Pine Cliff Energy Q2 2024 Earnings Report

Pine Cliff Energy EPS Results

• Actual EPS: -C$0.01
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Pine Cliff Energy Revenue Results

• Actual Revenue: $46.61 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Pine Cliff Energy Announcement Details

• Quarter: Q2 2024
• Date: 8/8/2024
• Time: N/A
• Conference Call Date: Friday, August 9, 2024
• Conference Call Time: 11:00AM ET

Pine Cliff is a natural gas and crude oil company with a long-term view of creating shareholder value.

Pine Cliff Energy Q2 2024 Earnings Call Transcript

Key Takeaways

• Pine Cliff has hedged its summer 2024 production at the highest forward strip in company history, ensuring strong realized gas prices despite current volatility.
• Starting in 2025, over 10% of Pine Cliff’s production will feed newly commissioned LNG export facilities, alongside booming U.S. LNG exports expanding from 13 to 28 Bcf/d, underpinning North American gas demand.
• The company reduced its dividend in March to align with cash flow, is cutting debt by $2 million each quarter, and aims to achieve less than one times debt-to-cash-flow by 2025.
• Capital planning for 2025 focuses on a modest drilling program across three high-return areas—Twinning, Caroline (NGL-rich), and basal Quartz—with well paybacks under one year.
• Pine Cliff completed a $106 million acquisition in December 2023 (with no equity issuance since 2019) and continues disciplined M&A, though future deals depend on market timing and valuations.

Presentation

[Kristopher Zack, Vice President, Finance at Pine Cliff Energy]

Thanks. Good morning, everybody. Thank you for joining us on our second quarter conference call. I'm just gonna remind everyone that you will remain... If you're on this call on the phone, you'll remain on mute for the duration of the call. If you have any questions about the quarter that you'd like Phil or I to address, please post them on the webcast. The link has been provided in the web, on our webpage, as well as in the, press release. At this point in time, I'm now going to turn the call over to our President and Chief Executive Officer, Phil Hodge.

[Phil Hodge, President and CEO at Pine Cliff Energy]

Thanks, Kris. Good morning, everybody. I think we will, as we've done in the last couple of webcasts, assume that everybody's read the press release, and you may have—you probably have read my president's letter. But I'll summarize a little bit of what we kinda put in there, provide a little color. This really is an opportunity for you to ask some questions, if you have any questions, and you can just forward them online, and we'll read them, and happy to answer them. Thanks to those who have already put some questions in the queue. As I mentioned in the President's letter, it's kind of an odd... It is an odd time in the natural gas producer space.

[Phil Hodge, President and CEO at Pine Cliff Energy]

This is our 13th year of running Pine Cliff, and it's never, we've never had a situation where we've had depressed natural gas prices in the summer and a really strong forward outlook on natural gas prices. We've had difficult gas prices before. That's not new. 2019, 2020 would be prime years to show that. But as we saw coming out of those years, when gas prices got a lot stronger, it feels like that same type of setup. The difference this time, though, is that I think the markets are already building that in.

[Phil Hodge, President and CEO at Pine Cliff Energy]

In other words, they've already [priced] the forward strip, and which is what, you know, you can hedge your natural gas prices forward at, is already reflecting the fact that there is gonna be significant demand coming into the North American market in the back half of this year and into 2025. And I know that for many years, we've been talking about LNG being the, you know, the prime kind of support for that increased demand, but it's now, it, it's coming from a lot of other sources. It's not just LNG. The LNG, I don't wanna diminish that because that is quite, especially from a Canadian perspective, quite monumental. We've never had the ability to export natural gas to any other continent, other... Sorry, any other country than the United States, and that's about to change.

[Phil Hodge, President and CEO at Pine Cliff Energy]

And it's gonna have a pretty radical impact on kind of the dynamics of the supply and demand here in Western Canada. 'Cause the old adage was that we were always producing gas at the wrong end of the pipe. In other words, we had to send the gas south, we had to send the gas east, and we had to pay the marketing cost to do that. We now are gonna have the ability to send gas west, and to have the ability to send that to, in fairly large quantities. Over 10% of all of our production of our current production will now be exported by, as LNG, starting in 2025.

