Gibson Energy Inc.

Good morning. My name is Michelle and I will be your conference operator today. At this time, I would like to welcome everyone to the Gibson Energy Q4 2022 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, Please press star, then the number two. Thank you. Mr. Hitches, you may begin your call.

Thank you, Operator.

Good morning, and thank you for joining us on this conference call discussing our fourth quarter and full year 2022 operational and financial results. On the call this morning from Gibson Energy are... Steve Spalding, President and Chief Executive Officer, and Sean Brown, Chief Financial Officer. Also in the room from the senior management team are Sean Wilson, Senior Vice President and Chief Administrative and Sustainability Officer, and Kyle DiGrucci, Senior Vice President and Chief Commercial Officer. Listeners are reminded that today's call refers to non-GAAP measures and forward-looking information descriptions and qualifications of such measures and information are set out in our continuous disclosure documents available on CDAR. Now I'd like to turn the call over to Steve. Steve?

Thanks, Mark. Good morning, everyone, and thank you for joining us today. With our solid fourth quarter results, we've delivered a strong year from our business in which we set several new high watermarks. In our infrastructure segment, which posted four consistent quarters this year, we reached a new high for adjusted EBITDA of $442 million. If you look over the last five years, we've nearly doubled our infrastructure cash flows, which have grown at a 14% compounded annual growth rate during this time period. If you think about having invested over a billion dollars in capital during these last five years, This also very much proves out that we did, in fact, realize our target of five to seven times EBITDA filled. For consolidated businesses, adjusted EBITDA of $521 million is a high watermark. This was a combination of a strong, consistent infrastructure performance that I spoke of, as well as marketing business ability to return to levels in line with our long-term run rate. Our distributable cash flow of $356 million also represents the strongest year ever for Gibson. As the adjusted EBITDA, distributable cash flow has roughly doubled since 2017. And importantly, as our share count has remained effectively flat from 2017. That translates into a per share compounded annual growth rate of 14%. And recall, our target when we rolled out our strategy in early 2018 was to target a 10% per share growth rate. In terms of our balance sheet, these results further improved our already strong financial position. Our leverage ratio decreased through the year to 2.7 times, which is below the bottom end of our target range. And our payout ratio has decreased to 60%, which is also below the lower end of our target range of 70 to 80%. Given the solid financial position and strong business performance, we were very active with our share repurchases in 2022. During the year, we bought back $146 million, which is just over 4% of our outstanding shares. We will continue to act on our commitment to return capital to our shareholders when appropriate within our capital allocation framework with a target of buying back at least $100 million in 2023. And consistent with our capital allocation framework, we've increased our dividend by two cents per share per quarter, which is a bit over 5%. we continue to see significant value in offering our shareholders modest and consistent dividend growth. We see it as reflecting the continued growth of our long-term stable infrastructure cash flows and our significant headroom on our infrastructure-only metrics. Between our dividend and our buybacks, we're offering shareholders annual return of capital of roughly 10%, which we think is very competitive within the infrastructure space. And to speak to how we continue to grow those infrastructure cash flows, at our Edmonton terminal, we placed the biofuels blending project in service during the second quarter. The project was delivered ahead of schedule and on budget. It was fairly sizable. In terms of capital costs, the project was roughly equivalent to one and a half tanks. And it's under a 25-year term. It's ESG positive and aligned with energy transition. We believe we will continue to build out additional infrastructure at Edmonton under this MSA to support Suncor's needs in energy transition fuels