Trican Well Service Ltd.

Good morning, ladies and gentlemen. Welcome to the Trican Wealth Service first quarter 2023 earnings results conference call and webcast. As a reminder, this conference call is being recorded. I would now like to turn the meeting over to Mr. Brad Fedora, President and CEO of Trican Wealth Service Limited. Please go ahead, Mr. Fedora.

Thank you, and good morning, everyone. Thank you for attending the Trican Q1 2023 webinar. quarterly results call. First, Scott Mattson, our Chief Financial Officer, will give an overview of the quarterly results. I will then provide some comments with respect to the general operating conditions and the outlook for the rest of this year, and then we'll turn the call over for questions. Several members of our team are in the room with me here today and will be available to answer any questions that may come up.

I'll now turn the call back to Scott. Thanks, Brad. So before we begin, I'd like to remind everyone that this conference call may contain forward-looking statements and other information based on current expectations or results for the company. Certain material factors or assumptions that were applied in drawing conclusions or making projections are reflected in the forward-looking information section of our MD&A for Q1 of 2023. A number of business risks and uncertainties could cause actual results to differ materially from these forward-looking statements and our financial outlook. please refer to our 2022 annual information form, business risk section of our Q1 2023 MD&A and our MD&A for the year ended December 31st, 2022 for a more complete description of business risks and uncertainties facing Trican. These documents are available on our website and on CDAR. During this call, we will refer to several common industry terms and we use certain non-GAP, non-IFRS measures which are more fully described in our Q1 2023 MD&A. And our quarterly results were released after close of market last night and are available both on CDAR and our website. So with that, let's move on to our results for the quarter. Most of my comments will draw comparisons to the first quarter of last year, and I'll provide some general commentary about our quarterly activity and our expectations going forward. Trican's results for the quarter were significantly improved compared to Q1 of 2022. Industry conditions were quite strong, which led to solid activity levels across our business lines. Inflation is somewhat moderated, leading to a more sustainable margin profile, and that resulted in improvements across all major financial categories. Revenue for the quarter was $297 million, an increase of about 36% compared to the same period of last year. Adjusted EBITDA came in at $81.6 million, a significant improvement over the $38.9 million we generated in Q1 of 2022. I would note that our adjusted EBITDA figure includes expenditures related to good end replacements, which totaled $2.3 million in the quarter and were expensed in the period. Adjusted EBITDA for the quarter came in at $82.9 million, or 28% of revenues, a significant improvement compared to the $42.0 million and 19% we printed last year. To arrive at EBITDA, we add back the effects of our cash settled share-based compensation to more clearly show the results of our operations and remove some of the financial noise associated with the changes in our share price. as we mark to market these items. On a consolidated basis, we generated positive earnings of $46 million in the quarter, or about $0.20 per share. Trican generated free cash flow of $69.5 million during the quarter, as compared to $30.4 million in Q1 of 2022. Our definition of free cash flow is essentially EBITDAs less non-discretionary cash expenditures, which include maintenance capital, interest, cash taxes paid, and cash settled stock-based comp. CapEx for the quarter was about $19.5 million, split between our maintenance capital program of $11.2 million and upgrade capital of $8.3 million. The upgrade capital mainly dedicated to our ongoing Tier 4 capital refurbishment program, which Brad will touch on later. Balance sheet remains in excellent shape. We exited the quarter with positive working capital of approximately $181 million, including cash of $25. And finally, with respect to our return of capital strategy, we were quite active with our NCIB program during the quarter. We repurchased and cancelled about 9.8 million shares at an average price of $3.31, equating to approximately 4% of the company's issued and outstanding shares based on the share count at the beginning of the year. We've remained active as we've moved into Q2, and have repurchased another 1.7 million shares or so since April 1st. As we reported yesterday, the Board of Directors declared a dividend of $0.04 per share to be paid on June 30th of 2023 to shareholders of record as of close of business on June 15th of 2023. And I would note that these dividends are designated as eligible dividends for Canadian tax purposes. So with that, I'll turn things back to Brad for some comments on our operating conditions and our outlook.

