Pembina Pipeline Corp (PBA) 2013 Q1 法說會逐字稿

Editor-- Portions of this transcript marked (Technical Difficulty) indicate audio problems. The missing text will be supplied if a full replay becomes available.

Good morning. My name is Laurel, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pembina Pipeline Corporation 2013 first-quarter results. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, we will have a question-and-answer session.

(Operator Instructions)

I would now like to turn the call over to Mr. Bob Michaleski, Chief Executive Officer. Please go ahead, sir.

Thank you Laurel. Good morning, everyone, and welcome to Pembina's conference call and webcast to review our first-quarter 2013 results. I'm Bob Michaleski, Pembina's Chief Executive Officer. Joining me on the call today are Mick Dilger, President and Chief Operating Officer, Peter Robertson, Vice President of Finance and Chief Financial Officer, and Scott Burrows, Vice President of Corporate Development and Investor Relations. Our agenda today follows our standard process. I will spend a few minutes reviewing the first-quarter 2013 results we released yesterday, provide an update on recent developments, including our CAD1 billion NGL infrastructure expansion, and then open up the line for questions.

I'd like to remind you that some of the comments made today may be forward-looking in nature, and are based on Pembina's current expectations, estimates, projections, risks, and assumptions. I must also point out that some of the information provided refers to non-GAAP measures. To learn more about these forward-looking statements and non-GAAP measures, please see Pembina's various financial reports available at Pembina.com and on both SEDAR and EDGAR. Actual results could differ materially from the forward-looking statements that may expressed or implied today.

Our financial and operating performance during the quarter was very strong, and I'm pleased with how our year has begun. Overall, the results generated by our business has benefited from the enhanced suite of services we are now able to offer, and relatively positive industry fundamentals. I'd like to point out, however, that quarter-over-quarter variances were largely due to the acquisition of Provident. As you all know, we closed the acquisition on April 2 of last year, so the results of these assets are included in the three months ended March 31, 2013 but not the comparable period of 2012.

Compared to the same quarter last year, we saw an almost 90% adjusted EBITDA and 100% increase in adjusted cash flow from operating activities. On a per-share basis, adjusted cash flow from operating activities grew over 18%, while our adjusted cash flow from operating per share grew, mainly due to higher EBITDA, it did benefit from lower interest paid in the quarter, due to the timing of the interest payments on our senior notes. The majority of our interest payments have fallen in Q2 and Q4 each year. On a consolidated basis, revenue and cost of goods sold increased CAD0.79 to CAD314.9 million from about CAD176 million in first quarter of 2012. Operating margin also saw a substantial increase of about 88%, growing from CAD128 million during the first quarter 2012 to CAD239.8 million during the first quarter of 2013.

Each of our businesses generated a strong result during the quarter. Looking first at Conventional Pipelines, we saw an average throughput increase of almost 6% from the same period of last y ear. Our average throughput for this quarter is 35,000 barrels per day. Some of our systems are running at or near capacity, which helped drive increased revenue in this business. One thing to note, that we are now including results for the pipeline system in Conventional Pipelines, which had previously included a [mincer]. While this had no impact on volumes, it did have and will continue to have an impact on revenue for the segment.

Offsetting revenue were higher operating expenses, which increased by 30% compared to prior period. This is because ramping up volumes and completing winter-only access work along the pipeline systems. Overall, property margin and actual pipelines increased approximately 12% during the first quarter compared to the same quarter last year.

Our Oil Sands & Heavy Oil business generated results during the quarter that virtually unchanged from the first quarter of 2012, due to the contracted nature of this business. However we did see a slight uptick of about 5% in operating margin due to throughput, being transferred into the Nipisi and Mitsue pipelines, beyond the contract's capacity. In our Gas Services business, we posted higher volumes at our Cutbank complex during the quarter, and have also increased certain fees, due to additional capital we invested in the assets. These factors resulted in an increase of revenue of 44%, a 43% jump in margin when compared to first quarter of 2012.

In our Midstream business, we saw the largest gains on a consolidated basis when comparing the first quarter of 2013 with the first quarter of 2012. Because of the former Provident business, results are reported in the Midstream group and of course, we didn't on those assets until April of last year. Operating margin generated by crude oil-related activities increased 44%, to higher volumes and increased activity on Pembina's pipeline systems. Wider margin, as well is increased throughput at the crude oil Midstream terminals. I'd like to note here that some of the opportunities we were able to take advantage of and execute on during the period, which drove the strong results were not typically seen in the first quarter, especially with respect to margins and storage activities.