and are hopeful in our ability to sanction a similar sized follow-on project later this year. At Moose Jaw, Not only did we safely and successfully complete our turnaround, but we also used the downtime as an opportunity to perform a required connections to complete an ESG positive fuel switching project. As a result, when the facility reentered service, capacity was increased roughly 10%, bringing us to 24,000 barrels a day, with our net fuel cost decreased, and our emissions intensity decreased by 15% per barrel. In terms of the business, our major focus right now is on securing additional growth projects. We continue to see the impacts of the lack of production growth, first coming out of COVID, and now in this capital discipline environment. Our goal remains to deploy $150 to $200 million per year. We're increasing our commercial focus by developing a new ventures team to review and develop opportunities outside our existing footprint and in energy transition. In terms of sanctioning the next round of capital, at Edmonton, we continue to hold discussions for additional tankage. We believe Gibson is very well positioned to support shippers on TMX, optimize crude netbacks, and meet steam requirements. requirements. We remain optimistic that we can sanction at least two additional tanks. In terms of timing, clear visibility to a TMX in-service date remains important to several of our potential customers, meaning sanctioning decisions are likely to be made by mid-year 2023. Also, we continue to advance discussions on additional infrastructure opportunities that could help supplement our capital investments in 2023 and in future years. On the ESG front, during the year, we continue to advance our ESG journey here at Gibson. With the release of our second sustainability report, we believe that the report showcases the progress we've made embedding sustainability into our business and the culture, as well as the meaningful work towards an ambitious 2025 and 2030 targets and our roadmap to net zero. We also received the company's third A- in a row from CDP, the Carbon Disclosure Project, which signifies Gibson's continued sustainability leadership. On the safety side, we're maintaining the best health and safety performance in our customers and our company's history. We view both our lost time injury frequency and our recordable vehicle incident frequency rates of zero for employees and contractors for the third year in a row as outstanding results. Also, we continue to maintain our target and top quartile safety performance among our peers and our total recordable injury frequency, or TRIF, with a rate of 0.46 for employees. That said, we remain vigilant. We will not become complacent and continue to evolve our safety culture and focus on achieving zero incidents. It's also worth noting achieved our board diversity targets and one of our senior leadership targets. having at least one racial and ethnic minority or indigenous person on the board, having 40% women on the board, both ahead of our 2025 target dates, having at least one racial or ethnic minority person or indigenous person hold an SVP role or above. Speaking of diversity and inclusion, we were honored to be recognized as one of Alberta's top 75 employers. We're also proud of our commitment to the communities we operate in and around, having made $1.5 million in contributions to nonprofit organizations, with the average employee having volunteered 14 hours last year. In terms of meaningful opportunities that we are focusing on, as we continue our journey, we recently released our Indigenous Engagement Principles, which will help us advance our Indigenous relationships relations efforts and further our relationships with indigenous communities in and around the areas in which we operate. To close, the business certainly delivered a solid quarter that capped a very strong year. Infrastructure reached a new high with strong, consistent performance across the asset base. With a strong second half, the marketing segment was to come in at the high end of our long-term run rate. And as a result, our strong business performance, we stayed true to our commitment to return capital to our shareholders through the buyback of $146 million and the increase of our dividend by 5% and our expectation to buy back an additional $100 million this year. I will now pass the call over to Sean, who will walk us through the financial results in more detail.

