MTDR 2024Q2

Good morning, ladies and gentlemen. Welcome to the second quarter 2024 Matador Resources Company earnings conference call. My name is Marvin Rivas, and I'll be serving as the operator for today. As a reminder, this conference is being recorded for replay purposes, and the replay will be available on the company's website for one year as discussed in the company's earnings press release issued yesterday. I'll now turn the call over to Mr. Mac Schmitz, Senior Vice President, Investor Relations for Matador. Mr. Schmitz, you may proceed.

Thank you, Marvin. Good morning, everyone, and thank you for joining us for Matador's second-quarter 2024 earnings conference call. Some of the presenters today will reference certain non-GAAP financial measures regularly used by Matador Resources in measuring the company's financial performance. Reconciliations of such non-GAAP financial measures with the comparable financial measures calculated in accordance with GAAP are contained at the end of the company's earnings press release. As a reminder, certain statements included in this morning's presentation may be forward-looking and reflect the company's current expectations or forecasts of future events based on the information that is now available. Actual results and future events could differ materially from those anticipated in such statements. Additional information concerning factors that could cause actual results to differ materially is contained in the company's earnings release and its most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q. In addition to our earnings press release, I would like to remind everyone that you can find a slide presentation in connection with the second-quarter 2024 earnings release under the Investor Relations tab on our corporate website. And with that, I would now like to turn the call over to Mr. Joe Foran, our Chairman, Founder, and CEO. Joe?

Thank you, Mac. Welcome to the call. We appreciate you taking the time to join us. We are excited about this quarter and even more enthusiastic about the upcoming quarters in the year ahead. The teams have worked very hard, and I want to highlight the collaboration behind these results, as everyone has contributed. I invite all of you to visit us sometime, have lunch or breakfast with the team, and see how effectively they work together, which I believe has led to these positive outcomes. I encourage you to check out the slides on our website that connect to the press release, as they help illustrate our story. Specifically, when we went public in 2012, we were producing about 3,300 barrels a day. Today, that number has risen to over 95,000, showing consistent growth and significant teamwork. I would like to thank everyone, especially our field team, who has kept operations running smoothly in both hot and cold weather. Their dedication is crucial in maintaining our progress. We are reporting proved reserves of approximately $500 million from Matador alone, and with Ameredev closing, subject to the usual contingencies and approvals, that figure will exceed $600 million. We are optimistic about the next two quarters, with much work ahead. If the teams continue their strong performance, I am confident I will be here in 90 days sharing more good news. If you appreciated this last quarter, the next should be even better. Now, I will open the phone for questions and provide any assistance needed. I want to emphasize that you are welcome to come visit and meet with us. Despite all the capital and technology involved in this business, it fundamentally comes down to the people, and meeting us in person will give you a sense of how we operate and the quality of our team. I think that’s significant, but I won’t dictate how you do your job; I just want to extend the invitation.

Marvin, we're ready for Q&A. Thanks.

Our first question comes from Gabe Daoud of TD Cowen.

Thank you. Hey, morning, everyone. Thanks for taking my questions. I was hoping we can maybe, Joe and team, just start with trajectory from here. Maybe for Matador, stand-alone, it looks like 50% or so of the activity is done in the first half; and the other 50%, more or less, in the second half. So just curious, what's maybe driving the big step-up in expectations on 4Q volumes? Is it well outperformance or maybe better base declines? Just kind of curious what's maybe behind the big step-up in 4Q.

Hey, Gabe. We really appreciate that question. This is Brian Willey, Executive Vice President and Chief Financial Officer. And I think you hit it on. I mean, it's really the work of the team. Joe started and talked about that from the beginning. And so it's the great teamwork and how the schedule works out. Tom does a really great job with doing the drill schedule and constantly trying to make it better and optimize that schedule. So we had a really great second quarter. And as we look forward into the future, third quarter and fourth quarter, you're exactly right. We increased in the third quarter, as Joe said earlier, and then we expect it to continue to increase and have that step up in the fourth quarter. And that's even before Ameredev. I think Joe mentioned Ameredev, which we're extremely excited about that closing and having the opportunity to do that, of course, subject to regulatory approvals and other customary closing conditions. But excited to integrate those assets. I think one of the great stories of this quarter and the second quarter is the Dagger Lake South well, which I'll pass it off to Chris to talk about in a minute, but doing those on efficiently and doing a very good job and bringing on a little bit sooner than we even expected. And it's really integrating those advanced assets. I think it shows how consistent we are in integrating the assets and being able to do that over time. And we expect the same thing with the Ameredev, that we'll be able to integrate those assets and be consistent and integrate those into our program and looking forward to that. So I'll pass it over to Chris. He can talk a little bit about the Dagger Lake South well and some of the efficiencies we have with those.

