Pembina Pipeline Corp (PBA) 2012 Q1 法說會逐字稿

Good morning. My name is Adam, and I will be your conference operator today. At this time I would like to welcome everyone to the Pembina Pipeline Corporation 2012 first quarter results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question and answer session. (Operator Instructions). Bob Michaleski, you may begin your conference.

Thanks, Adam. Good morning, everyone, and welcome to Pembina's conference call and webcast to review our first quarter 2012 results. I'm Bob Michaleski, Pembina's Chief Executive Officer; and joining me on the call are Peter Robertson, Pembina's Vice President of Finance and Chief Financial Officer; Glenys Hermanutz, our Vice President of Corporate Affairs; Scott Burrows, our Senior Manager of Corporate Development and Planning. Our agenda today follows our standard process. I will review the first quarter 2012 results we released yesterday, spend a few minutes providing an update on recent developments including our acquisition of Provident Energy, and open up the line for questions.

I'd like to remind some of the statements made may be forward-looking in nature and are based on Pembina's current expectations, estimates, projections, risks and assumptions. I must point out that some of the information I provide refers to non-GAAP measure. To learn more about the forward-looking statements and non-GAAP measures, please see Pembina's various financial reports available at www.pembina.com and at bothSEDAR and EDGAR. Actual results to differ materially from the forward-looking statements we express or imply today.

I want to start off by saying that this was one of our strongest quarters in terms of both operating and financial performance. I'm very pleased that we delivered these results while working to complete the acquisition of Provident, which closed on April 2, and while obtaining our listing on the New York Stock Exchange.

While we have been a combined company for just over a month now, I should point out that because we closed the transaction subsequent to the end of the first quarter, my synopsis of the first quarter results will refer to Pembina and Provident and standalone entities. Future quarters will include a consolidated view. I will touch base with how we are progressing with the integration with the two companies shortly, but first I'll go over the results we released yesterday, which demonstrate the solid foundation we have continued to build on and will support our long-term plans for the company going forward.

Now let's look at Pembina's Q1 results compared to the same quarter last year. A 28% increase in adjusted EBITDA, a30% increase in adjusted cash flow from operating activities, and 24% increase in adjusted earnings. We also realized strong consolidated volume growth of 15%, with first quarter 2012 aggregating volumes of 1.379 millionbarrels of oil equivalent per day compared to 1.203 million barrels per day in 2011. This is a new metric, so I'm not exactly sure it is going to mean much to anybody, but anyway we will review that in the future quarters.

You know that I'm referring to the adjusted numbers, since we incurred CAD21 million in acquisition related expenses during the quarter, including an CAD8 million [make whole] payment on the redemption of senior secured notes, which we completed on April 30.

Looking at the segment results in each of our businesses for the quarter, I'm very pleased that each reported improved results. On a consolidated basis revenue net of product purchased increased 26% to CAD176 million from about CAD141 million in the first quarter of 2011. And operating margin grew by more than 30%, from CAD97 million during the first quarter of 2011 to CAD128 million during the first quarter of 2012.

Our Oil Sands & Heavy Oil business are the largest Q1 over Q1 gain, delivering a 41% increase in revenue and 56% increase in operating margin on account of Nipisi and Mitsue pipelines, which started generating returns in the third quarter of 2011.

As well, our Gas Service business processed higher volumes at the Cutbank Complex during the quarter and realized an increase in revenue of 27% and a 26% jump in operating margin compared to the first quarter of 2011.

The Midstream & Marketing business also continued to show strong results. During the first quarter we saw a 24% increase in revenues, netof product purchases, and a 25% increase in operating margin over the same quarter of last year from this business. These improved results were largely due to higher volumes and increased activity in our Peace and Drayton Valley pipeline systems. Stronger commodity prices, wider margins, and the addition of the Edmonton Nexus Terminal, which includes new connections such as our connection with Southern Lights.