Sean. Thanks, Steve.

As Steve mentioned, another solid quarter to finish up a record-setting year. Infrastructure adjusted EBITDA of $110 million this quarter was in line with not just the third quarter of this year, but also the first and second quarter, which really speaks to the stability of cash flow we see from this part of the business. As always, a little movement within each of the parts that make up our infrastructure segment, but overall, once again, a very consistent result, which is what we like to see from an infrastructure business. Comparing this quarter to the fourth quarter of 2021, infrastructure adjusted EBITDA increased by about $4 million. As revenues at Edmonton benefited from additional infrastructure and service, as well as entering into the Suncor MSA, a higher contribution from Canadian Pipelines, and a higher contribution from both of our equity investments, which would be the DRU and the Joliet Terminal. In the marketing segment, adjusted EBITDA of $37 million was ahead of the outlook we provided on our last quarterly call. On the refined product side, the fourth quarter was similar to the third quarter of this year, with continued strength seen in both drilling fluids and TOPS. On the crude marketing side, results were not as strong as the third quarter, though we still had a notable contribution from quality-based opportunities. Relative to the fourth quarter of last year, this quarter's results were a $32 million improvement, with the majority of the improvement from refined products, but also a smaller increase in crude marketing. In terms of our outlook for marketing, the environment for refined products remains positive and we are constructive around the opportunities we see within our crude marketing business. As such, we would expect a justity bid of $40 million or higher in the first quarter. Finishing up the discussion of the results for this quarter, let me quickly work down to distributable cash flow. For the fourth quarter, we reported distributable cash flow of $88 million, which was a $24 million increase from the fourth quarter of 2021, and a $26 million decrease from the third quarter of this year. The majority of the differences would be from the marketing performance, as I discussed. In terms of smaller drivers, the third quarter of this year benefited from a positive FX impact, while taxes this quarter were higher than in the fourth quarter of last year due to much stronger marketing results increasing taxable income. Given it is also year-end, let me quickly compare results between the two years. On the infrastructure side, as we mentioned, it was another record year. While adjusted EBITDA was a $6 million increase from 2021, that year had benefited from a net $15 million or so in one-time items. So, on an underlying business basis, 2022 was a much stronger year than the headline results would indicate for the infrastructure segment. In terms of the main drivers of that increase, it would be higher contributions from the Edmonton Terminal and Canadian pipelines, as well as a full year of operation for the DRU. Marketing increased from $43 million in 2021 to $118 million in 2022, a $75 million increase. The largest driver was the refined products business. But clearly, crude marketing also had a much better year despite limited locational and time-based opportunities. As such, 2022 adjusted EBITDA increased by $76 million to $521 million, which was also a new high watermark. And on a distributable cash flow basis, the 2022 figure of $356 million was also a new high. Most of the $65 million increase relative to 2021 was driven by the factors I already described, as well as some FX gains this year, partly offset by higher taxes and interest costs. In terms of our financial position, our payout ratio now sits at 60%, which is well below the bottom end of our 70% to 80% target range. Our debt to adjusted EBITDA of 2.7 times, which is below the bottom end of our three to three and a half times target, remains flat from last quarter and is a decrease of half a turn from the end of 2021. This improvement was primarily driven by the meaningful increase in EBITDA year over year, though net debt did decrease slightly over the course of the year. We also look at our leverage on an infrastructure only basis. Using that lens, our leverage is three and a half times and our payout ratio would be approximately 68%, where we seek to be below four times and 100% respectively under our financial governing principles. Also, I would quickly note that we remain very well positioned in terms of our debt maturity profile. Fixed rate notes comprise about 85% of our current long-term debt, and the weighted average coupon in our senior unsecured notes is just over 3%, with no maturities until 2025. As such, we feel very well positioned in the current higher interest rate environment, though we continue to be proactive with our capital structure, including through our recent extension of our sustainably linked revolving credit facility to 2028. So, certainly a very strong financial position. And taking into account that financial position and the consistent performance of our infrastructure business, As well as the uplift in marketing results we saw through the year, we continue to adhere to our capital allocation philosophy. We bought back $146 million in shares in 2022. This repurchase of 6 million shares represents over 4% of shares outstanding at the start of the year and is an amount we view as particularly notable relative to peers. And we remain committed to continue our buybacks into 2023. We've remained active through the start of the year, currently targeting up to $100 million this year. At current share prices, that would be an incremental 3% of shares outstanding. Given this continued elevated rate of buybacks, we feel that combined with our track record of per share growth and our attractive dividend, we provide strong line of sight to total returns for our shareholders. And on the dividend, As Steve mentioned, we have also increased our return of capital to shareholders through a dividend increase of an additional $0.02 per share per quarter, or a 5% increase. With this increase, our annual dividend grows to $1.56 per share. We view this dividend as very solid, given we see it as backstopped by our long-term, stable infrastructure earnings. And with an infrastructure-only payout ratio of 68%, Relative to a cap of 100%, we certainly have headroom to continue to adhere to our preference of offering stable, modest dividend increases in the years to come. In summary, the results in both the fourth quarter and the furl year were solid. Infrastructure results were strong and consistent throughout 2022, including in the fourth quarter, setting a new high watermark for the year. Marketing had a strong recovery in 2022, finishing in the top end of our long-term run rate. And we expect to have a nice start to 2023 for that part of the business. And with our solid financial position, our continued ability to return capital shareholders through a safe growing dividend, as well as the significant share buybacks we've executed today and intend to execute on this year, results in a very strong value proposition for investors. At this point,

I will turn the call over to the operator to open up for questions.

Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star followed by the number one on your telephone keypad. If your question has been answered and you would like to withdraw from the queue, please press star followed by the number two. And if you are using a speakerphone, please lift your handset before entering any keys. Please stand by one moment for your first question. Your first question will come from Linda Azargalis at TD Securities. Please go ahead.

Thank you. Congratulations on a strong year. I'm wondering if you could help me. Hi, can you hear me?

I can't.

Okay, thank you. Just wondering when the board deliberates on a dividend going forward, how much do they value the consistency of dividend growth versus just ensuring the dividend is at a sustainable level as we look beyond this year?

Thanks, Linda. It's Sean here.

