Earnings Call: Q4 2015

Feb 11, 2016

Good morning. My name is Melissa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Keyera Corp. Year-End 2015 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question at this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Ms. Lavonne Smyth, you may begin your conference. Thank you and good morning. It's my pleasure to welcome you to Keyera's 2015 year-end conference call. With me are David Smith, President and CEO, Steven Kroeker, Senior Vice President and CFO, Brad Lock, Senior Vice President, Gathering and Processing Business Unit, and Dean Setoguchi, Senior Vice President, Liquids Business Unit. In a moment, David will provide an overview of the year, followed by an operations update from Brad and David. Steven will provide additional information about our financial results. We will open the call for questions once we complete our prepared remarks. Before we begin, however, I would like to remind listeners that some of our comments and answers that we will be providing today speak to future events. These forward-looking statements are given as of today's date and reflect events or outcomes that management currently expects to occur based on their belief about the relevant material factors, as well as our understanding of the business and the environment in which we operate. Because forward-looking statements address future events and outcomes, they necessarily involve risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties include general economic, market and business conditions, fluctuations in supply, demand, inventory levels, and pricing of natural gas, NGLs, iso-octane, and crude oil, the activities of producers and other industry players, our operating costs and other costs, the availability and cost of materials, equipment, labor, and other services essential for our capital projects, contractor performance, counterparty risk, governmental and regulatory actions or delays, competition for, among other things, business opportunities and capital, and other risks as are more fully set out in our publicly filed disclosure documents available on our website and SEDAR. We encourage you to review the MD&A, which can be found in our 2015 year-end report published yesterday and is available on our website and on SEDAR. With that, I'll turn it over to David Smith, our President and CEO. Thank you, Lavonne, and good morning, everyone. While this is a challenging time for our industry and our customers, Keyera had another very successful year in 2015, delivering record results in all three business segments. Our growth capital investment program has significantly expanded our infrastructure and continues to generate cash flow growth. Distributable cash flow was CAD 2.84 per share in 2015, representing a 20% increase over the prior year. Adjusted EBITDA was CAD 705 million, 33% higher than in 2014. With continued growth in cash flow per share, confidence in our outlook, we increased our dividend twice during 2015 for a total of 16%. Our payout ratio remains one of the most conservative in our peer group at 50% for the full year. Since going public in 2003, Keyera has delivered shareholders 14 consecutive dividend increases and a growth rate in the dividend per share of over 8% compounded annually. Steven will speak more about our financial results later in the call. With the expansion of Keyera's infrastructure, our customers delivered higher volumes of natural gas and natural gas liquids to our facilities and moved more condensate through our system in 2015 than ever before. However, with commodity prices at levels we haven't seen for over a decade, it is a challenging time for the oil and gas industry. While I am confident in the long-term competitiveness of the Western Canadian Sedimentary Basin, in the near term, we as an industry must be able to weather this storm together. Keyera is well-positioned with strategically located assets, a diverse service offering, and a strong balance sheet. We will continue to work with producers to provide efficient and cost-effective midstream solutions that contribute to the industry's long-term success. With that, I'll pass it over to Brad Locke to discuss our Gathering and Processing Business Unit. Thanks, David. The Gathering and Processing Business Unit had a strong year, delivering an operating margin of CAD 259 million, representing an increase of 19% over the prior year, as we are generating incremental cash from our latest capital investments. These investments include the Simonette gas plant expansion and condensate stabilizer, the Twin Rivers pipeline system, the turbo expander at the Ruby gas plant, and the new Alder Flats and Zeta Creek gas plants. Overall, gross throughput volumes for the year increased 5% to 1.5 million cubic feet per day, as increased volumes from our capital investment were more than offset by the effect of curtailments on our third-party sale of gas pipelines, lower drilling activity behind certain facilities, and the completion of 4 planned gas plant turnarounds. In the fourth quarter, gross average throughput volumes were 1.54 million cubic feet per day, an increase over the prior quarter, in part due to TCPL curtailments that were lifted at many of our affected facilities in mid-December. Recent throughputs indicate that a significant portion of the previously curtailed gas has returned to Strachan, Buck Lake, and the Brazeau River gas plants for processing. Looking ahead to 2016, it's reasonable to expect that our throughput volumes may trend lower as many customers have reduced their drilling and development