SemGroup's (SEMG) CEO Carlin Conner on Q2 2014 Results - Earnings Call Transcript

| About: SemGroup Corporation (SEMG)

SemGroup Corporation (NYSE:SEMG)

Q2 2014 Earnings Conference Call

August 8, 2014 11:00 ET

Executives

Alisa Perkins - Investor Relations

Carlin Conner - Chief Executive Officer

Bob Fitzgerald - Chief Financial Officer

Pete Schwiering - Chief Operating Officer, Rose Rock Midstream

Analysts

Brad Olsen - TPH

Brian Zarahn - Barclays

Shneur Gershuni - UBS

Steve Sherowski - Goldman Sachs

Craig Shere - Tuohy Brothers

James Carreker - U.S. Capital Advisors

Operator

Good day, ladies and gentlemen and welcome to the SemGroup Corporation and Rose Rock Midstream Second Quarter 2014 Earnings Conference Call. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this call is being recorded.

I would now like to turn the call over to Alisa Perkins. Please go ahead.

Alisa Perkins - Investor Relations

Thank you for joining us today. The presentation for today’s call is available under the Investor Relations section of our website at semgroupcorp.com or rrmidstream.com.

Before we begin our prepared remarks, I would like to bring your attention to Slides 2 and 3 for certain disclaimers and other cautionary statements as remarks within our presentation may contain forward-looking statements. Also included in the presentation are various non-GAAP financial measures, such as adjusted gross margin, EBITDA and adjusted EBITDA. Reconciliations to the most directly comparable GAAP financial measures are included in the presentation and can be found on our website.

Hosting the call today is Carlin Conner, our CEO and Bob Fitzgerald, our CFO. In addition, Pete Schwiering, COO of Rose Rock Midstream is available for questions.

With that, let me turn the call over to Carlin.

Carlin Conner - Chief Executive Officer

Thanks, Alisa. Before we review our second quarter results, I would like to take a few moments to update you on our key growth projects. First off, the White Cliffs pipeline expansion is up and running, the expansion of this 527-mile pipeline connecting the DJ Basin and Cushing was placed into operation this month and we are excited about the interest we have already received from additional shippers seeking firm capacity on the line.

Commercial interest in capacity subscriptions is increasing as production volumes continue to grow in the DJ Basin. We are now working to expand the truck unloading station at the origin of White Cliffs in Platteville, Colorado. This expansion will include four new truck unloading bays and 100,000 barrels of additional storage expected to be in service second quarter of 2015. Also important to note is that our share of White Cliffs is now fully owned by Rose Rock. During the second quarter, we completed the dropdown of the remaining one-third interest in SemGroup pipeline, which owns 51% of the White Cliffs to Rose Rock and SemGroup. We funded the acquisition with equity back to SemGroup as well as revolver borrowings that were later paid down with the proceeds from Rose Rock’s June bond issuance. Bob will have more comments on our capital structure later.

Rose Rock also closed on the acquisition of transportation assets from Chesapeake in the second quarter. These assets further expand our crude oil gathering capabilities in several key growing production areas. Rose Rock now operates a fleet of more than 250 trucks servicing the Bakken, DJ/Niobrara, Eagle Ford, Granite Wash, Mississippi Lime, Permian, San Juan and Utica resource plays. We announced yesterday that SemGas is accelerating the installation of our Rose Valley 2 plant. This expansion will serve growing Mississippi Lime gas processing volumes. We now anticipate the plant to be online by mid 2015.

And at SemCAMS, we continue to be excited about our position in the Duvernay play, where we recently completed the new KA North pipeline that terminates at our KA Plant. In the Montney, our gathering system in the Northwest Wapiti area is full. Last quarter, we announced that we are planning to loop our existing system to create additional capacity to K-3. We still expect this project to be completed in the second quarter of next year and we are now evaluating further expansions on this pipeline. It should be noted that our position in Central Alberta provides us with an excellent opportunity and platform to grow our gathering and processing business in this exciting region.

Now, moving to second quarter performance, SemGroup and Rose Rock are off to a solid start for 2014. Although, our second quarter adjusted EBITDA was down from the prior quarter, we are still on track to meet our updated full year guidance for both companies. You may recall that we guided towards adjusted EBITDA of $260 million to $275 million at SemGroup and $115 million to $120 million at Rose Rock. SemGroup’s adjusted EBITDA for the second quarter was $57.5 million. Rose Rock reported adjusted EBITDA of $20.6 million.