I mean, clearly, both of those would be key considerations. At the end of the day, you're only going to increase your dividend if your financial profile justifies it. So, you know, you're not so absolute in that the dividend has to grow. I mean, the underlying fundamentals have to support a steady, modest dividend increase, which we certainly think is the case. You know, we've said it before that both the board and management think that there's real value in that steady and modest dividend increase, but the financials have to certainly support that. So that would be the first principle, but we certainly think that we have seen that if you see the 14% distributable cash flow per share growth that Steve talked about in the prepared remarks and, you know, our visibility to continued growth moving forward.

Thank you. And just as a follow-up, with such a strong outlook for the first quarter in marketing, at what point might you be confident that you'll beat your run rate range this year?

I'll do that. Well, Linda, it's good talking to you this morning.

I would say it's way too early because, you know, it's the first quarter. We have done three really consistent quarters in a row. So we're excited about the potential of being in the upper range of that 80 to 120, but we're still very early in the year. And as you know, things can go better or worse going forward, so.

Thank you. Yeah, and just a quick accounting question maybe for Sean. Your depreciation has changed. Curious to get some more context around which types of assets lives were extended and what was the catalyst? Was it maybe with the increased commodity price outlook, any sort of geopolitical shift or maybe a view on repurposing assets for the energy transition?

Actually, none of the above, Linda, but, I mean, the types of assets think of really like our tanks and associated infrastructure, pipelines, things like that. Really what this was is our asset integrity team taking a look at the depreciable lives of our assets. We look at it every year. We took a much finer lens to it this year, and what we discovered is that just the depreciable lives that we had or that we were using for our assets were were just actually quite frankly much too low for what we are observing with the assets and certainly what we are observing, you know, relative to our peers. So I think even if you looked at, you know, the revised depreciable lives, it would actually still be on the low end of what we would observe relative to our peers, but actually had almost no impact or there was no sort of impact vis-a-vis current market environment, really anything external. It was 100% focused on our asset integrity team looking at our assets. looking at what we'd observed over time using their experience and observing what the depreciable lives utilized by our peers was.

Thank you. I'll jump back in the queue.

Thank you.

Your next question comes from Robert Kwan of RBC Capital Markets. Please go ahead.

Great. Good morning. If I can just ask around some of the projects or the potential projects, and the first being the tankage in Edmonton. You talked about your potential customers needing a clear path to TMX completion. I'm just wondering specifically, what do you think they need to see out of TMX to go forward?

I think just more certainty on just the startup date.

You know, they have much more clear line of sight to that than we do at shippers. And so they understand, you know, their needs and when they're going to need the tankage. So it's their lens that we're looking through, not ours.

Okay. And then just in terms of additional DRU phases, it's obviously drew out through 2022. Do you think that at this point they need

uh clarity both on tmx and the impact on the market as well as the mainline tolling framework let me turn that over to kyle our uh chief commercial officer um yeah robert i'd say that i think that you know mainline tolling would be be a part of it i mean i think it's as we've said before i mean bru in particular is those contracts are complicated there's a few variables to get to get right there. And so, you know, I think what they're thinking about right now is really just all the egress. I mean, you look at TMX and you look at the mainline tolling. Right now, egress is not necessarily a problem. So if you look at the arbitrage, you know, selling at the hubs north of the border makes sense right now. So I think all of those things are factors that they're considering right now. You know, we still think DRU is... compelling alternative to Python. But I would expect that those things are being weighed right now. And, you know, we would kind of expect that to be sort of a later in the year, greater line of sight, but those are the type of things that they're looking at right now. So mainline would be part of it, but more holistic view on egress, I think is, is what I would point to.

Got it. And if I can just finish with your new ventures team, Steve, you talked about it this quarter, or you mentioned it this quarter. You also talked about it last quarter. So I'm just wondering, you know, just the work that they've done to date, any early findings, you know, has there been any evolution of thought on how you would approach commercial frameworks for new businesses, as well as just the buy versus build decision?

On the team, we just, we're just now placing the people in the seats. You know, we've, um, We placed one last week. We've got another one coming in in about two weeks. So we're just placing people in the seats there. Really kind of a broad, they're bringing broad ideas that we haven't thought of in the past. You know, I can't really share those with you, but they are coming up with opportunities that we really haven't been exploring in the past that fit in the energy transition that we believe we could be successful in the long run.

And I get you don't want to get into too many details at this point, but when you talk about or can you broadly talk about why you wouldn't have thought about some of these ideas in the past? Is it just you didn't know they existed or just a new way of thinking of how to leverage your existing footprint?