Thanks, Scott. With respect to Q1, the quarter, we're very happy with how it went. It basically went exactly how we had planned. It seems like every year we have a slower start than we anticipate. So I think that's basically a trend that we're going to have to factor into our budgeting. We were lucky this year in that we didn't have any weather delays in March, and we were able to work right to the end of the month. And so even though we did have a bit of a slow start, the quarter continued. basically unfolded from an activity and financial perspective exactly how we had planned. We're still, like Scott was saying, there's still inflation in the system, but the rate of change has slowed considerably. It's things like sand, chemicals, third-party trucking, et cetera, our main source of third-party purchases, and we do have ongoing labor inflation within our company. So all of that adds up. It's significant. You know, we haven't seen any, now that commodity prices have come down a bit, of course, none of that was factored into our suppliers' pricing. And, you know, where they can, I think the whole value chain is trying to operate at a reasonable level from a return perspective. So I don't anticipate the inflation or costs are going to change anytime soon. Pricing has been very stable basically since last summer. We're fortunate that our customers have allowed us to pass on inflation as it has been occurring. So basically, pricing has been flat. It's just changed. It just fluctuates with inflation, which has been actually somewhat modest in the recent time. On the fracturing side, the market's very much balanced. There's about 32 staff fracking crews operating in Canada. And with two to 225 drilling rigs running, basically those 32 crews are operating close to capacity. But we're not in an undersupplied situation as of yet. And I don't expect that will change anytime soon. Trican is still operating seven frack crews, which we've been operating now, I think, for the last year and a bit. And we won't add crews into this market until activity levels rise. And certainly we have the equipment ready to go. We still have about five parked crews, which represents a fairly large percentage of the idle capacity in Canada. But we'll just play it by ear, and if there's demand for an additional crew, we will put it in the field. And if there isn't, we'll continue operating with our seven crews, four of which are the Tier 4 technology. We're very happy with the cementing division. Fracturing represents about 70% of our revenue, and cementing is about 20%, and coil is the remaining 10%. So the cementing division is very significant to this business, and I think we've done a lot to improve that. Even though it was running very well, we've done a lot to improve that in Q1, and we actually went from about 17 crews to... sort of 21, 22 crews in Q1, allowing us to better service our customers and maintain our market share in the deep, more technical areas of the basin. We still operate with about a 30% to 40% overall market share in Canada, but we're about a 50% market share in the Montney and the Deep Basin, which is where we think we have the most value and we can differentiate our product offering. And we will, again, the same with cementing as in fracturing. If activity lifts, you know, we'll try to bring on more units to make sure we minimize the late that we experienced in late 2022. But as with any kind of labor in the oil field services sector, it can be a challenge adding, you know, getting incremental workers. But we'll stay focused on making sure we're operating efficiently in each of our divisions. Coil has been fairly steady. We operate seven coil units. in Western Canada, and we don't expect that to change anytime soon. So just the outlook for the second half of this year, you know, I know everybody is nervous with where gas prices are and are sort of wondering if it has significantly impacted our forecast for the second half. And certainly we don't, you know, we're not naive. We keep a very close eye on natural gas prices in particular, condensate prices, what drives the economics of plays like the Montagnier and the Duvernay, et cetera. We're not seeing a big pullback in activity at all, actually, and I think there is a bit of a disconnect between the general market and what's happening here in the oil patch. And certainly it's something we're watching, but we expect the second half of the year to be fairly busy. We're now in a situation where our customers are spending less than 50% of cash flow very disciplined programs, very long-term thinking. It all feels quite thoughtful and well planned out. And when you're spending less than 50% of your cash flow on drilling and completions, inherently there's a bit of a shock absorber there. We obviously had a very warm winter both in North America and in Europe and that has a huge impact on gas prices and we expect that that'll level out as the year goes on and it feels like we're going to be reasonably busy for the next few years. And I've said this before, I've probably never felt this good about the industry from a long-term predictability perspective. The pressure pumping market is quite balanced. Any increase in activity that may occur late this year and next year would tighten up the supply and demand balance and may even require more crews coming into the market. But it sort of feels steady as she goes here for the next little while. We're We're obviously excited about the fact that some of the issues in Northeast BC with First Nations have been started to get worked out and more well licenses are being issued. And of course, that's all very LNG focused drilling. There's a big wells, multi-well pads, very fracturing intensive, very meaningful to our business. And I think I've been getting questions about if certain of your customers are focusing efforts in Northeast BC? Are they pulling work away from other areas? And the answer is you never know. It changes from quarter to quarter, but it feels like the increase in activity in Northeast BC will be incremental to the overall industry activity. I don't think it comes at the cost of something else at this stage. And of course, it's a very tight labor environment. We're doing all we can to make sure that we have good crews for our customers. and our people are operating in a safe and efficient manner. We take great pride in our staff and the work that they do. We're focused on training, particularly safety training. We're fortunate that our people are committed and are looking for more and more training all the time. We have an excellent safety record, and without the dedication of our people, we would not be able to operate as efficiently and safely as we have. We've taken an incredible amount of costs out of our business, In the last few years, it's quite significant and it's enabled us to maintain decent or reasonable margins. There is some issues with the supply chain. Nothing really has changed there and I don't expect that that's going to go away. The biggest one is sand supply. Every time we sort of go into quarters like Q1 or Q3 and there's a big ramp up in activity, it really stresses the logistics end of the