Hallador Energy Company (NASDAQ:HNRG) Q3 2020 Results Earnings Conference Call November 3, 2020 2:00 PM ET

Company Participants

Becky Palumbo – Director, Investor Relations

Brent Bilsland – President and CEO

Larry Martin – Chief Financial Officer

Conference Call Participants

Lucas Pipes – B. Riley Securities

Mark Kaufman – MLK Investment Management

Eric Fredback – Pacific Value

Operator

Good day. And welcome to Hallador Energy Third Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask question. [Operator Instructions]

Please note, this event is being recorded. I would now like to turn the conference over to Becky Palumbo, Director of Investor Relations. Please go ahead.

Becky Palumbo

Thank you, Andrew. And thank you, everybody, for joining us today — this event is being webcast live and you will be able to access a replay of this call on our website later today. Yesterday afternoon, we filed our Form 10-Q with the SEC for the third quarter 2020 financial and operating results and we also issued a press release with certain financial highlights. Both documents are posted on our website.

With me today on this call are Brent Bilsland, our President and CEO; and Larry Martin, our CFO. Larry will begin with a financial overview of the quarter and Brent will follow with our perspective on market conditions and outlook. We will open the call to your question after Brent’s remarks.

Today our remarks may include forward-looking statements that are subject to a variety of risks, uncertainties and assumption that could cause actual results to differ materially, for example, our estimates of mining costs, future cost sales, regulations relating to the Clean Air Act and other environmental initiatives.

While these forward-looking statements are based on information currently available to us, if one or more of these risks or uncertainties materialized or if our underlying assumptions prove incorrect, actual result may vary materially from those we projected or expected. We do not undertake to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise, unless required by law to do so.

So, with that, I am going to turn the call over to Larry.

Larry Martin

Thank you, Becky, and good afternoon, everyone. Let me go over our operating results for the third quarter and year-to-date. So for the third quarter, we add net income of $1.9 million, which resulted in a $0.06 per share for the nine months. We had a net loss of $1.5 million or $0.05 a share.

Our free cash flow for the quarter was $11.6 million and for the nine months $24.7 million and we define free cash flow as net income plus deferred income taxes. DD&A, ARO accretion, change in fair value of hedges and stock compensation less maintenance CapEx and equity investments method effects.

Our adjusted EBITDA, which we define as EBITDA plus stock compensation, ARO accretion and change in fair value of hedges less the effects of our equity method investments in Hourglass Sands was $17.1 million for the quarter, $44.2 million for the nine months.

We pay down debt of $14.2 million for the quarter and $33.2 million year-to-date. So our bank debt as of September 30th was $146.9 million and our net debt was $141.6 million. Our debt-to-EBITDA leverage ratio was 2.46 times, well within our 3.4 times or 3.5 times covenant.

I will now turn the call over to Brent Bilsland, our CEO

Brent Bilsland

Thank you, Larry. During the third quarter, shipments returned to normal, coal inventory was reduced and aggressive payments were made towards lowering our debt. None of these things would have been accomplished without the strong performance of our operations team. COVID has added new challenges for everyone. Yet our operations group has done a remarkable job protecting the health and safety of our people, keeping our cost structure in line and ensuring our customer shipments needs have been met.

Shipments for the quarter were 1.6 million tons, which is a 27% increase over the prior quarter. We expect to ship 1.7 million tons during the fourth quarter of this year. Improve shipments helped us reduce our coal inventory by $4.5 million during the third quarter. However, inventory levels remain elevated by 9.3 million tons year-to-date. We expect to further reduce coal inventory in the fourth quarter of this year.

As I stated earlier, COVID has brought many challenges and out of an abundance of caution at times up to 25% of our workforce was quarantined due to possible exposure issues. Despite these headwinds, during the third quarter, we were able to maintain production costs at $29.30 a ton within our — which is in — within our guidance range.

At Hallador, while we have remained intensely focused on creating positive cash flow to aggressively pay down debt, during the third quarter, we paid down $14.2 million and during the first nine months of the year, we have paid down $33.2 million. By the end of 2020 we are targeting that we will pay down a total of $40 billion for the year, bringing our debt down to $140 million, which would represent a 22% reduction in our bank debt year-over-year, all this from a company with a market capitalization of $25million to $27 million.