Hi, Gabe. This is Chris Calvert, Executive Vice President and Chief Operating Officer. Brian mentioned the teamwork, and I think we can talk about the lowered drilling and completion costs per foot. People might inquire about the pricing for oilfield services, but while those results are impressive, the real story lies in everyone contributing in their own way. Dagger Lake South is a prime example of this. From an operational standpoint, we previously discussed our pilot test for the trimul-frac completion process, and Dagger Lake South exemplifies this, with a six-well pad that resulted in about $350,000 savings per well. This achievement was only possible due to the collaboration among various teams, including the production team, the facilities team utilizing recycled water, and the operations team coordinating with the land group for necessary agreements. Many factors came together to create that $350,000 savings per well. Additionally, we benefited from accelerated production due to reduced well days and the efficiencies gained from the simul-frac and trimul-frac processes. Using trimul-frac results in approximately a 50% decrease in completion time per well. Ultimately, while we are bringing wells online faster, it’s essential to recognize the teamwork that contributes to the success of these processes.

Thank you. Our next question comes from the line of Scott Hanold of RBC Capital Markets.

Thanks. Good morning. You've had some notable success with the two large pads from the Advance acquisition, the Margarita and the Dagger Lake. I'm curious if you could provide some insights on the future plans for those assets. Additionally, do you support the cube development strategy? Is it something you think could be implemented across a larger portion of your acreage?

Hey, Scott. Good morning. This is Tom Elsener. Thank you for the question. We're very proud of the Dagger Lake South and the Margarita properties. The results have been excellent and exceeded our expectations. We plan to drill around a dozen more wells on the Advance properties in the latter half of this year. We will have a couple of rigs heading out there in the third quarter to drill 2.5-mile-long laterals. We appreciate that these wells are being drilled relatively simultaneously. We're working closely with our midstream team and Glenn Stetson, as Chris mentioned, on the teamwork and coordination needed to get these wells online. These are very promising targets, and I want to credit Ned Frost and the geoscience team for identifying targets like the Third Bone Spring carbonate, which will be included in this next phase of development. We've shared knowledge among different groups, and we anticipate drilling these wells across the Advance properties. The wells I mentioned are expected to be online in the first half of 2025. We'll provide more updates on their performance, but we anticipate consistent results with strong oil production in the mid-80s and low water-to-oil ratios. We've seen excellent initial production from Dagger Lake South, and we expect similar results from this next set of wells.

Yeah, this is Glenn. I want to add to what Tom mentioned. Dagger Lake South serves as a good example of the various factors we have to consider during cube development, highlighting the importance of careful coordination and planning. After acquiring the Advance assets a year ago, we immediately collaborated with Pronto to establish the connector from their system to the Dagger Lake South properties and another connector to San Mateo. This quarter, the value of that planning became evident as we activated 21 wells, producing around 30 million cubic feet of gas per day. All of this gas was sent to the Marlan plant, and there were instances where we exceeded the plant's capacity, using the connector to direct additional volumes to San Mateo. This led to San Mateo and Pronto processing nearly 0.5 Bcf of gas daily. Additionally, we were also producing close to 20,000 barrels of oil and 70,000 barrels of water per day. These are crucial details that require meticulous planning in cube development, and I believe our team has excelled in coordinating effectively across all groups to execute such a large-scale project.

Thank you. This is Joe. I’d like to add to that. Our midstream business has really helped because they were ready to go when the wells were ready, making it possible to manage oil, gas, and water effectively even while nearing full capacity. I give a lot of credit to them, including Justin and the processing team. Justin, could you share what you all were doing during that time?

Yes, sir. Senior Vice President of Operations, Midstream, Justin. As Glenn mentioned, we are filling up Marlan. For the last 45 days, we have consistently exceeded the capacity of that facility, and we are very excited about that. We have also used the connector line to direct the gas over to Black River. We look forward to the remainder of the year in our development plans, reaching capacity at both facilities and setting water gathering records on the San Mateo side, as we have tied a record number of wells in line this quarter.

