Mid-Con Energy Partners' CEO Discusses Q4 2012 Results - Earnings Call Transcript

Mar. 6.13 | About: Mid-Con Energy (MCEP)

Mid-Con Energy Partners (NASDAQ:MCEP)

Q4 2012 Earnings Conference Call

March 6, 2013 10:00 AM ET

Executives

Craig George - Executive Chairman

Randy Olmstead - CEO

Matt Lewis - Financial Investor Relations Associate

Jeff Olmstead - President & CFO

Analysts

Ethan Bellamy - Baird

Michael Peterson - MLV

John Ragozzino - RBC Capital Markets

Operator

Good day ladies and gentlemen and welcome to Mid-Con Energy Partners Fourth Quarter 2012 Earnings Conference Call. (Operator Instructions). I would now like to turn the conference over to Craig George, Executive Chairman. Sir you may begin.

Craig George

Thanks Syed and once again welcome to Mid-Con Energy Partners 2012 full year and 2012 fourth quarter conference call. Among those on the call with me today are Randy Olmstead, CEO, Jeff Olmstead, President and CFO, Dave Culbertson, Chief Accounting Officer, Nathan Pekar, General Counsel and Matt Lewis, Financial Investor Relations Associate.

As you all know we issued our earnings press release yesterday afternoon and hopefully you have been able to see that we ended 2012 on a very positive note comparing the end of 2011 to the end of 2012 our production was up about 60%, our crude reserves are up about 31% and EBITDA was up about 99%.

These increases came from a combination of both organic growth and acquisitions, these growth allowed us to increase our distribution rates or our unit holders by about 4% and with relatively low debt and access to capital markets we believe we’re well poised to continue to grow up and in just a minute Jeff will read us through our summary for the quarter and the year and then we will open the call to questions. If you like to follow along with the PowerPoint presentation go to our website midconenergypartners.com then in the Investor Relation section click on Events and Presentations. Before Jeff gets started Matt Lewis will review our forward-looking statement. Matt?

Matt Lewis

This conference includes forward-looking statements that are statements related to future and not past events with a meaning of the Federal Securities Law. Forward-looking statements are based on current expectations and include in these statements that is not directly related to current and historical fact and in this context forward-looking statements often address expected future business and financial performance, now can contain words such as anticipate, believe, estimate, expect, plan, project or other similar words. These forward-looking statements involve certain risks and uncertainties and ultimately may not prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements for further discussion of risks and uncertainties you should refer to Mid-Con Energy’s filings with the SEC available at www.midconenergypartners.com or www.sec.gov.

Mid-Con Energy undertakes no obligation and does not intend to update these forward-looking statements to reflect events and circumstances occurring after this call. You’re cautioned not to place undue reliance on these forward-looking statements which speak only of the date of this call. All forward-looking statements are qualified and their entirety by this cautionary statement and other SEC filings.

These forward-looking statements are subject to a number of risk and uncertainties and may include statements about our business strategies and ability to reflect results we produce through acquisitions and the development of our properties, oil and natural gas reserves, technology, realized oil and natural gas prices, production volumes, lease operating expenses, general and administrative expenses, future operating results, general and administrative expenses, future operating results, cash flow and liquidity, availability of our production equipment, availability of oil field labor, capital expenditures, availability in terms of capital marketing of the natural gas, general economy conditions, competition in the oil and natural gas industry, effectiveness of risk management activities, environmental liabilities, counter party credit risk, governmental regulation and taxation, development in the oil producing and natural gas producing countries and plans and objectives, expectations and intentions. With all that being said I will turn the call over to Jeff Olmstead.

Jeff Olmstead

Thanks Matt, for those of you who follow along again the presentation posted on the website I will be starting on slide three, 2012 highlights kind of as Craig mentioned production for 2012 averaged 1907 barrel of oil equivalent, this is a 60% increase over the 1191 barrels of oil equivalent in 2011. Further production for the fourth quarter of 2012 averaged 2261 barrels of oil equivalent well further December’s production averaged approximately 2376 barrels of oil equivalent. So as you can see our team’s efforts has continued to grow production nicely.