During the quarter both our liquidity and our leverage ratios improved to $52.7 million and 2.46 times debt to EBITDA ratio, respectively. This brings our debt to EBITDA leverage ratio a full term below or covenant of 3.5 times. On April 15th, Hallador receive a $10 million loan under the Paycheck Protection Program. The company expects a portion of this loan to be forgiven in early 2021.

Looking forward to energy markets recovering, inventory levels at both mines and utility customers have remained elevated but are improving rapidly. Natural gas prices have improved dramatically causing coal to dispatch in front of natural gas in most of our markets.

For the first nine months of 2020 Henry Hub natural gas prices averaged $1.88, currently gas prices are around $3.24 next year — $0.24 now and in the next year’s NYMEX is at the forward strip is at $3.11 as of last night.

Next year’s gas prices are higher as the market anticipates less gas production in 2021. One indicator of less future gas production is the dramatic slowdown in oil and gas drilling. Oil and gas rig counts as of October 23rd are 287 versus if you look at the peak in 2018, ‘19 it was 1085. That’s a 74% decline in the number of rigs drilling for oil and gas. Gas targets Pacific rigs as of the 23rd of October were 73 versus its 2018, 2019 peak of 198. That’s a 63% decline in the number of rigs drilling for gas.

LNG gas prices in Japan have improved dramatically from slightly over $4 in July of this year to $7 today. This is an impressive price recovery in only four months time. Eventually, improved LNG prices should improve coal exports. Coal export prices have been slow to rise but are improving. API 4 is above $60 now throughout 2021 and API 2 is above $60 in the fourth quarter of ‘21.

In summary, Hallador will continue to focus on generating positive cash flow and reducing our debt. We are encouraged by the recent improvements in all energy markets and are cautiously optimistic of the future.

With that, we’ll open up the line to the Q&A session.

Question-and-Answer Session

Operator

[Operator Instructions] The first question comes from Lucas Pipes of B. Riley Securities. Please go ahead.

Lucas Pipes

Hey. Good afternoon, everybody.

Brent Bilsland

Hey, Lucas.

Larry Martin

Good afternoon, Lucas.

Lucas Pipes

Brent, I wanted to ask on the pricing side specifically for coal. I’ll get to natural gas in a moment. But on the call side what’s kind of the current pricing look like if you were to go out sell spot tones and then looking ahead to 2021, 2022 some of your peers have noted that there is a market, there are — a couple of utilities have come forth asking for petroleum business. What sort of strip could we be looking at here for your average product? I would really appreciate your perspective on this? Thank you.

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Brent Bilsland

Well, I think, in general, the market like I said, coal inventory levels are relatively high at the utilities. I mean, if you go back to March, April timeframe, coal plant just didn’t run very much with a lockdown. Gas prices extremely cheap with the less power demand, that is probably kind of cause a backup of inventory levels.

We’ve now kind of seen that reverse where gas is dis, excuse me, coal is dispatching in front of gas in most of our market. So we’re seeing those inventory levels come down and we see this pretty strong or at least recently strong, gas prices are making two-year highs. So it looks like people are going to burn a lot of coal next year.

I think most utility buyers will kind of take a wait and see approach to buy. We don’t expect to see 2021 buying very aggressive here in the Thanksgiving timeframe, which would be normal. We think utilities will see what winter brings from coal burn perspective, see if gas prices hang in there or go higher and then eventually pull the trigger.

So to be fair, I just don’t think a lot is transacting right now. We did have some small spot business pop up, it was upper 30s. But I think those are very few data points out there to really go by, there were some blend and extend deals that we did this year. We pushed some tons out of 2020 into 2021 and then extended the term of our contracts with customers for multiple years.

So that’s kind of what you see happening. I think if gas prices, you’ve got a few people out there saying, oh, gas prices are going to see a major rally. I mean, I’ve even seen — I think Squawk Box yesterday had somebody saying that was going to be $6 gas, something quite frankly, $3.50 or north happens, I think, the buyers will suddenly become convinced to get much more aggressive of buying.

But right now, they’ve got a lot of inventory and they’ve been kind of chastised for being long and wrong in the past and with all the concerns about COVID. Is it going to be — how much more headwind will that bring going future, I just think field bars are going to take a wait and see approach.

