VAALCO Energy Inc (EGY) 2013 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to VAALCO Energy's second-quarter 2013 earnings report. For the conference, all participant lines are in a listen-only mode.

(Operator Instructions)

As a reminder, today's call is being recorded. I'll turn the conference now over to the Chairman and CEO, Mr. Robert Gerry. Please go ahead, sir.

Thank you, John, and good morning, ladies and gentlemen, and welcome to VAALCO Energy's second-quarter and six-month earnings conference call. Joining me this morning are Russell Scheirman, VAALCO's President and Chief Operating Officer; and Greg Hullinger, our Chief Financial Officer. Please bear with me for a moment here while I read our Safe Harbor Statement. This conference call includes forward-looking statements within the meaning of Section 27-A of the Securities Act of 1933 as amended. And Section 21-E of the Securities Exchange Act of 1934 as amended.

Forward-looking statements are those concerning VAALCO's plans, expectations, and objectives for future drilling, completion, and other operations and activities. All statements included in this conference call that address activities, events, or developments that VAALCO expects, believes, or anticipates will or may occur in the future, are forward-looking statements. Such statements are subject to a number of assumptions, risks, and uncertainties, many of which are beyond VAALCO's control. These and other risks are further described in VAALCO's annual report on Form 10-K for the year ended December 31, 2012, its Form 10-Q for the second quarter, filed on August 8, 2013, and other reports filed with the SEC, which can be reviewed at www.SEC.gov, or which can be received by contacting VAALCO Energy.

Let me begin with a few comments, before I turn the meeting over to Greg and Russell. It has been a busy and exciting three months for your Company. While revenues were severely impacted due to planned shutdowns at producing wells while we installed downhole pumps, earnings per share remained equal through the first quarter. Some of the shut-ins, plus generator refurbishment, continued into July, but it appears most of the work is behind us, and we believe production will ramp back up to the former revenues before the shut-ins occurred.

We have also been spending cash, primarily on the drilling program on Gabon, and the construction of two platforms in Louisiana, which will be shipped to Gabon mid 2014, and installed in the fourth quarter of 2014. Once those platforms are installed, and we have drilled development wells in the Etame field in the Southeast Etame extension, we believe production net to VAALCO could ramp up to between 7,000 and 8,000 barrels per day, starting in about 2015, or basically near double from today's production. That figure also, I may add, gives no credit to success in Gabon, at the currently drilling Ovoka prospect, the proposed Elili prospect or two additional exploration prospects, we anticipate drilling late in the fourth quarter of this year.

Outside of Gabon, recent communication and activity indicate breakthroughs in both Equatorial Guinea and Angola. As most of you know, we've been discussing with the government of Equatorial Guinea VAALCO's assumption of operatorship at Block P. And we now have a number of reasons to believe that this will occur in the nearer term, and though the exact timing is difficult to project, we continue to plan on drilling at least one exploration well this year on our block.

In Angola, this week, we submitted to the government a formal request to have the 40% interest they have been holding in Block 5 transferred to VAALCO. We have every reason to believe this will occur, as all the preliminary paperwork has been signed. That will give VAALCO 80% of Block P, with Sonangol retaining a 20% carried interest. With Sonangol's permission, we will immediately farm out that 40% to our partner that is already in place, go find a rig, and hopefully commence our long-awaited exploration program. So with that, a quick summary, I'll turn it over to Greg for his financial report.

Thanks, Bobby, and thanks to all of you for joining us on the call this morning. Let me start with the balance sheet. Cash plus restricted cash of $91.3 million at June 30, 2013, compared to $142.3 million at the end of 2012. As Bobby mentioned, cash is down due to the CapEx and workover expenditures that we've been incurring in 2013. That figure right now is a little bit over $40 million. CapEx alone for the current year is in excess of $34 million, and the major CapEx expenditures include $20 million for the construction of two new platforms that Bobby mentioned, that are being built in Houma, Louisiana, that will head for offshore Gabon. Plus, we've spent $10.5 million on two development wells offshore in Gabon, and we had $2.5 million for the final expenditures of the exploratory well onshore Gabon. That was our discovery well that we started drilling fourth quarter of last year.