Thank you. Our next question comes from Zach Parham of JPM.

Thanks for taking my question. You took down your D&C-per-foot guidance to $960 per foot at the midpoint. That's down about 5% versus the prior guidance and over 10% year over year. Can you just talk about the drivers of that decline in D&C cost? What's the split of cost deflation versus efficiency gains?

Hi, Zach. This is Chris Calvert again. I'll take that. Thank you for noticing. We're very proud of the revision in the second half of the year down to the $960 number we mentioned. The drivers behind that remain consistent with what we've discussed in recent quarters, focusing on sustainable efficiencies and improved processes. This includes strategies like simul-frac and trimul-frac, which allow us to spend fewer days drilling wells, as well as U-Turn savings. We're committed to sustainable process improvements that will endure regardless of the OFS pricing environment. Entering the second half of this year, we are experiencing a more competitive OFS market, with some services becoming competitively priced. Many of the factors contributing to this are efficiencies and mutually beneficial agreements with our vendors. For instance, with simul-frac and trimul-frac, we achieve 12 to 18 stages per day, benefiting both us and our service providers, whether it's Halliburton or Patterson. This trend underscores our ongoing efficiency narrative. U-Turns have similar results; the third U-Turn well we drilled was completed in about 50% of the time compared to the average of our first two wells. These efficiencies are significantly reducing our costs. While we believe the OFS market is deflationary in the second half of this year, most of this reduction is driven by efficiencies led by our operations team. Of course, none of this would be possible without the contributions of the land and geology teams who identify various subsurface targets. It’s a success story regarding D&C costs per foot, made possible by the efforts of everyone involved in the process.

Chris, that's a good answer. I want to emphasize that your MAXCOM room is contributing to efficiencies by saving time on wells. Every day you save reduces costs, and they have played a significant role in helping to set your 300 drilling records. The second part of that teamwork involves ensuring flow assurance in midstream operations. When you're ready to start production, they are also prepared. We are collaborating closely with Patterson and our other vendors. As we work together more next year, our focus is not on driving down prices but on finding ways to save time and enhance the effectiveness of their work. This real collaboration is something we hope to continue expanding.

I think that's a great point. If you refer to slide 9, we discussed the benefits of MAXCOM, which has been in place since 2018, including the drilling records generated from that room. Additionally, it has improved targeting, which leads to better productivity and recovery rates, along with enhanced processes that minimize the number of days spent on wells. MAXCOM also serves as a training tool for young engineers and geologists coming into the company from college. They work closely together for seven days on and seven days off, focusing on well planning and steering to better target these wells, ultimately resulting in improved recoveries. After a year or two, these geologists and engineers join asset teams, fostering a sense of camaraderie that enhances efficiency and communication among the teams.

Our next question comes from the line of Neal Dingmann of Truist.

Morning, Joe and Team. How you doing?

Hey, Neal.

Joe, quick important one. You didn't mention if we come up there to see you all if you'll be paying for breakfast. I wanted to get that out of the way first.

Say that again, please.

I just want to make sure you'll be paying for breakfast when we come up to visit you. I thought that would be an important one to get out of the way first.

That depends on how many questions you ask.

Joe, my question is around the midstream position. Now that you've had Piñon and you've got the San Mateo part of Advance, I would love to hear you guys' take as far as how much more build-out do you all think you need in the area now that you've added Piñon. Does that complete the full takeaway position in that area?

No, I don't think so. We're open to any opportunities that make sense financially and enhance our existing system. I don't envision putting a standalone pipeline in Chaves County without something nearby. It should be close to our properties so we can integrate it into our system, allowing for more options and the ability to transfer resources between plants, which increases our effectiveness. We're being careful about our decisions. Gregg Krug has done an excellent job. If you recall, back when we went public, we were frequently asked about takeaway issues, particularly in the Eagle Ford. It was a common concern that we addressed. We decided to speak with Gregg, who's been a long-time friend, about overseeing that part of our operations. He assembled an exceptional team not just in the midstream sector but also in measurement and managing a 24/7 measurement room, assisting with audits and recovering lost barrels. He has been a significant asset in many ways and advises on various recommendations that go before the executive team and potentially the Board, depending on their scale. This has positioned us well; just as Chris has reduced drilling days, we have minimized delays related to midstream connections. We are very open to opportunities. If we open a new drilling area and can enhance the pipeline situation, we will pursue it. We do not impose limits on what Gregg can achieve. He has established a strong team, and we expect to have midstream capabilities wherever we drill. I hope I articulated that correctly, Gregg.