Lucas Pipes

That’s helpful. Thank you, Brent, for that perspective. And to hone in a little bit on the gas side, you mentioned the decline in the rig count some of the changes internationally as well. And if you put it all together, what’s your outlook on the gas side and maybe more specifically, I know, you look at this very — a lot of detail in terms of the supply/demand balance for natural gas. Do you have a sense for how much supply — natural gas supply could be lost here on a year-on-year basis 2021 versus 2020?

Brent Bilsland

I think, looking more at 30,000 feet. I mean, we saw the oil and gas industry in the United States produce 30 million barrels of oil, I believe in ‘19 and now you’re seeing, currently we’re running more like at a 10.8 million barrels a day pace and you’ve seen mostly now with Q3 earnings starting to come out, you see multiple oil CEOs come out and say, well, they think that, there’s probably going to be a further decline in oil production unless costs — unless pricing gets above $40. Right now we’re down in the mid-$30s.

So, I don’t think we’re going to see, a year ago we were seeing associated gas — 40% of U.S. gas supply was coming from — associated gas coming from oil wells. So, as oil declines in backs off here 20% to 30%, I think that — I think we eventually will see that associated gas to some degree go away.

When you look over at the Marcellus and Utica, you’ve got EQT up, their CEO said this week that, they were not planning on production increases in 2021, because prices still weren’t high enough to justify the costs. We saw who else — I’m drawing a blank on names here. But we’ve seen Range Resources come up. Their CEO said the market is not incentivizing further growth.

So to me — every — the CEOs are all signaling that they’re not going to get crazy on drilling and in the $3 plus environment coal does very, very well. We have an inventory issue to kind of clear through. No one is really transacting on the export side. And it just kind of leads to a very unique year, where I think things are going to slow — start off very slow and I think in the back half 2021, it could get really interesting.

Just because we’ve seen a lot of production on the cold side come off, we’re not seeing a response from the gas people yet. And so I think all that is making our markets much more healthier than they’ve been.

We still have a lot of risk on COVID. What will that mean? We’ve seen Germany and France locked down their bars and restaurants again for a month. We’ve seen something similar to that out of the UK. What’s going to happen here in the U.S., in large part it is going to depend on what happens to the COVID numbers and who’s in charge. So, [inaudible] long way of saying, we expect to see less competition from gas and gas is coals primary competition still today.

Lucas Pipes

Very helpful, Brent. Thank you for that. And my last question, it’s Election Day. Could you share your perspective on kind of what a Biden or another term for Trump respectively mean for the coal sector and maybe more specifically the Illinois Basin? Thank you.

Brent Bilsland

Well, that — so an easy short question. Trump has been very vocal on his for all the abort of — here we’ve got our nation to where it’s energy independent. We are largest — we have been one of the largest producers of oil in the world. We’re still probably remain top three today. So, if it’s Trump, we’re definitely seeing a transition away from coal, whether Trump’s in office or whether Biden is.

The question really just comes down to pace. And the utilities — we’ve seen Duke Energy, who’s one of the larger players in Indiana. They had their Investor Day and put out their investor ESG type conference and they’re shutting down a lot of coal plants in the Carolinas. But also in that, it looks like to us they’re signaling more of a coal Indiana’s got 15 years and beyond.

And we — if you look at it, they’ve just got so many — if they were to try to shut it down right away, they first of all, from an economic perspective, huge stranded asset risk for the Indian utilities.

Secondly, so this more back to Biden, right, because Biden’s obviously had a lot of press about trying to transition and his $2 trillion stimulus plan. When we talked to the grid operators, when we talked to the President, CEO of MISO. MISO is the grid operator for the State of Indiana. But quite, they hold the largest region, they go all the way from Louisiana to Alberta, Canada.

So when we talked to the Chief Operating Officer there, and they’ve put out a report recently, can’t remember the title of it, Renewable Integration Impact Assessment, where they basically say, they can go to 30% renewables in MISO without too much struggle. But above that, they start to really have significant challenges. In MISO today is at 9% renewable.

When — if they try to get to 50%, the wheels is absolutely fall off. Really and behind the scenes, I’ll tell you more like 40%. So the grid was built for 60-megahertz generations — spinning generation. And so when you try to go to renewables, it just really wasn’t designed to do that, which is why you’re starting to see grid issues in California and Texas prop up, because both of those states are in the 30% renewable range and it’s his looks like the states are going to be the testing ground that everyone else is going to watch.