During the first quarter of 2012 Conventional Pipeline throughput averaged 467,000 barrels per day,approximately 20% higher than the same period in 2011 when average through put was 390,000 barrels per day. Increased activity on all of this business -- major pipeline system contributed to the volume growth and helped bump up revenue by 19% and operating margin by 20% during the quarter when compared to the same quarter of 2011. Even on a quarter over quarter basis our first quarter through put was almost 11% higher.

The solid performance we experienced in Q1 of 2012 across all of our businesses can be tied back to new technology being applied by producers to increase recoveries in the Western Canadian sedimentary basin, and new services Pembina has developed and is now offering to customers to meet increasing needs. G&A expenses of CAD17.6 million were incurred during the quarter, compared to CAD14.7 million during the first quarter of 2011, due to an increase in salaries and benefits for existing and new employees and increased ramp for new and expanded office is space.

As you will note in the news release issued yesterday, Provident also had a solid first quarter, which was in line with previously communicated guidance and with its first quarter of 2011 despite softening propane pricing. Both adjusted EBITDA and adjusted funds flow from operations were comparable to the same periods of the prior year at CAD61 million and CAD53 million for the first quarter of 2012 respectively. NGL sales volumes averaged approximately 126,000 barrels per day, a7% increase over the first quarter of 2011.

Provident total debt March 31 was CAD532 million, compared to CAD510 million at December 31, 2011, and capital expenditures in the first quarter of 2012 totaled CAD37 million. Market frac spread, which is the value received on the market for the sale of the standard NGL barrels, less the cost of natural gas from which the NGL was extracted, increased by 10% during the first quarter of 2012 over the first quarter of 2011 and reflects reduced cost of natural gas, which more are than offset reduced propane sales prices. I would direct you to Pembina's website where we posted our latest hedging information.

Now that we looked at the results, I would like to provide an update on the integration activities at Pembina. We've listed Pembina's common shares on the New York Stock Exchange on closing on the symbol PBA and assume the rights and obligations of Providence debentures, which are trading on the TSX under PPL.DB.E and PPL.DB.F. The new conversion prices for the debentures are available at our website under Investor Center and in the news release dated April 24 of 2012.

As we previously announced on closing of the acquisition, we increased our monthly dividend from CAD0.13 per share, or CAD1.56 annualized, to CAD0.135 per share per month or CAD1.62 annualized, which became effective with the April 25 record date.

At the corporate level, since closing the transaction we have been working to consolidate our office space at Eighth Avenue Place in Calgary, and we expect to have everyone moved over within the next few months. Our accounting teams are reviewing policies, procedures and processes, and developing reporting for the combined entity for the end of the second quarter. And we have got a team in place to ensure we are SOX compliant by the beginning of next year.

On the operational front, while our businesses are continuing to execute on the projects that are already underway, they are also starting to work on integrating our existing assets with the newly acquired assets and evaluating the various opportunities that our expanded footprint has created. Over the next few months we expect we will have more clarity on the specific growth endeavors that we will undertake.

Turning to Gas Services. We did have a setback at Musreau Deep Cut, which we put into service in February. The facility was running for six weeks before a gearbox failure caused us to cease operating the Deep Cut. We've ordered replacement parts and are working towards a mitigation plan with our area customers. All of the gas is still being processed at the Cutbank Shallow Cut facilities, so no production for the customers has been shut in.

For the Resthaven and Saturn facilities Pembina has ordered much of the long lead equipment for both projects and has initiated construction at both plant sites. We are working with our stakeholders and regulatory bodies on the environmental planning and route selection for the pipeline portion of the projects and are also completing preliminary engineering work. Subject to regulatory and environmental approval, we expect to have both of these projects completed in the latter part of 2013. The relatively mild winter has made for ideal construction conditions. The Saturn site has completely cleared and support beams being put in place. At Resthaven camps have been put in place and compressors being delivered to the site.