I think it's not our existing footprint. I think as you get people in the door that have a depth and experience. They bring ideas and relationships that we didn't have before.

Okay, that's great. Thank you very much.

Your next question comes from Robert Cotelier of CIBC Capital Markets. Please go ahead.

Hey, good morning. I think maybe I'll follow up on that last question, and sorry if this is a little bit repetitive, but You've mentioned energy transition as an area that maybe you can target with the new ventures team. I wonder if there's any specific areas where you feel the company has either an expertise or an asset footprint advantage that can be exploited, particularly to energy transition?

You know, we looked at the HRD last year pretty hard.

We do think we have the organizational capability to do HRD. Of course, you know, the U.S., you know, moving forward with the IRA, that kind of puts some definitely hold on the project here in Canada. And it does make it a better opportunity down in the States. So HRD itself is something that we have the organizational capability to do. So looking forward, we'll continue to look at those type of opportunities and try to how do we reduce the risk on any commodity exposure if we did ever move forward with a project like that. But here in Canada, we're going to need different governmental support to build a project.

Yeah, that's understandable. And just to follow that up a little bit, do you think there's any impact of Buy America on some refinery product sales? For example, materials used in roads and bridges?

I'll let Kyle take that.

Yeah, I mean, I think that we've kind of heard that. There's nothing really, I would say, material that I think is coming in scale at the moment. I mean, it's something that we keep an eye on. Obviously, we're in that business. In the event there was an opportunity, we would look at it. But I would say that... Nothing at the moment that I would say is in scale that would be looking to replace any of that. But I mean, as you mentioned, it's, you know, we've we've heard similar narratives, but not the material right now.

And Robert, you know, the federal government, that's a federal government policy, right? So what they're doing is on federal roads and interstates. So if they're giving a larger demand for asphalt, that just means the whole market has a larger demand. We may not be able to sell into that market, but we can sell into the other markets that's getting pulled into. Yeah.

Okay. I understand that. And then just a couple quick questions for Sean here. First one I almost hate to ask, but at what point do you become concerned that you're too under levered? And how long are you willing to remain patient before doing something more aggressive on the repurchases like a substantial issuer bid?

I'd say it's tough to see a point where I'd feel like we're actually too under levered, to be honest. I think we have a relatively conservative view to leverage. We're at 2.7 times relative to the three to three and a half target. We have been. And we'll continue to be at the lower end of leverage as it relates to our peers. And we think that makes sense. And we think it has behooved us as we've moved through what has been, you know, a couple different cycles, certainly since this business has transformed. So, you know, currently at 2.7 times. That's also, you know, as a reminder, on relatively strong marketing results. you know, go backwards, not even, you know, sort of 12 to 18 months and that business was performing somewhat differently and the leverage profile would have been different. So I think, you know, 2.7 times, it certainly would not be prudent to jack that up at this point in time because things can always change, which we know. And we think something that benefits the company and our shareholders is having that conservative leverage profile.

Yeah, I can't blame you at all for that. And last question for me is more of a curiosity here, but it looks like your credit facility was extended for the second time in relatively rapid succession. So I'm curious as to what's driving that and whether or not there's any amendments of consequence that were made to the facility subsequent to the year end.

No, that's actually a great question, Robert. So we did extend our credit facility. It closed on February 10th. We typically extend our credit facility more in the March-April timeframe, so you're absolutely right. This one was accelerated somewhat. As I think you would have seen, you know, throughout certainly, you know, pre- and post-pandemic, we've always been fairly prudent as we've considered our credit facility. Feedback that we had been getting is that perhaps pricing would start to increase on credit facilities and there'd be more pressure as we move forward. Given that, we thought it made sense to accelerate our extension by a month or two to try and get ahead of that. If that's the case, I mean, we're successful in extending our credit facility with all of our existing syndicate banks at pricing the exact same as it was before. So I view that as being a success. And if anything, it was really just more a proactive move to try and get ahead of what we are hearing could potentially be some increases in pricing as you move throughout the year.

Okay, thanks very much.

Your next question comes from Ben Pham of BMO. Please go ahead.

Hi, thanks. Good morning. Maybe back to the new ventures team and maybe thinking about when you do look at maybe potentially maybe a new geography if that's in the lens you're looking at, how large does it have to be, that new geography is, let's say, a percent of EBITDA for you to actually put the effort and time into it.

