EV Energy Partners, L.P. CEO Discusses Q1 2013 Results - Earnings Call Transcript

| About: EV Energy (EVEP)

EV Energy Partners, L.P. (NASDAQ:EVEP)

Q1 2013 Earnings Call

May 10, 2013 9:00 a.m. ET

Executives

John B. Walker - Executive Chairman

Michael E. Mercer - Senior Vice President & Chief Financial Officer

Mark A. Houser - President and Chief Executive Officer

Analysts

Kevin Smith - Raymond James

Ethan Bellamy‎ - Robert W. Baird

Praneeth Satish - Wells Fargo

Dan Guffey - Stifel Nicolaus

Operator

Good day, ladies and gentlemen and thank you for standing by. Welcome to the EV Energy Partners' First Quarter 2013 Earnings Conference Call. During today's presentation all parties will be in a listen-only mode. Following the presentation the conference will be open for questions. (Operator Instructions). This conference is being recorded today, May 10, 2013.

I would now like to turn the call over to John Walker, Executive Chairman. Please go ahead, sir.

John B. Walker

Thank you, George. Good morning everyone. I am here in the Houston office with EVEP's executives.

Our base business continues to perform well, and our diversified assets and low decline rate again helped the first quarter. Our production was above guidance in the first quarter due primarily to strong performance from our Barnett shale in Mid-Continent areas and despite our share of winter weather issues and some ongoing problems with the Southern Union plant in Eastern Mexico that shut in our production for most of the first quarter. In addition, revenue was hurt meaningfully by ethane and butane prices.

Lease operating expenses were slightly higher because of the winter weather and higher production levels for the quarter. G&A was above guidance due to the payroll taxes on the vesting of incentive units for our employees. However we will not have these costs for the remainder of the years since this only occurs annually in January.

Our CapEx for upstream was 21 million, $5 million below the guidance midpoint and our large midstream CapEx was on target at $68 million. Mark Houser will go into detail about our operations but I am pleased that across our large operating areas we continue to drive down drilling and completion costs. The Barnett continues to exceed expectations and five recent wells have had initial production rates two-thirds better than what we expected.

As all of you are aware we put in place five-year hedges during the large spike in oil and gas prices in the first half of 2008. Those expired at the end of last year. On one hand we are pleased with being hedged this year with an approximately a 90% hedge position with $5 natural prices and $89 oil prices. However, these prices represent an 8% decline from our gas hedges last year and a 10% drop from the oil hedges last year. We also had the benefit in 2012 of having a significant amount of ethane and propane hedged at prices significantly higher than the current depressed prices.

Due to a combination of all these factors EBITDA and distributable cash flow was slightly below guidance and Mike Mercer will address this shortly. The acquisition in divestiture market has several large and attractive PDP property offerings. It's a buyers' market in all phases of the acquisition market and EVEP has begun again to evaluate assets that offer accretive growth to our unit holders.

Now let me turn to the Utica. Within about two months production from the wet gas window will increase dramatically adding value to our wet gas acreage. Dominion's Natrium plant will be processing 200 million cubic feet per day of wet gas by the end of May and UEO will have the first 200 million cubic feet per day trying at its Kensington Ohio plant operational in late June. UEO, Dominion, Columbia and Mark West are forecast to have the capacity to process 1 billion cubic feet per day of wet gas by year-end.

UEO alone has equivalent order to process 600 million cubic feet per day by year-end or early January and another 200 million cubic feet per day during the first half of next year. Therefore UEO will be processing the majority of the Utica's wet gas production in the December 2013-January 2014 timeframe. Ultimately, the Utica is projected to have 2.5 billion cubic feet per day in place to process gas. So the processing bottleneck should be reduced by July and eliminated by year-end, allowing wet gas wells to come on line and produce to their capacity.

Regarding our sales process there are three areas of focus. The first and most important area of focus is wet gas window. We are marketing acreage in the eight counties that comprise the wet gas window. It's our most valuable acreage at this time because of the tremendous success with wells there specifically in Carroll, Harrison, Guernsey and Lowell counties.

In our re-packaging, allowing companies to buy as little as one county, we have received interest both from large companies that just wanted a few counties to small companies that can only afford one or two counties. These are encouraged on a first-come basis at prices at or above our county thresholds. We will require a mark-up response to our asset purchase agreement to expedite negotiations and immediately advance foreclosing.