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So we talked to the grid operators about, well, we see all these utilities, which your members saying, gosh, we’re going to go 50% carbon free or we’re going to go 100% carbon free by these dates. Their comment is, look, politicians are telling utility CEOs, what they want. Utility CEOs are saying this is a great growth opportunity for our earnings. So let’s go do it. But physics isn’t quite there yet.

So we take great security in the fact that we think the grid does absolutely need this. And when you look at our assets, they’re designed to run for another 10 years, 15 years and we think that the grid in Indiana is designed to be burning coal for another 15 years plus.

So there will be a transition. I just think it’s going to be a lot longer tailed than what some of the headlines remain verticals today. And S&T talking about China is just starting construction of new coal plants.

So, the world — we have got a lot of people out there trying to say that, solar is cheaper. We definitely don’t think that is the case. We think people will choose that, because it’s a lower carbon option. But it’s got a heck of a reliability issue associated with it, batteries are not ready to go. Look at the ISO comments out of California. They’re in there — California’s turned the lights off three times since August.

And I just don’t think people are going to put up with that. We got the largest — fifth largest economy in the world and we can’t keep the lights on and that’s 30% renewable. Their plan is to go to 43% renewables here in 10 years.

Lucas Pipes

Yeah.

Brent Bilsland

And so they’re going to put more intermittent power on the grid and at the same point in time, we’re going to stop selling gasoline cars, which means that we’re going to have more demand, because we’re going to try to fuel our transportation industry with electricity.

A lot of these are growth opportunities for the utilities and there definitely will be a transition and it definitely — but it definitely is going to take, it’s not going to be inexpensive, and it’s going to take a very long period of time. So, although, it’s a long way of saying it, if Biden wins there still be a industry and if Trump wins there still be a coal industry.

Lucas Pipes

Brent, very helpful. I appreciate this answer. Very, very helpful. Best of luck and I will pass it over.

Brent Bilsland

Thank you, Lucas.

Operator

[Operator Instructions] The next question comes from Mark Kaufman of MLK Investment Management. Please go ahead.

Mark Kaufman

Hey. Good afternoon. Thanks very much for your answers here. I’m kind of a newcomer to the company, but familiar with natural gases competitor. Great answer. My question is more of a shorter term question. The natural gas is in backwardation ‘21 looks great, ‘22 not so much. So my question is, if ‘22 were to change and improve, and the gas producers would change their thoughts about trying to create more gas available? How would that? Well, how — you seemed to indicate that coal prices would probably start to, I shouldn’t say, rise? There should be some more, let me rephrase that, there would actually be more demand for coal. Because it seems that, the only way prices go up is because there’s a shortage of something. And with that, shifts back to the, its natural gas, which shift back to the question of coal. How quickly can you pivot to actually, like, obviously, you’ve got some extra inventory. But would you need to mine more in a sense to catch up with potential demand that would be from coal, if pricing on natural gas were higher. Sorry, to be long winded?

Brent Bilsland

Yeah. No problem. Thanks for the question, Mark. So I think you asked two questions. You made a comment about 2022 gas pricing being in backwardation, right? So the strip in 2021 is that, $3.10 is strip in 2022 is something like $2.80 or something like that.

There’s some interesting articles out there that are saying that because of different loan covenants of the gas producers, that gas producers are forced to hedge 18 months out a lot of their gas production and this is this is potentially what is causing part of this backwardation in the gas field or the gas patch, is that, you’ve got a lot of producers that have to sell 18 months out, but you don’t necessarily have a lot of buyers out there.

That’s right, you know the decline in the production of the shale wells, it’s like 60%, 70% in the first year. So with that whether you want to go out and drill right away, now, you’ve really got to have something locked in on price, because you’re going to sell most of whatever it is you’re drilling.

Mark Kaufman

Correct. So there’s lot of the gas.

Brent Bilsland

And they acknowledge on the new well.

Mark Kaufman

Yeah. So I think that there’s a lot of — capital dried up for the gas patch about a year ago. So now, all of these companies are basically saying, hey, we’ve got to drill within cash flow. So they are try to pay down debt, they are try to pay dividends and they’re trying to maintain their production.

