBC. Please go ahead.

Thanks. Good morning, all. You know, Lynn, I don't want to beat a dead horse, but I feel like I'm going to here. You know, on dividends versus stock buybacks, you obviously made a lot of compelling cases that buybacks make a lot of sense. And, you know, they do provide a lot of flexibility, I guess, to a certain extent. And, you know, maybe at a high level it would be helpful if you could just give us a sense. I know it sounds like buybacks are an option you're looking at, and it sounds like the next step. But why not that be the first step? Like what was the decision to go with the dividend before the buyback?

Well, Scott, I wish you could be in all these investor calls we have because, like I said, some guys don't want any dividends. Others want every penny of free cash flow. So, you know, these are hard decisions to make. And, again, again, A lot of comments were, you know, investors want the cash in their pocket. They can reinvest in the stock if they want to. If they want to reinvest in something else, they can. Stock buybacks, you know, and maybe we should have combined it. You know, I'm not saying we did exactly right here. We probably should have announced a combination of buyback and of fixed dividend looking back now. But, you know, again, we're going to get there quickly, so I'm not too concerned. We just thought we'd do the fixed dividend first. and then followed up with the stock repurchase.

Yeah, and I'd probably just add that just kind of the process of getting a dividend done, we wanted to announce it so we could kind of get that, you know, get the record date sent and get started paying the actual cash.

And then, you know, how do you, you know, contemplate, you know, usage? You know, when you think about usage of the free cash flow, and look, I think, you know, it's – You know, you guys got a good runway of inventory for, you know, at least five years and maybe a little bit longer. But, you know, obviously, when you think about the durability and sustainability of that free cash flow generation, I think generally investors would like to see it, you know, somewhere in that decade plus if, you know, they can. And so, obviously, you know, it feels like that, you know, potentially some of that free cash flow could be earmarked. for, you know, various types of, you know, consolidation. But, like, can you give a sense of, like, as you look at that pre-cash flow wall that you're seeing, you know, how much of that dry powder do you think makes sense to keep in your hands, you know, for opportunities if they pick up?

You know, it's a good question. And, you know, I think size of company matters in this regard. I mean, I share your comment on our inventory. I think we're fine, but we're not where we want to be. I think that's really what drove us in 21 to pay down a revolver. I mean, and again, we've got to remember, we started the year at $35, $40 WTI, and we were in a totally different world than where we ended up at $80 at the end of the year. So things have changed dramatically here. But we are constantly looking to see if we can find properties that compete against our current properties. And we want to have some dry powder to execute on those and I don't know what the right number is. Again, you see companies come in at 40, 50. I know there's a few out at 60% of free cash flow in total between fixed stock buybacks and variable dividends. So I think ultimately, you know, that still allows us to pursue these acquisitions when we find them and keep our balance sheet strong. I mean, we're trying to do a lot of things here and we're We're fortunate to have a really strong balance sheet right now. We want to protect that, but we do want to grow the company at the same time.

Yeah, and let's also remember, Scott, that we have an untapped revolver, $750 million of capacity on it. So it's not a matter of hoarding cash to save our pennies for a deal. We've got a lot of liquidity that we can tap to do things.

Would you be willing to use equity to do something if it made sense, or is that a non-starter discussion?

No, I think, you know, we've used it in the past. And, you know, I don't have a problem with all with using it if we think our stock and fad at a reasonable number. I mean, again, you got to just evaluate the time you are and where you think your stock is. You know, right now, we use cash versus our stock because we think our stocks slide, you know, it's below what we think we're worth. So we would tend to use more of the cash position.

Understood. Thank you.

Our next question comes from David Dickelbaum with Cowan. Please go ahead.

Morning, Lynn and Jimmy. Thanks for squeezing me in here. Hey, David. How are you doing? Doing well. And congrats on the operations update. You know, you pointed out the delays, I think, as the five-well pad, which I believe was in the Cassandra area. For context, as we move forward here, particularly with the higher working interest in Sanish, how long should we be thinking about those two rigs just staying in that Sanish area, or are there going to be more of these sort of longer lateral developments that get sprinkled into the program.

Maybe I'll let Chip take the first shot at that, if you don't mind.

Yeah, will do. David, thanks for the question. Yeah, you know, our program has about 65% of our program is in Saanich, and then we move to the west, the hidden bench, Foreman Butte, later in the year. We're probably close to 35%, maybe a little bit more than that, or three milers as we go along. So that will drive capital efficiency as we go and hope to minimize some of the inflation impacts. And so that's kind of what the program has us doing right now. We'll run back up into that Cassandra area later this year and knock out that additional pad that was delayed.

You know, one of the things that matters a lot to us is all this ESG conversation. I think, you know, as we look to bring these wells on, we want to make sure we have the takeaway that's required. We're not allowing or trying to flare anything. We've done a great job working with our mainstream partners. And so some of this movement is dictated because of commodity takeaway as well.

It was a mechanical issue up in the Cassandra, not a systemic issue. So we'll get back over there later in the year.

Yeah, thanks, Chip. And then, Lynn, you know, I know a lot's been asked around this, but, like, one, I think it just – It seems like you've been pretty explicit that you think Whiting's perfectly capable of paying a 50% rate of its free cash while still maintaining enough cash hoarding and flexibility to pursue M&As. It seems like that's a reasonable target as investors compare you to some of your peers.

Yeah, I'm not going to let you put a percentage on me, David, but I think you see the numbers and you see, I think we have a lot of flexibility here and we can do the right thing. We will do the right thing. We're excited about that. I mean, This is not a situation where we're trying to put cash on the balance sheet. You know, we want to return it to shareholders and we want to do the right thing, but at the same time, we are looking for opportunities. You know, yeah, I think your numbers are very reasonable.

And then I guess in terms of how we should think about how that presents itself over the course of the year, the conversation when the fixed dividend, I know we talked about the intention to start, you know, kind of small and build into this program, but How frequently is the return of capital program being reevaluated? And, you know, at some point it sounds like we should get another update at least this year. But, you know, is this something that occurs on like a three-month basis or it's just ad hoc?

Yeah, we probably talk monthly, weekly. I have a lot of – we have a great board. We work together and I stay in communication, you know, we all – got thrown together here about 16 months ago, 18 months ago. And it's been a great, great opportunity to get to know each other and share ideas. So we talk a lot and we've talked about all this for the last several months. So yeah, you're going to see this evolve and you'll probably see it evolve fairly quickly. You know, I think it's really important to our shareholders and we want to do the right thing. We've always had the intentions doing the right thing. And sometimes we have a different timeframe than other people, but that's fine. You know, we're excited where we're headed. So,

Thanks for the messaging and the clarification, guys, and good luck ahead.

I appreciate it, David. Have a great day.

Thank you. Ladies and gentlemen, there are no further questions at this time. I'll turn the floor back to management for closing remarks. Thanks.

All right. Thanks again, Sarah. You know, in closing, I want to thank our shareholders for your continued support. I can assure you that we're excited with our free cash flow projections for 22 and beyond. We have listened to our shareholders and their comments on the emphasis on return of capital, as well as continue to participate in opportunistic acquisitions that build on our future. Our board and our management are very much aligned in expanding our return of capital structure to our shareholders, and we will roll out this additional information soon. At the same time, I want to thank our staff for the continued dedication they have given to our company and shareholders. A special shout-out to our field staff that endure some very challenging weather conditions during the winter months each year. Their ability to maintain production and operations is not lost to me, and they deserve kudos above and beyond their daily routines. With that, I thank everybody for joining us this morning. Feel free to give us a call if there's any other questions. Thank you very much for your time.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.