sand. There's lots of sand available, but there isn't lots of rail and trucks available. And so we are expecting the summer to be pretty tricky, and we're going to be making sure that we manage that appropriately and are looking six weeks into the future at all times. And we're very fortunate that our logistics group and our supply group here at Trican seem to, no matter what, seem to get that figured out and allowing us to provide service for our customers. you know, from a corporate strategy perspective, nothing really has changed. We're very bullish on the industry in Canada. You know, we believe that Canada will play a very important and growing role with respect to providing the world with clean, reliable, sustainable energy, particularly natural gas. You know, China LNG demand will recover. We won't get warm winters in Europe forever. You know, I think more and more Canada is going to be a key supplier to the world with respect to providing our clean, sustainable natural gas. And certainly, you know, we've got now three LNG or four LNG projects coming on in the next few years. The first one being LNG Canada, which should be active in 2025 and plays like the Montney, whether it's Northeast BC, Alberta, the deep basin will play well into our, we'll be feeding that facility. with natural gas, and that will make sure that there's an ongoing demand for our services. I would say frack intensity on a per-well basis is still increasing. Larger sand volumes, more stages. We are starting to see a trend where some of the customers that were doing ball drop systems are looking at going to a plug-and-perf style of completion, which is more fracturing intensive, more sand going into the wells. So we will keep a close eye on that. That's generally, I would say, beneficial to us as long as we can manage the logistics of sand supply. Our strategy is still to differentiate and modernize our business while maintaining a conservative balance sheet. We're focusing on state-of-the-art equipment, making sure the systems are keeping up, allowing us to make good decisions, predict, you know, use data to make predictions. We're very focused on ESG and Indigenous partnerships. And it's all about building a sustainable business that will thrive in Canada for the years to come. You know, we base our business on a guiding principle of clean air, clean water. Our Tier 4 technology has replaced diesel with natural gas, much lower emissions. less particulates into the air, et cetera. Our chemistries allow for more use of produced water and recycled water. So there's less need to take fresh water out of the lakes and rivers. You know, the oil and gas industry doesn't take much water or doesn't use much water, especially compared to other industries like the agricultural business. But still, you know, we're always looking for ways to reduce our footprint, reduce our impact on the environment. And I think we've got a great start. to building a sustainable business. Our fourth tier four fleet came into service late Q1. So now we are, out of the seven crews that we're operating, four of them are tier four. So they're brand new fleets, you know, and I know this industry is plagued with underinvestment, you know, just much like our customers. But, you know, we really stand out with respect to having almost a brand new fleet operating today compared to two years ago. And that allows much more efficient operations, less maintenance and repair costs. The people are excited to work on the new, latest, greatest equipment and technology. The customers are excited to use it to reduce their emissions, reduce their fuel costs. So I think our strategy has played out well. We've got a great start to having the most technically advanced fleet in Canada. We don't foresee that changing anytime soon. know and just along that since the beginning of 2021 we've displaced 28 million liters of diesel with our tier 4 technology that's really meaningful and we're using natural gas for the most part right up right from the pad so our customers are happy with it the public is happy that means less fuel trucks on the road less emissions i think it's a win-win for for everybody um You know, we do expect that this will be the standard technology going forward. But, you know, I think we've done a good job of staying one step ahead. And as we've been building our Tier 4 technology, we've also just recently brought in what we call an electrified backside of our frack spread. And really what that means is we've electrified the blender, the chemical unit, sand storage and delivery equipment, and the data van. And so it used to be with our Tier 4 technology that we were displacing about 75% to 80% of the diesel usage on location. With this new electric equipment, we're now up to 85% to 90% diesel displacement. So again, less emissions, less fuel cost, and more importantly, it's all electronically controlled from the data van. So we have No people in the hot zone, or what we call the hot zone, which is the danger zone of a natural gas spread. It's all operated from the data van. So we're very excited about this, something our customers are basically getting in line to use. So we will continue to differentiate our product offering going forward, and we're completely agnostic with respect to technology. As long as it provides a benefit for our customers, provides a return for our shareholders, We will continue to evaluate all the technologies that are out there and put in place what we think is the best one for the Canadian operating environment. On the return of capital strategy, I think Scott has touched on this. We have a diversified return of capital. We believe in share buybacks, dividends, a modest sustainable dividend. We've purchased 11.5 million shares since year end. We've purchased 38% of the outstanding shares since we began the buyback program back in 2017. So very happy with how that's going. We expect to maintain the dividend for the years to come. And I think we're going to be probably more opportunistic on our NCIB going forward. I think we will definitely fulfill our full 10% by the end of the program, which gets renewed in October. Certainly we'll look for down days to be more active on buying our stock back. And lastly, just before we go to questions, with respect to the forest fires that are burning in Alberta, we haven't had any effect on our operations materially as of yet. Its breakup is without a doubt our slowest month of the year. We're not all that active. We've had to evacuate a few locations, abandoned some equipment on location, but so far so good. Nobody's been harmed. None of our equipment's been burned. We don't expect this to have any significant impact on our quarter, assuming we get control of these fires. Q2 is probably more impacted by rain than anything. And as always with our quarter, it's very June back-end loaded, which happens to be the rainiest month of the year in Alberta. So we're actually more concerned about... getting a bunch of rain at this stage than anything. But I think in general, our Q2 should be very, very similar to last year's. I think I'll stop there and we'll go to questions and I'll pass it back to you. Thank you.