And on top of that, we expended nearly $6 million on our share of workover expenses to replace the electrical submersible pumps on three of our on shore Gabon wells -- offshore Gabon wells. Offsetting some of this cash decrease is our trade receivables, which if you're looked at our balance sheet, and those trade receivable represent our share of proceeds from the crude lifting. Trade receivables were $20 million higher than the position at year-end 2012 due to the timing of the liftings in the first half of June. And by the way, this cash has been received in July of this year.

Current assets at $127 million are down 15% from the end of 2012. As you would expect, the decrease in cash and other current assets is largely picked up in the property and equipment segment of the balance sheet. Property and equipment, at $296 million, is up 13% prior to DD&A. And if we can look at the total on the balance sheet, the total assets are up 2% at June 30, 2013 compared to December 31 of last year.

Moving on to revenues, revenues are down significantly, 2013 versus 2012. There are several reasons for the decrease, and the first reason is that we didn't have a listing at the end of June 2013, and consequently, we had the FPSO halfway full at about 458,000 gross barrels. Lifting that inventory will benefit our quarter-three 2013 revenues. On top of that, production for the quarter and for the first half of 2013 was lower than the same period in 2012. The main item is the shut-in of two of the three producing wells in the Ebouri field, which occurred in July 2012. The impact of this over the first six months of this year is close to 400,000 barrels. After installing the H2S processing equipment, we will bring these wells back online. The current timing for being able to restore full production from the Ebouri field in early 2016.

To a lesser extent, other items have negatively impacted production as well. We have had three wells off production for portions of 2013 for the replacement of electrical submersible pumps. And any time we are moving the rig in the proximity of our platforms, we curtailed production while the rig is being moved on or off location. This, coupled with some generator issues on the Avouma Platform -- which hopefully will be resolved later this month, and normal decline as the older wells mature, our production, and thus sales, have been at a lower rate in 2013 when compared to 2012.

Also having an impact on the revenues was the average price received on our crude sales, was down 5% in the second quarter of 2013, versus the second quarter of 2012. Revenues were down 50% quarter two this year versus quarter two last year. For the six months, revenues down 30%. We sold 280,000 net barrels during the second quarter of 2013, compared to 538,000 barrels in the second quarter of last year. As already mentioned, pricing was down 5% at $102.21, compared to $107.51 in the second quarter of 2012. Revenues from the United States, primarily the Granite Wash property in Texas, are not material. The details of the volumes and values associated with that are included in our 10-Q.

Next let me move on to expenses. Production expenses were $7 million in the second quarter of this year, compared to $6.5 million in quarter two of 2012. Although fairly close in total quarter to quarter, we did have $4.5 million of well workover costs in our Q2 2013 expenses. However, we benefited from capitalizing production expenses associated with our share of crude inventory aboard the FPSO. And as well, we had lower FPSO expenses, due to lower throughput volumes.

Exploration expense during the second quarter of 2013 totaled $4.3 million compared to $3.5 million for the same period in 2012. The main components of the quarter two 2013 number is $3 million for the unsuccessful Ebouri explosion well, and $0.7 million for writing down the remaining undeveloped leasehold costs on our Granite Wash producing lease. DD&A expense was significantly lower at $3.4 million compared to $6.9 million when we looked at quarter two 2013 versus quarter two 2012. And this was a result of the lower sales volumes that we already discussed. G&A expenses are in good shape at $2.5 million in quarter two 2013, versus $3 million in quarter two 2012.

Income tax expense was also significantly lower in the second quarter of 2013, than in the same period in 2012. And those numbers are $4.6 million versus $26.7 million. With the high level of CapEx and OpEx spending that were occurring, the cost account has been at high levels. Therefore most of our barrels sold during the quarter were [cost level] barrels, which do not bear the Gabonese income tax. Income tax is generated solely on the amount of profitable barrels, and we expect to continue to see low income taxes for the remainder of the year.

On to net income. Net income for the quarter ended June 30, 2013, was $7.1 million compared to $12.3 million for the same period in 2012. Earnings per share were $0.12 per share, compared to $0.18 per share. For the six month period, net income was $14.3 million, compared to $19.4 million. Our earnings per share were $0.25 for the first half of 2013, compared to $0.33 per share for the first half of 2012. With that, let me go ahead and turn it over to Russell Scheirman to provide you with an operational update.