We continue to in investigate several other opportunities to expand our Gas Services business. Many of the exciting new developments in the segment are close to our existing infrastructure, and with new technologies and the supportive pricing environment for NGL we expect to see the need for increased gas handling requirements. These new gas volumes, in combination with the liquids value imbedded in the gas, has created interest in new and upgraded gas plants with enhanced liquids extraction capacity and ethane plus transportation opportunities.

Now turning to our Conventional Pipeline business. I mentioned earlier that we are seeing increased volumes on our major systems. As a result we are working to expand NGL capacity on both our Peace and Northern pipeline systems by a total of 55,000 barrels per day to accommodate increased customer demand, resulting from strong drilling results and increased field liquids extractions by area producers.

Subject to reaching acceptable agreements with customers and obtaining necessary regulatory approvals, the NGL expansion will require Pembina to install five new pump stations and upgrade five existing pump stations, which we expect to cost approximately CAD100 million. Pembina expects at 20,000 barrels a day the NGL expansion can be brought into service by the end of 2012 and the remaining 35,000 bare barrels per day by the end of 2013.

This staged approach is structured to accommodate the transportation capacity needs of our customers and producers in the area. Once completed the proposed NGL expansion is expected to increase capacity in the Northern NGL System by 48% to 170,000 barrels per day. The response to Pembina's firm service open season has been very positive, and we are working towards finalizing agreements by the end of the second quarter.

On the Drayton Valley system Pembina is finishing work required to refurbish our Calmar booster station, which will add an additional 50,000 barrels per day capacity to the Drayton Valley main line, bringing the total capacity of the system to approximately 190,000 barrels per day. We expect to complete the refurbishment this month and get the booster station up and running. We are continuing to work with the customers to assess their transportation needs over the next three to five years to ensure we have the capacity to accommodate their growing production.

In our Midstream & Marketing business we continue to develop our Pembina Nexus Terminal, and as I mentioned earlier, we commissioned a connection to Southern Lights in Q1 for diluent supply. We have also started preliminary work to develop full service truck terminals at several locations.

That brings me to Oil Sands & Heavy Oil. As you know, we completed construction of our Nipisi and Mitsue pipeline projects in the middle of 2011. Both pipelines are now in service and contributing to our results in this business. With these pipelines now ramped up, we are working with customers in the area to pursue the many expansions and integration opportunities associated with this key infrastructure.

Now looking at our financing activity for 2012. As I mentioned earlier we increased our dividend to CAD1.62 per share per year. Pembina is currently in the position of strong liquidity with cash and unutilized debt facilities at March 31 of CAD450 million, and we establish a new five year CAD1.5 billion credit facility on the close of this acquisition. We believe we will have access to capital markets to fund our growth projects, and we reinstated the DRIP to assist with funding our 2012 to 2013 plans. We have seen an excellent uptake in our DRIP, which since the acquisition is currently raising CAD21 million per month.

This was a milestone quarter for Pembina. Our results are a clear reflection of the progress we are continuing to make on our growth strategy. And with the acquisition of Provident, we expect that growth opportunities will fold at an accelerated pace going forward. We are very excited to begin reporting as a combined entity in August when we release our second quarter results.

One final house keeping item before I open the line for questions. I wanted to mention that Pembina's annual general meeting is scheduled for May 22 at 2 PM at the Metropolitan Centre here in Calgary. The details on our website under Investor Center, and we look forward to seeing those of you who are able to make it there.

With that we can start the Q&A. Operator, please go ahead and open up line for questions.

(Operator Instructions). Yours first question comes from the line of Linda Ezergailis. Your line is open.

Than you. Congratulations on a strong quarter.

Thanks.

I have questions with respect to the Conventional segment. I'm wondering what the nature of the operating efficiencies were in the quarter?

