Murphy Oil Corp (MUR) 2008 Q2 法說會逐字稿

Good morning, and afternoon, ladies and gentlemen and thank you for standing by. Welcome to the Murphy Oil Corporation second quarter earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (OPERATOR INSTRUCTIONS). As a reminder, this conference is being recorded today, Thursday, July 31st, of 2008. At this time, I would like to turn the presentation over to the President and Chief Executive Officer, Claiborne Deming. Please go ahead, sir.

Thank you. Good afternoon. I'm joined today by Kevin Fitzgerald, Senior VP and Chief Financial Officer, John Eckert, VP and Controller, Mindy West, VP and Treasurer, and Dory Stiles, Manager of Investor Relations. I'll turn it over to Dory at this time.

Thanks, Claiborne. Welcome everyone and thank you for joining us. Today's call will follow our usual format. Kevin will begin by providing a review of second quarter 2008 results, Claiborne will then follow with an operational update, after which questions will be taken.

Please keep in mind that some of the comments made during this call will be considered forward-looking statements. As such, no assurances can be given that these events will occur or that the projections will be attained. A variety of factors exist that may cause actual results to differ. Many of these have been identified in Murphy's January 1997 Form 8-K filed with the SEC. I'll now turn the call over to Kevin for his remarks.

Net income for the second quarter of '08 was $627 million, or $3.27 per diluted share. As compared to net income in the second quarter of '07 of $250.3 million, or $1.32 per share. For the six months of '08, net income was a $1.036 billion, $5.40 per diluted share, compared to net income for the six months of '07 of $360.9 million or $1.90 per diluted share. Net income in the second quarter of '08 included a $67.9 million after tax gain at $0.35 a share on the sale of our Lloydminster heavy oil properties in Western Canada. Net income in the second quarter and for the six months of 2007 include an after tax cost of $24 million, or $0.13 a share, related to the closure of 55 retail gasoline stations in the US and Canada. The 2008 six month period included after tax gains from the sales of Canadian assets, including the just mentioned Lloydminster sale of $108.3 million or $0.57 per diluted share.

Looking at the income by segment, first we'll look at E&P. Income in the second quarter of '08 was $585 million compared to $149.3 million in the second quarter of last year. The 2008 quarter included the previously mentioned gain from the sale of the Lloydminster properties, higher E&P earnings for the 2008 quarter were otherwise attributable to higher crude oil and natural price realizations and higher oil sales volumes. Natural gas production volumes fell slightly. Crude oil and gas liquids production for the current quarter was over 111,000 barrels per day as compared to approximately 80,000 barrels per day last year. The increase was primarily attributable to production from Kikeh offshore Malaysia, which started up in the third quarter of '07, that was partially offset by lower volumes off the East Coast of Canada.

Natural gas sales volumes were 55 million cubic feet per day in in the second quarter of '08, compared to 57 million cubic feet per day in the second quarter of last year. The decrease was attributable to the sale of Berkana Energy in Canada earlier this year,off set by volumes in the Northwest Mondo field in the Gulf of Mexico which came on stream last July. Down time at the Independence hub during the second quarter reduced our production for Mondo by approximately 9 million cubic feet a day. Had the platform been fully operational, the second quarter 2008 natural gas volumes would have increased over last year.

Looking at R&M, downstream segments, second quarter of '08 net income was $77.3 million compared to $124.2 million in the second quarter of last year. The earnings decline in the '08 quarter was primarily in the US where refining and marketing margins were much weaker than last year. The 2007 quarter was burdened with the previously mentioned $24 million of after tax costs related to the retail gasoline station closings. However, in the UK, income from the downstream business improved in the '08 quarter relative to '07 due to stronger refining margins and to the larger UK refining system following the acquisition of the additional 70% interest in the Milford Haven Wales refinery that was closed in December of last year. In the corporate segment in the second quarter of '08 we had a net charge of $35.3 million compared to $23.2 million charge last year. This cost increase is attributable to a combination of higher administrative expenses and higher net interest expense, as we experienced increased borrowing levels and lower amounts capitalized to development projects. As of June 30, 2008, Murphy's long-term debt amounted to approximately $1.5 billion, which is 20.2% of total capital employed.

And with that I'll turn it over to Claiborne.