To keep pace with our drilling operations, we need to continue expanding our midstream presence. This area is growing consistently each year, and it’s essential for us to ensure adequate flow assurance. Our main objective is to stay proactive in this regard. We will be focusing on continuously exploring new opportunities.

I have one more point to add. Our third-party participants have continued to expand, which increases the likelihood of needing to ensure we're properly servicing them along with their drill bit, not just ours.

We want to emphasize to third parties that we are committed to supporting them. Our approach is driven by a producer mentality, so shutting down or reducing production is not an option for us. We aim to stay proactive, which benefits our third-party partners as they also reap the rewards of this mentality.

Yeah. Neal, it's Glenn Stetson. I want to echo what Joe and Gregg said and highlight two points. First, we're focused on building the new 200-million-cubic-feet-a-day cryogenic gas processing facility at the Marlan plant. That project is on schedule and within budget, and we expect to get the plant online in the first half of next year. I commend the teams for their efforts this year; they have constructed over 50 miles of pipe and compressor stations to support the production from many of the new wells activated this last quarter. Additionally, regarding Piñon, it's important to note that Ameredev has built approximately 135 miles of infield gathering pipelines, which aligns with Matador’s approach of managing their own gathering and processing. This 135 miles includes crude, water, and gas gathering, along with high-pressure gas pipelines for gas lift. This underscores the strategic nature of the midstream business, and Ameredev has a significant portion of it as well.

Yeah, this is Gregg again. I do want to kind of pile on to what Joe mentioned as far as the measurement audit group that we have. That's something that some companies don't have, and that's something that we've taken very serious. And we've been able to find millions of dollars over the years that probably would have just been unnoticed and lost because we audit all of our systems. We do balance checks every month, and we just don't let anything get by us. And I think we've got a reputation throughout the industry that always stayed on top of our business when it comes to measurement. So I take a lot of pride in that.

Thank you. Our next question comes from the line of Leo Mariani of Roth.

Hey, guys. I was hoping to dive into Ameredev a little bit more here. Can you give us maybe an update on where current production is there on the asset? And I want to say that they are maybe running a rig. So I just wanted to confirm here that the ninth rig that you're bringing on might be a replacement rig for the rig they're running once the deal closes? Just wanted to kind of get a sense of how you're approaching that asset. I assume you're going to continue to drill on it post-close. I know you've replaced some rigs in other properties in the past. So any color on that would be great.

Yes, this is Brian Willey. I appreciate the question. The Ameredev team has been very professional and great to work with. They are the same team we collaborated with during the Advance acquisition, and they performed excellently with the rig before we took over Advance. We are thrilled that they are doing well with Ameredev as they continue their operations. They are currently managing the rig, and we are effectively coordinating with them. They have the control and make the decisions, but we are moving towards closing, pending regulatory approval. Our teams are working closely with theirs, and I know some of our people have been in Austin collaborating with them as we conduct due diligence and advance the transaction. We are very excited about the acreage; it all starts with the rock, and it's exceptional. I’ll pass it over to Tom to discuss the rock further and share more about Ameredev's activities.

Sure. Thanks, Brian. This is Tom Elsener again. Leo, that's a good question. We're clearly very excited about the Ameredev properties and acquisitions. We're currently observing, and they are doing a great job, as Brian mentioned. We expect similar performance. They are operating one rig, and at the time of the announcement, they had 13 drilled but uncompleted laterals. They are working on getting those finished and brought online. As noted previously, the estimated production for the third quarter is around 25,000 BOE per day with a good 65% oil cut. We are eager to begin working on these properties. They have over 200 federal permits, and we look forward to getting started. I believe the ninth rig will be ready to deploy as soon as possible, and we'll be drilling some promising Wolfbone wells and Bone Spring targets as well. We had 431 gross, 371 net locations that we're excited to develop, coordinating closely with our midstream group and Piñon. We can't wait to get started. We anticipate discussing this further once the deal is closed, which is expected to happen late in the third quarter, and then we'll provide an update.