Since we didn't on the Provident assets in the first quarter of last year, we have not any comparison of the results of the aggregated midstream activities. But I think it is important to note that these assets performed very well for the quarter, due to strong demand for propane in Western Canada, and attractive prices in Eastern Canada, with less volumes at the Redwater West and East facilities. During the quarter, we incurred consolidated G&A expenses of CAD32.6 million compared to CAD17.6 million during the first quarter of 2012. This increase is, for the most part, associated growth of our Company since the acquisition of Provident, and is mainly due to an increase in these number of employees over the period, as well as increased dollars and benefit to employees. Share-based payment accruals have also risen as a result of share price appreciation during the first quarter of last year.

Now, with the addition of many new projects in Q1, I am very pleased to report that Pembina has increased its 2013 capital spending plan over CAD1 billion from the previously-announced budget of CAD965 million. I'll go over these projects briefly, and we can talk more during the Q&A if you have specific questions. Looking at Gas Services, Pembina announced on March 5 that we will proceed with Saturn II, essentially twinning Saturn I, as part of a CAD1 billion NGL infrastructure expansion. This facility will extract valuable NGL from raw gas streams in the Berland area of Alberta, and is underpinned by a service contract with a third party for 100 million cubic feet a day, approximately 65 facilities for a term of 10 years. We expect the project to be in service by late 2015, subject to regulatory and environmental capital costs of approximately CAD170 million.

Based on 100% capacity, Saturn II is expected to extract approximately 13,500 barrels per day of NGL, which we transported on the same pipeline lateral Pembina is currently constructing for Saturn I. Construction of the contract (inaudible) progressing well. We expect to have the Saturn I facility in this year in the third quarter and the Resthaven facility is in service in the third quarter of next year. As noted in our first-quarter report, we are planning to take over operations at Resthaven, to help streamline operations at existing facility while the new shallow cut are being constructed. We don't expect this to have an impact on results for our Gas Service business. In our Conventional Pipeline business, we are pursuing numerous crude oil opportunities and NGL capacity expansions for a total capital investment of approximately CAD800 million.

Rather than reiterate all the details contained in the first quarter report, I'll touch on a few highlights about the progress of these projects. First, in our Crude Oil and Condensate expansions, we are working to complete the Phase I expansion and bring three pumps into service by October of 2013. This will bump up crude oil condensate capacity on the Peace pipeline by 40,000 barrels per day at a cost of about CAD30 million. We are at the same time continuing to work on Phase II of LVP. This will see our crude oil and condensate capacity of our Peace pipeline reach 150,000 barrels per day in late 2014. We are progressing with detailed design and engineering as most work required to complete the expansion will occur at existing sites, making the regulatory process to go quite smoothly.

Turning to our NGL capacity expansion plan, we added three pump stations for the NGL expansion in April. The pump stations cost a total of approximately CAD30 million and we expect to have them in place and in service in June. Once they are up and running, we will have an additional 17,000 barrels per day of capacity on the Peace/Northern NGL system. By October, we expect a further 35,000 barrels per day onstream Phase I expansion. We are also progressing with our regulatory and environmental applications, stakeholder information, and detailed engineering and design for a Phase II NGL expansion which we announced on March 5, as part of our CAD1 billion NGL infrastructure expansion.

Beyond the expansion, we recently completed a non-binding open season to assess future demand for transportation services in the areas of our pipelines. Based on initial results, we have sufficient support to proceed to next in the process and expect to have more details to discuss in the coming months. In midstream, we are also pursuing a variety of crude oil, condensate and NGL related projects. The most substantial of these investments are RFS II, a new CAD415 million 70,000-barrel per day fractionator at its Redwater site. This project rounds out our CAD1 billion NGL infrastructure expansion plan, and has secured our 10-year initial term take-or-pay agreement.

Leveraging off of engineering for the original fractionator, RFS II is suspected to be in-service late in the fourth quarter of 2015. Ethane produced from RFS II will be sold under a long-term arrangement to NOVA Chemicals Corporation. Storage cavern development also continues to be major focus at our Redwater site. We brought two long-term fee-for-service contracts into service in April and expect to bring a third cavern into service shortly.