The sale of our acreage in the wet gas window is the highest priority of EnerVest and the EVEP and through this revised process we have already received offers of some of the acreage. The second area of focus is the creation of a joint venture to unlock the vast potential from the volatile oil window. There is very little production data from this area so the market evaluates it correctly is being more risky then the wet gas window acreage.

From our cores, logs, and pressure tests we know that some of the best rock in the Point Pleasant is in (test cores) in Stark counties. These are well pressured, has excellent porosity, low order saturation and high total organic carbon or TLCs in the play. We need to learn how to get the volatile oil out in commercial qualities. Mark Houser is leading an effort to achieve this which includes negotiations with service companies, financial entities and oil companies with technically advanced experience in complex oil shale.

EVEP owns about 30% of EnerVest's dominant position in this part of the play. There are not enough wells drilled there yet and through one or more joint ventures we intend to find the completion technique that will solve this problem. It could take one or two years for us to find these solutions and maximize the value of our position in this play. We will keep you informed on at least a quarterly basis on our progress.

The third area of focus is our non-operated acreage. EVEP has low exposure with less than 20,000 acres in our non-operated acreage. We continue to have discussions with foreign and financial entities about selling our position. Ken Mariani, CEO of EnerVest Operating is leading our discussions in this segment of our acreage monetization. The most valuable of this acreage is in the Chesapeake, Total, EnerVest wet gas window joint-venture. When the large amount of gas in this joint-venture begins to be processed in May and June it will become more visible to the financial community and more attractive to those who want to participate in the Utica. Gross production from the Chesapeake, Total, EnerVest joint-venture should exceed 700 million cubic feet per day by year end.

Now I want to turn to EVEP's midstream investments. Cardinal Gas Services, in which we have a 9% interest in the low pressure gathering system in the wet gas window and UEO Buckeye in which we have a 21% interest in high pressure gathering, processing and fractionation facilities. These companion investments are the key to achieving the ultimate maximum value in the wet gas window. Cardinal has laid lines to approximately 250 wells and it's transporting approximately 86.5 million cubic feet per day as of May 1st. Revenue from this system is highly restricted until UEO and Natrium begin processing wet gas in the next 50 days.

Combined with restricted capacity for those wells that are producing, there are approximately 75 wells that are completed and waiting to be connected to the gathering system. UEO's processing and fractionation facilities are on schedule to startup in late June. In addition to processing wet gas from the Chesapeake joint venture UEO also has contracts to process and fractionate with other producers and processors.

Momentum, the managing partner UEO is doing an excellent job of completing the first phase of this project on time and on budget which is unique so far in the Appalachian Basin. These large investments, in excess of $350 million for EVEP are projected to have excellent rates of return. Since the system dominates the wet gas window it creates great operations for EVEP in terms of permanently holding it, or exercising tag-along rights if Momentum chooses to sell its position.

I would be remiss if I didn't address the acreage sales by Devon and Chesapeake in the Utica. Virtually all of Devon's acreage is in the black oil window west of the volatile oil window. And to my knowledge there have not been any positive results from wells in tests today. However, the data set is very limited as the number of wells drilled is very low. The black oil appears to be normally pressured and thermally immature. That is the reason that we sold our acreage in that window to Chesapeake in 2010. Chesapeake in turn sold this acreage to Devon at the end of 2011.

Separately Chesapeake is attempting to sell our hand sell its acreage outside the wet gas window. Wells drilled by Chesapeake inside the wet gas window are being carried by Total for the next three to four years for 60% of the well cost. For that same period EnerVest and EVEP are also being carried for a similar amount. We are not surprised at all that Chesapeake is focusing on the wet gas window and selling the balance of its acreage in the Utica.

We are excited about the next three quarters in particular as natural gas processing constraints are removed. Well completions and turn-in line dates accelerate and well production from capacity restricted location is allowed to flow more freely. Success on the upstream portion of our Utica investment will also mean success on our significant midstream Utica investment as the gathering system is more fully utilized and the processing and fractionation plants begin operation.

EVEP and EnerVest are uniquely positioned and risk diversified in the Utica as a large acreage holder, a royalty owner on almost 900,000 acres, a well operator, a significant non-operator working interest holder, an owner of gathering pipeline infrastructure and an investor in natural gas processing and fractionizing facilities.