We have increased SemGroup’s dividend to $0.27 per share, a 12.5% quarter-over-quarter increase and a 35% increase over our dividend issued one year ago. We continue to grow quarterly distributions at Rose Rock with the previously announced distribution of $0.535 per unit, an 8% increase quarter-over-quarter and a 22% increase over last year’s second quarter. This increase represents the tenth consecutive quarter of increasing distributions. In June, we also increased our consolidated CapEx guidance to $475 million. We are spending nearly 90% of our capital on high return organic growth projects in key asset plays. In the presentation, we provided more detail on all the projects previously discussed.

I will now hand the call over to Bob for a more in-depth look at our financial results.

Bob Fitzgerald - Chief Financial Officer

Thanks, Carlin. Beginning on Slide 9 of our earnings presentation, as noted in our press release yesterday, we reported adjusted EBITDA of $57.5 million, down 15% compared to the first quarter of 2014 but up 32% when compared to last year’s second quarter. Much of the reduction on a quarter-over-quarter basis was anticipated and included in our full year guidance, including a reduction in our crude marketing volumes and the plant shutdown of our Okay-3 plant in Canada.

SemGroup reported a net loss of $17.6 million for the second quarter. Non-cash items affecting net income in the second quarter included a $19 million charge for warrant expense due to our stock price appreciation and a non-cash loss on the sale of our SemGas Eufaula gathering system of $20 million.

Turning to our segment results on Slide 10 the decrease in our crude segment related to lower marketing volumes reflecting the termination of a short-term marketing opportunity that was available to us in the fourth quarter of 2013 and the first quarter of 2014. Compared to the same quarter a year ago, our marketing volumes are up nearly 80% due to our previously discussed increase and tankage dedicated to marketing activities.

As described during our last earnings call, we converted 600,000 barrels of tankage from leased storage to marketing usage. We expect to maintain this level of operational and marketing tankage for the rest of 2014. Other factors impacting the quarter, included higher G&A costs related to dropdown expenses, debt financing cost and higher overhead expenses. SemGas reported a 16% increase in adjusted EBITDA related to additional processing volumes in our Northern Oklahoma system. Gas processing volumes in Oklahoma increased nearly 50% on a quarter-over-quarter basis, reflecting the full contribution of our Rose Valley 1 plant that was brought online in March. We are experiencing a stronger than expected ramp up in volumes in the Mississippi Lime and therefore we are accelerating the installation of the new Rose Valley 2 plant to mid 2015.

Our SemCAMS business in Canada was down $3.7 million due to the plant shutdown of our K-3 plant in early May as we discussed on our last earnings call. K-3 was back up in operating before the end of the quarter. Although SemCAMS experienced a large decrease in earnings during the second quarter related to the plant shutdown, we expect the business to finish the year with adjusted EBITDA at a level exceeding last year’s results.

Next, moving to our capitalization and liquidity position on Slide 11. Rose Rock issued $400 million in senior unsecured notes June 27 with a coupon of 5% and 5.625%. We have reflected the Rose Rock bond issuance on a pro forma basis as of June 30 as it’s settled after the quarter end. On a pro forma basis, we ended the second quarter with total consolidated debt of $825 million. SemGroup’s consolidated debt to capitalization ratio is 41% and net debt to adjusted EBITDA leverage ratio is 3.2 times. We ended the quarter with total liquidity of $1 billion.

Moving next to Rose Rock’s results on Slide 12, we reported second quarter adjusted EBITDA of $20.6 million, down 26% from the prior quarter reflecting the lower marketing volumes discussed earlier and increased G&A costs from the final White Cliffs dropdown transaction.

Next, turning to CapEx, Slide 13 provides Rose Rock’s anticipated capital expenditures for 2014 of $125 million consistent with our recently updated guidance. The guidance update on Slide 14 includes the acquisition of Chesapeake’s crude trucking business previously discussed as well as the full 51% of White Cliffs pipeline for the second half of 2014. Rose Rock’s capitalization and liquidity position is presented on Slide 15. As described in my earlier comments regarding the consolidated cap table, we have presented Rose Rock’s capitalization on a pro forma basis as of June 30, to reflect the final settlement of the bond offering.