Thanks, Greg. I'll start out talking about our activities on our Etame concession offshore Gabon. We're currently producing at 17,000 barrels per day from that concession. We are on to the final well of our six-well drilling and workover program with a 350 foot jackup rig, the KCA Deutag, Ben Rinnes. As we noted at the last conference call, we successfully drilled and completed the Avouma 3-H development well, and we're producing that well on electrical submersible pump at 2,000 barrels per day. It initially came on at 4,000 barrels a day, but it started making some water, so we put it on pump. It has stabilized over the last 45 to 60 days at this 2,000 barrels a day rate.

We also completed two pump replacements on the Avouma Platform before moving the rig over to Ebouri. During June and July, we've experienced some generator problems that restricted us to producing only two of the four wells on the Avouma Platform. We estimate this is costing us about 1,500 to 2,000 barrels per day until the generators can be repaired. We have all the repair items in country now, and the technicians are out on location effecting the repairs, and we expect them to be completed by the end of this month.

After we completed the Avouma program, we moved on to the exploration well at Ebouri, in a new fault block west of the main accumulation. Unfortunately though, the well was unsuccessful, as the Gamba and Dentale Formations came in deeper than mapped, and were water wet. We then did the Ebouri 2-H workover successfully. That's a 3,500 barrel per day well. It was down for about three weeks during parts of June and July, but is now back on with two brand new ESPs and producing just fine. We've since moved the rig to an open water exploration well, which we referred to at the last conference as the Mu prospect. It's been renamed with an official name by the government as the Ovoka Marine No.1 well.

It's a 38 million barrel Gamba prospect, that also has deeper potential in the Lucina turbidite formation. The main risk of this prospect is similar to most of the prospects, whether or not the closure around the salt is really there or not, that we see on the seismic. In the Lucina section, the main risk will be the presence of sand. The Lucina and the Melania Formations are the source rock formations for the oil that ends up in the Gamba. And if you end up with turbidite sands within those, they can trap oil also. And we have a three-way structure that closes onto a large fault that we're drilling, that's under the Gamba.

We expect that well to be down by the end of this month or early next month, at which time we'll announce the results. After we finish that well, the rig is going to another operator for two wells, and then we have an option to take the rig back for up to two additional wells. The consortium has agreed, and voted on one open water exploration well, on a prospect we called the N Lead. I think it's going to be renamed the [Cocoa] Lead.

There's a second exploration well that's pending approval. The AFE is being circulated, and if it's approved, then we'll exercise the option for both wells. Otherwise, if not, parties will have to decide whether someone wants to go non-consent to drill the well, and that would have to be worked out, based on the results of the circulating AFE. We should have all that sorted out by early September, and know whether we're going to drill one or two exploration wells. VAALCO obviously supports the second exploration well, since we're the one that presented the AFE to the partners.

On the facilities front, the new platforms, we're moving forward with fabrication. The jackets have been raised. And we are building these at Gulf Island in Houma, Louisiana. One platform will be installed on the Etame field, as we mentioned last conference call, and should have between three and five wells drilled from that platform. The second production platform, we'll develop the Southeast Etame discovery, and the North Tchibala field, which was a former Elf discovery. Both of those will be new fields, and add new production. The North Tchibala field also has a gas sand that we plan to tap later in the project life to displace the need to burn diesel, to run all our generators.

We just recently awarded the installation contract for these two platforms to a company called EMAS, that's based in Singapore. They'll be using a vessel called the Constellation, that is a brand new 3,000 ton lifting capacity installation vessel. We'll be their first job on this vessel, obviously not the first job for the Company. The Company installed dozens and dozens of platforms around the world. The jackets will leave in the first quarter and should be installed beginning in February of next year.

The lifting vessel will leave the arena, and a pipe laying vessel will arrive, and we will lay all of the pipelines to connect up the two platforms and the gas lines and the other lines that we need to lay, in order to put this infrastructure into place. And then the Constellation will return some time during the third quarter to commence installing the two decks, which should be completed early in the fourth quarter and after about 30 days of commissioning, we should be in a position to move a rig onto the first platform and we'll start on Etame and begin drilling.

Each platform represents now about a $40 million net investment to VAALCO which is up from what we indicated up around $36 million last quarter. This is about a 10% increase from our last call, and is mainly due to the cost of the installation contract. EMAS was the low bidder, but all the bids were higher than what we were anticipating, when we went into final investment decision. Once we get these two platforms installed, our goal is to get production back up to above 20,000 barrels a day through 2016. And that will be followed by early 2016, when we will be installing a sweetening facility for the Ebouri wells, to eliminate the H2S associated with the two wells that encountered H2S last year. So that's what is going on Etame.