We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, Please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. The first question comes from Cole Pereira of Stifel. Please go ahead.

Morning, all. So it sounds like Q3 is looking pretty good. Obviously, there's always a couple different ways it can go, but can you talk about how you see that quarter playing out relative to Q1 and whether there could be an opportunity for margin expansion through either A, better economies of scale or B, higher net pricing?

Yeah, I think Q3 will be similar to probably be, when you look at last year's Q3 and Q1, take an average of those two, it's probably where it's going to wash out. But again, it's early. This is an interesting time of year because our customers are reviewing budgets and plans for the second half of the year. And of course, Natural gas prices are not cooperating. But, yeah, the board is full for Q3. So we expect that we're going to have a decent quarter. We think pricing is going to stay flat. We don't expect any sort of expansion or degradation of margins. I think we're sort of at a stage here where the market's fairly balanced, and I think pricing will stay pretty similar to what it was in Q1 and the second half of last year.

got it thanks and this kind of a difficult question answer but from your perspective how much white space was there in q1 across the basin or you know how much do you think drilling activity needs to rise before you need another frack crew in the basin generally if you were to add a frack crew you know you I don't think any

of the companies in the pressure pumping business would do so without sort of at least a year of visibility, we would need an incremental growth of sort of five to seven drilling rigs on an annual basis to add additional frack crews. There's lots of white space. That's normal. There's travel days, rig up days. There's scheduling conflicts. White space is just part of the game, and it's never going to go away. It's more making sure that if we have drilling rig growth in northwest Alberta, northeast BC, that looks like five to ten rigs on an ongoing sustained basis. You might see another frack crew come in, but I'm not the one to be able to answer that. as to how much white space our competitors are dealing with. I would assume their schedules are fairly similar to ours, but I don't think you're going to see that this summer, or the addition of a frack group.

Got it. So, I mean, you paid off your debt, been active with the buyback, paying a nice dividend now. The business should continue to grow in Canada, just from LNG, Blueberry. But how do you think about growth beyond that by M&A either in Canada or the U.S.?

We're always looking. I think probably the biggest hurdle to M&A at this stage is just the multiples that are being assigned to the industry as a whole. The average pressure pumping multiple in Canada and the U.S. is less than three. We're fortunate we get a premium multiple, but the willingness to transact at those levels is low. Regardless whether it's cash or shares, I know you can say it's really irrelevant as long as if you're doing a share deal, but just psychologically, it's tough to transact when you have a two times EBITDA multiple.

Got it. Okay, that's all for me. Thanks. I'll turn it back.

The next question comes from Waqar Syed of ATV Capital Markets. Please go ahead.