We ended the quarter with total consolidated debt of $456 million, an increase of $211 million from the first quarter reflecting the $400 million bond issuance in June. The bonds have a coupon rate of 5.625% and mature in July 2022. Rose Rock’s debt to capitalization ratio is 64% and net debt to adjusted EBITDA leverage ratio is 3.9 times.

We ended the quarter with total liquidity of just over $500 million. During the quarter, we funded the $300 million dropdown acquisition with $114.4 million of cash borrowings on Rose Rock’s revolving credit facility along with the issuance of 2.4 million common units and 1.25 million Class A units to SemGroup.

As outlined in detail on Slide 42, our distributable cash flow for the second quarter was approximately $70 million. Our distribution of about $70 million represents a coverage ratio of just over one times for the quarter. We are targeting a distribution growth rate of 25% and a coverage ratio of 1.1 to 1.2 times for 2014.

I will now turn the call back over to Carlin for some final comments.

Carlin Conner - Chief Executive Officer

Thanks Bob. Now, that I have been on the job for four months, I can report that our asset platforms continued to perform as or better than expected while also providing high value organic growth options. The importance of basin and our regional diversification is very clear to this management team and we continue to be very active in pursuing expansion to all avenues available to us. Our efforts in M&A and developing green ground field projects are picking up pace as we narrow our focus on our next steps.

Corporate diligence, business sustainability and value creation are still very high priorities that we manage daily. We strongly believe in our ability to execute and with our dual currency, strong balance sheets and supportive Board, we will be successful in growing our SemGroup Holdings either at Rose Rock Midstream or at SemGroup itself.

Thanks for you time this morning. Operator, can you now open the line for any questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question comes from Brad Olsen of TPH. Your line is open.

Brad Olsen - TPH

Hi, good morning everyone.

Carlin Conner

Good morning, Brad.

Brad Olsen - TPH

Carlin, it looks like you are now starting to core up the SemGroup asset portfolio, you mentioned a sale of a gathering – an Oklahoma gathering asset in your quarterly presentations and it looks like you also sold off some of your NGL LP units during the quarter, I think historically you have mentioned Mexico and UK as also potential non-core assets, beyond the remainder of the NGL LPs, should we be on the look out for anything else in the way of asset sales over the next couple of quarters?

Carlin Conner

Well, Brad, we as always we look at our assets on an ongoing basis and we refer to Mexico and UK. We were in middle of that strategic planning process that we conclude in September with the report to our Board. At this point in time, we feel like the Mexican business is performing. Just recently energy reform in Mexico has passed. So we are being very thoughtful and careful about making sure that we do not divest a business that has some alternative value as well. We know how to conduct business in Mexico and we want to make sure that we have an opportunity to at least look at the opportunities out that may present themselves in Mexico under this new energy reform.

Brad Olsen - TPH

Got it. And given the fact that SemGroup right now $300 million of notes at the SemGroup level, over the next couple of years, you will likely do a handful of dropdowns which will further kind of delever increase the net cash position on your balance sheet. When I think about the disposals it seems like you are building up cash and you are already in a position where your balance sheet is pretty conservatively positioned today, is there a use of proceeds that you have got your eye on or something in M&A market which is looking attractive enough that you want to get yourself positioned before you make a move?

Carlin Conner

Well, I think you nailed it, positioning is very important. With respect to the NGL position, we have always said it’s a source of capital, unfortunately due to the inquisitive in nature of NGL. And by the way we are very thankful for the value they have created. We are a significant unit holder. It’s difficult for us to actually liquidate those positions and grab that capital. So we have to be very thoughtful and maybe little more forward thinking in freeing up that capital.

Brad Olsen - TPH

Got it. And when – on your first quarterly call last quarter you did mention that you are kind of thinking about where you might want to move SemGroup in terms of where the next operational step out might be, are you still thinking about things broadly kind of in a similar way broadening geographically potentially expanding in Canada, any new thoughts on where you see opportunities in the midstream space today?

Carlin Conner

We are – that’s exactly what we are trying to put in place is the regional basin diversification. We think it’s very important going forward for us to achieve that goal. That’s going to give us a larger platform and we can then potentially grow organically off of those new platforms. That is the number one priority.

Brad Olsen - TPH

Got it. And just one final one for me, the last quarter you mentioned that you might be transferring some of your Cushing capacity to be more available for marketing activities or market opportunities that you see there in the MidCon, any update on how that strategy is going whether you continued to see those types of market opportunities and that’s it from me? Thanks.