[Phil Hodge, President and CEO at Pine Cliff Energy]

But, compounding on that, and I touch on that in both my email, if you're a subscriber, if you're not a subscriber to our email, you can sign up on our website. But in the email, I talk about the fact that we've got Mexico LNG also starting up at the exact same time, and we've got a very large increase happening out of the Gulf of Mexico in the United States. The United States has now become the largest LNG exporter in the world, having started from zero in 2016. So it's been extremely impressive, and they now are exporting between 13 and 14 Bcf a day. That number is gonna go to over 28 Bcf a day in the next few years. That's significant. And so it's this unique time in the market.

[Phil Hodge, President and CEO at Pine Cliff Energy]

I understand the frustration that shareholders have, because we're all shareholders, and so you know, we all would like the stock price to be higher. I think we've However, we've always managed Pine Cliff for the long term and not the short term. And from that perspective, we, you know, that's why back in March, we reduced our dividend, because we didn't wanna be, sustaining the dividend with debt. We wanted to maintain that we, can do it within cash flow. We watch that very, very closely, what we call kind of our payout ratio, to make sure that our, our cash, that we're paying out, either by way of dividend and all of the costs of doing our business, are not greater than what we're bringing in.

[Phil Hodge, President and CEO at Pine Cliff Energy]

It is, you know, I think the number one surprise, just reading some of the analyst reports that came out last night on us after the financials, is I think people were surprised that our realized price was as strong as it was. And that's, you know, not surprising because, you know, that's not really transparent, because that's a lot of the work that goes behind the scenes on selling gas forward on a monthly basis, not just on the hedge basis, which we are, you know, that's what you see in the financial statements. And that even, you know, the hedge position is the largest position we've ever had in the history of Pine Cliff going into this summer. We expected to have a volatile summer. We were, it's, it has delivered in spades.

[Phil Hodge, President and CEO at Pine Cliff Energy]

It's been a very volatile summer for natural gas prices. But it is, we're very comfortable with where we've positioned the company to get through 2024 and then still be able to capitalize on 2025. The, I think the... When I look at as an investor, I mean, one of the questions we got was: How do we value Pine Cliff? And it's a, it's a very valid question, 'cause I think with a lot of oil and gas companies, there's many different ways to value it, and it kinda depends on the business model.

[Phil Hodge, President and CEO at Pine Cliff Energy]

If you've got a business model, for instance, that is very actively drilling and that you're, you know, you have a lot of wells or a lot of rigs going, moving all the time. A very important part of that is what the inventory is. Are you able to maintain that production increases to offset the decline? The average natural gas decline, you know, the average producer in our basin in the public markets, has a 30% decline rate, 31%, actually. And so that, that's—it's very important. For us, because of the low decline rate, and then, like I say, that's not an answer to all ills. I mean, it is just... It's a different business model.

[Phil Hodge, President and CEO at Pine Cliff Energy]

From my perspective, what it then becomes is how much cash flow can you generate, and how much can you return to your shareholders? And that, I think, is what is gonna get focused on more and more as we go into 2025. It's gonna be on the free cash flow yield. When I talk about free cash flow yield, we talk about after all of your costs, we're essentially keeping production flat, though. You've got to make sure you're comparing apples to apples. In 2024, we cut our CapEx considerably, and that was obviously by design. We really do not believe it's a this is a year to be bringing on new wells into weak commodity prices. So because of that, we've let our production decline. Now, it's not, like, as we talked about, it's a low decline, but nevertheless, it's declining.

[Phil Hodge, President and CEO at Pine Cliff Energy]

The plan would be in 2025, that we would start to go back to our typical program, which is a modest drilling program, that allows us to keep the kind of production roughly flat and allows us to generate as much free cash flow as possible. Cash flow that we can return to the shareholders. One of the other questions we got is the plan for the debt repayments. That ties into that. With the free cash flow that we've got in 2025, our plan would be to continue to make the payments that we're making currently, and we've made. You know, we're paying down CAD 2 million every quarter against our principal debt. The plan is to continue to make those payments every quarter and knock that debt down.

[Phil Hodge, President and CEO at Pine Cliff Energy]

If depending on, you know, the forward strip, it's and no one knows exactly what commodity prices are gonna be next year. But I think most analysts with their forward strips have got us anywhere, somewhere in an CAD 80 million cash flow range. If that is a range that we're able to achieve and our debt is, you know, our long-term debt is like CAD 60 million, then clearly we're back within and under the 1x debt to cash flow, which is a goal that we've always had, to try to keep the debt under 1x. Currently, we're under 2x, but our view is that we'll get back to under 1x in 2025.