Adjusted EBITDA for 2012 is approximately $47.7 million which was a 99% increase from the $24 million in EBITDA in 2011, fourth quarter EBITDA was approximately 13.3 million which marks our best quarter yet as a partnership. Net reserves is audited by Cawley, Gillespie, increased 31% year-over-year from 10 million barrels of oil equivalent at 12.31 in 2011 to 13.1 million barrels of oil equivalent at December 31, 2012. Reserves were 99% oil and 67% proved developed on a Boe basis. We did have four bolt-on acquisitions during 2012 where we acquired working interest in some of our existing waterflood units along with some additional properties in North Eastern Oklahoma and [across a range] [ph] water flood unit in Hugoton.

Total acquisition price for these four transactions was approximately $49 million and added over 400 barrels a day in production. We were successful in increasing distributions by approximately 4% from our initial quarterly distribution rate of $0.475 per unit per quarter to our current rate of $0.495 per unit per quarter or $1.98 per unit annualized.

Finally we completed our first follow-on on offering in October 2012, generated $20.4 million in net proceeds for the sale of 1 million common units.

Moving to slide four, the earning summary production for 2012 was approximately 698,000 barrels of oil equivalent for the year or 1907 barrels of oil equivalent per day which resulted again in the 60% increase over the 434,000 barrels of equivalent produced during 2011 or 1191 barrels a day. This resulted in total revenues from oil and gas sales of $61.6 million before the effective hedging of $65.3 million after the effect of hedging which is an 82% increase over the $35.9 million in revenues after the effect of hedging in 2011. Production for the fourth quarter of 2012 was 208,000 barrels of oil equivalent or 2261 barrels a day which was a 53% increase over the 136,000 barrels of oil equivalent or 1481 barrels of oil equivalent per day in the fourth quarter of ’11.

This resulted in $17.2 million in revenues before the effective hedging, 19 million after the effective hedging which was a 79% increase over the 10.6 million of revenues after the effective hedging for the fourth quarter of ’11.

Moving to slide five, the coverage ratio calculation - EBITDA for the fourth quarter was again $13.3 million after expenses which resulted in a distributable cash flow of $11.7 million after subtracting $548,000 in cash interest expense and just over $1 million in maintenance CapEx. This resulted in distributable cash flow of $59.9 per unit for the quarter or 1.21 times coverage based on the $0.495 per unit paid on February for the fourth quarter.

Looking at slide six this is just kind of a quick grab to show that we did declare $0.01 per unit distribution increase in both third and fourth quarters in 2012 which again resulted in 4% distribution increase from our initial distribution rate of $0.475 per unit. Total distributions paid since our IPO have been just under $2 or a $1.987 per unit. As we announced in our third quarter call we do expect to continue to grow distribution this year. We announced then 6% to 8% distribution growth over the then $0.485 per unit per quarter paid that quarter - this will hopefully result in distribution rate of $0.515 to $0.525 per unit per quarter by the end of this year.

Looking at slide seven, continued to maintain what we feel is a very conservative balance sheet; at the end of the year we had liquidity of $53.1 million including $52 million in availability under the line of credit and $1.1 million in cash up to $13.3 million in EBITDA for the fourth quarter or $53.2 million annualized result in debt to EBITDA of just under 1.5 times or 1.47 times.

Our borrowing base review with our banks will be completed over the next month or so and we will announce any significant changes to the credit facility if or when they come, however at this point time I do not anticipate making any significant change to the line of credit or to the terms of it unless there is a compelling event or reason to do so.

Looking at slide eight and nine, outline our existing hedge profile, as you see we have added a few new hedges for 2013 and ’14 since our last release, we’re now 76% hedged or approximately 76% hedged in 2013 and at weighted average floor price of around $98 and approximately 70% hedged in 2014 at a weighted average floor price of $93.56. As in the past these percentages are based on expected production from our total proved reserves as audited by Cawley, Gillespie and not just on PDP expectations.

We have also added a few hedges in 2015 just approximately 5% with the price just over $90; we will continue to watch 2015 and 2016 as we get closer to the dates or as prices become more attractive later on.

Slide nine shows the additional details we have shown in the past highlighting which trades have been added since the third quarter call and just provides more detail for those that want it for their models and things.

Slide 10, the 2012 capital expenditures this is just a breakdown to show you all where the money was spent on capital expenditures in the year; total CapEx for 2012 was approximately $21.6 million broken up by $17.4 million in growth CapEx and 4.2 million in maintenance CapEx for the year. This resulted in a total of 39 gross new wells across the property base with 31 new producers and eight new injectors in the waterflood units.