With respect to crude oil midstream development, we continue to advance a number of initiatives aimed at increasing the optionality of our midstream business so we can leverage our assets, to manage a variety of market conditions and increase fee-for-service revenue generating components. We are working towards completing and bringing into service two full-service terminals, which will help bring additional volume onto our systems, and we are also working to enhance the connectivity of our Pembina Nexus Terminal. This applies not only to pipeline connectivity, but also to rail, as we will be adding crude oil rail, on and offloading services in the next several months.

While most of the projects I discussed are imminent, we are also continuing to develop longer-term plans for exporting propane offshore. This project is still in the conceptual phase, but we do hope to have something to say about it in the next several months. While we expect on our attractive suite of growth projects, opportunities will rely in part on our ability to maintain a strong financial position. To this end, we completed the offering near the end of the first quarter of CAD345 million in common shares, and in April, we issued CAD200 million in 30-year notes. As well, in April, we opened our DRIP up to US investors assisting in our growth plans. At this afternoon's AGM, we will be asking our shareholders to vote in favor of amending our bylaws to enable us to issue preferred shares. This will allow us to further diversify our capital structure, and provide even more confidence in our ability to fund the capital program going forward.

In closing, the first quarter of the year marks the first 12 months of our future as a combined company and was a very positive one for Pembina. Our business has produced solid cash flow, and we see the next chapter of long-term contracted growth. We expect to see our existing asset base and growth projects generate attractive returns for Pembina and our shareholders in the years to come.

Before I open the line up for questions, I want to remind everyone that Pembina's annual meeting is scheduled for this afternoon at 2.00 PM at the Metropolitan Center here in Calgary. I look forward to seeing those of you are able to make it. For those of you who are unable to attend, it will be webcast. For the details to confirm the access to the webcast are on our website at www.Pembina.com under investor center. With that, we can start the Q&A. Laurel, please go ahead and open up the line for questions.

(Operator Instructions)

[Zaim LaCanny], Canaccord Genuity.

Awesome quarter, guys. I hope you can hear me clearly. I'm getting a lot of static on my end. With regards to the lower depreciation on the conventional system, is there one-time items included in the CAD8.5 million depreciation decline? Or is this a good run rate going forward?

Well, it's a bit of a complicated story relating to our adjustments and asset retirement obligations, because the discount. The rate we used at the end of the quarter was higher than the discount rate at the end of 2012, and because of that adjustment, some of the assets that they are related to were already fully depreciated. So, that result -- flowback the depreciation that will charge them previous years. So, as discount rates continues to rise, you will see that impact going forward into future years.

Okay. Thank you for that. Just on the successful non-binding open season, can you provide a little more color as to what the next steps will be in the timing for this initiative?

Well, I think what we can say, is that we are now -- we've assembled the information from the various potential customers here and we are just evaluating that expectation. Next steps will be to actually move forward, with respect to trying to determine the ultimate potential, and work with those who have submitted their information to us. So, in terms of timing, I think it's going to take us a couple of months to do that. But, as I say, we are quite optimistic with respect to that go-forward position on that opportunity.

Great. Thanks a lot.

Linda Ezergailis, TD Securities.

Congratulations on a strong quarter. I'm just wondering if you could help us maybe stratify the crude oil midstream operating margin growth a little bit. I'm assuming that maybe half would be as a result of higher volumes and activity, and maybe the balance would be wider margins. Perhaps you could just walk us through that, and we are already in May, so maybe provide comments as to what you see for Q2, and for the balance of the year in terms of margins?

Well, I don't actually have the breakdown, Linda, that you're looking for. I'm not sure Scott, whether we have that. I guess all I can say, Linda, really the first quarter really does represent a pretty strong quarter. What I would not do, so, I would not say that the results of the first quarter, we could simply could extrapolate through the end of the year, because market conditions are clearly changing. They change pretty much every day. It's a good strong quarter as far as the month of April is concerned, I think it was a reasonable month, it was not as strong as March.

So, really, we are off to a good start. I think volumes will continue to stay strong through the balance of the year, that's our projection. So, we will certainly, obviously, not see any significant increase in volumes until we get the capacity additions added. To the extent there is a national LDP product coming our way, at the end of the year, that is positive for the Midstream results. So, I really can't give you really good guidance as to what to expect for the balance of the year, I would say it's looking like again another solid year in our crude oil midstream business.