Our next question comes from the line of John Freeman of Raymond James.

Hi, guys. The topic I wanted to follow up on was just some of what Chris was talking about earlier on just the reduced days on well cycle term improvement. I'm just trying to reconcile maybe the updated guidance with the ninth rig. So it looks like you are saying you get an incremental four gross operated wells with the addition of that ninth rig. And in 2Q alone, you were able to bring online four more gross operated wells that you all had planned on. So I'm just trying to understand how much of those incremental wells in 2Q was due to what you were talking about earlier, Chris, just cycle time improvements versus just maybe a timing sort of an issue, and how to think about maybe that full-year guide if it necessarily might have an upward bias if these cycle times continue?

Yes, John, this is Brian. I will pass it to Chris shortly. Thank you for your question; it's excellent. We are excited to discuss efficiencies. Chris always appreciates that. Looking ahead to Q2, you are correct that we brought on four more gross wells than anticipated, contributing to our performance. Moving forward, we believe that the addition of our ninth rig will allow us to add about four more wells. However, production won't be significant this year since those wells will come online late in December, but we are optimistic about that rig. Chris can provide more details on the ninth rig and the efficiencies it will bring.

Good question, John. The efficiencies we've experienced and reduced time spent on wells is something we've been discussing for many quarters. When we consider quarterly timing, there's often a lot of back-and-forth regarding well completions, especially when they span a quarter. Specifically regarding the ninth rig, as Tom mentioned, we’re looking forward to using it for the Ameredev integration once it closes. One major area of efficiency is the increased use of trimul-frac. We've completed our first pilot test of trimul-frac with the six Dagger Lake South Wells, and we're currently conducting a second test. We've also identified a potential third trimul-frac that could be implemented later this quarter. These advances will contribute to reducing our cycle times. We've factored in savings from simul-frac and fewer drilling days due to simul-frac, but the additional efficiencies from trimul-frac were not something we initially guided on for this year. The reduction in days for well completion, whether on the drilling or completion sides, can be attributed to improved processes and upgraded equipment from Patterson. Our ability to drill longer laterals, use upsized pumps, incorporate high-torque top drives, and increase setback capabilities allows us to push lateral lengths beyond 2 to 2.5 miles, along with improved cycle times for U-Turn wells as I've mentioned before. Our partnerships with vendors have enabled us to acquire superior equipment, including the ninth rig. All these elements contribute to the reduced cycle times we’re experiencing. While it’s challenging to pinpoint specific wells to particular efficiencies, this is an ongoing focus for us as we progress through the program looking ahead.

Our next question comes from the line of Phillips Johnston of Capital One Securities.

Hey, guys. Thank you. Just a follow-up on Leo's question regarding the Ameredev properties. I realize the production is still on track in 25,000 to 26,000 a day for Q3. But as we think out to Q4, just given the uncompleted laterals, would you expect the Ameredev stand-alone volumes to be directionally flat versus the third quarter or would you expect a little bit of growth there?

Hey, Phil. This is Tom Elsener. I think we would look forward to commenting more on that, again, after the deal closes. There are two groups of drilled but uncompleted laterals. The first group going on now and the second is a little bit more uncertain as to the exact timing. And I think it'd probably just be more appropriate for us to comment on that once we close.

Our next question comes from the line of Kevin MacCurdy of Pickering Energy Partners.

Hey. Good morning, and thank you for taking my question. This year, your legacy program will be about 8.5 rigs with really just the eight rigs contributing to production in 2024. And that resulted in pretty material growth throughout the year. Obviously, when you get the Ameredev volumes, then your maintenance production levels will increase. Without asking for too much detail in 2025, do you think that a nine-rig program is sufficient to hold those volumes flat or even grow a little bit?