[Phil Hodge, President and CEO at Pine Cliff Energy]

And the reason we wanna do that is that it gives us a strong balance sheet in case there's any acquisitions that are gonna make sense to us. We are still very much a company that has grown and continues to look at acquisitions as a for future growth. And so we've gone from 100 barrels a day to over 24,000 by making what we believe to be a very smart, creative, disciplined acquisitions over the last 13 years. So, you know, we did a CAD 106 million acquisition in December of 2023. That's the acquisition that we're now paying down. It's turned out to be, from a production and asset standpoint, to be a very good acquisition. Those assets are continuing to perform exactly as we hoped they would.

[Phil Hodge, President and CEO at Pine Cliff Energy]

We think there's gonna be opportunities in the back half of this year and into 2025 to make other acquisitions that will be a good fit for our model, and we'll be very active looking at those types of acquisitions. But you never know, they're... You know, we don't control that timing. We don't control what vendors are willing to sell the assets for. So you just need to be prepared. We're very proud of the fact that we have not used any equity since 2019 to do any of the acquisitions, even though we've done multiple acquisitions in between that 2019 and now. Again, that's driven by the fact that we're big shareholders. I mean, the management owns a lot of stock. Our insiders, we talked to, have been with us a long time.

[Phil Hodge, President and CEO at Pine Cliff Energy]

I think they have been with us a long time because they fully appreciate the fact that we are very disciplined on our acquisitions. And that's not gonna change, because, like I said, everything has to make sense on a per share basis because we are big shareholders. So it's... You know, like I said, Q2 is always kind of a softer, kind of generally quarter for in the natural gas space because it's the beginning of summer. Q3 is looking a lot like Q2. You know, here we are, we're already, we're seven weeks away from the end of Q3.

[Phil Hodge, President and CEO at Pine Cliff Energy]

We continue to keep a sharp focus on making sure that we're able to continue to pay down the dividends and stay within our covenants, and again, prepare ourselves for what's coming in the back half of this year and into next year. Another question we had was about the shorting of our or any stocks. I guess the question was more framed in the fact that Wall Street seems to be paying high rates of return to loan stock for shorts. We've never had much of a short position against Pine Cliff. We're always one of the lowest percentage ones, and I think there's a couple reasons for that. One is because we pay a pretty good dividend, and so anybody who's short stocks has to deal with that.

[Phil Hodge, President and CEO at Pine Cliff Energy]

We also pay it monthly, so that makes it even a little bit more complex for those who are trying to short stock. But I think probably the biggest reason is we have a lot of very large shareholders who are not loaning their stock to people to have shorts on them. So it's our liquidity to—for the short market isn't very strong. So I think that's historically, like I say, in 13 years, it's been very few times that we've had any kind of significant shorting against the stock, and I think that continues today. I mean, today, our yield would be close to 7%, and that's a, that's a, you know, pretty strong dividend yield, especially given the fact that we've, you know, it is a time where natural gas commodity is quite weak....

[Phil Hodge, President and CEO at Pine Cliff Energy]

We're, you know, I'm not gonna try to call a bottom, but it sure feels like we're pretty close to the bottom on the natural gas commodity prices. They're just. We're now, you know, I think the number one reason that there's been such a depression around natural gas prices is a fear that storage could fill in both the United States and Canada this summer. And the reason for that is because we've come off two very warm winters, and because of that, not as much gas was used in the heating in the winters, and therefore, we came into the springs with more gas in place. The U.S. has done a good job of cutting production.

[Phil Hodge, President and CEO at Pine Cliff Energy]

When gas prices went under $2, there was very large producers that came out very vocally saying that they were gonna cut production. That continues today. And so I think there is generally a belief that storage is gonna finish in October, somewhere around 3.8 or 3.9 Tcf. That is under the capacity levels of capacity. So that's a good thing. So I think as people get more and more comfortable that that's that there isn't gonna be a situation where storage is gonna fill, then prices in the United States should continue to rise. In Canada, it's a little bit more complex because this is goes back to the LNG.

[Phil Hodge, President and CEO at Pine Cliff Energy]

This is the very first time that we've ever, as an industry, have to prepare for the fact that more than 10% of our production, or an increase in demand is gonna go up by more than 10% in the next 6 to 9 months. And so production's been pretty resilient, has stayed pretty, pretty up around that 18 Bcf a day. That being said, in the last few weeks, we've seen it come down a little bit as well. So it's gonna be interesting.