That's helpful. Can you maybe provide us with some similar comments around Empress East as well and the propane pricing and other dynamics there?

Well, it's interesting. We have, in our quarter, we identified that Empress East actually had a fairly decent quarter. Propane prices continue to remain fairly strong. Out East, I think that inventories have remained positive. (Technical Difficulty - Start)

Okay. Great. I missed, actually, the response to the crackling on the line. I will access the transcript.

Sorry. We are getting a lot of static here. I don't know where it's coming from. I guess we can really hang up and start over again.

Okay. Thank you.

Carl Kirst, BMO Capital Markets.

I apologize, but Bob, you broke out when in your prepared commentary you were talking about the propane exports. I didn't catch quite what was said there. I didn't know if you could maybe we address the time frame it that you think you might know towards feasibility and also, inasmuch as there are others looking at propane export, are there possibilities of joint ventures, or do you think that, quite frankly, just given how long propane is going to be in Canada, that there certainly is enough room for everyone?

Well, Carl, I think that is sort of interesting. Right now, we are still in, obviously, commercial discussions with respect to an export terminal. I think we would obviously like to be able to have something more to say about that within the next month or so. I think it's fair to say that there does appear to be significant and for demand for finding an outlook for propane out of Western Canada. So, I think there's a lot of interest here.

I think there's interest on the part of Asians in particular, because of the shorter difference to ship from say Prince Rupert to Asia prepared to go through the Panama Canal and around the horn. That obviously makes it more attract of two OS and Canadian propane to the West Coast and onward. So, we are continuing to advance that project. I hope that we'll have something to say about it, probably within a couple of months. I don't know if you have any other comment there?

Not really. We are continuing to advance a location. That's underway, in terms of joint ventures and partners, I'd say anything is possible right now. You have to get to a certain economy of scale to make one of these things work and so, we are accessing both our ability to of supply enough product, but the ability for someone to take enough product away. Of course, there's the rail component in between. So, it is a complex undertaking and it will take some time. But, I concur with Bob. Hopefully by no later than the end of summer, will have something to say about it one way or the other.

Great. Thanks for the color.

Robert Catellier, Macquarie.

I'm wondering if you could elaborate just a bit on the Empress East situation, particularly impact of the strong premiums Sarnia are having. Not only with respect to the prices you realized, but the basis risk on the hedge, given how disconnected those prices seem to have been in the first quarter versus (technical difficulties).

Robert, all I can say, now, is that the propane prices remained relatively strong right through until now. I think we're looking at propane price, I think we're talking summer approaching CAD1.20 a gallon. In Sarnia versus I think CAD0.95, CAD0.96 at Bellevue, I think pricing remained relatively strong, as well. So, that's a positive.

Rob, what I can tell you, I call where that will continue other than to say inventories are lower than at this level last year. We are continuing to sell into that market and I think that's positive for us going forward. I can't really say whether these prices will -- what will happen to the prices. Typically, you expect them to drop during the summer months as the inventories are building.

I think we are somewhat optimistic about where we are, given that we had kind of what's considered more over normal winter. I think, also, there's more export capacity being built out of the Gulf Coast which is helping take some of the surface propane under the market. So, think over time we are going to see what happens. We will be cautiously optimistic at this stage.

I concur with your interview with the macro market in large, there. I'm specifically curious about Sarnia. EMEA was -- what's driving those, and how you view them in terms of their sustainability. Also, how that complicates hedging, given the basis for other markets.

I will let Peter speak to hedging, Rob. We have actually not been all that active in terms of hedging on hedging propane, in particular, because -- I will let these guys.

Rob, we are currently hedged about 50% of our gas supply cost. Not just Empress, but at Sarnia are as well. Hedges obviously -- we can't hedge the good prices at Sarnia. These hedges are based off Mont Belvieu price, whereas we are getting at least a 20% premium to the Belvieu price right now in Sarnia. We're happy with our 50% hedge and our gas supply cost. But, we will monitor that, always monitor that going forward, if we see an opportunity to layer on additional hedges as appropriate.

