W&T Offshore Inc (WTI) 2017 Q4 法說會逐字稿

Greetings, and welcome to the W&T Offshore fourth quarter conference call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Lisa Elliott with Dennard Lascar Investor Relations. Ms. Elliott, you may begin.

Thank you, operator, and good morning, everyone. We're glad to have you join us on W&T Offshore's conference call to review financial and operational results for the fourth quarter of 2017.

Before I turn the call over to the company, I'd like to remind you that information reported on this call speaks only as of today, March 1, 2018, and therefore, time-sensitive information may no longer be accurate as of the date of any replay. Also please refer to the fourth quarter 2017 financial and operational results announcement that W&T released yesterday for a disclosure on forward-looking statements and reconciliations of non-GAAP measures.

At this time, I'd like to turn the call over to Mr. Tracy Krohn, W&T's Chairman and CEO.

Thanks, Lisa. So good morning, everyone, and thanks for joining us today. With me this morning, as usual, is Tom Murphy, our Chief Operations Officer; Danny Gibbons, our Chief Financial Officer; and Steve Schroeder, our Chief Technical Officer. They're going to be available to answer questions later during the call.

So yesterday, after the market closed, we announced solid results for fourth quarter and full year 2017 and provided our year-end proved reserves, showing that we replaced slightly more than 100% of our production. We think this is a pretty good feat on a modest capital expenditure program. We also reported positive earnings and strong cash flow.

Production averaged 37,526 barrels of oil equivalent per day, which was within our guidance range. It was up about 3% sequentially from the prior quarter. We estimate that production would have far exceeded guidance this quarter and been above fourth quarter last year if we hadn't been impacted by substantial downtime and deferrals associated primarily with weather, pipeline outages and unplanned platform maintenance by third parties that collectively resulted in deferred production of almost 6,100 barrels of oil equivalent per day.

You may recall that in the beginning of the fourth quarter, we experienced production deferrals as a result of Hurricane Nate. This deferred production quite a number of days while many of the downstream pipelines and platforms were unable to resume normal operations, and that was like a few days to a few weeks. It's not all -- it's not at all unusual for us to experience some downtime, but the fourth quarter may have set a record for outages. Fortunately, the production was deferred and not lost, so if not produced in the fourth quarter, we will produce it in the next or following quarters.

So oil and liquids represented about 58% of fourth quarter production, which is up from 55% a year ago. The Mahogany, Ewing Bank 910 and Virgo fields, all oily projects, delivered the largest production increases in 2017. And if you'll recall, we completed 3 new projects at Mahogany in 2017 as we started the year with a highly successful A-18 and followed that with the A-16 well, then the A-8 well and finally finished the year working on the A-17 well. That will add to production in 2018.

Two projects completed on our Ewing Bank 910 field in 2016 also added to production in 2017. The recompletion of a well at our Virgo field in the late 2016 also added production to 2017.

Revenue continued to climb in 2017 as commodity prices recovered, and with unhedged production, we were able to fully benefit from that increase. The combined average realized sales price was $36.79 per BOE in the fourth quarter compared to $30.83 per BOE in the same period of 2016. That represents an improvement of almost $6 per barrel of oil equivalent or 19.3%.

So another thing we saw on the fourth quarter that has continued so far into 2018 is positive crude oil price differentials. You may recall that before the collapse in crude prices in mid-2014, spiral down in 2015, we used to enjoy some very positive crude oil differentials because of many of our crude prices like LLS which prices like Brent rather than WTI. So in 2015, our crude oil differentials became negative and, at times, nearly $6 per barrel negative.

So fast-forward to fourth quarter 2017. In the months of November, December, our crude oil price differentials turned positive, and we were also positive again into January 2018. What we've experienced in these last 3 months is a widening of the Brent/WTI differential and a narrowing of the light/heavy crude differential. We suspect that this lighter depth phenomena is due to the turmoil in Venezuela and the decreased exports of that heavy sour creed -- crude to the U.S.

So adjusted EBITDA for the fourth quarter was $72.9 million, up $3.3 million compared to the fourth quarter of 2016. Adjusted EBITDA for the full year of 2017 was $268.4 million, up $89.3 million over the full year 2016. Our adjusted EBITDA margin was 55% for the full year of 2017, up from 45% in 2016.