I'll start by updating you on the current activities within our E&P business and then move to downstream. An active exploration program kicked off last month and to date, we have finished two Gulf of Mexico wells and drilling continues at Buntal at Malaysia. In the Gulf, the prospect drilled was a carried well at Sapphire and Lloyd 268 where non commercial quantities of natural gas were encountered, and the well was plugged and abandoned. Secondly, at Diamond and Lloyd Ridge 370, natural gas was found sufficient for a subsidy tieback. The rig will move to the Manhattan prospect, Lloyd Ridge 511, where we have a 100% interest. There's both a shallow and deep component to this prospect and at this time we will only be testing a shallow section. Depending upon results at Manhattan, we will either drill an appraisal well or one of several other exploratory prospects in the Eastern Gulf. Offshore Malaysia in Block A, drilling continues at Buntal, and we anticipate reaching target depth soon.

For the second half of 2008, the exploration calendar will be active outside of the Gulf, with multiple wells coming up. Offshore Malaysia, an additional well was planned either in block H area around our Rotan discovery or Shangal, a Block D prospect. Also in Malaysia, two or three exploration wells are scheduled for offshore Sarawak in the fourth quarter as we pick up another jackup to complement the rig drilling development wells in the Sarawak project. Offshore Australia in the Browns basin a well will be delivered in the fourth quarter on acreage we operate with a 40% working interest, targeting a multi TCF sized prospect. Offshore the Republic of Congo, the two wells previously planned for 2008 will slip to mid-2009 due to a different rig being contracted.

Turning to current production, the ramp-up of Kikeh located in Block K offshore Malaysia is continuing with 10 wells now on stream producing 85,000 barrels per day. We remain on schedule to reach the plateau production rate of 120,000 barrels per day by the end of 2008 and continue to be pleased with the field performance. In the fourth quarter of this year, natural gas production will commence from Kikeh. Production volumes there will achieve levels of 120 million cubic feet per day when fully ramped up. Production from operating areas elsewhere remains good. In the UK, planned maintenance at [Shahaling] and Mungo Moio during the fourth quarter will reduce volumes there, Gulf of Mexico production was unaffected by hurricane dolly last week.

Development work continues the next tranche of production growth. Tupper, our Montney pipe sands gas resource play in British Columbia is on track to begin producing in the fourth quarter. 25 wells have been drilled so far on our holdings which total 125 sections. We recently tested a horizontal well at 9.5 million cubic feet per day. This will be the first phase of development for a project that will be a source of meaningful growth for many years to come. As evidenced by recent transactions, this area has attracted an extraordinary amount of attention and we're certainly glad to be a stake holder. Sarawak Malaysia, Phase one of our natural gas project begins to push towards startup in the first quarter of 2009. In the Gulf of Mexico, the Thunder Hawk development is on track for first production towards the end of the second quarter of 2009. The hull was scheduled to sail away shortly from a shipyard and work continues on the topsides. Development work at Azurite offshore Republic of Congo has also remained on schedule for its second quarter 2009 production startup.

Moving to downstream, our enhanced UK refining position generated early financial returns. The UK segment provided quite strong earnings at a time when its US counterparts lagged due to distressed margins caused by steadily escalating crude prices and decreased product demand. UK margins, especially distillate, were markedly better. The UK refinery continues to perform well, even though margins have retreated somewhat from second quarter levels. The plant is currently running 102,000 barrels per day. In the US, refining margins have improved over the last couple of weeks. However, Superior, where asphalt prices have lagged the runup of crude is running at a reduced rate of 26,000 barrels per day, following a full plant turnaround in May. Moreau is operating profitably at 112,000 barrels per day and has a mid-September planned 38 day maintenance turnaround of one of its units at which time crude runs should afternoon around 93,000 barrels a day.

In retail we continue to see increases in year-over-year fuel volumes and merchandise sales. Gasoline demand for our sites in the US started slowing the second week of June, although we continue to have quite strong year on year gains. Capturing margin in the steadily rising wholesale environment can be challenging as we have seen for most of the first half of the year. However, the reverse is also true. Over the last several weeks, fuel margins have improved nicely as wholesale gasoline prices retreated. We currently have 986 stations in operations, including eight stand-alone Murphy Expresses, which, by the way, have been nice earners.