activities in response to the ongoing low commodity price environment. Our producers are continuing to develop resource plays around certain core Keyera facilities, although at a slower pace compared to prior years. For example, the Wilson Creek pipeline expansion that was completed in early 2016 is bringing new volumes to the Rimbey gas plant in the first quarter. Also, at the Minnehik-Buck Lake gas plant, a producer extended their take-or-pay throughput commitment to the end of 2018 based on their continued need for gas processing. As David mentioned, we need to weather this storm together with our customers. At Keyera, we continue to review our operating cost structure to ensure that we are providing the most cost-effective midstream solutions. We are also working with customers to create solutions in the near term that allow for long-term success. I will now turn it over to David to discuss the Liquids Business Unit. Thanks, Brad. As Lavon mentioned, Dean Setoguchi is here with us, but he's not talking because he took an elbow to his jaw in a recent hockey game. I'll be talking about the Liquids Business Unit today, and hopefully, I'll do as good a job as he would. The Liquids Business Unit also performed very well in 2015, with both the NGL infrastructure and marketing segments generating record results. The NGL infrastructure segment operating margin was CAD 220 million, up 16% over the prior year, primarily due to the continued growth in demand for our diluent handling services, high utilization of our fractionation facilities and storage assets, increased volumes at certain rail terminals, and the new deethanizer at KFS that began operating in April. Over the past several years, Keyera has continued to focus on developing natural gas liquids and oil sands-related projects that provide long-term fee-for-service revenues to enhance shareholder value. In 2015, we completed the deethanizer at KFS, expanded our underground storage capacity, and began moving propane out of Alberta from our newly constructed Josephburg rail terminal. In 2016, we will more than double our C3+ fractionation capacity at KFS, supported by long-term contracts. We expect the 35,000 barrels per day of additional fractionation capacity to be available in the second quarter. We are also continuing to expand our 12.5 million barrels of underground storage capacity at KFS. The 14th and 15th caverns are expected to be completed in 2017 and 2018, respectively. In response to demand for crude oil storage, Keyera has partnered with Kinder Morgan to build the Baseline Terminal, a crude oil storage terminal on vacant land at our AEF site east of Edmonton. The initial scope of the project is 12 tanks with 4.8 million barrels of capacity that we expect will be available beginning in the second half of 2017. 100% of the terminal's capacity is underpinned by take-or-pay agreements ranging up to 10 years in length. For our oil sands customers, our industry-leading condensate hub at Edmonton-Fort Saskatchewan provides the most receipt and delivery points and offers customers a flexible and reliable system to source, store, trade, and deliver diluent. As part of our business strategy, we continue to pursue opportunities to enhance our system. In 2015, we agreed to acquire a 50% interest in the southern portion of the Grand Rapids Diluent Pipeline, which is being constructed by TransCanada in partnership with Brion. The pipeline will provide Keyera with an additional 225,000 barrels per day of diluent transportation capacity between Edmonton and Fort Saskatchewan. We have also entered into agreements to purchase and lease an existing pipeline between Redwater and Edmonton. We are currently advancing work to convert the northern portion of the pipeline between Redwater and Fort Saskatchewan into condensate service. Subject to completing our due diligence and securing regulatory approvals, our plan is to use this northern portion of the pipeline to receive incremental diluent under a long-term diluent handling agreement with North West Sturgeon Refinery. The lease for the southern portion of the pipeline will provide us with optionality for other services in the future. Finally, Enbridge is proceeding on schedule with the construction of the Norlite Pipeline, in which Keyera has a 30% interest. Moving on to our marketing segment. Operating margin was CAD 244 million in 2015, higher than 2014, primarily due to the success of our iso-octane business. Keyera continued to benefit through 2015 from low butane feedstock prices, strong demand for gasoline in the summer driving months, higher octane premia, and a weak Canadian dollar. In addition, each of our other NGL products, butane, propane, and condensate, contributed positively to the marketing segment's operating margin, reflecting our effective risk management strategy. Looking ahead, we are confident in the 2016 outlook for the Liquids Business Unit. Our iso-octane sales volumes will be lower due to the planned six-week turnaround at AEF beginning in September, but we expect to be generating cash flows from the frac expansion at KFS by mid-year, and we will see a full year of cash flows from the various projects that we completed in 2015. The Liquids Business Unit generates multiple cash flow streams through our facilities from the sale of products and services related to diluent, solvent, crude oil, iso-octane, propane, butane, and other related products. It is a diversified business. With that, I'll turn it over to Steven to discuss the financial results in more detail. Thanks, David. As mentioned earlier, we had a successful year