Net cash provided by operating activities for the year 2017 was $159.4 million, which is an increase of $145.2 million over 2016. Yes, let me repeat that. That's an increase of $145 million over 2016. The increase in cash flows in 2017 was primarily due to higher realized prices, lower operating expenses and lower interest payments.

OpEx decreased by $11.3 million, and interest expense decreased $46.4 million. We continue to have a keen focus on bringing our expenses down to get back to EBITDA margins that are necessary to resume normal activity in Gulf of Mexico. For all intents and purposes, we're there.

Net income was $23.4 million or $0.16 per share. Excluding special items, our adjusted net income for the fourth quarter of 2017 was $24.2 million. That represents a $16.5 million increase over the fourth quarter of 2016. So total liquidity at the end of 2017 was $248.7 million, made up of cash balance of $99.1 million and revolver availability of almost $150 million. So with the pickup in drilling activity, we've been spending more, but our free cash flow has improved a great deal from last year.

So during 2018, we expect to receive $65.1 million in federal income tax refunds related to specified liability losses associated with our P&A activities, allowing us to capture net operating loss carrybacks. By ending 2017 with a strong cash balance and building cash throughout 2018, we expect to be in a good position to be able to either pay off the upcoming 2019 debt maturities during 2018 or refinance them or do some combination of both.

So to provide additional financial flexibility, as we have previously reported throughout 2017 and now into 2018, we've been working to establish a drilling joint venture with private investors. We're in the final stages of establishing that joint venture that's going to allow us to drill and exploit assets on a promoted basis and with reduced capital outlay. We've completed negotiations with an initial group of investors but are subject to funding at an initial closing expected to occur by mid-March. More investors may join the joint venture before or after the initial closing.

It's important to note that establishing an investment vehicle with these outside parties that allows us to drill wells on a promoted basis will enable our announced 2018 capital spending plan to be much lower. Once all conditions to the initial closing of this joint venture are met, we will announce the final terms and revise our 2018 capital budget. So additionally, this joint venture could position us in the future to participate in high-quality prospects we may not otherwise have been able to participate in.

So our 2017 CapEx was only about $130 million, and despite that, we replaced over 100% of our 2017 production. And we saw total proved reserves increase slightly. Our year-end 2017 SEC proved reserves were 74.2 million barrels of oil equivalent or 445.3 Bcf equivalent. That's comprised of 46% crude oil, 11% NGLs, and that's a total of 57% liquids.

About 74% of our 2017 proved reserves were classified as proved developed producing. 10% is proved developed nonproducing, and 16% is proved undeveloped. So I think we're doing a pretty good job of converting categories of reserves. So compared to last year, our proved developed producing reserves increased 15.2%, with significant contribution coming from the A-18 well at Mahogany.

Present value of our reported SEC proved reserves discounted at 10% was 999 -- excuse me, $992.9 million. That's up 32% from $754.9 million at the end of 2016. Of course, that's driven by higher commodity prices used for the SEC calculation but also because total proved reserves were slightly higher as well. If we utilize the NYMEX forward curve on the last day of 2007 -- 2017, PV-10 value would have been $1.1 billion. So it was a good year with strong improvement in the value of our asset base.

With that, let's talk a little bit about 2018. Our plan is to continue to unlock the value of our substantial drilling inventory. We are focused on a group of oil-focused projects comprised of a few that are low risk and high return, combined with some others that are higher-risk and higher-return potential that, assuming success, will be placed on production fairly quickly. Our inventory of high-quality exploration, drilling and field extension projects in the Gulf of Mexico are based on advanced seismic and processing that's amid our growing understanding of some of our key fields.

So to build shareholder value, we want to balance the use of that cash generation to strengthen our balance sheet by reducing debt as well as reinvest at more high-return projects. Currently, we have established a 2018 capital program of $130 million that includes completing 3 wells that we started in 2017 and then commence and complete 7 additional wells. Three of the wells are in the deepwater, and the rest are on the shelf. We are or will be the operator on a majority of these projects, but the budget also includes 12 recompletes that are expected to cost around $7.5 million.

So additionally, we estimate that we'll spend approximately $24 million on plugging and abandonment activities in 2018, which is way down from what we spent in 2016 and 2017. We're pleased that we aggressively addressed our asset retirement obligations at a time of low service costs and lower commodity prices, and now -- and that allows us to now concentrate on more of our drilling and acquisition plans.