To wrap up, we've had a good year so far. Operationally I'm pleased, except for delay in gas production startup from Kikeh, production is a growing strength and we reaffirm our guidance of 130,000 barrels a day for the year. Our key oil and gas field developments are all on track. The UK refinery was able to pick up the slack for the US R&M group for the second quarter and as crude has weakened over the last several weeks, we have picked up banner profits in our US retail segment and we sell around 250,000 barrels a day. The discovery at Diamond, albeit modest, is a start. As noted, we have a number of high potential wild cats on tap, balanced by unusual production growth, including two large long life gas assets, Sarawak in Malaysia, and Tupper in British Columbia. In addition, our balance sheet is extremely strong and as prices cycle down, and I suspect opportunities at more attractive valuations will become available.

I'm now ready to take your questions.

Thank you, sir. Ladies and gentlemen, at this time we will begin the question-and-answer session. (OPERATOR INSTRUCTIONS). One moment, please, for the first question. Our first question will come from the line of Ryan Todd with Deutsche Bank. Please go ahead.

Great. Good afternoon, gentlemen. Quick question on production volumes. Again, in terms of the moving pieces for 3Q I was having a little bit of a hard time getting quite to the 128. Is it just a delay on getting the wells on line in Kikeh. Are there any other pieces we should with aware of?

This is Dory. Let me walk you through the -- what we've had built in there. That might answer your question for you specifically. Start with the oil piece. In the US, we have 11,000 barrels per day, the United Kingdom, 3,000 barrels per day. Canadian heavy, 8,000 barrels per day, offshore Eastern Canada, 16,000, Syncrude, 12,000, Ecuador, 7,000 and Malaysia, 63,000. Natural gas in the US, 41 million cubic feet per day, the UK, 4 million and Canada, 1 million.

Okay. That's very helpful. Thanks. If I could just ask one more, then. On refining or actually back to the -- on Diamond and Sapphire, can you give any sort of estimates in terms of gross resource or is it too early to say on that.

Well, Sapphire is a dry hole.

Sapphire was dry. But on Diamond.

No. It's a tieback size, somewhere 35, 50 Bcf, in that range.

35 to 50 Bcf.

Yes.

Thank you, gentlemen. I appreciate it.

Thank you. Our next question comes from the line of Kate Lucas with JPMorgan. Please go ahead.

Hi, good afternoon.

Kate, how you doing?

Hi, just fine, thanks. Just a quick question on Kikeh and just the rate at which you've been able to recover your costs there. How far along are you in recovering costs out of the cost recovery pool and then how big is the overall pool or how much further do you have to go?

Kate, this is Mindy. I'll take that question. Currently the cost recovery pool on a gross basis is just a little over $900 million but it's important to understand that that number is fluid. It decreases as we make listings from Kikeh but it also increases as we continue to spend money not just in the Kikeh field but in the Kakap field as well. As we've mentioned before, for our production numbers for next year we modeled more of a mid-year type payback. That's probably going to occur if oil prices continue to hold toward the first part of '09, which would decrease our production forecast by roughly 6,000 barrels a day.

Starting in mid-year, next year?

We originally modeled mid-year but if you lift that up to beginning of '09 you would need to take an additional 6,000 barrels a day out of our forecast.

And then when do you expect to start paying the -- if you have $900 million left to recover, including or not including any additional costs you might, when do you expect to start incurring or accounting for the supplemental payment?

The supplemental payment begins to occur on day one, it's just that you don't realize -- you don't really notice it now because only roughly 15% of our net barrels are subjected to that right now as we're fully utilizing our cost recovery allocation. Once you have payback and all the barrels are thrown into the profit split, that number is going to approach 100% of our net instead of the 15%. It won't ever get quite to 100% because you can always recover your operating cost.

Right.

So the supplemental payment is there. It's just not noticeable right now.

Okay. And do you think that by the end of 4Q you would have recovered the remaining more or less remaining $900 million to have basically close to 100% of the barrels starting to reflect the payment or would that be more of a -- ?

That should occur early '09. That should start to become much more noticeable and material at the beginning of next year. That number is fluid so as we spend capital going forward in the block that percentage from quarter-to-quarter will change.

Okay. All right. Thanks very much.

Thank you. We'll move to the next question from the line of Erik Mielke from Merrill Lynch. Please go ahead.