Carlin Conner

Thanks Brad. With respect to the tankage in Cushing, we really what we said was that there was 600,000 barrels of tankage that we took out of third party leasing and moved it into marketing. At this point in time we do not have any intention to increase the amount of tankage that we take off of the third party leasing and moving into marketing.

Brad Olsen - TPH

Got it.

Carlin Conner

Thanks Brad.

Operator

Thank you. Our next question comes from Brian Zarahn of Barclays. Your line is open.

Brian Zarahn - Barclays

Good morning.

Carlin Conner

Good morning, Brian.

Brian Zarahn - Barclays

On the Platteville truck unloading project, just curious what’s driving the analytics expansion now and not earlier, has your volume expectations on White Cliffs changed?

Carlin Conner

I would say and then maybe Pete can add color, that we have always felt that the volume ramp would be pretty steep and we feel good about it. I think it’s a function of getting barrels into the system. And having the ability to handle more producers is really important.

Pete Schwiering

Yes. This is Pete, Brian. And we have seen a growth of our number of our customers up there that have requested additional truck unloading space up there. So we are adding four lanes and possible to add some additional lanes after that for all our new customers and particularly with White Cliffs II just coming on.

Brian Zarahn - Barclays

In regards to that could you – maybe elaborate on your earlier comments on your discussions with shippers for additional contracted capacity, so where you are today and perhaps where you maybe in the future?

Pete Schwiering

Yes. Brian, it's Pete again. We will be going out for an open season on the additional contractor space that we have probably late next week and we anticipate to add all that committed space taken up with the open season.

Brian Zarahn - Barclays

Good, we will stay tuned on that. And the last one from me, how is the recent trucking acquisition performing?

Pete Schwiering

Very good, we are trying to integrate both operations together right now as you know the Chesapeake is backed up by a commitment from Chesapeake on volume and the integration is going very well and we are excited about it.

Brian Zarahn - Barclays

Thank you.

Carlin Conner

Thanks Brian.

Operator

Thank you. Our next question comes from Shneur Gershuni of UBS. Your line is open.

Shneur Gershuni - UBS

Hi, good morning everyone.

Carlin Conner

Good morning, Shneur.

Shneur Gershuni - UBS

I am going to ask some of the same questions I guess possibly from a different angle, but so as you – I think you had mentioned to Brad, you sold the NGL units and so forth you have had the dropdown, you raised some capital, I guess kind of my thought or my question is really about kind of like what’s next, are you focused on organic opportunities in anything materialize from the July planning meeting? And then I guess secondly, if you can talk about the fact that you did move up the planned Rose Rock dropdown to the middle of the year, does that leave room for another dropdown towards the end of the year?

Carlin Conner

Well, thanks for the question, Shneur. What’s next we continue to work parallel past. Organic growth is very important to us. We believe that our core competencies allow us to execute in the field creating value for our customers and ultimately for our shareholders. We love organic growth. So, we will continue to of course pursue that at all cost and make sure that we capture everything we can capture of the existing platforms. At the same time, simultaneous to that there is an effort to achieve regional diversification and be able to create more platforms, so we can execute that organic growth. So, I wouldn’t say one of the other with respect to how we are going to grow. We need both and we are focusing on both.

With respect to the dropdown schedule, yes, we moved it up a little bit, the White Cliffs drop. We are glad to get that one done. It was a good process. We are really excited about White Cliffs. Rose Rock has now has SemGroup’s full 51% interest and it’s a good system. It’s going to create a lot of value for the Rose Rock unitholders and ultimately to SemGroup as well through its ownership. As far as the next drop, we have always said we really don’t want to guide on timing on these drops. We wait and make sure that the assets are mature and ready for to be dropped. And we are moving on looking at the next most likely group of assets, which is the Glass Mountain interest as well as the two Wattenberg pipes, Wattenberg trunk and then Wattenberg extension. That most likely will be the next group and we will not really comment on timing at this point in time.

Shneur Gershuni - UBS

Okay. You really amped up the dividend and distribution growth rates with the update that you did in June and reiterate it today. Is there any reason why we are going to see something similar in 2015? I was wondering if you can maybe sort of talk about what are the right conditions that will allow that to happen and conversely any impediment that would prevent that kind of a rate from occurring?