Now I will turn the presentation over to Mike Mercer to discuss the quarter's financial results.

Michael E. Mercer

Thank you, John. For the first quarter our adjusted EBITDA actual was 48.5 million which is a 25% decrease over the first quarter of last year and 30% versus the fourth quarter of last year. Distributable cash flow for the quarter was 21.8 million, which was a 37% decrease over the prior year's quarter and 43% sequentially. Distributions for the first quarter payable on May 15th to unit holders of record as of May 9th will be approximately $33.8 million. The decline in adjusted EBITBA ex-distributable cash flow even with similar production levels compared to the previous quarter is primarily due to decreases on our realized gains, our natural gas crude oil and NGL hedges, and the lower average sales prices per unit for crude oil, and especially on natural gas liquids.

Our natural gas liquids price declined from $46 per barrel the first quarter last year down to about $30 per barrel in the first quarter this year. And we know that's not unique to us that's true for natural gas liquids production across the broad.

For the first quarter production was 10.3 bcf of natural gas, 263,000 barrels of crude and 503,000 barrels of NGLs or a 165.2 million cubic feet equivalents per day which is over 3% above the midpoint of our previous guidance estimate. This is a 4% increase from the first quarter of last year and a 1% decrease from the prior quarters so basically flat. First quarter net loss was 46.6 million or a $1.08 per basic and diluted average unit outstanding, but I would note several items on that. 38.3 million was unrealized losses on commodity and interest rate derivatives, primarily due to increases in natural gas prices over the quarter, from quarter to quarter; 0.7 million of non-cash realized loss related to derivatives; $400,000 of dry hole cost was included in that income.

We had 4.5 million of non-cash compensation related cost in G&A, a 5.2 million of non-cash leasehold write-down impairment charges primarily in the mid-continent area and leases we allowed to expire and $0.1 million of non-cash deferred income cash taxes. It should also be noted very importantly that G&A expense included as George mentioned about $3.2 million of payroll related tax cash costs which are associated with the annual vesting of our phantom units during the first quarter. The vesting of our Phantom units is an annual event and therefore these costs will not occur, this $3.2 million of cost will not incur in G&A for the second through the fourth quarters of the year.

As John mentioned our mid-stream capital of 68 million for the quarter was consistent with the midpoint of our previous guidance but our drilling capital was 21 million or approximately 5 million lower than our guidance midpoint and Mark will talk about that a little later.

With regards to hedges, at the end of the earnings release you will see that we have highlighted natural gas hedges, we entered into since the end of the first quarter of 2013 as well as the full hedge table as to where our hedges stand today. We added about 3,000 mmbut per day of natural gas swaps and 439 for the remainder of this year and 15,000 mmbtus per day at 434 for 2014 and 2015. This leaves us about 90% hedged of current production rates for 2013 and 70% for 2014 and '15.

I would now like to turn over to Mark Houser for a review of our operations.

Mark A. Houser

Thanks, Mike and good morning everyone. My remarks today will be reasonably brief and focused on our other operations, as John has described our primary Utica activities. First, looking at capital expenditures; first quarter upstream capital expenditures were 21.1 million, about 5 million below the midpoint of guidance. The Barnett accounted for about 60% of that capital and performed extremely well. As you'll recall EVEP owns an average 31.3% interest in the overall EnerVest Barnett investment. Our Barnett team is running two to three rigs for the year, drilled 18 wells during the quarter and brought 14 of those online.

Initial production rates from these wells over 11% higher than we anticipated and drilling cost were over 9% lower than we anticipated. Consistent with last quarter we continue to drive down costs and increase productivity. From quarter-to-quarter we had experienced a 16% drop in cost per foot for our drilling and completion activity in the Barnett and a 24% increase in the effective length of our horizontal section.

We have also recently incorporated a locking system on one of our pads for the first time and are seeing very significant time and cost savings on our drilling. Earlier this month on the (Crystal Wagner) lease in Wise county, we brought on five new wells which IPed at a combined rate of 19.4 million cubic feet a day and 1Au85 barrels a day, 65% high than we anticipated.

In the Austin Chalk we brought on one operated drilled well in the quarter, the Bowen Ranch a grass root multi-stage frac well. The 30-day IP on this well was 540 barrels a day and 1.3 million a day which was 156% higher than we expected. We also had production from the first (Taylor) joint-venture well actually from two -- from the first (Taylor) joint-venture well and we now have our first two (Taylor) sand well on line, each producing close to 200 barrels per day with low decline rates.