This is Joe, and I’ll start off by asking Tom, Chris, and Brian to share their thoughts. The importance of reducing days on wells cannot be overstated. If we can shorten the time it takes to drill, our existing rig fleet can manage many more wells. We are optimistic that our rigs will operate more efficiently, and as Chris mentioned, new equipment and techniques are being introduced that should also help decrease drilling time. This will be a crucial aspect as we plan for 2025, determining how many rigs we need and how effective they will be in drilling our targeted number of wells. The next two quarters will provide us with better insights on this matter. We have never aimed for growth just for the sake of it; our expansions are part of a strategic plan and team effort to position ourselves correctly, ensuring our capital expenditures are directed appropriately. There have been years when we could have increased growth if we had allocated less to midstream investments, but without those midstream capabilities today, we would be vulnerable in numerous scenarios. We wouldn’t have the flow assurance or the quick hookups and water disposal capacity we need. Our decision to divert some capital expenditure from drilling rigs to invest in midstream was a strategic long-term move, and we believe it was the right approach. Regarding drilling, we fully encourage our teams to develop a growth strategy while also maintaining the flexibility to seize opportunities, such as the recent ones with Ameredev or Advance. Many aren't willing to part with their best assets, so when quality opportunities arise, we want to be in a position to acquire them. This year, we’ve cautiously managed our rig count to allow for growth or reduction as circumstances dictate. We were in a solid position when Ameredev became available and successfully paid down our line of credit. Our current reserve-based lending has been cleared, leaving us with no borrowing, enabling us to allocate those funds towards Ameredev or midstream expansion, which has been beneficial. An essential part of our strategy is building in as many options each year as possible, considering that each year brings unexpected developments. We strive to maintain flexibility, both financially and through our equipment and team. This balancing act is crucial, and I believe our teams have done exceptionally well in adapting to changing conditions. The unpredictability of events like COVID underscores the importance of preparing for various scenarios while keeping our options open. While it may sound like a cliché, we focus on maintaining that flexibility, which has proven to be a successful strategy over the past 40 years. Starting with just 270,000 in 1983, we’ve continually worked to improve and our teams have done a commendable job in being ready to pivot when needed.

Yes, I completely agree. We often emphasize that this is a people and relationship-driven business. I'd like to highlight two points. First, regarding our relationships with the banks, we’ve mentioned Ameredev earlier. I want to express our gratitude to our banks for their tremendous support. Earlier this year, we visited each of the 19 banks in person, which helped strengthen those relationships, and they have been very beneficial as they supported the Ameredev acquisition. Secondly, it all starts with our employees. We had a remarkable intern program this summer with around 30 interns who have been outstanding. We continually improve our recruitment of the best talent. Looking at our employee stock purchase plan, it's an opportunity for our employees to acquire shares in the company. Typically, a good participation rate in such plans is around 50% to 60%. In our recent period, we achieved an incredible 95% participation, which is almost unprecedented. This speaks to our unity and collaboration. Ultimately, it’s all about the people and the teams. This is a fantastic business and a great industry to be part of.

One other thing I want to add to show the importance and the integral nature of our midstream, we've added to our Board Susan Ward who was at Shell for many years and was their Chief Financial Officer when Shell Pipeline went public. So that gives us another pair of eyes. Are we headed in the right direction? And we're using it to its best advantage. And Gregg and his team have put together just a great group. And I know that the results that we have and what the midstream has done and also built out relationships with a real blue-chip list of companies that are our third-party partners. And it's just as important that we treat them right as any of our teams on their deals. So there's still a lot of wood for us to chop there, but I think that attention is making us a better company.

Thank you, ladies and gentlemen. This ends the Q&A portion of this morning's conference call. I'd like to turn the call over to management for closing remarks.

Thank you very much for participating. After reflecting on Truist's comment about breakfast, I want to assure everyone that if you join us for breakfast, it will be on us. Lastly, I want to highlight that our team has accomplished an impressive amount of work. Ned, could you share our progress since we started with the three zones we were focused on?

Sure, Joe. Thank you. This is Ned Frost, EVP of Geosciences. Joe is referring to when we started in the Delaware Basin, where we focused on three specific zones: the Second Bone Spring, the Wolfcamp A-XY, and the Wolfcamp B. Today, we are producing from 11 different zones, with 25 distinct target intervals that we can map throughout the basin. Achieving this has required collaboration from all our teams, including reservoir engineers, land teams, drilling, and operations to successfully complete these wells. We are very proud of the progress we’ve made over the years and are confident that we have much more to achieve. We appreciate your support and will keep doing what we do.

All right. With that, I'm through. But thank you all for listening in and your time. We really appreciate it. We know it's valuable, and appreciate the relationship.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes today's program. You may now disconnect.