Bob Fitzgerald

Shneur, this is Bob Fitzgerald. I will go ahead and take that one. As far as the ramp up, we are very excited about the ability to grow both our distributions at Rose Rock and the dividends at SemGroup. As you know, our current policy and process is to drive the dividend based up on the distributions received from our mass element partnership ownership interest. That will continue to drive it at least for the time being. And that’s going to be driven largely by our dropdown strategy. So, stayed tuned as Carlin was just talking about, we are not guiding on the timing of the drops, but that’s certainly one of the largest catalyst in terms of growing, both the distributions and therefore the dividends.

Shneur Gershuni - UBS

Great. And one last final follow-up in the drop that you just recently did, you took back Rose Rock interest into SemGroup and so forth. I was wondering maybe if you can talk about kind of the thought process there. We are often told by institutional investors that the liquidity at Rose Rock is an impediment to investing in the units and why not book two opportunities to increase the flow like when you do dropdowns and so forth?

Bob Fitzgerald

Yes, that is an ongoing analysis that we do. This particular drop that we did here in the last quarter was really driven by the need, the desire by our part to mitigate taxes. So, by taking back units to SemGroup that helped to shield those taxes and defer the tax gain into the future. But we are very cognizant of the fact that Rose Rock would be able to benefit its trading with additional flowed outstanding. And so every time we do an analysis of a drop, we have a lot of discussion about that. So, we will see how that plays out in our future drops.

Shneur Gershuni - UBS

Great, thank you. That’s all from me.

Operator

Thank you. Our next question comes from Steve Sherowski of Goldman Sachs. Your line is open.

Steve Sherowski - Goldman Sachs

Hi, good morning. Just a quick question on the acceleration of Rose Valley 2 into the middle of next year, is there any shift in CapEx associated with the move?

Bob Fitzgerald

Hi, Steve. This is Bob. I will take that one. There has been a bit of a shift in CapEx. You might notice that we increased our Northern Oklahoma capital guidance that we put in the presentation by about $15 million. That was largely driven by putting some additional capital into 2014 then obviously we will continue to spend into 2015. So, the drivers of that are going to be our well connect and expansion overall and then the plant spend. So, you did see a bit of an increase this quarter as a result of that.

Steve Sherowski - Goldman Sachs

Okay. And how should I think about the volume ramp on Rose Valley 2?

Bob Fitzgerald

Well, as you saw in our presentation material, we are up about 50% of this quarter-over-quarter. We are continuing to look at our guidance on that. We updated that as far as this most recent guidance that we did in June to 130% year-over-year. Initially, we were guiding, I think it was 110%, 120% range. So, we reflected that in our current guidance. And as we indicated, it continues to grow very quickly in this area as we see the rig counts go up.

Steve Sherowski - Goldman Sachs

Okay. And just a final question on the NGL LP unit sale, what price was that at?

Carlin Conner

Bob is looking it up real quick.

Bob Fitzgerald

Yes. We ended up selling it at – it was 42.21, is what we ended up.

Steve Sherowski - Goldman Sachs

Okay, that’s it from me. Thank you.

Operator

Thank you. Our next question comes from Craig Shere of Tuohy Brothers. Your line is open.

Craig Shere - Tuohy Brothers

Good morning, guys. Look forward to seeing everybody next week. Couple of quick ones here what are the prospects for new Wapiti sweetening plant? I think a couple of years back, that was on the table and it’s rather large figure as far as growth CapEx?

Carlin Conner

Well, it’s still on the table for us. We took it off because of the gas environment at the time, the gas price environment and it’s coming back a bit. But we are constantly reviewing – because of our incumbent position there we are constantly reviewing when we can also add from Midstream services to the production environment. So, it is a potential project. We also have some other real exciting projects in the area that we look forward to talking about really soon.

Craig Shere - Tuohy Brothers

Great. And just a clarification on Rose Valley 2, I think that plant had already been kind of been an ace up your sleeves, so to speak, it was built and held in storage if I understand. So, that $15 million that’s it right and then we get all the EBITDA benefit?

Bob Fitzgerald

Well, Craig just to be clear on that, this is Bob again. The Rose Valley 2 plant what we had was the fabrication of the plant. The installation cost and the compression that goes along with that is still what we are going to be spending capital on. That $15 million is just part of our additional capital, but we will be spending more than $15 million when it’s all said and done. A lot of that will come into 2015 though as well.