Thank you for taking my question, and good morning. Scott, just a housekeeping question. The 1.7 million shares that you bought quarter to date, what was the average purchase price?

Good question, Waqar. You got me on that one, but it'll be between 3 and 325. Okay.

And then, Brad, you've got five crews, you said, that are parked right now. Would those be Tier 2 diesel or Tier 2 dual fuel?

Diesel. Diesel.

Yeah.

I mean, it depends on the day, but generally they'd be older diesel equipment that would require fairly significant upgrades before we brought them into the field.

And then, Brad, I noticed that the coil tubing revenues have been, like, maybe for a little while flat to down. What's the rationale for that? What's your outlook as well for that business?

Well, the rationale is that we're not doing a good enough job of our coils division, something that is getting more focus and attention here. We have made some moves with people and brought people in to help us build that division up. And I think it's a little early to make predictions on how fast that division grows at this stage. We're kind of doing a bottom-up sort of review of the business.

Okay. And we've seen a trend on the U.S. side in pumping that companies are offering integrated services, whether that's, you know, frac sand logistics or mining or even, you know, fuel at the well sites or wireline, for example. Is that something that you would consider?

Yeah, I mean, the answer is, yeah, we would consider everything. We look at, particularly with respect to sand logistics, we're always looking at ways to to make our logistics operations more efficient. We do expect tightness in the market. And again, it's not because of the amount of sand out there. It's the industry's abilities to move it from A to B when you need it. It's quite a process, obviously, to bring sand from Wisconsin to Northeast BC. So we're always looking at the potential to make investments you know, to better serve our customers. But, again, you know, we don't spend money unless we can get a return on it. And, you know, sometimes that's difficult to do. You know, and with respect to sort of integrated services, we tend to somewhat shy away from those situations, particularly wireline, because, you know, eventually the customer just wants it for free and, you know, we We're not, you know, we can't have a sustainable company with, you know, giving away products and services.

Yeah. Makes sense. And just one final question. You know, touched on BC and, you know, activity growth that could happen there with LNG. Now, given the very stringent environmental regulations that are being implemented there, from a pumping perspective um and again from a supply chain perspective there what do you think is going eventually going to be the best answer there you know is tier four going to be the best answer uh dgb or is it going to be e-fleets or how are you thinking about that marketplace and uh the growth there yeah like our market our our thinking about that market continues to evolve all the time and as as new information becomes available you know we

We factor that information and process it accordingly. It's a tough operating environment. They're remote. There's no power lines, certainly not with the amount of electricity that would be required to run a frack spread. So even though our goal is 100% natural gas, and when we look at all the technologies out there, we want to get to the stage where we are burning 100% natural gas as a fuel You know, no diesel being consumed on location at all. And we're sort of 90% of the way there, give or take, with our tier four engines and our electric equipment that runs off a natural gas generator. So, you know, we hope that we can adapt our existing equipment, but we don't, at this stage, given the cost of an electric fleet, there just isn't a willingness by the customers to to pay more for their pumping services and you know electric any fleet is I don't know seventy seventy-five million Canadian you could never justify the economics of that type of investment and the other thing is it would be a totally different way of doing things you would need different different mechanics different operators different procedures which that's fine But it's just something to consider when you think about totally changing your equipment designs and technologies. The system is, frankly, isn't sort of set up for that at this stage. But, you know, it's the transition of our backside to run off electricity, given what I just said, was actually quite easy and has worked really well so far. So we think we'll be buying more of that. You know, it's like I said, lower maintenance, less people, less fuel costs. You know, we just got to make sure that the equipment eventually pays out in a reasonable time.

Great. Well, thank you very much for your comments. Appreciate that.

Thank you. The next question comes from Aaron McNeil of TD Cohen. Please go ahead.

Good morning, and thanks for taking my questions. Brad, to sort of follow up on Cole's M&A question, you obviously mentioned prevailing valuations for Trican and your pressure-pumping peers and sort of that unwillingness to transact. But, you know, aside from chipping away at the NCIB, which it sounds like you're going to do, why not take a bigger swing with an SIB?

Yeah, we think about that all the time. You know, and I think it's certainly something that needs to be thought through carefully, because I would tend to agree with you, given the, you know, you're basically using that as your M&A strategy by buying yourself back, which is great. So, yeah, I tend to agree with your thinking.

What sort of leverage would you take on to do that?