Well, I think it is fair to say that every quarter or every year we look at ways of improving and streamlining our operations, but I'm saying there is nothing really specific here. That is just a mindset for the Company. I think what I can say for the quarter, compared to, say, the fourth quarter of last year, operating costs were lower, and largely driven by the timing of our in integrity related expenditures. And so the guidance I would give -- or suggest for the balance of the year is that we probably expect our in integrity related costs in the second quarter probably not to be much higher than the first quarter, but the third and fourth quarters we will be spending much more money on integrity.

And so I think that is really, again, in line with our guidance in the past that suggests that, as we are starting to ramp up volumes on our pipelines, we feel it is necessary to accelerate the integrity and work on those pipelines, because they will be operating at pressures that in some cases they have never seen. So we are front ending those expenditures. I think the timing in Q1 and likely Q2 will be lower than what we experienced in Q4, but I would expect -- I certainly wouldn't suggest that you would normalize the expenditures for the first quarter and say they [will be the] same for the balance of the year.

Thank you. And just a follow-up on your Marketing business. An excellent quarter from that segment as well. I know on the last call -- and while you qualified your statement that it was still early in the year, but you suggested that perhaps 2012 could be similar to 2011. And yet you enjoyed a 26% year-over-year increase in your EBITDA. How might we think of the balance of the year, assuming the strip forward future prices don't move around that much for your liquidities business?

I think we did experience -- there were some rather interesting pricing differentials taking place in the first quarter, which extended into the second quarter, but not to the same extent, Linda. I think the 2012 is still going to be a fairly strong year. Again, I would not simply extrapolate the results for the first quarter. But 2012 I think will look as 2011, possibly a bit better, because I think the one factor that is obviously developing is we are seeing more volumes coming our way in 2012 than we did in 2011. So as a result I would expect there to be a modest improvement. But we will -- as we go through the year, Linda, will be able to give you better insight as to what is developing in that area.

Great, thank you. And appreciate your updated hedging disclosure on the legacy Provident assets. I'm wondering if you have put any thought to whether you will change your hedging strategy, or if at this point you will -- it appears that you will continue to -- the legacy Provident hedging strategy?

Linda, I think it is fair -- I mean, this is still early innings for us, and I think the Provident management board put in a hedging policy, and I think at this stage it is fair to say that Pembina is going to carry on with that established policy. I don't see any reason for us to change it at this time.

Great. Thank you very much.

You're welcome.

Your next question comes from the line of Juan Plessis. Your line is open.

Thanks very much. With respect to the Musreau facility, when do you expect that to come back online?

Juan, we -- right now we are in the process of lining up a replacement gearbox, and we actually have ordered a new gearbox as well, and that gearbox won't be in for quite some time. But the replacement gearbox, we will have to test it and so on, but we think probablyearliest would be four weeks, but we are saying four to six weeks and should hopefully be back in service.

Okay. Thanks for that. And there are any more acquisition related costs to recognize outside of the CAD21 million that you expensed in the first quarter?

To be clear, we have got CAD8 million was related to the prepayment of our secured notes. So the balance is related to Provident related acquisition costs. I expect there will be modest costs that will come through the second and third quarters of the year, Juan, but they are not going to be significant. Certainly not anywhere near the magnitude. I think they're -- we're probably looking, I'm going to say, CAD2 million to CAD3 million.

Okay, great. Thanks very much.

You're welcome.

Your next question comes from the line of Carl Kirst. Your line is open.

Thanks. Good morning, everybody, and nice quarter. Sorry, just a clarification on the Musreau outage and with the replacement gearbox and saying the four to six weeks. With no one being shut in, that is not expected then to have a financial impact?

Carl, we are being impacted by, we are saying, roughly -- almost a CAD0.5 million a month in Gas Services and probably close to the same in our Conventional business unit while that facility is down. So there is going be a financial impact. It is modest. We do have business interruption insurance in place, but it is subject to a 45 day deductible, so we won't -- at this stage if we get the gearbox in place and back operational, it is going to have a modest financial impact on us, but nothing of significance between the Gas Service business unit or the Conventional business unit.