Hi. My question relates to the exploration that you have in the Eastern Gulf of Mexico and trying to understand what your estimates are for Diamond -- I beg your pardon, for Emerald and Manhattan following the slightly disappointing results from Sapphire and Diamond.

Well, gosh. I don't think we're going to change what we think might be there. What happened at Sapphire and Diamond is a good reflector, in fact, fabulous reflector but it was a low gas saturated reservoir and so you had hydrocarbons, gas, that flagged, but just not sufficient quantities in most cases to be economic. So query is the same phenomenon which is bette noir of seismic events in the Gulf of Mexico. Does that recur again at Manhattan and again at Emerald. Manhattan, which we're going to next, it's either upper Miocene or Pleistocene age, different age, little bit shallower than either the other two. Little different age rock and traps roughly the same, however. So we'll go from Diamond there and, yes, depending upon results in Manhattan, we either go to Emerald or we have a couple of other options that are coming up. Now, Manhattan has got a shallow component which we're going to reach. There's a deep component which we would like to. It's probably lower Miocene, lapping against salt, and between the two it's a really large prospect, between the two shallow and deep sections, somewhere between 500 Bcf and a TCF. It's really unusually large for the Gulf, this stage of the Gulf. And I wouldn't change those on that prospect at this point.

Can I ask on -- I know it's a difficult one to estimate going into the next quarter, but what should we expect in terms of exploration expense that you know would already be coming through in the quarter. We had slightly low exploration in Q2, I guess that has something to do with you had found out Sapphire.

Right. Dory, you want to handle that.

Our range for the quarter, there's -- we have 55 million built in there for G and G with amortization and you add in the dry hole potential of 55 million, that gets you up to the 110 million top end of the exploration expense range, the low end being 55 million.

That's great. Thanks.

Thank you. Our next question will come from the line of Gene Gillespie, with Gillespie Consulting Group. Please go ahead.

Good quarter, Claiborne.

Thank you, Gene. I like that new company.

You like that? That's pretty creative, isn't it? Listen, I want to ask a question that's unrelated to the quarters. Under the new SEC rules, I'd like for your interpretation. It would appear to me that you're going to have an opportunity to book the approximately 130 million barrels of Syncrude reserve that you have in Canada and secondly, correct me if I'm wrong, but secondly, is this going to make it a little easier to book reserves in some of these frontier areas like Malaysia, where you've had a very -- it's been a very slow process in terms of adding reserves to the books.

The answer is certainly we'll be able to book Syncrude if they continue to -- if it holds up, this proposal from the SEC, which I presume it will. I think on the margin, Gene, it's going to be easier in Malaysia to book. They're allowing you to use more technical parameters and use the latest techniques that people use. However, they're still cautious on basins where there's not analogs and there's not a lot of production history. So I think we'll still wrestle with that a bit. I think the good news in Malaysia is that we're going to have production. So really, under any of the scenarios, I think you'll see increased bookings for us and it will always be a bit measured but we're producing now from most of the main reservoirs and we're injecting water and getting good pressure responses, so we pretty much have a good sense of where we are. So I think you'll see continued bookings, at least in that particular basin, based on that fact, if not from the new SEC parameters.

Now, at Kikeh you've got a pretty large number left to go, 250 million barrels, something like that.

Yes, 240 oil is our number for gross recoverable and we've booked about --

65.

65. So the delta's there, 180, something like that. So we'll obviously book a fair amount this year.

Then the gas component, if you start production in the fourth quarter, you'll book some gas or -- ?

We booked some gas last year from Kikeh.

One-third.

About one-third of what our recoverable is. Yes, so I'm sure we'll book some more gas there as well as we get some production history.

The metrics could look pretty darn good this year.

I hope so. I hope so. We're spending more money, but we've got a fair amount to book.

Is the CapEx number that you had provided before, is that still a solid number?

We're about 3 billion now in total, I mean, that includes --

That's up a couple hundred.

Downstream as well.

We were 2, 8 before.

It represents mainly buying some leases in the Gulf and buying some leases in Tupper.

Thank you.

Thank you. Our next question will come from the line of Paul Cheng with Lehman Brothers. Please go ahead.

Hey, guys.

Hello.

Hi. Claiborne, you talked about 3 billion for 2008, any update on 2009?

No, we really don't, Paul. We'll go through our budgeting process here. October is when we'll take our first real serious pass at it. So I really can't update you.