So walking through the 2018 program, let's start with projects that were commenced in 2017 but are not yet on production. Currently, completion operations are underway on the A-17 well at Ship Shoal 349 Mahogany. This well is expected to be online in the middle of March. This well found a previously undiscovered deeper sand, resulting in proved reserve additions with significant upside. This well was originally targeting what we thought was the T-sand, but instead, we discovered a deeper sand, which we are calling the V-Sand. We're also able to extend known limits of one of the field pay sands, which we have seen in earlier wells. We're very encouraged by these 2 new finds. So this is very interesting data that will be used to more fully understand the large subsalt reservoirs, which continue to provide exciting opportunities.

So once we complete the A-17 well and we get it online, we'll [scoot] the rig over to commence the A-5 side track. That well shouldn't take that long. We plan to get it online in the next few months. We have another well planned at Mahogany after the A-5 side track but haven't fully vetted out location -- exact location of the target. We should reach some conclusion on that here in the next few months. We also have some remedial work planned that will increase production as well.

So with that, we also drilled an exploration well at Main Pass 286. In mid-December, the well reached TD of 14,562 feet and logged 112 feet of gross hydrocarbon interval. That resulted in new field discovery for the company. This was an open-water exploratory location, which means it was not drilled from an existing platform or structure. We're currently doing the front-end engineering design, so-called FEED design, and thus evaluating what we think is going to be our optimal development solution.

We have a couple of development alternatives available to us, including producing this field back to W&T-owned and operated infrastructure at our Main Pass 283 platform. We're also looking towards having this field online in early 2019, pending our sanction timing and details. W&T holds a 100% working interest in this well.

We recently mobilized a drill rig to our deepwater Viosca Knoll 823 Virgo platform and spudded the A-10 side track well in late January. We're the operator and have an 80% working interest. The A-10 side track marks the beginning of what we expect to be a multi-well drilling program in our Virgo field, the first drilling to occur since the initial development of the field. The A-10 side track well was drilled up to known pay in adjacent wellbore and recently reached total depth of 16,770 feet, logging over 300 feet of measured depth hydrocarbon column. We're moving into completion mode of the well. We expect to have it online during late Q1, maybe early Q2. Following the completion of the A-10 side track, we anticipate moving the drill to the second well in our drilling program.

So another one of our '18 -- 2018 drilling programs involves the Ewing Bank 910 field. If you'll recall, we also had a successful drilling program there in 2016, where we drilled 2 wells that are currently on production. Two wells planned for this year are the South Tim 311 A-2 and A-3 wells. South Tim 311 and 320 are part of the Ewing 910 field. Platform modifications are beginning on the South Tim 311 platform, preparing for rig mobilization. That rig will mobilize the platform in the first quarter, with a likely spud date sometime in the second quarter. So we believe both of these wells are low-risk exploration opportunities with multi-stacked pays and potential. And assuming success, these wells can be brought online pretty quick with existing infrastructure.

So as is often the case, we have multiple recompletion opportunities as lower zones deplete and we move up the wellbore to recomplete upper stack pay sands. These provide low-cost and, moreover, low-risk production additions. As we look back on our recomplete plans for 2017, we anticipated that we would perform a good deal more recompletes than we actually did. Part of that estimating process relates to when we think a particular sand will deplete so that the well can be replete -- or recompleted to another zone, rather. So in a number of cases, in 2017, the sands that we thought would deplete lasted longer and delayed the process. That's a good result for production reserves and cash flow but doesn't help in providing accurate and timely guidance to The Street, kind of a quality problem.

As I discussed earlier, in order to provide additional financial flexibility, we're in the final stages of establishing a drilling joint venture to be formed with private investors that allows us to drill and exploit assets on a promoted basis and with reduced capital outlay. We've completed negotiations with that initial group of investors but are subject to funding at an initial closing expected to close on or before mid-March. Again, more investors may join the joint venture before or after the initial closing.

Once again, all conditions to the initial closing are met -- once those are met, we'll announce the final terms and revise our 2018 capital budget. However, this will not have an impact on our drilling plans, just our ownership percentage. It's expected that entities owned and controlled by me and my family will invest on the same terms as are negotiated with unaffiliated investors to acquire an approximate 4% interest in the drilling joint venture.