Okay, that is very helpful, appreciate that. And then Bob, correct me if I'm wrong, you stated in your comments that we might be in a position in the next several months to get more specific on some future growth activities. And not to perhaps put the cart in front of the horse, but can you give the nature of that, as far as is this what we might say further penetration in the identified unrisked backlog of the two companies? Or is this even new business that is that is outside of what was previously seen?

I think it is within the scope of the projects we have been working on, Carl. I think as each month passes, of course, you get closer to negotiations with your customers. And I think the projects we talked about near term -- the number one project that we would have on our books now that we have acquired Provident is really to look at building a new fractionator at Redwater. And of course, if you want to talk about getting closer, at this stage wewant to ensure that we have got customers in place to backstop the volumes that would be going through a new fractionator, so that is the type of conversation that we would have underway right now, Carl.

So it would be entirely consistent with where we have been in the past except we are progressing as time passes on each of these. And in particular I think it is fair to say we are feeling more confident in our ability to talk about a fractionator at an existing facility where there is a existing infrastructure, as opposed to building a brand new fractionator ourselves. So this just makes -- this kind of accelerates that whole process.

Perfect. I appreciate the color. Last question if I could, and this is more, I guess, strategic as we look out over the next couple of years and there continues to be momentum building for LNG export on the West Coast. Would Pembina look to participate in that solely from the increased activity on the gathering processing side, or would there even be thoughts of going after big inch gas line?

Carl, I think it is fair to say we have got unrisked capital opportunities that are approaching CAD4 billion, and those are -- generally those opportunities are within the areas that we already have our focus. And I would like to think that we'd continue to probably maximize value by focusing in the areas that we currently have operations and expertise. SoI would like to think that will be our priority over the next three to four years is developing out those -- or proving out those unrisked development opportunities without looking at getting into LNG exports or other larger diameter pipelines.

Perfect. Thanks, guys.

Thanks, Carl.

Your next question comes from the line of Matthew Akman. Your line is open.

Thanks, guys. A couple of questions on your development projects. First on Saturn, does the further development of it and ultimate construction depend on any more contracting of it? Is it contingent on that at all, or is it really just other kinds of environmental permits and so forth?

It is really regulatory environmental, Carl. I think we have in place all of the contracting that we need for that facility. To add some color to it, I think that in the process that we found there is additional demand for additional processing capacity in that area. So there is a chance that some day we might be talking about an expansion of that facility, but that will be for the future.

Thanks for that. And related to the terminals, there was some discussion about further development of the Pembina Nexus Terminal. Now that you acquired Provident, I'm wondering about the pace of development there versus, say, utilizing the Provident terminal assets in and around Fort Saskatchewan instead as kind of a major jumping off point for future growth in terminals in that area?

I should maybe clarify, Matthew, if it wasn't clear. When we talked about terminals, we are also talking about development of full service terminals, and I think we have four projects currently underway in our Midstream & Marketing group right now with respect to terminal development.

We all are still looking at building out on PNT, because it is really -- there we handle crude oil primarily -- crude oil condensate -- and whereas with the Provident terminals and so on they handle other natural gas liquids. So it is almost like, on the one hand, we're going to look at on building out the crude oil condensate opportunities that we see at PNT, and we'll continue to look at developments and movements of Redwater natural gas liquids. I kind of see those as being a little bit like two different terminaling opportunities.

Great. So you will pursue growth at both?

Yes.

Great. Thanks, those are my questions.

Okay, Matthew.

Your next question comes from the line of Robert Kwan. Your line is open.

Good morning. Bob, maybe if I could build on the PNT and Redwater, sounds like there has been thought, at least as you integrated in the Provident assets, and you have the Southern Lights connection up to PNT. Do you see the need to connect Southern Lights right through to Redwater? Or give it sounds like PNT is going to be this condensate launching pad, is that something -- because it sounds like -- or it sounded like from Provident that was something that was going to be a difficult connection. So is that something that you still want to build?