[Phil Hodge, President and CEO at Pine Cliff Energy]

You know, when you do winter drilling, a lot of the companies that are having very active drilling programs would have committed to those rigs and those crews in the winter, and they, because they, you know, the plan would have been for a more moderate or more average winter, and that didn't happen. But you've already committed to the drilling. Those rigs, those wells, the production from those wells would have come on in the spring, and then they've now, there's a natural decline. There's a very high initial rates of production for those wells. That's starting to wane a little bit, and so that is probably having an impact on the supply. And you've got some, you know, a lot of the maintenance projects for the pipelines and also for the producers.

[Phil Hodge, President and CEO at Pine Cliff Energy]

Producers tend to plan their turnarounds and their workovers on any of their facilities at the same time that in the summer, and also at the same time that TC Energy is having maintenance turnarounds. So that's. There's still more of that to happen in August. We've got some maintenance starting up here on next Monday. That'll impact production just like it did in July. So there's, you know, and then again, we're into September, October, and that, you know, that's a bit of a wild card for weather. You never know what you're gonna get in in Canada in those months. So it's, it's an interesting time. I think what makes me comfortable as a Pine Cliff shareholder is that things look very a lot stronger in the winter and in going to 2025.

[Phil Hodge, President and CEO at Pine Cliff Energy]

We've got gas prices. The forward strip is in around that CAD 2.50 level. At those levels, Pine Cliff does very well on a cash flow basis, and it becomes a situation where we will then have excess capital to determine how we wanna allocate it. And I think at the end of the day, that's what our shareholders look to us to do, and I think hopefully have gained confidence in our ability to do that over the last 13 years, is how do we allocate capital? Is there acquisitions that make sense? Is there drilling that makes sense? Does it make sense for us to increase our dividend? We've increased, you know, we've increased the dividend twice since we started it in 2022.

[Phil Hodge, President and CEO at Pine Cliff Energy]

We've decreased it once because it was prudent, in our view, to do that at the same time. I think by the end of this year, we're somewhere around CAD 95 million, I think, of, that we've paid out in dividends, if we maintain the current rate. That's pretty impressive for a company of our size. You know, for a company that's got an enterprise value of CAD 400 million, have just started up our dividend, two years ago. So that's, that's the power of, of our, the business model that we've built, is that it has the ability to generate a lot of free cash flow. And because we don't spend as much as others on, drilling CapEx, we can therefore give that, that, that excess cash flow back to shareholders. And that's the plan.

[Phil Hodge, President and CEO at Pine Cliff Energy]

And it also will give us a cost of capital that'll allow us to take advantage of acquisition opportunities should they present themselves. So I think that's kind of the summary of kinda where we're at, the quarter. I think between the press release and my letter and the email that we sent out, I think you should have a pretty good sense of how we're viewing the world these days, and it and how we're kind of why we can remain you know very positive shareholders of Pine Cliff. It's been interesting doing some of the investor meetings, and we're gonna ramp up our investor relations work here in as we head into the fall, because I think natural gas is gonna become very topical.

[Phil Hodge, President and CEO at Pine Cliff Energy]

I think Canadian natural gas, in particular, is gonna become very topical. There's a lot of, you know, some of the other headwinds that we've, or tailwinds we've talked about, previously with, with you at, in various formats is, you know, we've got the oil sands production rising because of the TMX pipeline, and that increases the, local natural gas demand. I can speak from personal, you know, we, we read all about these data centers, but it's also hitting at a personal level because we've had various discussions with different parties about, about, how the data center model works, because they need, very reliable, power for their, for those operations, and that seems to be an area that is growing very rapidly, and that's coming at us-...

[Phil Hodge, President and CEO at Pine Cliff Energy]

I mean, that was, that's just in the last kind of 12 months that that's been on the, on our data or on our radar. But there's, you know, we've got the several major capital projects in Alberta, including the ATCO pipeline that's being built. There's been ethanol projects in northern Alberta. There's the very last coal facility came off the grid in Alberta in 2024. So there's a little, again, a lot of reasons to be optimistic for a natural gas producer going forward. We protected ourselves with hedges in the back half of this year, substantially more than we have in the, in the past. Again, because we're not... You know, although we're very optimistic in the future, we're not sure when that future is gonna kick in.