Now that we've looked at it that way, Ben, I think we're looking for opportunities that are kind of right size for us. If we take really large chunks, then we're going to want a lot more security of revenue. If the security revenue is smaller, then we'll probably do a smaller projects, right? Because we don't want to get out in front of our skis.

Okay, so it sounds like any potential new opportunity that would be on traditional, you would plan to fund that on your balance sheet?

I mean, it really depends on the opportunity, Ben. I mean, at the end of the day, you know, we do fundamentally believe in being fully funded, you know, within existing cash flows. That wouldn't change for this new ventures team. But at the same time, it depends on the opportunity and, you know, relative merits of that. So I think it's tough to be completely myopic and around, you know, what the parameters may look like without knowing what the exact opportunity is. But in general, we have and we continue to believe that being fully funded within your own means is absolutely fundamental to the value proposition we're offering.

Okay, got it. And maybe lastly on cap allocation, I get the infrastructure driving the dividend growth. On share buybacks, what's the thought process that's being lowered this year versus last year when your marketing looks like it's, I know it's still early in the year, but it looks like it could be maybe even comparable to last year.

You absolutely nailed it, Ben. It's just early in the year. If you think about the cadence, as we talked about share buybacks last year, our target to start the year was actually that same $100 million. And as we moved this through the year and had more visibility on Where capital was ending up and marketing was ending up, those are really the two levers. So with marketing performing quite well and capital coming in, certainly at the lower end of what we were hoping, you know, that's what drove the larger buyback. You know, our hope certainly this year is that capital will move to the high end of our range or higher, and we can deploy that capital, you know, towards growth capital as opposed to buybacks. And we hope marketing will outperform again. So, I mean, it's just, you know, we're – A month and a half into the year, and so it's too early to say, but those are really the factors that will influence it as we move through the year.

Okay, got it. Thank you.

Ladies and gentlemen, once again, if you would like to ask a question, please press star 1 at this time. Your next question will come from Andrew Kuski of Credit Suisse. Please go ahead.

Thanks. Good morning. I guess the first question is just about your balance sheet and not to be patronizing about it, but you've done a good job of deleveraging things. And given the shift we've seen in the yield curve, and you just look around generally across the lay of the land, do you anticipate some others really running into trouble with their sort of misfinancing of assets and really carrying too much debt and now being squeezed by interest payments that may cough up some assets in the market or provide you some opportunities that maybe otherwise wouldn't have been there?

I mean, we could always be hopeful. I mean, we're not here to opine on how other people have managed their capital structure or what that may mean. You know, certainly there are some asset packages that have been rumored to be coming to market, but into the extent that they do, as you note, Andrew, I mean, we've got a fantastic balance sheet that we could certainly utilize to take advantage of that. But I mean, it's tough for us to really speculate on what may or may not happen to other people. We're really focused on on keeping our balance sheet pristine and making sure that that sets us up well for success.

Okay, I appreciate that. And then just in that longer-term context of managing the business, and you think about your pathway to net zero, how do you conceptualize the costs of carbon escalating in Canada and really the cost of abatement? Is it a straight NPV for you, or how do you really think about that?

Yeah, I mean, for us, we've got net zero targets.

There's going to be some measure of a cost to that. But again, it's something that we think we can do. We actually, you know, if you think of it, how we're going to get there, we've already gotten there partially through Moose Jaw. You know, it's going to be through things like, if you think of it, our Scope 2 PPAs, which actually don't actually have an outlay. It's more an avoidance or replacement of existing costs. So as we think about net zero, we do recognize that there will be some costs to achieve it, but we think it's something that it's certainly understandable and something that is well within our means. So, again, it's tough to be absolutely myopic on where that's going to be. I mean, as we've talked about before, we think with existing technologies, we can get about 90% there, so there's still a little bit of 10% that we need by the time we hit 2050 to figure out. But, again, you know, we think that's certainly well within our means. Okay.

I appreciate that. Thank you.

There are no further questions, so I would now like to hand the call back to Mark for any closing remarks.

Thanks, Operator, and thanks, everyone, for joining us for our 2022 fourth quarter and full year conference call. Again, I would like to note that we have made certain information available on our website at gibsonenergy.com. And as always, if you have any further questions, please do reach out at investor.relations at gibsonenergy.com. Thanks, everyone, and thanks for your continued support of Gibson. Have a great day.

Ladies and gentlemen, this does conclude your conference call for this morning. We would like to thank everyone for participating, and would you kindly disconnect your