We will take it one step at a time, Robert. I think right now we are trying to build out from PNT and have that as a launching pad for condensate distributions to oil sands related projects as well as the -- our Nipisi project. So that isour initial focus. We will look at other opportunities with respect to the combination of Provident to see what we can do there as well. Because in particular, if get to build a new fractionator, there will be condensate coming off that fractionator, which again will be used to as a diluent source, largely for the oil sands we believe. And so wewill look at ways of interconnecting or combining our distribution capability out of either Redwater or PNT.

Okay. And then I guess just on the funding plan and the work you guys did with the credit rating agencies to get them onside for just that one notch downgrade. Just wondering as part of those discussions with the rating agencies, what was contemplated with respect to how you expect to finance the funding plan through the remainder of this year and specifically the equity needs?

Maybe I will have Peter address that question, Robert.

Robert, I think certainly we indicated that on future projects we would generally finance those on a 50/50 basis; [i.e.] almost ignoring the current state of the balance sheet. The going forward projects 50/50 debt and equity.

We have to seen how we spend on the current forecasted CAD700 million in CapEx this year and how strong the [DRIP] program is. If it continues the way it is, we will be generating over CAD200 million in the [DRIP] for 2012 and 2013. So it remains to be seen if we require any additional equity in 2012. That will depend a lot on how much of our capital program we actually get done in 2012. Some of it may well run into first and second quarters of 2013.

So is it fair to say -- it sounds like from what you are saying, Peter, that the potential equity plan is back to where it was prior to Provident? That depending on the spending, it was either going to be potentially later this year, but if the spending is moved into 2013, it could be a first half of 2013 thing? But still saw the need for external equity?

In a way, yes. The Provident CapEx is fairly minor, but we are estimating about CAD150 million for 2012. So it doesn't have a big impact on our current plans for 2012.

Okay. That's great. And then just a last numbers question. I apologize if you gave this earlier in the call. I didn't see, was there an exit rate for the Conventional Pipeline volumes? I think you gave a similar number in Q4.

We probably gave you that number in Q4 because we knew the number, but at this stage, Robert, we are continuing to see requests for new connections. We are seeing increased truck volumes coming our way. I think that right now where we are at is a pretty solid condition. [When we go to] second quarter, we typically experience road bans, so second quarter will likely be a little soft. It is hard to say where we will be at end of the year, but I think there is a good chance we will be able to average at levels that actually would be slightly higher than what we experienced in the first quarter, particularly the -- as we put in excess capacity at some of our pipelines.

Okay. So kind of the normal seasonal softness for Q2, but not seeing any abnormal trends on volumes?

No.

Okay.

No, I think that has been still very strong, Robert, in terms of requests for new connections, and we are pretty enthused about what we are seeing.

That's great. Thanks very much.

Sure.

Your next question he comes from the line of Ken Kramer. Your line is open.

He may be gone.

Your next question comes from the line of Robert Catellier. Your line is open.

Thanks. Most of my questions is have been answered. Just on the full service terminals, do you have a sense of how large that business can grow, either by the number of terminals or how much capital might be put to work there?

I think roughly, Robert, I think we identified something like 15 possible locations. About three a year. And so in terms of costs, I would say maybe CAD30 million per year for the next, say, five years. Round numbers?

Okay. And then just finally following up on the question about the credit rating agencies and what you committed to. Were there any commitments made on the payout ratio side?

No, not at all, Robert. We are -- I think we have had a pretty good start to the year, and we think our payout ratios will probably -- they will probably move up a bit as we get into additional capital expenditures in the balance of the year , but again that could be offset to a certain extent by what we are seeing in terms of new activity, too. So no, there is no commitments or expectations by the rating agencies with respect to payout ratio.

Okay. Thank you.

Thanks, Rob.

Your next question comes from the line of Steven Paget. Your line is open.

Thank you. Would it be possible for you to give a breakdown of the conventional oil throughput between the Alberta system and Western system?