The third (Taylor) well is currently being drilled. EnerVest including EVEP is being carried in the seven to nine wells in the play which if successful could be expanded across a good bit of our Chalk acreage. As we had planned we are also moving a rig back into the Chalk to drill up to seven grassroots Chalk wells for the remainder of the year. EVEP has a little over 14% average interest in the Chalk assets.

For 2013 our overall upstream capital plans are consistent with what we discussed previously. We will stay focused on our 20% hurdle rate and are targeting up to $110 million for E&P capital of which about 9 million will be spent drilling and completing about 156 gross wells. The capital spending may ultimately come in a bit lower as we are seemingly getting more bang for our buck. Of that about 90 million, 66 million will be for drilling the 65 to 70 gross wells in the Barnett. The remaining capital will be somewhat evenly distributed between our other wells in the Austin Chalk mid-continent and conventional Appalachia. And here is and particularly the Chalk where EnerVest control for 800,000 gross acres will also provide for additional growth opportunities for EVEP in the Eaglebine, Eagle Ford and Taylor Sands.

Now looking at production and operating expenses, EVEP's net production of a little over a 165 million cubic feet equivalent was at the high end of our guidance despite a pretty tough quarter from a winter perspective. Our teams did a good job of keeping things flowing in the first quarter. The one exception was in our (dormant) field in the Permian where the Southern Union Gas plant was down for most of the quarter and resulted in us being down by about 2 million cubic feet a day. The SUG plant came on line, came back on line in late March.

While production did stay reasonably stronger overall, our operating costs were slightly higher than we anticipated as our teams battled freeze-offs and pretty heavy snow in many parts of the country. There are always ups and downs but we have continued to see strong production performance into this quarter as the winter has eased a bit and we have continued to bring our new wells on line.

Production per weekly estimate this quarter has been towards the high end in the guidance. In fact last week EnerVest experienced highest production rate we've ever seen since we owned the Barnett at 247 million, over 247 million equivalent a day net to EnerVest, that's 78 million net to EVEP.

So in summary as was mentioned in the press release we feel like we had a strong operating performance in our base business through a tough winter spell for the first quarter. Our Barnett performance in particular has been excellent and as John has discussed our mid-stream investment in UEO is moving forward and our plan for monetizing our Utica acreage is progressing.

So with that I will turn it back over to John.

John B. Walker

Thanks, Mark. We are ready for questions, George.

Question-and-Answer Session

Operator

Thank you, sir. (Operator Instructions). Please ask two questions and then return to the queue for additional questions. Thank you. Our first question is from the line of Kevin Smith of Raymond James. Please go ahead.

Kevin Smith - Raymond James

Hi, good morning, gentlemen.

John B. Walker

Good morning, Kevin.

Kevin Smith - Raymond James

John and Mark, I appreciate your comments but I want to make certain I understood something. You know, is it a correct assumption that Tuscarawas and Stark Counties said they'll remove from the auction process all the JVM. So think about the JV or the acreage that are actually in the market subtracted from that.

John B. Walker

They haven't necessary been removed because we continue to have the discussions about our overall position in the Utica but at the same time I might have a somewhat different view from Wall Street. I want to maximize the value that we are getting. And until we solve this issue and they evolve to volatile oil window on the consistency in the amount of flow from the volatile oil window I don't think that we are going to get the type of offer for our position there that's satisfactory. And so I purposely said that we are focusing on joint ventures to get people to carry us to in that position to help solve this problem and it's not that different from the Eagle Ford or the Bakken again I will remind people that it took seven years in the Bakken to solve the problem we think it will take a lot less time for us to solve this problem in the volatile oil window. It has all the characteristics that should allow the volatile oil window to flow at commercial rates.

Kevin Smith - Raymond James

Great, and then one question for Mike. How do you think about the financing for the mid-stream CapEx. I assume you are getting no credit right now from the bank group for this asset, and you are thinking about maybe putting in a debt tranche?

Michael E. Mercer

Right now we are financing this with bonds and our credit facility. I mean right now we are bond based there is no direct credit being given for the mid-stream because it is not online yet. And ultimately, as we completed out the plan is to finance it with proceeds from (inaudible) assets.