I think that you talk about say 2008, 130. Previously that you have a number that for 2009 production. Can you remind me what's the number or is there any change to that number.

Paul, we had last year I think for 2009 we have 204,000 is our production number. Now, that is assuming, as Mindy discussed earlier, that that was assuming that Kikeh would pay out at mid-year '09, so you're going to -- if that occurs earlier, you would drop some barrels from there.

Okay. Sure. Also, maybe this is for Dory. For Kikeh, what type of startup rate should we assume in the fourth quarter?

We're looking at Tupper, Paul, averaging around 30 million a day for the quarter. It may be a bit more than that. Exiting, somewhere around 40, 44 million a day. So we'll ramp up as we bring wells on. And Kikeh, I don't have it to mind. Our plateau is 120 and we ramp up -- we start in late September is our latest.

65 for the quarter.

We'll average 65 for the quarter.

So you'll ramp up pretty quickly in both cases.

Yes, pretty quickly. Then I think you'll see Tupper do quite nicely in the first quarter of '09 too and also Kikeh.

If we're looking at Tupper, looking at the pipe gas into Canada but you guys are somewhat low (inaudible) compared to some of your peers in the lower 48 on conventional resource plays, a number of that. How's your view on that. Is that you think you're too late and you can't really get with a reasonable price. You think you have better fish to fry somewhere else? I mean, how should we look at your strategy in that.

Paul, we got into Tupper last year at mid-year and then increased our position pretty much steadily all through the back end of last year. So we got in at real attractive pricing. Because now it's probably double since then and we think we've got 2 TCF after royalty there. I'm at 125 sections. The recent results that we're getting, we're extremely pleased with what we're seeing from both the upper and lower Montney in fact in Tupper one. I think it's a home run. I think it's going to be a significant volume that's going to be over $300 million a day, net to the company from Tupper. So I wouldn't back down a bit. Now, a lot of fancy numbers are being thrown about, people getting leasehold positions. Tupper now, but also in the lower 48.

You know, I tend, when the industry gets really frothy, to slow down a bit and when the industry slows down a bit to get a little frothy myself. I think you've got to put your foot on the brake a bit and let these things cycle down. And we're seeing it. And if all the gas is going to get to the market that people say is going to get to the market from this resource plays, then I think there's a risk that natural gas prices come under a bit of pressure here as we go forward, because it's gas, not oil, it's going to stay here in the US. It's basically the economy slows and so you've got folks quite aggressively getting admittedly very good assets but even great assets can be overcapitalized and I know that personally right well from (inaudible). So I think you just have to be a bit cautious here. But if you see a good one and it fits within your economic parameters like Tupper did for us, I think you act and act fast.

You don't have a problem in terms of the pay concept, just think that right now the industry maybe is a little bit too frenetic about the pricing.

Every company is different, certainly. And I tend try not to put all the eggs in one basket, whether it be resource plays or any particular type of play or type of asset class. And so having more of these resource plays at the right price I think would be a very important part of Murphy's future. I wouldn't want to have all of them there. I just wouldn't. So I think over time, if you have a company which is a bit timeless and you think, gee, what are you going to look like in 20 years, I think it's good to have oil, it's good to have natural gas, it's good to be in the US, it's also important to be an internationally exposed company and I think you'll see that from Murphy and certainly resource plays in the U.S. will be a part of that and likely a growing part of that. But over the last six months, buying assets, I think you got to be careful.

I know you must be tired of people asking this question, one of your competitors just indicated that they are evaluating whether they want to split the company into two and wondering that, have you guys revisit or looked at that also and what is your current view? Any change the last time you talked?

I've been really open with people that we have thought about our downstream business a lot of different ways and certainly that was on option that we've looked at. Only note of caution I would say is, one, their assets, the company you're referring to are certainly different from ours. And secondly, that particular market has changed pretty fast over the last six months. If you look at the equities of the independent R&M stocks, they're down anywhere from 60 to 80% and then on top of that, credit markets are awfully choppy out there to use a euphemism. And as you probably know, working capital requirements if nothing else for downstream companies for today's environment are extraordinarily high and then a weakened credit environment, I think you need to be mindful of all those facts just from the way we look at it. I don't know if you've seen some of the terms that have been paid for some of these credit facilities, but wow, they're awfully high. So I think you've got to be a bit cautious here in that particular regard. Even though I have to tell you, our downstream company is substantially better than it was. The second quarter certainly benefited from the new asset in the UK and the third quarter is going to benefit substantially from our retail assets in the US.