As you can see on the right side of the slide we have also broken up total CapEx by core area with Southern Oklahoma representing just over half the total CapEx for the year, North Eastern Oklahoma 6.4 million or about 30% and the remainder spread out mainly Hugoton Basin and a little bit in our other.

Looking at slide 11, how did that result in any changes or asset review, this is the updated asset review chart we have shown in the past and is updated based on the reserve report audited by Cawley, Gillespie; total proved reserves for 2012 were approximately 13.1 million barrels of oil equivalent, these were 67% proved developed, 99% oil, 99% operated on a Boe basis. As you can see we have broken it out by production during, production averages for December of 2012 total of 2376 barrels of oil equivalent a day on average resulted in a current or repeat ratio of approximately 15 years.

We still have our three main core areas of North Eastern Oklahoma, Southern Oklahoma is nascent, Southern Oklahoma still represents about 0.5 of crude reserves while the Hugoton increase with the acquisition of the cost we’re representing now about 24% of crude reserves with North Eastern Oklahoma now is about 24 in crude reserves.

Look at slide 12, just a little more detail kind of graphical, sure want to break down the crude reserves working on both core area and reserve category as mentioned earlier reserves have grown about 31% year-over-year only significant change year-over-year has been that Hugoton has become a greater part of the value. So that Oklahoma again still approximately half the reserves and North Eastern Oklahoma while growing has come down a little bit on the relative basis with Hugoton growing.

Crude (inaudible) reserves stated at about 2/3rds of our total I believe last year they were about 69% of total crude at 12.31 I think. Slide 13 shows a breakdown of where their current production is coming from and how that changed from 2011 as you can see total production grew almost 50% from just under 1600 barrels a day in December of 2011 to 2376 barrels of oil equivalent in a day of December 2012.

So the Oklahoma currently represents about 58% of current production at 1374 barrels of oil equivalent per day, this is up from a 1022 barrels of oil equivalent a day in December of 2011 but as the lower percentage of the total production as Hugoton has grown more in a relative basis with the acquisition cost of the rigs.

Looking at slide 14, these next couple of slides address our guidance and forecast for 2013, as we have broken this down like we did I believe for the second half guidance 2011 with the production range. We do expect production from the year to average between 2500 and 25 barrels oil equivalent in a day or 2675 barrels oil equivalent in a day between those two with the mid-point being around 2600 barrels oil equivalent in a day. This is based on our existing asset base and scheduled CapEx program, it's important to note that this does not include any potential acquisitions.

Rest of the assumptions I believe are not far off from what we used in the past, we assumed a $85 flat of WTI price for the year resulting EBITDA showed mid-point of our production and assumptions, new core production assumption and does include revenue from hedging based on the $85 WTI price. Maintenance CapEx has increased a bit from last year’s expectation of $6 million, this increase is due mainly to the acquisition of properties in 2012 and also some due to changes in the drilling program in the latter part of last year they pushed some of the expected maintenance CapEx we expected do in 12 crossover in the first quarter for 2013.

As a result of all this we expect distributable cash flow of $2.58 per unit that our current rate of a $1.98 preunit would result in a 1.3 times coverage which obviously we have this plenty of room to execute our expected distribution increases for this year.

Slide 15, you can see a little more detail, we expect to spend $23.55 million in total CapEx in 2013, broken down by both maintenance and growth CapEx on the left side of the slide and further broken down by core area on the right side.

We will again send about half of our capital expenditures in Southern Oklahoma this year with the remainder been set fairly between North Eastern Oklahoma and Hugoton. Just a result in similar number of new well coming online this year, I have a quite few new injectors relative to what we did in 2012.

Finally in summary with our first full year being a public company under our belt, we are very pleased with the results so far and hope you are all too, production has continued to grow steadily and surely from around 1300 barrels of oil equivalent a day, we first styled our S1 in 2011, that’s just under 1600 barrels a day in December of 11 to now just under 2400 barrels oil a day in December of 2012.

As a result EBITDA grew a healthy 99% year-over-year from $24 million in ’11 to $47.7 million in 2012, all this allowed a increased distributions for initial rate for $0.475 per unit per quarter at our IPO to the current rate of $0.495 per unit per quarter. We anticipate 2013 to be just a successful as 2012 as it's expected to grow from the average of 2261 barrels of oil equivalent a day in ’12 to between 25 and 26.75 barrels of oil equivalent a day in 2013.