Craig Shere - Tuohy Brothers

Right. But your 2015 CapEx guidance hadn’t changed, I guess when I say that’s it, I mean, so whatever you would have spent to exchange that now is being spent in this guidance period that $15 million increase covers everything. There is nothing additional you would expect to spend while in the back half of next year, you will get the benefit of this plant up and running?

Carlin Conner

Yes. With regard to the plant cost, that’s true. Obviously, we are going to continue to spend capital on well connections and field compression. So, that’s going to be ongoing capital outlay.

Craig Shere - Tuohy Brothers

Okay, great. Thank you.

Operator

Thank you. Our next question comes from James Carreker of U.S. Capital Advisors. Your line is open.

James Carreker - U.S. Capital Advisors

Good morning. Thanks for taking my question. Just in regards to SemGas, as you kind of talked about in your prepared remarks volumes were up very nicely Q1 over Q2, I think 50%, but we only saw adjusted EBITDA up 15% or 16%. I was wondering if you could kind of comment on that a little bit and let us know what’s going on?

Carlin Conner

One of the things that we have done, I think we talked about in past calls is we really converted the gas revenue generation capacity to fee-based. Much of what we are doing today is going to be fee-based. So, we are really driven directly by our volume uplift and the fee structure out there. James, so you ought to be able to see a pretty straight correlation going forward on that.

James Carreker - U.S. Capital Advisors

Okay. So, maybe Q1 was a little off, but from now on volumes and revenues or EBITDA will kind of be in line?

Carlin Conner

I think that will be true, because the large driver right now that you have seen with the new plant is going to be Chesapeake and all of Chesapeake’s volume is on a fee basis.

James Carreker - U.S. Capital Advisors

Okay, fair enough. Thanks for that. And then just now with the White Cliffs expansion and service, can you talk a little bit about the impact that that will have in the third quarter may be there is some down time as you put it in the service, but now with extra volumes kind of like what’s the net-net of that looking out for the next three months?

Bob Fitzgerald

As Carlin talked about in his opening comments, the ramp up is now complete we are, as far as the construction projects goes. We are flowing volumes in August and then we are going to continue to see the ramp. At this point, we haven’t made any changes to our guidance. We are still looking at the same level of ramp in 2014. But it’s a little bit of a stay tuned. We do expect as Pete was talking about big interest in getting additional firm capacity. We will hopefully lock that up here this quarter. And then we will be able to give you a bit more clarity around how we see that ramp shaping up given the new pipe.

James Carreker - U.S. Capital Advisors

Do you guys have any idea what current volumes are now that the expansion is in service have you seen a nice step change increase already from the little time that it’s been in service?

Carlin Conner

Yes. We projected that we would see a 15% to 20% I think increase year-on-year. We think that the ramp is a little – is more steep in that. So we are really excited that I think in short – maybe give us another couple of months that we can report back what the actual volume looks like. But it is steeper than we had anticipated which is of course good news.

James Carreker - U.S. Capital Advisors

Great, thanks for that color. And then one final question from me, on the crude marketing margins, can you remind us kind of what drives that, is that going to be based more on just production raw volumes, or is that going to be on certain basis differentials that we can look at, do you think Q2 is a good number going forward, is that affected by the trucking acquisitions at all, can you provide a little color there?

Carlin Conner

What drives our marketing margins are going to be really the basis differential or basis differentials in the locations we were buying the crude. And we are doing our marketing primarily in two areas, one is in North Dakota. The second area is in and around the Cushing. So those are going to be the two drivers in terms of what we see. The second quarter, I think is probably a pretty good indicator what we would expect to see going forward. This quarter that we reported is a good benchmark for you.

James Carreker - U.S. Capital Advisors

Okay, fair enough. Thanks a lot. That’s all I have.

Operator

Thank you. I am not showing any further questions in queue. I would like to turn the call back over to Carlin Conner for any further remarks.

Carlin Conner - Chief Executive Officer

Thank you very much for joining us today. As you can tell a lot going on for both companies, we have a great portfolio of major growth projects to pursue and structurally we are very well-positioned. We are excited to continue executing on our strategic plan and have great confidence in our ability to create significant long-term value for our shareholders. Thank you, again, for joining us, and for the great questions.

Operator

Ladies and gentlemen, thank you for participating in today’s conference. This concludes today’s program. You may all disconnect. Everyone have a great day.

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