Thank you. Keep on. Have a great quarter.

Thanks very much.

Thank you. (OPERATOR INSTRUCTIONS). One moment for the next question. Next question comes from the line of Mark Gilman with The Benchmark Company, go ahead.

Claiborne, how are you? I saw that Noble drilled a dry hole offshore and I was wondering have you looked at that at all and how it might relate to prospects you would define in the block you acquired there.

Best that we know, Mark, they didn't test the same age rock that we have. But we don't know everything about it yet. But that's the first pass that we've seen at it. So that's all I know. And I don't know much except I don't think it's condemned or tainted what we've gotten because they had a different target there. But we still have to shoot some 3D and firm up what we've got.

Okay. And in the quarter, if I could read numbers correctly, Milford Haven runs were 119,000 a day which I thought is above name plate. Are you raising the name plate on that unit?

Mark, that includes some intermediates. We've got an oversized cracker there. So we can import feedstocks, intermediate feedstocks and I'm not looking at the numbers you are, but I would suspect that's what it is.

Oh, I see. Okay. Back to the Eastern Gulf for just a sec, Claiborne sounds to me if I interpreted your remarks correctly that you're primarily using good old fashioned bright spot technologies to find prospects. Is that pretty much true?

In the particular case of the Eastern Gulf these were really nice prospects in the sense that they had a deep seated structure and then there was a structure obviously on top of the deep seated structure, there was a bright spot conformable to structure and there were flat spots and it almost doesn't get any better than that, if you do all the statistics, typically those things pay or discoveries certainly more than 50% of the time. And so, those are just the odds. Those are just the statistics as you go through the Gulf of Mexico and you look at those types of structures.

How does it integrate with what might have been the deposition pattern.

Everyone's got a depositional model that they the use and certainly we have one as well, and we have a way to see the sediments there, and the sediments certainly were there. It was a breached trap in both cases and so you had low gas saturated water, basically, that reflects extraordinarily well. As you all know, fizz gas, another way to say it, has been the reason for a number of dry holes and it struck again. I wish I could discount that away with more technology, but so far, we haven't been able to do that. And it's early days. I mean, if they don't work, they don't work. I mean, that's why obviously we, recognizing risk, we farmed down Sapphire and had no financial exposure and with Diamond we don't have hardly any money in the leases themselves because we brought in partners who we promoted. So we certainly cater to the risk. We're aware of the risk and financially addressed the risk. I would have preferred to make a big, booming discovery, especially Diamond, which had a lot of potential. But in fact we managed it, which is what we're paid to do.

One other one for Kevin so he doesn't feel unloved.

I was feeling unloved until you got on the line.

You were feeling unloved?

Yes, because they were saying any more calls and there wasn't a Mark Gilman. I was thinking, "My heavens!"

I was taking a nap because I'm getting kind of old.

Through my remarks?

Yes. Deferred tax number, very large in the second quarter. Is that in any way related to the Kikeh ramp-up? I know this is a hard thing to predict going forward. But was there anything unusual that was responsible for that?

No, it's related to the Kikeh ramp-up. You'll see some more of that as we continue to ramp-up the plateau.

All righty. Thanks, guys.

Thank you.

Thank you, sir. (OPERATOR INSTRUCTIONS). One moment, please, for the next question. Management, at this time we have no additional questions in the queue. I'll turn the conference back to you for any closing remarks.

Thank you very much and we appreciate you being part of the conference call. Good day.

Thank you, management. Ladies and gentlemen, at this time we will conclude today's teleconference presentation. We do thank you for your participation on the conference call. If you would like to listen to a replay, you can do so by dialing 1-800-405-2236 and using the access code of 11116776 followed by the pound sign. Once again, if you would like to listen to a replay of today's teleconference, you can do so by dialing 1-800-405-2236 and using the access code of 11116776 followed by the pound sign. Ladies and gentlemen, we will conclude today's teleconference presentation for the Murphy Oil Corporation second quarter earnings conference call. You may now disconnect and please have a pleasant day, and thank you for using AT&T teleconferencing.