Depending on commodity prices as well result EBITDA growing from the 47.7 million in 2011 over $60 million in 2013. This will ultimately allow to grow distribution as expected to between $0.515 and $0.525 per unit per quarter by the end of the year while maintaining our current healthy coverage levels in relatively low amount of debt. Along those lines we do have plenty of liquidity and ability under our revolver to potentially capitalize an acquisition opportunities that could leave to further production growth which can possible lead to additional distribution increases for our unit holders.

Should additional acquisition opportunities arise beyond with our current borrowing capacity will allow, I’m sure you all saw that we did file our F3 last Friday which when declared effective that the SEC will access the equity markets a little more quickly as on need to rise.

I’ll point out that there are no current play needs to utilize the (inaudible) offering, better positions us nicely to be able to quickly take advantage of all the opportunities that you’re seeing. Again I appreciate the continued interest and support with Mid-Con Energy Partners. I hope everyone is pleased, we have been with the results thus far and with that Syed I think we will open it up to questions.

Question-and-Answer Session

Operator

(Operator Instructions). Our first question comes from Ethan Bellamy from Baird.

Ethan Bellamy - Baird

With respect to the acquisition market I mean you guys are obviously looking at the smaller subset of deals that will be waterflood suitable, what does that landscape look like and is there any more low hanging fruit in terms of acquisitions on working interest?

Jeff Olmstead

I think the answer to both of those the first one what does that look like? It has been - we have been as active in reviewing projects again as we have ever been in our history and we’re seeing more and more opportunities that we do think will flood. I think some of the owners are pretty proud of their production, most people are pretty proud of their oil but we have specially on the private side has been actively acquiring things as we have ever been and just adding new waterfloods that will hopefully be nice dropdowns in the coming years.

I’m sorry what was the second part of your question?

Ethan Bellamy - Baird

Just if there is other working interest for the [execution] [ph] just might be a little lower.

Jeff Olmstead

There is definitely more working interest owners, however kind of double edged sword, as successful as we have been at growing our production other working interest owners are excited about what we continue to do and little more interested on hanging on to it, so, no, I don’t, we’re always out there trying to but I don’t anticipate any more large working interest acquisitions in the existing units.

Ethan Bellamy - Baird

Okay, what about in other basins, have you looked, are you looking, actively looking in Texas for example, or are you sticking to Oklahoma?

Jeff Olmstead

As we mentioned in the past we have, our operating company through what is the public or the private we’re currently operating in Texas, Arkansas, Louisiana, Kansas, Colorado, we were operating North Dakota, we did just sell those assets that we had on private side. We have also looked at waterflood potential in California, Wyoming, Montana, Illinois, so yes we have been very active and yes looking at other basins as well.

Ethan Bellamy - Baird

Okay. One more question, we got pretty good long range production guidance from you during the due diligence process for the IPO, where and - can you update us on where and when or at what level you expect production to peak on the existing asset base given the current CapEx plans?

Jeff Olmstead

I believe I can; I don’t think I have a firm number on that yet, we have had a lot of success and a lot of new data especially in Southern Oklahoma this year, where it looks like we have more rock down there than initially we had estimated, so what we do know is the peak you’re talking about when we did the due diligence and we’ve told people is we’ve said the existing assets were going to peak around 2400 barrels a day in the middle of ’14. That number has gone up and out but I don’t have a firm number yet that I’m willing to put a guidance number on and we do hope to provide that sometime this year.

Operator

Thank you. Our next question comes from Michael Peterson from MLV.

Michael Peterson - MLV

Jeff a couple of questions first I like to take a different tact and follow on to Ethan’s questions, given the nature of your operations you have been very successful in adding bolt on acquisitions of smaller size and incorporating that into the franchise. As you look at your second year of operation, do you see an outlook for assets that you can continue on that pace or is there a point where you feel like in order to grow you may need to look at larger chunkier acquisitions?

Jeff Olmstead

No, I think at this point in time the size of acquisitions we have done so far in the couple hundred barrels a day maybe up to three or four hundred barrels a day it's still very, very impactful for us and very interesting to us. I also believe there is less competition for acquisitions of those size, that being said I think right now we’re currently evaluating assets as small as 80 barrels a day and large as 1500 barrels a day.