Moving to onshore, we're in continuing discussions about the development area that we filed for with the government of Gabon. Basically, the issue is over some new fees that they want to impose onto this AEE, it's called an AEE, which is exploitation area. These fees are for a new industrial zone that they want establish. And were not in our original [proxy] sharing contract. And we've been going back and forth with them about why should we have to take on these new fees and if we do, they need to be cost recoverable. And we're in the doldrums of summer, unfortunately right now, and so a lot of people are not around. And it's going to take a few more months to get this sorted out.

But I've had the personal assurance from the Oil Minister that we'll get this AEE, and we've invited him over in September to come and visit the platform construction site. So hopefully, we can get through the red tape and get this thing going. If we do, we can file a development plan in early 2014 and begin the process of tying the wells back to the Atora field, which is our partner's field. Total operates the Atora field. It's about 5 miles from our discovery. And we can then move this project forward. We're also concurrent with the development area negotiating a new exploration extension, which will have some different terms to it than previously.

Bobby mentioned Equatorial Guinea, that we're working on becoming an operator in Block P. The block -- we're excited about the block. It's got a 2007 discovery that was made by Venus that found a 300 foot oil column in a channel sand, in about 800 feet of water. And there are two other large channels that we want to get drilled here as soon as we can sort out this operatorship issue. We have meetings with both GE Petrol and the Minister sometime in the next few weeks, to try and sort this issue out. But we have had some written assurances from the Oil Minister that we're moving in this direction.

Bobby also mentioned in Angola, that we have a plan in place now to get the 40% interest assigned to VAALCO, so we can then farm it out. The farm-out agreement is being negotiated during this interim, and we're in about the third draft and getting close to finishing it, so that it can be filed as soon as we get the 40% interest assigned to VAALCO. Once that's done, we have a couple prospects that we want to get drilled and we would be in the market for a semi to get those prospects drilled. We also have agreed with this new partner to acquire some deeper water seismic over a structure that we see on 2D lines comparable to the kind of structure that Cobalt has been drilling on their blocks in the Kwanza Basin. With that, Bobby, I'll turn it back to you.

Thanks, Russell. I think that you'll get an idea that everything is fairly active here in VAALCO. I'm sure some of you have some questions, so, I'll turn it back to you, John, to see what questions we could answer.

(Operator Instructions)

We have the line of Leo Mariani with RBC Capital Markets. Please go ahead.

You talked about current production at 17,000 barrels a day here offshore Gabon. It sounds like it's still going up as you're finishing off the workover program. What would you expect that to be, when you're done with all the workovers and all the wells are online?

18,000 to 19,000, hopefully closer to 19,000.

Okay. That's helpful. And I guess additionally, on the workovers, how much of that do you expect to expense in the third quarter?

Not all that much, Leo. Most of it has already been recorded or accrued -- paid or accrued.

Greg, you also talked about capitalizing some of your LOE in the second quarter. Is that a new policy for VAALCO? And how much did you all capitalize?

It's an existing policy. We go in and take a look at our share of inventory, and because we can't sell it, we value it at lower cost to market. It's on the books for $35 a barrel which includes operating costs, DD&A, and our valuation has a little over $2 million I believe.

All right. So you capitalize roughly $2 million in the second quarter?

That's right.

Okay.

We show the crude oil inventory on the books at $3.3 million. But the reduction on the production expense side of it was about $2 million.

Okay. And I guess just on the Angola deal, maybe you can help me explain it a little bit better. But if I'm understanding correctly, are you going to write a check for the 40% interest to the government and then immediately farm it out and recoup that from your partners? Is that the way it's working?

There's no check. Under the joint operating agreement, if somebody is taken out for being in default, the other partners have the right to take up the interest. We had to go round and round with Sonangol P&P which is the carried interest, to get them to officially acknowledge and document that they had no interest in taking up their percentage. In theory, they could have taken one-third of that interest, but they would not have been carried on that one-third. That's one-third of the 40%.