Kevin Smith - Raymond James

Okay, thank you.

Operator

Thank you. And our next question is from the line of Ethan Bellamy‎ with Robert W. Baird. Please go ahead.

Ethan Bellamy‎ - Robert W. Baird

Yeah, good morning guys. So just to segue from Kevin's question, Mike your last response. Where is the inflection point in the year at which if you weren't able to sell something into that match your thresholds on a kind of county by county basis that you have to think about something different either on the financing side or on the midstream CapEx.

Michael E. Mercer

We'd have to address that at the time Ethan, with regard to what we do there.

Ethan Bellamy‎ - Robert W. Baird

Yeah I don't think we want to go into the inflection point in the year.

Michael E. Mercer

And let me also I have some fairly long comments and I did purposely say that we had received new offers. So you know that's clearly when you preceded your question with that price but we are encouraged. I don't want to -- I learn from our mistakes. I am not going to give you timeframe but we do feel good about the progress that we are making in the wet gas window.

Ethan Bellamy‎ - Robert W. Baird

Okay and to that point, I know you don't want to talk about specific values but are the bids that you have received so far in the new county-by-county framework are those within spending distance of something that can get done, have you been low balled, can you handicap the probability for us of getting something done this year?

Michael E. Mercer

Well as we expect they are all the above. Some we rejected outright, some are pretty close to thresholds. So it really is when you give more than one offer and you get some people, we are in a buyer's market that in my opinion shifted about August or September of last year in retrospect and I think that we are going to make some progress here.

Ethan Bellamy‎ - Robert W. Baird

I will re-queue you. Thank you.

Operator

Thank you. And our next question is from the line of Praneeth Satish with Wells Fargo. Please go ahead.

Praneeth Satish - Wells Fargo

Hi, good morning. I guess just in terms of the JV for the volatile oil window I mean how much ballpark capital will be spent at the MLP, is it going to be significant, or maybe any thoughts on that?

John B. Walker

I think for the midstream business which includes the volatile, I mean the wet gas window but it also includes the NGLs from the volatile oil window. And our footprint is right in the middle of the play and I think I said it would be in excess of $350 million right now. Now I did use a term that I thought would be interesting to you that while we'll have a billion cubic feet of processing incapability, a billion cubic feet, yes of processing capability by year-end that ultimately looking at the plans of the various processing is about 2.5 billion.

Michael E. Mercer

Let me jump in. I think as I understood the question, it was a little bit different, John from that. It was tied more to, if we enter into volatile oil window joint-venture what kind of capital exposure will EVEP have and the answer on that is that we will be looking for opportunities where we have folks come in who provide a carry. I know most of the market will suggest sometimes an upfront cash, a small amount relative to the overall acreage value plus security that's the kind of opportunity that we are looking for. In parallel they are continuing to consider bids on the volatile window but as John said we want to maximize value.

Praneeth Satish - Wells Fargo

Okay thanks and then another question on the midstream assets. I guess have you considered selling that this year, have you received any bids just in case be the acreage sales don't pan out.

John B. Walker

Well we consider selling anything but we haven't had any offers, it is not something that is active currently and the midstream business in the year could be a wonderful thing for us to hold but if someone wants to pay a whole bunch more for it then we think it's worth we will sell that and of course of having Momentum which has a history of getting large multiples for their investments, we were satisfied to have some tag along rights with them. They own 30% of the processing and fractionation facilities we own 21%. So collectively we have 51% with Momentum being the operator of that and that's important in selling having operations.

Praneeth Satish with Wells Fargo

Okay thanks I'll hop back in the queue.

Operator

Thank you. Our next question is from the line of Ethan Bellamy with Robert W. Baird. Please go ahead.

Ethan Bellamy – Robert W. Baird.

You guys still have the ability to do your original strategy per unit though which was drop down assets from the EnerVest. If you like where EVEP units are trading right now and I assume we do because we are against our buyers in the high 40s, why wouldn't EnerVest take EVEP equity for some of the other more mature drop down assets here and sort of go back to the original strategy if the Utica is taking longer than we all had expected and hoped for.

John B. Walker

So let me make sure Ethan that I understand you are saying why wouldn't the institutional investors take equity of EVEP is that what you're asking?

Ethan Bellamy‎ - Robert W. Baird

Yes I mean a drop down for equity that de-levers, helps fund midstream that's basically the question.