with all three business segments generating record results. Our results reflect the strength and diversity of our cash flow streams and the fact we completed a number of strategic growth initiatives that are generating incremental cash flow. The iso-octane business and our overall risk management strategy also continued to give strong results. Adjusted EBITDA and distributable cash flow were strong for both the fourth quarter and for the year. For the fourth quarter, adjusted EBITDA was CAD 175 million, distributable cash flow was CAD 0.72 per share. For the year, adjusted EBITDA was CAD 705 million and distributable cash flow was CAD 2.84 per share. The 2015 adjusted EBITDA includes approximately CAD 40 million of cash gains from the first quarter related to financial and physical hedges. That, when combined with realized gains in the fourth quarter of 2014, substantially offset our 2014 year-end inventory writedown. In 2015, approximately 65% of our operating margin was earned from our fee-for-service business. As well, total operating margin was diversified across various business segments. Gathering and Processing, 35%; NGL Infrastructure, 30%; Marketing, 33%; and other income, which includes our oil and gas production, 2%. Net earnings for the year were CAD 202 million, compared to CAD 230 million in 2014. Consistent with Keyera's growing business, general and administrative expenses, depreciation and amortization expenses, financing costs increased year-over-year. Our 2015 net income included non-cash impairment expense of CAD 95 million due to asset write-downs during the year. Current income taxes were CAD 88 million in 2015, compared to only CAD 32 million in the prior year. This increase was due to the growth in our business, which increased taxable income and exceeded our available capital cost allowance deductions. We expect our cash taxes to be significantly lower in 2016, estimated at between CAD 15 million and CAD 25 million, due to increased capital cost allowance deductions from several major capital projects that are now available for use. In 2015, Keyera invested CAD 641 million, including acquisitions in growth projects, supported primarily by fee-for-service contracts without direct commodity price exposure. In 2016, we plan to invest between CAD 600 million and CAD 700 million in growth capital projects that will focus primarily on NGL infrastructure backed by customer demand. Keyera is well-positioned to fund this program, given our strong balance sheet and liquidity, our low payout ratio, our dividend reinvestment plans, and our accessed accounts. That concludes my remarks. David. Thanks, Steven. As our 2015 results demonstrate, demand for Keyera's products and services continues to be strong. While 2016 will have its challenges, we will continue to manage the business for the long term and are very well positioned to weather the current downturn in the industry. Our assets are strategically located within the Western Canada Sedimentary Basin above some of the most economic geological zones, where producers remain active. Our condensate network, marketing services, and iso-octane business provide diversity to our cash flow streams. We have one of the strongest balance sheets in our peer group. At the end of the year, our net debt to EBITDA ratio was 2.3 times, which provides us with the flexibility to selectively pursue the right projects and acquisitions. In 2016, we expect to benefit from the capital investments that we've made over the last few years as projects ramp up to generate incremental cash flow. As Keyera is a service provider to the energy sector, we will work with our customers during this challenging time to provide midstream solutions that are efficient and cost-effective to help support the overall competitiveness of the Western Canada Sedimentary Basin within the global market. On behalf of Keyera's directors and management team, I would like to thank our employees, customers, shareholders, and other stakeholders for their continued support. With that, I'll turn it back over to the operator. Please go ahead with questions. At this time, I would like to remind everyone, in order to ask a question, press star then the number 1 on your telephone keypad. We'll pause for a moment to compile the Q&A roster. Your first question comes from the line of Linda Ezergailis from TD Securities. Your line is open. Thank you. Just have a question about your gathering and processing volumes. I'm thinking that maybe we might see some increase in the first quarter if you're still benefiting from sales gas restrictions being lifted, and then that dissipates. Or can you comment about what you're seeing so far in the first quarter? Linda, this is Brad. We've certainly seen some of the volumes come back that were curtailed due to the TCPL restrictions that impacted us through most of 2015. Those volumes, for the most part, have remained consistent through the current. It's hard to say what's gonna happen through the remainder of the year. There's pockets of our business where producer activity continues to be reasonably robust, and there's other areas where it's softened out. All in all, we're cautious, but we don't expect the impact of either slightly declining volumes to be that material. Okay, thank you. Just maybe a follow-up question for Steven or David. With respect to your capital budget range now tightening a little bit, clearly that could change if you see other projects or acquisitions opportunistically. How might you think about dividend growth and payout ratio going forward? Has that shifted a little bit to keep