Basically, what we've done is we've eliminated the need for our new partner to have to negotiate with Sonangol E&P, which is the government entity. They were getting bogged down in that process. So we are just going to take the interest into VAALCO and walk in with a signed farm-out agreement and say, this is the way we want to go forward. And it should eliminate some of this red tape that's been going on. This is what -- this is the way we've been advised to do it by the number-two guy at Sonangol, who said yes, everybody was fine with the partner. Yes, everybody was fine with what you were doing. But it got bogged down in negotiations between our new partner and the government, and it was just better for us to take the interest, which we had the right to under the JOA, and then just present a complete farm-out agreement.

All right. So sounds like you guys have basically negotiated that farm-out for the most part with your new partner. Or do you feel comfortable with the major terms there?

Yes.

And Leo, we've been talking about this, even before when we thought we were going through the process where Sonangol would issue that interest. The farm-out agreement has the new partner coming in and reimbursing VAALCO for its excess costs it's incurred essentially back to 2009. You see our bad debt expense, we continue to write off the portion above our 40% interest. To date, that's $7 million. And that's the entry price for the new partner. They come in and get us back to where we would have been if we had a valid partner with us all the way through this process. And that $7 million, assuming that we get it and this deal works, that goes right to net income because we've already taken the expense.

Okay. That's really helpful. Thanks.

Our next question is from Jamie Wilen with Wilen Management Company. Please go ahead.

The way you're going to proceed in Angola, you do not need the approval of anyone to -- as opposed to getting a new partner. You don't need the approval, because it's a partner to you, as opposed to the whole consortium.

We'll need to get an approval. But it won't be a negotiation between our new partner and the government. It will be a negotiation between our new partner and us, which then needs to be blessed by the government. The government always has the right to make sure that a partner is a qualified entity, and capable of doing business, and all those kind of things, which this company is. So it should be simple. But it never is, unfortunately.

Right. It always should have been simple. The timing on this process? When will you --

The letter is in requesting the transfer of the interest to VAALCO. We received the letter from Sonangol P&P that said no, we don't want any of the interest. So the entire 40%, per the JOA is entitled to come to VAALCO, and we've just asked that they bless that.

Okay. And once again, I realize it's -- timing of this is really hard to predict. When do you think you'll say okay, and then you can present the partner?

What we've done is, this is the process that Sonangol has advised us to follow. Before we were trying to directly have our new partner receive the 40% from the government. The government felt that was too complex. So they suggested, VAALCO, we'll assign it to you and you farm it out to your new partner, who they know, and so we have agreed to do that. And how long that process will take, it should not take long but everything has taken far too long. I'd like to tell you we could do it the day after tomorrow, but I cannot tell you when it will finally be completed. We still hope if it happens fairly rapidly, to drill a well this year, if we can get a rig.

Okay. So you think this is a fourth-quarter event, but you're hopeful it realistically could be a fourth-quarter event.

Realistically, it could happen in the fourth quarter.

In Equatorial Guinea, you're dealing with a 300 foot oil column that was discovered half a dozen years ago. Why was that never drilled?

Because the company that was the operator, Devon, made a strategic decision to exit the entire international arena, and they sold their Equatorial Guinean assets, the biggest piece of which was an interest in the Zafiro field, which is like a 1 billion barrel field that Exxon Mobil operates. They sold that, it was preempted by the government. The government ended up picking up the interest. And with that interest came this interest in Block P, and the government has just sat on it. And frankly, the reason that the Ministry is supporting VAALCO becoming the operator is because nothing has been happening. And they think that if they get a private operating entity that knows how to operate in West Africa, things will start to happen. That's what's going on.

And how do they tax the proceeds of the profits from our well there?

It's actually as good a contract as we have in Etame. We have 75% cost recovery. There is a 25% income tax, but on balance, it's comparable to what we would receive from Etame. So during the early days, when you have the cost account full from the development, you would be receiving in excess of 70% of the revenues.

Last two, balance sheet questions. Your receivables went up, yet you really did not have any sort of major lifting at the end of June. I would expect your receivables to go up if you had a major --

We had a million barrels that were lifted early in June, two different dates and the terms are that the payment comes in 30 days after lifting. So that's why they show up as a receivable. Part of it showed up on July 1.

Okay, perfect. And lastly, I want to commend you on the initiating and activating the share repurchase plan. I think it's a great thing for shareholders. And if we are successful in 2012, the reduced share base will benefit us all, so thank you very much for that. And I'm done.

(Operator Instructions)

We'll go to Neil Nelson with DERS Group. Please go ahead.