As it relates to our production guidance, our estimates do not yet reflect what we believe are viable acquisition opportunities that can increase both production and reserves. We continue to evaluate these opportunities and are confident that we can execute on some of them as they arise. Reduction in capital dedicated to drilling wells can be put to use for either acquisitions or debt reductions or both. It's our intent to reduce debt further over the next several months.

So with that, stay tuned. Operator, we can now open the lines for questions.

(Operator Instructions) Our first question is from Richard Tullis with Capital One Securities.

It seems like you gave a good bit of detail where you could on the JV that's coming together. So just to get a total understanding of it. So it sounds like the list of projects that are provided in today's -- or yesterday's release would still be the same ones that you had planned to drill if and when the JV structure is announced. So no expansion there, it would just change your ownership interest in those same projects, Tracy?

That's correct.

And then the proceeds would mostly go toward paying down debt this year?

Well, that and/or acquisitions or both, also subject to refi-ing the entire facility.

Okay. So I know in...

Well, it gives us -- what it does, Richard, it gives us a lot more options.

Okay, okay. So I know you talked in the release about the 2019 maturities. How are you looking at, say, the 2020 maturities as well, Tracy? The -- I guess it comes up in May of 2020.

Right, yes.

How are you looking at those? Would you try to expand a JV or other type of vehicles like that to help with that effort as well?

Well, with the ability now to have this flexibility with this joint venture program, we see that as less problematic as it was before. We expect to pay down some debt. We expect to drill more wells. We expect to have pretty good success based on this. I mean, I've taken the rare and unusual situation of also investing in this personally to help attract some of our capital in this joint venture solution that we have. So I believe in it. The company is going to put its own money into it. I'm going to put my own money into it. We see this as a positive development for the company going forward. We think that it gives us several more options as far as managing the debt going forward. We recognize that we need to lower the debt some, and that's what we're going to do. I'm perfectly confident that we can actually take care of the short-term maturities with cash if need be. This gives us -- this just gives us some more opportunities to do things that might come up in the way of acquisitions and/or additional wells that we might want to drill.

Okay. That's helpful. And my second question, you talked a little bit about the acquisition potential. What is the landscape looking like right now? And is the -- how's the impact in commodity price impacting the kind of the asking prices by the sellers? What's the total landscape looking like right now?

Well, clearly, prices going up helps everybody. It makes it easier to pay a price that others might accept, and it makes it easier to do financing where it's necessary. So it's all positive from that standpoint. I mean, most of what we're looking at right now is -- are going to be cash purchases. So that's important to us, and it's important to the sellers.

Our next question is from Patrick Fitzgerald with Robert W. Baird & Co.

I have a couple on the capital structure as well. Would you draw or can you draw on the revolver to pay down the 2019 notes?

That's a double-sided question actually, Patrick. Under certain conditions, we could. That's not our intent. I think what we'd rather do is just pay down debt rather than exchange -- essentially, exchange debt for debt. We think that there's a [correlation] factor for both paying down debt and refi-ing the rest of it.

Right. So you have the notes due '19 and also the 1.5 lien due '19, right?

Correct.

So you're saying you would use cash to pay down the 2019 notes and then refi the 1.5 lien?

No, what I'm saying is that we have the ability to do both and that, as a result of all this, it leaves us with the opportunity to refi in different ways. So now we have a little bit more flexible financial ability, and we have a possibility of making some debt paydown and refi-ing and also doing acquisitions.

Right. Okay. So the JV, in theory, I think, I kind of understand that it would allow you to spend a lot less on CapEx. But wouldn't it also hinder your operating cash flow from the new wells that you're drilling with a partner?

Well, there's a whole lot more that I need to give you in detail that I'll be able to give you in just a few more days. So rather than going to more details at this time, I'd like to defer on that. But the short answer is, I mean, I think you've seen what we posted as guidance for 2018, and I don't expect that to go down any more. So I think we're okay from that aspect of it. Actually, I think we're being pretty conservative on our guidance, and you'll see some pretty good answers by the end of the year.

So that guidance takes in, to some extent, a JV or doesn't take that into account?

It does.

Our next question is from Jon Evans with SG Capital Management.

This may be redundant. I'm just trying to understand, but I wanted to unpack the production guide that you gave. So you basically went into the Q4 that you had a little over 6,000 a day from shut-ins, and you did 3.5 million. But you guided 3.1 million to 3.5 million, so the midpoint would be down again. So was there more issues with pipelines in Q1? Or is this just you building the JV which...