I don't know if I've have got that, Steve.

Okay.

I don't think it is much different than it has been traditionally. I'm not sure if we disclosed that in the past, Scott?

The throughput on the BC system was 22,000 barrels, so 5% of the overall throughput.

Okay. Thanks, Scott. Second question, are you offering any integrated services already now that you have Provident assets, and could you give us an example what the integrated service might look like?

Just generically, Steven, I think what we can say is that we got in gas processing. We were providing then gas processing. And then we went into deep cuts, and we were providing deep cuts processing. And then we were building gathering and storage to handle the liquids off of a processing facility, and then transporting the liquids to market, say, in the Edmonton region.

So in terms of service offerings now, we can also talk about fractionation for our customers and storage and distribution, and I think the one element that is still needs to be addressed is what do you do with the ethane. So I think again we have to look at doing some arrangement with the ethane consumers in the province that will give our customers some confidence that they also can address their ethane requirements.

So I think it is developing, Steven, as a full service offering for our customers. At the same time we are consumers of some of those products that will come off the fractionator. It is tying together very nicely, I think, in terms of the conversations we can have with our producers and even look at utilizing some of those services ourselves.

Okay. You mean like in a marketing way?

Yes.

Okay, okay. Could you please break down the CAD4 billion in unrisked development opportunities between your four divisions?

Well, I could say roughly -- I can give you some rough guidance.

Okay.

Oil Sands would be CAD1 billion to CAD1.5 billion. Gas processing and fractionating roughly CAD1 billion. Conventional, it kind of depends on the extent of the developments we go through and further expansions, butwe could be looking at somewhere between CAD500 million and CAD700 million. And then Midstream & Marketing, again, it's generally pretty modest, but we will see the full service terminal development as well as potentially other storage development opportunities. And so it would make up kind of the balance, Steven.

Okay. Thanks for that. Can you comment, Bob, please, on how much the capital costs at Saturn have been locked down at this point?

I don't have that information, Steven. I know we preordered long lead items, but I don't know specifically what it entails at this stage.

Okay. Thanks very much. Those were my questions.

Thanks, Steven.

(Operator Instructions). Your next question comes from the line of Ken Kramer. Your line is open.

Gentlemen, I don't know who to direct this question to, but whomever feels qualified, I would welcome a response. Currently you have eight security analysts following the stock in Canada, but none in the United States that I have been able to find. I'm wondering what your thoughts are on expanding your investor public relations in the United States?

Who wants to handle that question?

I think now that we are listed on the New York Stock Exchange we certainly will be spending more time visiting with our US investors, and certainly would look to acquire some interest from the firms in the US to provide coverage for those investors.

Thank you.

Your next question comes from the line of Steven Paget. Your line is open.

Just a follow-up question if I might. I remember Provident having some [locks] getting contracts to store synthetic crude, and with Pembina being a big pipeliner of synthetic crude from Horizon and Syncrude, is there something that you could link up between the storage at Redwater and the pipelines?

Steven, I think that is definitely an opportunity for us. I think it would be dependent on our customers obviously that own the synthetic crude to develop and explore those opportunities. But certainly that is the business we are in, and I see our customers are looking at the pricing swings that can take place and have taken place here, and they may view storage as an opportunity to try to take some of the market fluctuations out of the equation. I think that would be a goodopportunity for them, and for us as well, Steve.

Okay. Thank you.

You're welcome.

And there are no further questions at this time. I would like I turn the call back to the presenters.

Thanks to all those that participated in the call this morning. We had some excellent questions, and I guess if we haven't been able to answer them, Scott, Glenys here and I are available. And to the extent we haven't answered or addressed them, we are available to answer those questions. So thanks again for participating this morning. We look forward to talking to you either at our AGM, which is coming up, or [alternatively] at the end of the second quarter. Thanks a lot.

This concludes today's conference call. You may now disconnect.