some powder dry in case assets come up for sale more from producers? How are you thinking about capital allocation? Linda, we don't provide guidance, as you know, around our dividend policy and our. We don't have a target growth rate or a target payout ratio. Having said that, our payout ratio at 50% gives us a fair bit of cushion. The board, each quarter, looks at a whole variety of different factors, including our cash flow outlook and our capital expenditure outlook. We've had a pretty good track record of growth in dividend per share, and at this point, I don't see any reason why that kind of a track record can't be continued. I think it's fair to say that we are being somewhat cautious just because of the industry outlook at this point. Great. Thank you. Another thing that I would mention too, is that as we bring on some of the projects that are underway currently, we will see a growth in the portion of our cash flow that's represented by long-term contracts, fee-for-service business. Projects like Norlite and Baseline Terminal will provide a fair bit more certainty to the cash flows from those parts of the business as we look forward. Okay. Thank you. Okay. Your next question comes from the line of David Galison from Canaccord Genuity. Your line is open. Good morning, everyone. I guess I'd like to touch on the gathering and processing volumes. If we do see the volumes trending lower, just wondering if you could maybe talk about some of the potential flexibility you might have in the system, either through tolling or other levers that might help provide some offset? I guess, certainly with the network of plants that we have and the interconnected network that we've built, it certainly does give us some flexibility to move volumes around if they're warranted. I think ultimately, we've got to ensure that we are managing the volume expectations and the fees on behalf of our customers as well. It's hard to comment specifically on what kind of things that we could do, but I think, we certainly, because of our connectivity, it gives us a fair bit more flexibility than other companies may have. Okay. Just on the M&A front, I know you really can't comment around specifics, but just wondering, in your discussions that you're having with producers for potential asset divestitures, can you maybe provide some color in general around what type of valuations are you seeing? Or is there a disconnect still between what maybe the producers may be looking for versus what Keyera might be looking to pay? David, it's David Smith here. I'll comment on that. We haven't really changed the criteria that we apply to acquisition opportunities. It's a little early to say whether vendor expectations are changing. What I would say is that there still seems to be lots of buyer interest out there for assets. We've seen a number of transactions recently that involve both the traditional players as well as some new players funded by private equity that have been active. I think it's still a very competitive business. We at Keyera have a very good idea of what the criteria are, both strategically and economically, that we would apply to the kinds of opportunities that we look at. Having assets that are sustainable long-term is the number one priority for us. Okay. Thank you very much. Your next question comes from the line of Ben Pham from BMO Capital Markets. Your line is open. Okay, thanks. Good morning. Just want to stick with the G&P commentary on just some of the volume side of things, the commentary on potentially the softening the volumes. I wanted to clarify, have you come up with that commentary because you've already been seeing some volume declines and you're extrapolating that, or is that more your customers saying, "Hey, if commodity prices stay at X, then we might have to shut down some production. I think if we look at our throughputs quarter-over-quarter and year-over-year, to this point, we have not seen a decline in volumes on aggregate across our facilities. We see individual plants that are seeing some declines, and we're seeing other plants that have growth. We're just cognizant that if you look at the drilling activity that's occurring today, it's significantly lower than we've seen in years past. Naturally, over time, that has the potential to extrapolate to reduced volumes to our throughputs. We don't have producers that are telling us their volumes are going to be lower, and we don't have an expectation of lower volumes. We're just looking at the science and industry and trying to be cautious about what we could see through 2016. Okay, great. Thank you for clarifying that. Also wanted to see if you can expand on your commentary about I think you've described it as creative solutions near term. Can you expand on that? Well, maybe I'll take that one, Ben. What Brad was referring to is that we're looking very hard at our whole network to identify areas that we can achieve cost reductions. In most cases, those cost reductions would flow directly to our customers because of the flow through of operating cost. What we're trying to do is to be as responsive as we can be to this low commodity price environment. In areas where we can eliminate more expensive components of plant operations, we will do that. In areas where we can take volumes to plants that have efficiencies and other advantages, we will do that. We have a tremendous advantage, particularly in the west central area of Alberta, where we have a network of a variety of different gas plants that are connected with gathering systems. That's an area where we have seen continued activity. As