So we still believe there is benefit and impact for range the, 300, 400, 500 barrels a day I think are very impactful to us and maybe has a higher chance of capture given the less competition but that does not preclude the smaller or the larger.

Michael Peterson - MLV

Next question can you give us a little bit of an update - progress on your next generation initiatives and things like your surfactant project.

Jeff Olmstead

The surfactant project has actually got a lot more legs in it in the last 12 months than I think even we had anticipated, I don’t know that we can announce yet who we have had agreements to do business with, I will say that some very large companies have shown a lot of interest and we’re working on proposals for them right now. It's probably premature to provide you that information until I do have solid defensible scientific information.

Michael Peterson - MLV

But a more prospective outlook even than you had in the past for an attractive venture.

Jeff Olmstead

Yes, absolutely. I think we have got six very different companies that we’re providing proposals for right now to do pilots on their projects from a surfactant standpoint.

Randy Olmstead

The focus on CFT is really research and science and we’re establishing a lab, we’re staffing up with some very bright people to work with University of Oklahoma to advance the theories in what we’re seeing successful to working in the lab and apply those out in the fields. We hope to do a number of pilots both for ourselves and for customers but at this point it's still research and development that we’re pretty excited about; it’s going to take some time before the possibility of ever adding new reserves.

Michael Peterson - MLV

Understood Randy I recognize this is a next generation kind of a prospect but for a young enterprise like Mid-Con having prospects like this in the pipeline I think is certainly attractive from an investor perspective and that was the basis for the question but I appreciate your color this morning gentlemen and thanks again.

Operator

Thank you. Our next question comes from John Ragozzino from RBC Capital Markets.

John Ragozzino - RBC Capital Markets

With respect to the year-end reserves report can you walk me through the actual detail of the writing of the 2012 number inducing the specifics of the acquisition program and any organic extensions or revisions that might be in that number?

Jeff Olmstead

Yes if you look at page four of the press release there is a breakdown of where it started at December 2011.

John Ragozzino - RBC Capital Markets

I apologize let me retract that question because I breezed through when I was on conference yesterday, that’s my excuse. Is there - when you look at the maintenance CapEx levels for 2013 relative to 2012 would you expect there to be a similar type of growth rate in terms of - your production levels are up 60% and you saw a very significant increase in maintenance CapEx. Will there be - going to continue to grow in tandem with production levels over time or at some point will you see it flatten off?

Jeff Olmstead

I think yes it will grow slightly with production levels but again the $8 million or the 8.2 we forecasted here does have quite a bit of what we would expect it to do last year. So a lot of it just a timing we thought it will be done in November, December now it can be more like January, February, so I would say from a year-over-year or if you looked at a two year basis kind of that $12 million or $13 million will be more accurate as opposed to being $8 million to $10 million annually in the future.

John Ragozzino - RBC Capital Markets

Okay care to give us an update on the current inventory of drop down opportunities at the parent level?

Jeff Olmstead

It's similar to what has been in the past, we have even added more since we talked in the past again not comfortably yet given the color as to timing or size but we do feel that potentially late this year possibly early ‘14 would be the time for the first one and as we get closer to that and as the properties get more mature I’ll try to get more definitive in terms of size and timing.

John Ragozzino - RBC Capital Markets

Okay thanks and just a house keeping questions, you guys have been following me (inaudible) today as you mentioned in the comments, I did read that part.

Jeff Olmstead

Yes after closing the market today.

Operator

Thank you. (Operator Instructions). Our next question comes from (inaudible).

Unidentified Analyst

I wanted to just sort not to be (inaudible) but on our math and your guidance you’re levered approximately 1.5 times DCF which I think you know given the maintenance CapEx is at the absolute low relative to the peer group, I was hoping if you could just sort of provide a little bit of granularity in terms of how you see this year unfolding on the acquisition front specifically given that your guidance excludes all M&A activity and just given the sort of the I guess if you want dislocation of your leverage relative to your peers, how should we think about the M&A opportunity evolving through the course of this year.