And we think that there’s — they’re messaging that they don’t expect growth at these prices, the margins just aren’t there. So you have seen a rebound a little bit and the equity values of the gas companies, you’ve seen the opposite for the oil patch. I think that the top 25 oil companies share prices are down 2% to 3% year-over-year. And if you look like EQT and Range, their stocks up like roughly 80% this year.

So to us the economics right now, gas looks better than oil. But the CEOs are saying we’re not going to expand production at these prices. Because I think capital for them is become more expensive.

So back to — if we see higher gas prices, will that lead to more coal production? It absolutely will. But also think there’s a lot of coal producers that have 10% of capacity kind of sitting there ready to go.

So we don’t, like I said, we think from a buying perspective, it’s going to be quite through Christmas. And then unless gas prices does go $0.50 higher or more from — beyond that, I think it could get interesting in the back half of the year, because I think exports could show up.

What we’re trying to follow is is why is LNG in Japan gone from $4 to $7 in four months. I mean, that’s just a dramatic move, which kind of puts coal back in the money in that Asian market. Europe we haven’t seen that yet. LNG is still in the $5.15 in the U.K. and in $5.50 in Europe. So it hasn’t quite responded there. Gas inventories in Europe’s are also much better.

So that’s what’s supporting the market. The COVID issues are constraining the market there. So a lot of it really will come down to what is the winter look like, both in Europe and in the United States, Is it coal, that’s going to have a dramatic influence on the market.

If this winter starts off coal and you see gas prices rise, you’re going to see fuel buyers get nervous and come out and cover. Because right now, they’re looking at burn projections that quite frankly are all over the place.

In some scenarios, if we go return to the $2 gas market, these field bars are saying, we already have enough coal bar. That if we go to a $3.50 market, there may not be enough coal to supply them. So it’s going to be a volatile ride and everyone’s going to wait until the last minute to make decisions, which is a little unusual. Normally, by Thanksgiving, we’re contracting with customers for business in 2021. Fortunately, for Hallador we have a pretty good book. We have over 5 million tons already contracted. So we don’t have to do a lot of work. But we certainly would like to sell more tons. And we certainly expect to sell more tons. So, Mark, I hope I’ve answered your question.

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Mark Kaufman

So it sounds like if it’s there, you’re ready. If the demand…

Brent Bilsland

If they were already, we would have to hire more people. But we’ve shown that we can do that and — but we have the equipment. We have available capacity, correct.

Mark Kaufman

Okay. Thanks very much.

Brent Bilsland

Thank you.

Operator

[Operator Instructions] The next question comes from Eric Fredback of Pacific Value. Please go ahead.

Eric Fredback

Hey, guys. Thanks for taking my call and congrats on the good quarter. We’re just curious about…

Brent Bilsland

Thank you.

Eric Fredback

… any of the supply destruction that you guys have seen out there on the coal side. I know I think Archon mentioned that they’re pulling 20 million tons from this year and then trying to reduce that in the 50% in the next two years, three years. So any extra color you have on that and anything else you’re seeing?

Brent Bilsland

Yeah. We’ve seen a dramatic pullback. I think if you’ve looked at coal production. First quarter of 2019, there was something like 14 mines running in the State of Indiana and annualized pace of 34 million tons. If you look to today, is an internal number, that’s not probably won’t correlate with anything that’s published. There’s roughly six mines running in Indiana at a pace of about 17 million tons, 18 million tones. So we’ve seen almost coal production in the State of Indiana go to half.

Now, some of those are permanent closures. I know we’ve permanently closed the mine and we’ve seen another competitor permanently closed the mine. And some of those are just kind of sitting there idle. We’ve seen a competitor here in the last few weeks, lay off all their workforce and idle all their minds and just loading out inventory.

So we have we have permanent closures of supply destruction, as you would call it. We have mine such as ourselves that are running at 80% of capacity and then we have other minds that they laid off their workforce. So can those mines come back? Yes, they can. But there’s going to be a scramble for people and it remains to be seen when that happens and what that looks like.

Eric Fredback

Great. Thanks. So, yeah, you said 80 — around 80% capacity right now. What — I mean how high can you get that and still kind of keep production costs where they’re at or let’s say, under $30 a ton. Yeah.