The first question is that in your Equatorial Guinea news release yesterday, you talked about two wells in the first half of 2014, but Bobby mentioned one well, perhaps in the fourth quarter of this year. And I'm assuming that requires a semi-sub to do that effort. Is that correct?

That's correct. I may be ambitious in saying we'd like to do it this year. One well obviously would have to spell into 2015. If we can get this whole thing resolved quickly --

2014.

What?

You said 2015. 2014.

2014. Apologize. It's all a matter of timing. If all the paperwork moves quickly forward, we could probably do it this year.

And you mention that the Elili prospect in Etame, does that not require a semi-sub to drill that well?

That does.

But you still think that might occur this year?

It's close, whether or not we can do it or not. We're still waiting for partners to make up their minds, whether they want to join VAALCO. I know one of them doesn't. And we're waiting for a second major partner really, to make a decision about that. My guess is, it won't be drilled this year. My guess is, it will probably be drilled 2014.

And have you installed water knockout on Avouma, and I know it's been in the works for a long time. Is that in operation now?

Yes, it is. But with the two wells that are down, waiting on the generator repairs, we don't really need it. We're using it, we're troubleshooting it, we're making sure it's up and running. When we turn these two wells, we obviously shut in our worst two wells while we're waiting on the generator repairs, and those wells make 70%, 80% water cut. They can each make 1,000 barrels a day when they're on, but there's your 8,000 barrels of water that we'll need to knock out when we turn those two wells back on. The system is up and operational.

And given the recent security issues in Gabon -- oil security issues, and the absence of any Gabon Navy or Coast Guard, what concerns does VAALCO have? And how are they addressing them about security?

We're always concerned about that. To our knowledge, other than over on the Eastern Coast of Africa in Somalia, in West Africa, there's never been a Suezmax class size tanker that's been boarded by these pirates. We think about it. But we are not in a position to put armed guards or anything on our facilities. We're not going to go that route.

There is, in fact, a small Navy in Gabon and there's been some meetings about how the oil companies could keep an eye out for suspicious vessels, and report that, and the Navy would go investigate. How efficient that would be, I can't tell you, but it's certainly something that everybody is talking about. The government -- I think it was a wakeup call for the government that they'll come as far down as Gabon. So they are thinking about some concrete steps of what they can do.

They have recently been trying to eliminate poaching from fishing vessels, and they've done a pretty good job of it, using the oil companies that report vessels that are fishing in and around the oil installations, where they're not supposed to be. And the Navy has shown up and arrested the vessels and taken them in, and put a pretty big damper on this kind of thing. So you have to hope that if one of these groups gets out there, that they actually catch them. And maybe that will provide the disincentive for them to come back.

And chances are pretty good too. Piracy is a concern with vessels that are moving. Don't forget, we're just sitting there. The people that pick up our oil probably have more of a concern about this than we do. Our vessel is going nowhere. It's hard to imagine how they think they could transfer crude oil from our tanker into a bigger tanker or something. But everybody is very well aware of it, and so is Gabon. We're in communication with the owner-operators. Everybody is on the lookout for it.

And could you give some color about the liftings? When you have these four-day back to back, or two separate liftings, do you have to pay a mobilization fee twice?

No. It hasn't really affected us, because we have two vessels in theater right now, because of the drilling activities. And we use one of those vessels when the tank -- to help keep the tanker off of our vessel. But no. And to answer your question, we would not separately mob and demob a vessel. We keep the stand-by tanker around for four more days. The cost of the moorage for the tanker waiting to pick up the extra cargo is on the buyer, and not on us.

And the last question I have is on Ovoka. What date was that well spud, and what's the current depth?

Current depth is around a thousand meters. I can't recall off the top of my head, the exact date. It was about 10 or 12 days ago. We're currently running casing. We're running our 13.375 inch casing, and when we drill out from under, we've got 300 or 400 meters to go before we get to our first objective, which is the Gamba. And then the ultimate total depth on the well will be about 2,600 meters to 2,800 meters, depending on where we find basement.

Thank you very much. Appreciate it.

To the presenters on the call, there are no additional questions in queue.

Okay. Well, thank you all very much, and I look forward to our third quarter conference call. Thank you, John.

You're welcome, and ladies and gentlemen, that does conclude your conference for today. Thank you for your participation, and you may now disconnect.