specific examples, we're very happy so far with the volume and cash flow performance of the two new plants that we added to the portfolio in 2015 at Alder Flats and Zeta Creek. We continue to look at things that we can do, both short-term and long-term, in this environment to try and be as efficient as we can be for our customers' benefit. Okay. That's great. That's all for me. Thanks. Your next question comes from the line of Robert Kwan from RBC Capital Markets. Your line is open. Good morning. Maybe just continuing a little bit on there. You laid out some of the creative solutions that you're trying to do within your network, but one of the things I think you guys saw in the last downturn was volumes coming out of smaller facilities from others into some of the larger, more efficient plants like your own. Is that something you're having discussions with or anything that you're seeing right now, just given, again, your larger efficiency kind of end-to-end chain out there? Yeah, I would say that's exactly true. There's a number of facilities in the neighborhoods of our plants that are small. As those producers look for enhanced efficiency, they're looking at plants like ours where they can gain some of that. I think that those discussions are certainly going to continue as we go forward as producers try to optimize their portfolio and come to us looking for those creative solutions that I talked about. Okay. Brad, you talked about drilling activity. Have you had some discussions there with, I'm sure you have, but what's the nature then, or the feedback you're getting from your customers post some of the royalty clarity that we have? Did you sense from them that people maybe were holding back a little bit with the drilling plan where there wasn't a lot of clarity around things like deep drilling credits and with this clarity that maybe we will see, albeit at a lower level, but still see some pickup in drilling that might have been held back? It's kind of hard to say. I think the producer community out there that we engage with regularly is cautious. They're cautious both on their capital allocation, commodity prices. I think the royalty review and the uncertainty around that contribute to that as well. The fact that the royalty review has now provided a little bit of clarity on what the go-forward plan is, I think it's maybe one sense of relief, but they've got a lot of headwinds that they're still facing. I think they're trying to optimize their drilling programs to the places where they can make the best returns for their drilling dollar. Fortunately for us, a lot of our plants are located in places where they can get those optimum returns. That's why it's hard to say when you see an overall drilling decline in the basin. There's areas around some of our plants that are continuing to see activity. Right. The overall impact is hard to predict today. Robert, I would add to that I think the clarity around the royalty program has certainly helped. Many of the zones in the areas around our facilities are still economic at the prices that we're seeing, although not nearly as attractive with low liquids prices. What's constraining the drilling more so than the economics of the resource play is simply the availability of cash flow. A lot of the reduction in capital programs that you're seeing announced over the course of the last few weeks is really just a response to expectations of lower cash flow and availability of funding. Okay. If I can just ask one last question here. Historically, when we've seen a more challenging commodity price environment, that's often been a time where you've picked up G&P assets. I guess, just with the prolonged downturn here, has it changed how you're approaching potential M&A activity? I would say no. I think we still have a pretty good sense for what the nature is of the facilities that we'd be interested in purchasing. It's no secret that we would like to have a stronger presence in the Montney, and if we could find the right opportunity to establish more of a foothold in the Montney, we would. Our criteria really haven't changed. I think what often happens in this kind of a downturn is that a lot of the smaller, less efficient facilities end up shutting down. Those are the kinds of facilities that we wouldn't have a big interest in the first place. Okay. That's great. Thanks, David. Thanks, Brad. Thanks, Robert. Next question comes from the line of Andrew Kuske from Credit Suisse. Your line is open. Thank you. Good morning. I guess it sounds like Dean's in a pretty rough hockey league from the sounds of things. Onto my first question. Given the fact you've got a bit of a good partnership culture, and if I look at what you've done on an asset basis with Enbridge, with TransCanada, and then also with Kinder, how do you think that plays out with maybe other potential opportunities in the current environment we're seeing where people are facing some tough decisions on infrastructure assets and maybe trying to get creative themselves? I guess, David, how do you think this partnership culture that you have pans out in the future for growth opportunities? It's an excellent question. I think what I would say just as a premise or as a preface is that we at Keyera always look at what's the best solution for industry. It might be better for us to go out and build some assets 100%, but if that means that things get overcapitalized and creates an inefficient infrastructure, then that's not the right long-term solution for the industry. In each of the arrangements that we have with Enbridge and with Kinder Morgan and with