John B. Walker

We’ve never considered our institutional investors in some of these situations, we had more than one fund that's dropping down, doing anything other than cash transactions. As you might imagine when we do these things we have conflicts committees on both sides and cash is the easiest way to get a deal done when you superimpose units in there it makes it more complex and so I think it's likely that any dropdowns we do in the future as we've done in the past would for all cash, there's the market out there that we can turn around and sell units which would be the same effect.

Ethan Bellamy‎ - Robert W. Baird

Got it okay and then one last question from me. How has the leadership change at Chesapeake changed your relationship, has it changed the game plan or the strategy or has it freed up any assets that they might have had basically is there any change at all with the obvious departure?

John B. Walker

No I mean the interim CEO, Steve Dixon who's been at Chesapeake for I just over 20 years and he's been the Chief Operating Officer, present Chief Operating Officer for several years, since Tom Ward left. And so we haven't seen anything different but currently Chesapeake had some debt and cash flow issues and they have a lot of assets for sale. And so obviously we were one of the buyers of those assets that we are pleased with when we bought the Permian in last year.

Mark A. Houser

Let me, this is Mark let me comment on that too. Ron Gajdica and some of the other members of our overall EnerVest team were up in Chesapeake office over the last couple of days for our quarterly operating meeting. And one of the things we are seeing with the change, that really isn't a change but they continue to move forward on their Utica plan. Again they are still committed to over 540 wells as committed in their original plan with Total and through their financing.

Again keep in mind they've only got about 67 or 70ish wells producing right now. Another 37 completed and 75 waiting on pipeline and 16ish rigs programmed. So they are very active and continue to actually drive cost down, and to get more and more efficient and more and more effective in their completion practices. So from that aspect they seem to be really getting down appropriately down the learning curve in terms of this Utica.

So that's been a good thing and there's a lot more clarity around performance as we move forward which again as John said in his notes helps the overall Utica and is going to help the overall Utica a lot over the next several months.

Ethan Bellamy‎ - Robert W. Baird

Thanks guys.

Operator

Thank you your next question is from the line of Ravi Sinha with Bank of America. Please go ahead.

Ravi Sinha - Bank of America

Yes, Hi good morning guys just wanted to get some clarity like your debt-to-EBITDA level is rising, so where is your comfort level around that and if you could remind us where do you stand against your debt covenants?

Michael E. Mercer

With regard to our senior debt, senior security debt, the EBITDA covenant it is through the first quarter of next year, 3.0 times covenant. As you know that was changed earlier this year. Right now I believe it is well below that right now. It will clearly increase as we move through the year. And as we spend money in our mid-stream capital program and taking the through asset sales or monetizations we will keep it down at the appropriate levels.

Ravi Sinha - Bank of America

That's all I have. Thank you very much.

Operator

Thank you and our next question is from the line of Dan Guffey with Stifel Nicolaus. Please go ahead.

Dan Guffey - Stifel Nicolaus

Hi, guys. You mentioned in your prepared remarks a return to screening accretive asset acquisitions. Are those to be primarily dropdowns you are looking at from EnerVest or any third parties and also are those smaller bolt-on acquisitions or you are looking at larger packages?

John B. Walker

Well, of course EnerVest is one of the largest buyers of assets in the market and we see nearly all packages and we are seeing a large number of packages right now. And so Dan I think that the real answer is probably all of the above. We have identified some dropdowns from our institutional investors with Utica monetization. But it's something that we need to be looking at and that was the reason that I talked about it.

Dan Guffey - Stifel Nicolaus

Okay, so independent and then Utica monetization, I mean potential acquisition opportunities I mean those are -- you are still on hold waiting for the Utica, it's just ongoing?

John B. Walker

And the reason that I said it is when you are in a buyers' market and you can buy things at attractive and accretive rates to our unit holders I think we should be a participant.

Dan Guffey - Stifel Nicolaus

Okay, thanks guys.

Operator

Thank you. And I am showing no further questions. I will turn it back to John Walker for closing remarks.

John B. Walker

Well, thank all of you for listening in. We pretty thoroughly covered our quarter as well as the situation in the Utica. Please contact Mike or Jennifer Dickson if you have further questions. We appreciate it and we look forward to our next earnings call. Thank you.

Operator

Ladies and gentlemen this concludes our conference for today. We thank you for your participation. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!