Rob, just in terms of pricing, I mean, if you look at Canadian inventory, they decreased 1 million barrels over the first quarter. So, we are 64% lower than the five-year average. So, really, that's what's driving the strong Canadian pricing. In April, we had another cold month. So, winter really continued on all the way through April. So, just now, as it's starting to warm up, are we starting to see injections versus withdrawals.

Okay. That's helpful. Then, my other question had to do with just the capital program. Now that you've had significant customer commitments to move forward with the large part of your program, I'm wondering what you are doing to control risk on that CAD1 billion capital spend this y ear. I was wondering if you could address both the materials component and the labor component separately? Just an update on how you are managing risk on those items.

Mick will handle that one, Rob.

Let's work through it step-by-step. The pipeline expansions are mainly pump station additions. So, we are putting in, I think, 12 or 15 pumps, and they are identical pumps and we know what they cost. So, we don't have a linear disturbance there, and no landowner impacts. So, it's quite predictable what those costs might be. Most of it material purchase.

With the fractionator, we've been working on the engineering there for many, many months and we are, as you know, twinning an existing asset. We are building something we've built before, and we know how to operate. So, again, it's not a science experiment. It's something that we are quite comfortable with. Saturn II would be exactly the same thing. We are twinning something that we've already built, and that's working out very well. So, when you think about all three of those components, a lot of its green field, but it's stuff we've done the twin of in the past. It takes a lot of risk out of the equation.

A lot of the long lead items, as well, Rob, have actually been ordered already. If you look at Saturn I, we expect that we will be starting up here in the third quarter of this year, with our expectation to be on time and on budget. Actually, Scott just mentioned that with respect to the fractionator at Redwater II, we've actually now have a permit from the RCB. We received that permit three weeks after we applied for it, so that's good for us. The only area that probably is looking a little different than we thought, (Technical Difficulty - End) we have talked about Resthaven being delayed, there is some scope and design changes we are continuing to work on. So, I think the costs are going to be higher, and obviously when you delay a project, it's going to cost more. We believe that we have justification for adjusting our fees to deal with the modifications that are being made here on Resthaven.

So, all in all, Rob, we are pretty comfortable with our ability to deliver on budget. I think, one thing, like we didn't spend as much money probably in the first quarter as we probably anticipated. So, there could be a carry forward into 2014. But, we are still saying, just over CAD1 billion of capital for the year, which will be obviously, again, a record for Pembina. I think we are feeling pretty comfortable about it.

Okay. That was good color. Thank you.

Robert Kwan, RBC Capital Markets.

Just on Saturn I, you mentioned that is going to come in third quarter. I think that's a quarter ahead of schedule. I'm just wondering, have I read that right? If so, is it just contingency on timing? Or did something else go right and was that something that might be repeatable, in terms of some of your other projects?

Well, I wish they all could be repeatable, to be ahead of budget, on time and on budget is really pretty attractive at these stages. I don't think there's anything in particular there, Rob. We got through the pipeline construction in good order, the gas plant things have worked out quite well there. It's a good facility for us. The land and all that was -- it was a little different than when we did Musreau. Musreau was a very tight complex and things were quite difficult working conditions there. But Saturn has been good. As I talked, and mentioned that Resthaven is going to be delayed. So, you get some good and some not so good. Overall, we are pretty happy with where we are.

I guess just with Resthaven, the delay, you mentioned, and also previously, that some of that was due to scope changes and you were just mentioning that you think you will be able to recover that in fees. Was that something that -- the scope changes -- was that initiated by you? Or initiated by the customer?

A bit of both. The customers are finding they have more liquids out there than first thought. So, some of the equipment related to liquids handling had to be upsized. Which, is inconvenient, in terms of timing, but very good, because it's pointing more product to our systems. Ultimately through our fractionator. So, that was -- let's call it half. The other half, was just design improvements we took over a design from a producer that was going to initially do this project and then handed it over to us. We weren't quite comfortable with all the elements of the design, so some of it was changed by us to make the plant a little more robust and a little safer.

Okay. Just wondering if you could provide any additional color on the funding plan, generally, what specifically assuming you get the approval on the press. Your thoughts on using that product. It's maybe a little bit more expensive than your debt cost on an after-tax basis, but your thoughts on kind of using that sometime this year?