Brent Bilsland

Well, I — we’re — I think we had about a chall — we had a very challenging quarter from a production standpoint and that there were times we had 25% of our workforce quarantining. Now that doesn’t mean they were tested positive for COVID. That means they came in and said, well, my spouse has it or I was around some of this weekend who tested positive. And so out of an abundance of caution, our policy is, we’ve got to quarantine that employee until they have a negative test.

So for our ops people to say, gosh, we’re running it basically a 6 million ton pace in on any given day. We’re not sure who’s going to walk in the door for work, right? Because…

Eric Fredback

Yeah.

Brent Bilsland

And that — it isn’t — even as easy as that sounds, because skill sets aren’t necessarily, you are going to have all your electricians out, well, that’s a problem. You are going to have all your miner operators sick that day. So that’s a problem.

So specific skill sets, obviously, we do a lot of cross training, and obviously, we’ve got a lot of units. So we’re somewhat guarded against that. So to see our customers where they were with the with the labor issues that kind of cropped up in the third quarter, I felt pretty good about that.

So we’re still saying that we expect our cost to stay below $30 for the balance of this year and into early next year. I don’t really see that changing at this time. If we run harder, those costs drop a few bucks a ton.

Eric Fredback

Okay. Cool. Thanks. Yeah. And then one final quick question. Because the quarter you guys had with the cash flow and the ability to pay down as much debt as you did. We’re — I am just kind of curious what your end goal is, as far as deleveraging and how far you want to take that?

Brent Bilsland

Well, look in 2014, we were a company that was net debt free. So — and that’s a very good way to live life.

Eric Fredback

Yes.

Brent Bilsland

We think — I think you’ve seen other competitors out there saying, hey, we’d love one time debt-to-EBITDA, I think that would be a really good target and we’ll reevaluate when we get to that point. But right now, we’re just trying to pay down aggressively as possible.

I thought we probably made great progress on that to pay down. We’re on target, like I said, to pay down 23% of our debt this year. So with all the headwinds of COVID, which makes producing an operating company or operating production company challenging. So, I think more of the same from us.

Eric Fredback

Okay. Great. Yeah. Well, congrats, again, on a great quarter and appreciate the help.

Brent Bilsland

Thank you.

Operator

[Operator Instructions] The next question comes from Brian Bassett [ph], a private investor. Please go ahead.

Brent Bilsland

Brian.

Operator

Perhaps your line is — your phone is on mute.

Unidentified Analyst

Hello. Yeah. Yeah.

Operator

Please go ahead. Thank.

Unidentified Analyst

Hello. Thank you for taking the question. Could you guys help with a little bit of what we should expect in Q4 from a CapEx standpoint and an inventory reduction standpoint?

Brent Bilsland

Yeah. So our CapEx for the fourth quarter will be about right ratable for what it’s been the first three quarters, $5 million or 6 million for CapEx. And what was your other — what was the end of that question?

Unidentified Analyst

Regarding how much more inventory you think you will work through…

Brent Bilsland

Oh! I think…

Unidentified Analyst

…in the fourth quarter.

Brent Bilsland

… our inventory. I think our inventory reduction will be very similar to the third quarter, $5 million — I think $5 million, maybe $5.5 million reduction. And that will still be a little higher then we started the year with. But our first quarter and second quarter of next year are kind of front-end loaded. So then we would further reduce it first quarter next year. But probably $5 million to $5.5 million reduction this quarter.

Unidentified Analyst

Excellent. And one last question, when you guys — like big picture, what’s the price on net gas that we should be thinking is the number that within Indiana coal would dispatch in front of?

Brent Bilsland

Varies a little bit by each utility? What’s the price of coal? What’s the price of transportation? But I think $2.30 is kind of a good general range. When we see $2.30 at Henry Hub.

Unidentified Analyst

Great. Thank you very much for taking the question.

Brent Bilsland

Yeah. In Indiana. Yes.

Unidentified Analyst

Great. Thank you, guys. Thanks for taking the questions.

Brent Bilsland

Yeah. Thank you.

Operator

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Brent Bilsland for any closing remarks.

Brent Bilsland

I want to thank everyone for taking the time to listen to our call today and specifically all those that ask questions. We appreciate your interest and I look forward to talking to you next quarter. Thank you.

Operator

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.



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