[Phil Hodge, President and CEO at Pine Cliff Energy]

So, we've got another question just added here. Says the, "How do you value PNE? The market seems to value PNE on its dividend yield. The share price seems to move in lockstep with the dividend yield of other gas producers. Do you agree?" I think that definitely the dividend yield is an important part to how our investors now value Pine Cliff. I would agree with that. I think we before, it was purely about cash flow and how much cash flow we could generate. I mean, going in, we did. In 2022, well, go back to 2021, we did CAD 59 million of cash flow in one year, and that was, you know, that was the best year in the history of Pine Cliff, and that was pre-dividend.

[Phil Hodge, President and CEO at Pine Cliff Energy]

Then in 2022, when gas prices rose, and that's the kind of environment I think we're heading into, we did CAD 163 million of cash flow in that. We did CAD 55 million in one quarter. That's when the dividend got put in place. So I think then it become a much more stronger or much more definitive way to value Pine Cliff, because the, the dividend yield is very, very easy to calculate, right in front of you, and it's a lot - than as opposed to trying to guess what we're gonna do with excess cash flow. 'Cause like I said, you know, there are other ways to, for, for us to use that capital on the, on paying down debt or doing acquisitions. I know, Kris, do you have anything to add to that question?

[Kristopher Zack, Vice President, Finance at Pine Cliff Energy]

I think, I think the dividend yield certainly provides a bit of a floor on our valuation, obviously. But as commodity prices improve, and what we're seeing in 2025, we'll have excess cash flow in addition to that dividend payment, and I think that's where it will get a little bit more... We get a little more credit for that, for that incremental cash flow, because then we can deploy that cash flow in ways that are accretive for our shareholders, whether that's through acquisition, whether that's through, debt repayment, or whether that's through incremental payments to shareholders.

[Phil Hodge, President and CEO at Pine Cliff Energy]

Another question we've got here is regarding our inventory profile, since we've done the Certus acquisition in December, and how has that changed? That's a really good question, because I was commenting to my board of directors yesterday on this, the very same topic. We have never had the inventory optionality that we have today. We've got three areas that were very, you know, all of which are have very good high economic prospects for drilling, and therefore, we're gonna have to determine, again, going back to capital allocation, where the best place to spend that is. One is our traditional in the Twining area, which is where we've done all of our drilling, our modest drilling efforts over the last three, four years have all been in that area.

[Phil Hodge, President and CEO at Pine Cliff Energy]

The second one is the Caroline area, which is that came with the Certus assets. Mostly focused there... So the Twining area is Pekisko oil, mainly focused. Now, it comes with, you know, a substantial amount of gas with that oil. The Glauconite oil in the Caroline area, we've been partnering with the... This is the same area that both Whitecap and Tourmaline are quite active in. And so we've done active transactions with them to try to optimize the land base. In other words, in that area, you really want to be doing two-mile wells, and so everybody knows that, and so there's been swapping that's been going on to enable all the parties to get more pieces of land that allow them to be able to do two-mile wells. And we've been...

[Phil Hodge, President and CEO at Pine Cliff Energy]

That's been successful for all the parties in the area. And then the third area that we are quite excited about is the Basal Quartz area. And that's an area that we don't even have-- you know, we haven't mentioned that a lot to investors, but it's getting-- there's a lot of activity in the area around our lands. So obviously, when you have got a lot of activity and a lot of partners in and around your land base, that creates different opportunities for partnerships, for ways to optimize capital and infrastructure build with your- with neighboring producers. And so a lot of those discussions are underway now because we really... You know, we're now starting to plan for 2025.

[Phil Hodge, President and CEO at Pine Cliff Energy]

You know, on, at a forward strip basis, we will go back to our a more traditional drilling program. We haven't yet set the budget for 2025, but that what we need to determine is, where do we wanna spend it? Having this debate internally is something that I've never experienced here at Pine Cliff before, because we've never had multiple areas that all generate really strong rates of return. We're talking about, you know, in many of these areas, we're talking about less than one-year paybacks. And so those are very good opportunities. We're gonna have to determine what the best way to do it. Some of it depends on partners in the area and being able to work with them on infrastructure needs.

[Phil Hodge, President and CEO at Pine Cliff Energy]

Others might be, you know, it may be more influenced by where is oil prices at the time versus gas prices or, or NGL prices. So we're very... You know, it, it's gonna be a very active time. We've brought in, we've got more geology help and land help within our team that we've never had before to allow us to be able to get ready to exploit these areas. And so it's, it's quite exciting in around here. Another question was, other than more favorable macro conditions, how do you envision growing the dividend?... Well, we just touched on that a little bit. I think that the one thing that I don't think people fully appreciate, and I, and I some of the analysts pointed this out yesterday, and I think they're accurate in pointing it out.