Yes, there were. There were more issues with pipelines in Q1. Also, there's another couple of extraordinary items. There was a fire at one of the structures where we send product across -- well, actually downstream. So yes, all these things are what I would call one-off occurrences that, unfortunately, just happened at a not very good time for us.

And so the question I have for you is just -- you mentioned before that it's not lost production. It just kind of gets moved to the right. So should we think about that production from Q4, Q1 just showing up in Q2? Or how should we think about that?

It's a little bit hard for me to project right now because of the nature of the third-party structures that we're having to deal with. So yes, it will, I just can't give you an exact timing on the guidance. Like I said, we've tried to be as conservative as we can. I'm tired of telling people that there's things that are going to happen that I can't control. So we've taken a very -- what I think is a very conservative stance here. And I realize the market is probably going to beat us up a little bit for it, but there's -- it's better to underpromise and overdeliver, right?

Yes, absolutely. So I guess a better question is, can you give us a sense of kind of where you're running then? You may not be selling at that rate because of pipelines, et cetera, but where is kind of production on a daily basis? Is it 40,000 a day, 41,000? What's kind of that number, rough number?

Currently, right now, we're at about 220 million cubic feet equivalent per day.

Our next question is from John Aschenbeck with Seaport Global Securities.

First one is just to follow up on 2018 guidance and thinking of the potential production contribution from, call it, your high-risk exploration type projects scheduled for this year. I suppose this is a 2-part question. First, if those projects are successful, you mentioned you could get those on pretty quickly. Could you get some of those on during the year? And then secondly, how risked is that expected production from those higher-risk projects? I suppose I'm trying to get a feel just generally for the potential upside to 2018 production in regard to those higher-risk projects.

Okay. So the answer to your first question is yes, we do expect to get these things on production fairly quickly. As a function of how risked it is, I don't really have an answer for that. I mean, what we tried to do is build in kind of a worst-case scenario and a -- some acknowledgment of the fact that, yes, we've taken a lower percentage in some of these wells, but we've taken a promote. And it's kind of hard for me to give you those answers until such time that I really report all the details of it.

Okay, understood. That was helpful. Okay. And then lastly, hate to belabor the JV topic, but I suppose I'm going to try a few more questions. And I apologize if I missed this detail, too, but just thinking about the -- of the promote, how substantial could that be, just thinking of the capital? Would your partners effectively carry all the capital there for you?

No. Once again, John, I would ask you to defer for just a little while longer until we can disseminate that to all the market and have everything buttoned up. I think you'll be quite pleased with what we've done here. I think everybody's happy with it. Recognize that I'm on both sides of this transaction personally. So I think it's a very fair deal for everyone. We spent longer trying to get this done than I thought that we would. For all the people listening that are in the business of raising funds, I have a newfound respect for what you do. Having said that, really the timing on this for closing was just, unfortunately, right at the time where we needed to report everything. We deferred as long as we could on fourth quarter, but we just got caught up in a little bit of a time bind here. But I think when you get the rest of it, you'll have a pretty good feeling about it. Sorry to be so nebulous, but I don't really have any choice at this point.

Our next question is from Vance Shaw with Crédit Suisse.

This is Vance Shaw of Crédit Suisse Asset Management. Tracy, I just want to get -- a quick question on -- I mean, you can see what's going on at Fieldwood and their kind of odd financial situation they're in where they're going bankrupt and making acquisitions at the same time. There seems to be a lot going on in the offshore Gulf of Mexico, consolidation, a lot of people interested in buying companies. Could you just like give us your thoughts on sort of what you think is going on and how W&T is going to sort of address that environment?

Sure. This is fairly typical late-market change, and I've been through about 6 of these down cycles now. Unfortunately, I'm afraid that dates me a little bit. But what I see is very typical of what we see in these late-market turnarounds, where the market begins to turn around and investors start to pay a great deal of attention to things that have high cash flow. And so that's why I think you're seeing some -- a little bit of increased interest in the Gulf of Mexico. It's because of the high cash flow characteristics of the properties.

Got you. Do you see big oil continuing to sort of sell, especially in the deeper water, and for the independents to be buying in and the private equity guys to be more aggressive? Is that one of the things you're seeing?