Our funding requirements will depend a lot on where our capital does get spent. But, the pref market will be another option for us going forward. We have our CAD1.5 billion bank facility virtually unutilized to date. So, that gives us lots of flexibility with respect to timing. We certainly see the pref market as being a good market today, in general, and it will be a good product for us to use going forward. But, I can't say anything about timing at this point.

I guess just on that, Peter, philosophically, you mentioned that it will be driven a little bit by timing. But the pref market -- frankly, any funding option, how out in front do you want to get, in terms of having a more conservative funding plan? Or, is your thought that things will be accommodated for quite a while and therefore you really do want to just match it correctly with the need?

In the short term, we don't see rates rising. But, beyond the 18 month to 2-year mark, there is a concern there that rates could well be higher. So, as we draw down on our bank facility, I think it's prudent to look in as much of that on a long-term basis as we can to match the life of our assets. So, we want -- I mean, we are not likely to be drawing down on our bank facility to the full extent and we will term out -- generally, perhaps shorter than we might have done a number of years ago.

That's great. Thank you.

David Noseworthy, CIBC.

I'm sorry I missed some of your discussion on Empress East, I got disconnected. Just wanted to -- in case I missed it -- follow-up on what your expectation was in the second half of the year around Mariner East and Mariner West impacting your Sarnia prices.

David, I didn't catch that part. The impact on Sarnia pricing caused by?

The COD or the estimate of Mariner East and Mariner West pipelines?

We don't have a view on that on that, at this stage, David. From our perspective, we are going to opportunistically still continue to try to access that premium market for the second half of the year, and at this stage, I think as far as our forecast are concerned, obviously, we are not -- we don't share our forecast. But we do know that the overall NGL business unit will exceed our budget expectations for 2013. So, we are still expecting a positive result for the balance of the year.

Okay. Thanks for that. Just in case I missed some of this, the Resthaven -- just looking at the numbers that you have in your MD&A, both for Saturn and for Resthaven, those look a little lower to me than what I've seen in the past. Is it that you've excluded the pipeline associated to those projects? Is that why the CapEx is lower? Or, have the costs come down dramatically.

No, David. That's correct. We've excluded the pipeline portion. We are not just showing the pure plant capital.

Okay. Perfect. Should I just assume that really the overall cost relative to when the pipeline was included is generally the same, and in the case of Resthaven that additional CAD35 million?

Yes. That's correct.

Okay. Have the owners approved that scope change?

We are in discussions currently with them, David. So, they have not, as yet, given the blessing. But we think we have a strong case for justifying an increase in the capital fee.

They have approved the scope changes for the increased liquids. But some of the design changes are still under review. So, some of it has been approved.

Okay. Part one yes, part two still to go?

Yes.

Got it. In terms of -- one of your competitors, TransCanada recently announced a Heartland pipeline and terminal facility. It seems like kind of the project that's ideally suited for Pembina's asset suite. You see more demand for that kind of service offering? Or, does the lack of an international export pipeline limit Pembina's ability to secure this kind of service offering?

Well, we view any takeaway capacity from the basin as positive, no matter whether it's gas, NGL, the stuff we are working on with propane, or crude. So, any of those kinds of developments are positive. With the expansion plans we've announced so far, we believe there is enough takeaway capacity in the industry, but beyond that, for our open season, it remains to be seen how large that will be and if there's sufficient takeaway capacity. So, certainly any announcements for other takeaway projects would be viewed positively by Pembina.

What I kind of meant more was, do you see an opportunity to build out when you start doing this oil, crude rail oil to build out more terminals in the Heartland and pipeline connected into either Edmonton or Hardisty, similar to what TransCanada announced?

Yes, we do.

Okay. Fair enough. Then, just one last question with regards to Younger and that tie-in that you completed. What kind of volumes do you expect, related to that tie-in?

I think it's about under CAD100 million a day. So, it's not massive in the scope of Younger's nameplate, but it's certainly helpful. The volumes there are building and we are optimistic -- we hope that can continue, but we will see.

Would the economics around those volumes were similar to the rest of volumes going through Younger?

Yes.

Okay. Perfect. Thank you very much. Those are my questions.

(Operator Instructions)

With no further questions, I'll turn the call back over to our presenters.

All right. Well, thanks for those who participated on the call this morning, and for those of you who are in Calgary, we expect to see you at our AGM this afternoon and we can carry on this conversation further. So, again, thanks for participating, and look forward to speaking to you again soon.

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