[Phil Hodge, President and CEO at Pine Cliff Energy]

That acquisition that we did in December of 2023, if we had not done that acquisition, I don't think our dividend would be able to be, we wouldn't be able to sustain it at the level it's at today. Having liquids and having NGLs as part of our production mix has turned out to be extremely important part of the sustainability of our dividend. So if oil prices and NGL prices continue to stay strong in 2025, and, you know, when I say strong, that's kind of above $70, which is above what they are today, then that's gonna allow us to, you know, to maintain or to have a drill program that will also be able to help support the sustainability of the dividend.

[Phil Hodge, President and CEO at Pine Cliff Energy]

I think the way we look at the business now and the way we look at any acquisition we do, is how does this help us sustain and hopefully grow the dividend? Like I said, it's not a true variable dividend. There isn't a formula that we've put out to the market and said, "This is when it's gonna go up, and this is when it's gonna go down." But you can see from our actions that we're gonna be, you know, watch the payout ratio on our entire business. What are, what are our cash flows coming in and what are cash flows going out? And what is left over from that, that allows us to get more comfort level around.

[Phil Hodge, President and CEO at Pine Cliff Energy]

We've talked about a payout ratio in the—you know, we think that because of our low decline, we can maybe have a higher payout ratio than a lot of the other producers in the space. And so if our payout ratio is somewhere in that, you know, between 70% and 80% or 70% and 85%, that's a pretty comfortable level because there isn't a lot of moving pieces in our business model. If that's the case, you can again back look at what we could potentially do for cash flow going forward, and that opens up cash flow that we can pay out. Again, there's always gonna be acquisitions for us to look at, and so we'll... You know, that'll have to be built into where we think capital should be best allocated.

[Phil Hodge, President and CEO at Pine Cliff Energy]

But the plan clearly is to grow the dividend, and I think that in our view, we'll be able to do it in a couple of ways. One is, we believe the commodity prices are gonna be rising, and we also think that our drilling inventory is gonna be able to increase our, our mix, and our cash flow. I don't know, Kris, is anything to add to that?

[Kristopher Zack, Vice President, Finance at Pine Cliff Energy]

No, I think that's, I think that's a really good summary.

[Phil Hodge, President and CEO at Pine Cliff Energy]

Another question is, are there any opportunities for infrastructure dispositions to accelerate balance sheet deleveraging? You know, we've had different players approach us on infrastructure. And, you know, for instance, the Aden pipeline is one, which is the pipeline that goes to the United States. That's one that we've had different discussions with different groups on. We own over 80% of our infrastructure, that's a pretty key piece to why we've been able to maintain our low operating costs. So we're not we haven't yet seen a business situation or a business offer that would seem to make good sense for us to dispose of our infrastructure, but that doesn't mean that couldn't happen in the future.

[Phil Hodge, President and CEO at Pine Cliff Energy]

We're very sensitive to the fact that, especially at times like this, when people see our, you know, our higher realized price, even though the AECO price was as low as it was in Q2, one of the reasons is because we own our infrastructure. And if we didn't own our infrastructure, then it's possible that your variable costs are gonna continue to rise, and therefore, you're gonna probably have to shut in production. For us, you know, we watch it closely, but because we own our own infrastructure, because we're going through our own system, our break-even point is a lot lower, and so therefore, we're able to maintain production through difficult periods of time. So I wouldn't say never to infrastructure dispositions, but it's not something that we're actively seeking either. We quite like when we go in to buy assets.

[Phil Hodge, President and CEO at Pine Cliff Energy]

If they own their infrastructure, that's definitely a positive on things we look at. Some really good questions this quarter. Thank you. Appreciate it. I think, everybody who's listening or anyone who follows us knows that we're very accessible. So if there's any follow-up questions, just email us, or give us a call. Like I said, if you're not already an email subscriber, you can get on that list on our website. We'll be putting this recording onto our website for those who weren't able to attend today. Thank you for those who were able to attend. I appreciate it very much, and thanks for the support.

Participants

Executives

• Kristopher Zack, Vice President, Finance
• Phil Hodge, President and CEO