I'm not sure quite how to evaluate it. I'll tell you that managers are tasked with the idea of replacing reserves and increasing production. So where can you do that reliably is -- kind of leads you to the shale resource basins and whatnot. So -- but when you're faced with the idea that you got to make some cash flow, it kind of makes you think about the Gulf of Mexico as well.

Our next question is from Hassan Ahmad with Serengeti Asset Management.

Just trying to think about your priorities in terms of -- you mentioned acquisitions. You mentioned some debt reduction. And obviously, there's a production decline as well. So how do you kind of balance those 3 concepts? And what is sort of a path towards 1, 2 and 3 in terms of priorities?

Sure. Well, we have a priority in making sure that we meet our obligations. We also have a priority in trying to grow the company. Sometimes, you need to shrink a little bit to grow it, and that's kind of what we've looked at here with regard to this joint venture project. We also wanted to develop something that we thought was repeatable, so that's an encouragement as well. I think that you'll see a much stronger company in W&T in the future. I'm pretty sure that we've put ourselves in a good position to make sure that, that occurs. We're still making great cash flow. I mean, even though the production is down, you need to figure out, are we making more money than we were before? And of course, we are. We have a great deal of deferred production, and there's several other things that occurred along with that. And I don't want to create a list of excuses because, at the end of the day, production was down. It's just a fact. So it doesn't matter really why. What matters is what are you going to do going forward. So part of what we're doing is making sure we protect the company and meet all of our obligations and have flexibility. And that requires us to look at it a slightly different way. We're very confident of our ability to pay our debt down and also refi whatever stubs may exist. Similarly, we've created a path forward and also given us flexibility to make acquisitions as well. We also have a goal of creating a larger entity -- or a larger fund to make acquisitions. We've announced that in the past, so that's where we're going.

And when you -- I think I'd stab at the JV. I just -- most JVs that we've seen in energy space is either cash and carry, so you get some cash upfront and someone carries you on CapEx, or there's assets contributed into there and there's some sort of promote that the partner receives and then the company starts to receive better economics on the back end. So what is this structure? Is it the first or is it the second type of structure?

Okay. Well, let me tell you this. We're going to give you all the details in the next 10 days or so. I think you'll be very pleased with what you'd see. It'll be different from what you've been looking at.

We now have a follow-up question from Richard Tullis with Capital One Securities.

When you look at the -- some of the big offshore deepwater projects you're involved in, is there any requirements that you foresee, say, for 2019 for drilling at Big Bend and Dantzler?

No, not at this time.

Okay. And then second, you mentioned in the release about the upcoming substantial tax refund. What's the current status of the judgment from last summer, somewhere, if I remember correctly, around $40 million? How is that working on the opposite end of the spectrum, money -- potential money going out the door?

Yes. That judgment is being appealed right now, so that's just in due course. But we've already made accruals for that and everything, so anything that happened on the other side of it would be [lining up towards positive.]

We also have a follow-up question from Jon Evans of SG Capital Management.

Tracy, this might be for Danny, but I'm just curious. I know it's the government, but do you have any kind of timing of when you think you get the tax refund? And then just the other question with that is do you think -- could you just help us understand, if you do some of this plugging and abandonment work, how much it would lessen potentially the tax refund and would be pushed out to '19?

The tax refund, Jon, is supposed to be -- will get settled probably in the second quarter, some of it in the fourth quarter, and that should be the end of it because of the change in tax law.

Got it. And then the last question I have, just for you, Tracy. The A-17 well, you said it's going to start producing in March. Can you give us any kind of sense of what you think it'll do per day? Or do you have any kind of range you can give us?

I think what we're going to do is we're going to take it on very gently at first. We have had some issues in the past with regard to fines migration in some of these wells. And we treat them and they come back, but it's a continuing source of aggravation for us. But we believe we've come up with a different theory. So yes, it will come on at a predetermined rate, and I'm not going to give you that just yet because I haven't fully vetted it with everybody. But what we would expect to do is gradually increase it over time as we stabilize the wellbore for near-wellbore fines migration.

Mr. Krohn, there are no further questions at this time. I would like to turn the floor back over to you for closing comments.

Well, very good. Thank you, operator. And we appreciate everybody's participation this morning. Stay tuned. We'll have more for you in a few days.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.