Oh, we haven't worked our way through that yet. You know, we're, as you know, we're debt adverse, but we're not, you know, we're not afraid of debt, reasonable levels of debt. So, you know, I couldn't sort of get into specifics at this point, but we would be comfortable with a little bit of debt for sure, you know, given our non-cash working capital surplus, which is fairly significant, as you saw. That obviously is a protection against leverage in a downturn, but we're still pretty conservative. You know, it's just our nature around the table. It's not going to change anytime soon.

Makes total sense. You know, you sort of mentioned it in the prepared remarks, but how should we be thinking about, you know, further or incremental investments in the dynamic gas blending engines beyond what you've sort of articulated?

Well, we've got our fifth spread coming this year, and we're basically of the mentality that we want to modernize the fleet in its entirety. And at the same time, though, we don't want to be overcommitted to one type of technology unless we really feel that it's going to provide 100% natural gas solution down the road. We've been very happy with how the equipment's been running. It effectively operates at 100% utilization It's very well received by the customers. It's a significant part of our ESG plan. But we're always, like I said, we're agnostic to technology. If something better comes along tomorrow, we would switch. But in general, as part of our annual capital budget, there would be sort of at least one fleet upgrade, I would say.

When do you have to start ordering stuff for the 2024 capital budget?

A very long lead time on equipment now. I mean, I'm looking at Todd, but it's over a year. 12 months.

Yeah. All right. Appreciate the time.

Thanks.

Thanks. Once again, to join the question queue, you may press star then one on your telephone keypad. you'll hear its own acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. If you have a question, please press star then 1 now. The next question comes from Keith Mackey of RBC. Please go ahead.

Hi, good morning. I'm hoping you can talk a little bit more about the trend in pad size in Western Canada that you're doing. How... How many wells per pad would you say your equipment is working on on average, and how is this trended over the last year to two?

The trend is definitely more wells per pad. I don't have the exact numbers handy, but probably our average pad would be four to six wells. Just looking at the other people in the room here. You know, we do see 10 well pads, but they're not commonplace for us yet. And, you know, we certainly, we think it's going there sooner than later. And that's, you know, that's great because anytime you can sit on location for a month plus, you know, makes for, you know, a very effective use of the equipment. And the people, you know, the staff love it, right? When you sort of, you rig in and you just sort of have your, manufacturing facility that runs every day. I know I'm not really answering your question, but the number of wells per pad has definitely trended up, but it hasn't trended up as fast as I thought it would. I think once you get more targeted LNG development, you will see additional wells on a pad.

Okay, got it. No, that's helpful. Maybe just to turn to the electric ancillary equipment, can you just talk about what percentage of your sites or crews are working with that type of equipment now, and how high do you think that can go? Can you be fully electric on the back end on all of your fleets, or will it be a mix of some kind? We just brought our first...

set late Q1. So it's still very early days. So far, so good. And we do have another set on order that will be operating in the second half of this year. So we would imagine all of our equipment would get there. Certainly that equipment that sits on the pad, it may not be practical in a cardium situation where you're on and off in a very short period of time. and you need room for the generator, et cetera. But it's something I would assume all of our sort of Montney Deep Basin fleets would get eventually.

Yeah. And what's roughly the cost to outfit a fleet with that type of equipment now?

Five million? Yeah. Canadian? Five million Canadian, yeah. So it's not insignificant, right? And we can't spend money unless there's a return, so we think quite carefully about that situation.

Yeah, and I guess on that, what is the business proposition for it? Is it charged out on a percentage of fuel savings, or is there a higher rate that you can charge for providing electric and solar equipment?

It's based around the fuel savings for sure. I mean, it's different in every situation, but it's generally, yeah, there's less emissions and it's fairly significant fuel savings. Personnel as well. Less people on location. So our costs, our people and our repairs, we expect that this equipment is going to be quite reliable, especially with respect to the blender. And blenders can often be the source of, the majority of the breakdowns on location. So, you know, part of our motivation for this equipment was not just the electrification, frankly, it was also finding a more reliable blender. So we think we'll get our returns with a combination of all of those.

Got it. Okay. Thanks very much. I'll leave it there.

Thank you. If there are no more questions on the phone lines, this concludes the question and answer session. I would like to turn the conference back over to Mr. Fedora for any closing remarks.

Thank you, everyone, for your time and your interest in our company. And if there's any follow-up questions, the executive team will be available today and Monday to answer any questions you may have. Thanks again.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.