Jeff Olmstead

Sure the way we look at acquisitions is we’re trying to be very opportunistic, we have been very, very active in pursuing projects. As you may have seen we’re a little bit conservative and we don’t try to step out there and pay the huge premiums that the some of the transactions we have seen in the market because we still had such a nice organic growth built in we don’t feel the pressure to need to make acquisitions for the sake of making acquisitions, that being said we would hope to do something similar that we did last year. We could add-on again we have got $49 million worth of acquisitions last year, if we did that this year I would be very pleased if we didn’t I know we have got the organic growth that will continue to be there and on the private side we got drop downs over the next 12 to 18 months. We hopefully will be available to offset too. So I know that’s not the direct answer you’re looking for but will give a little color to how we’re thinking about it.

We do have offers out right now on properties, we almost at any given time have offers out on properties from both the public and the private but they are again we’re going to be opportunistic and the timings we can buy things the right way at the right price that we know will add value, be accretive to (inaudible).

Randy Olmstead

And Chris from the standpoint of our debt the 1.5 again is compared to our peers is on the low end but we’re pretty conservative in nature and we want that dry powder to again be opportunistic as Jeff said but on a normal basis we’re at a comfort level.

Unidentified Analyst

Got it and just to understand a little bit better the bid at right now in terms of properties that you’re bidding on and happen sort of constipated a transaction, is this purely a valuation matter, is it an asset quality matter, you know sort of what has been the bottleneck I guess.

Jeff Olmstead

I would say it's on those sides, sometimes by the time we get out to do a field tour there ends up being maybe some more repair work that needs to be done, we had originally anticipated that effects the economics, sometimes it's just purely we can’t get a nice accretion, I don’t want to buy something to grow just for the sake of growing and be able to add significantly to distributable cash flow and hopefully grow a distributions or at this point we will stick with our organic growth.

Operator

Thank you. We’ve a follow up question from John Ragozzino from RBC Capital Markets.

John Ragozzino - RBC Capital Markets

Just tying down a little bit more detail on this new found information with respect to the reserves that I have found. Can you give me a little more color as to what was driving the revisions on the oil side, it's a fairly robust number and it's on the performance side, I’m assuming it wasn’t pricing.

Jeff Olmstead

No it was mainly on, well some of it is the gas properties of course were written down both with pricing and with and again getting those 1% just the gas prices, the gas assets were written down. Some of it was the pricing, the SEC price tag was 2% or 3% below it was year before and a little bit of it was expenses have come up a $1 several barrels of oil equivalent so when you combine both pricing comes down and the dollar coming up with these flat prices you get a lot of reserves kind of way in the out years and if you just have a slight change in prices or expenses that does cut off some of the in the reserve, so from a value standpoint I don’t that it affected as much. I think we grew from around $325 million in total crudes to 403 or 404 it will be in the 10K this evening but from a kind of total reserves on the tail, the tail gets cut off a little bit.

John Ragozzino - RBC Capital Markets

Okay great so there is now a significant performance concerns at all?

Jeff Olmstead

No.

Operator

Thank you. Our next question comes from (inaudible).

Unidentified Analyst

Just quick question on LOE, a little higher in 4Qs that we had saw I was just wondering was there anything unusual in that number? And then obviously it's moving down from 4Q levels for ’13 kind of a 16.30 per Boe number but how should we think of LOE and maybe if you can just give us a little color on that.

Jeff Olmstead

If you look at the guidance slide I think it does break it out $16.33 is kind of our midpoint number, I think it can be plus or minus 4% or 5% when it's all set and done, fourth quarter was a little higher in that when we bought (inaudible) there was quite a bit of repair work and stuff like that to be done that don’t always get capitalized as CapEx, it gets put into LOE because it is repair tax stuff. Also just Hugoton basin is a little more expensive than Southern Oklahoma and North Eastern Oklahoma so the fact that Hugoton is coming up that’s why I think on the year we averaged around $15.50 somewhere in that range but our guidance is about a $1 above that. So kind of these things, well new properties are doing some remedial work overstuff and two just Hugoton basin is just more expensive than the other two areas as we have added reserves to it, the weighted average cost is going to go up a little bit.

Operator

Thank you. I’m showing no further questions at this time gentlemen.

Jeff Olmstead

All right, well guys we thank you for the interest and thank you for the continued support. We will be around I will be in the office the rest of the week, Matt Lewis as well. We will be here to answer any follow-up questions as you dig through the data and dig through the 10K. Feel free to give us a call.

Operator

Ladies and gentlemen thank you for participating in today’s conference. This concludes the program you may all disconnect and have a wonderful day.

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