TransCanada and Brion now, and with the two gas plants that we participated in in 2015, what we're trying to do there is just try and do our part to create the most efficient infrastructure that we can for the benefit of the industry. We think that that will stand the test of time and add cash flow for us as well. I think in the current environment, there's a lot of companies that are looking for ways to try and create alternate sources of funding without sacrificing their strategic levers. I do think that that will create some interesting partnership opportunities as they look for ways to spread the capital cost, still have a participation. I think that's exactly what we did last year with Velvet and with Bellatrix at the plants that we participated in. It's quite possible we'll see more of those kinds of structures. Okay, that's helpful. Maybe just asking a question in geographic terms, Canada versus the U.S. Obviously, we've seen a really steep sell-off in the values of a lot of the MLPs in the U.S. Do you take a view that there's some interesting basins you may want to have exposure into, or this is an opportunity to either do partnerships or just get in areas where you don't currently have exposure or just bulk up existing exposure, whether Canada or the U.S.? Well, the U.S. is an area that we've looked at, and we've looked at opportunities in the past. As you point out, in the past, the MLPs have had a very aggressive approach, and that's perhaps changed with the different cost of capital now. We will continue to be selective in the things that we look at outside of our backyard. We are excited about the potential for the Hull terminal that we acquired from ExxonMobil a few years ago, and we're in the process of looking at things that we can do to enhance and expand the business that we do at Hull in Texas. If we saw the opportunity in the U.S. to do similar kinds of deals where we can bring something to the table, I think we will. I think we're going to be very cautious about making a big step in that direction. Okay, that's helpful. Thank you. Your next question comes from the line of Steven Paget from FirstEnergy Capital. Your line is open. Thank you. Good morning. You've talked about buyer interest in new gas processing, but what about seller interest? Are E&P companies more willing to monetize their gas plants? Depends on which one you talk to, Steven. Some of them are still sticking to the religion of constructing and owning and operating all of their own facilities. Others, I think, are now in the current environment, more interested in finding ways to use their facilities in a way to create more capital funding for more drilling and development of reserves and production. I would say we're probably seeing more. I think it's fair to say we're seeing more, but it's really company and situation specific. Okay. Thank you, David. It looks like Alberta went from a butane surplus to a market with some net butane imports back to a surplus again, and please correct me if I'm wrong. Are Keyera and specifically AEF better off now that there's more butane in Alberta? I guess the short answer would be yes. Butane over the course of the last few years has been relatively balanced in Western Canada. The supply and the demand, if you look at it on a year-to-year basis, are relatively in balance. Seasonally, though, Steven, what we do see is that during the summer months, butane tends to be in surplus, and that's when we have taken the opportunity to bring some volumes of butane in by rail at a time when we can get it cheaply and use our storage to take advantage of soft prices for butane. Butane doesn't get used as a blend stock as much during the summer months as it is in demand during the winter months, and so that's why you see that seasonality. We are also seeing, of course, new fractionation capacity coming on in 2016 with our project and with Pembina's project. I think that that will likely create some additional supply. Overall, across North America, we've certainly seen, just like all the other NGL products, we've certainly seen a growth in supply for butane, and that's created a somewhat softer price outlook, which is beneficial for AEF. Well, thank you, David. The third question, if I may, is about the propane transportation system out of Alberta. Is that network about as efficient as it can be now with Josephburg up and running, or is there additional infrastructure investments to be made, either in Alberta or other points to improve propane netbacks for producers, especially now that more fractionation is coming? Well, it's my understanding that both Pembina and Plains are also adding to their rail loading capability for propane, Steven. I think that with Josephburg and with the investments that Plains and Pembina have made, I don't think we see a need for additional propane egress at this point. Of course, the challenge for the industry is to find markets for the propane. North America is oversupplied currently, and that's why we've seen prices for propane so low. The ultimate answer for that is to see more exports out of North America. We are seeing a significant ramp up in exports, most of which are coming out of the U.S. Gulf Coast. There are a number of companies that are looking at trying to create a West Coast alternative for propane exports. So far, those have been running into some regulatory challenges. That's what we need to rebalance the market across North America is continued growth in exports offshore. David, I think you said that we need more offshore exports. How long is it before Keyera needs to be contacting offshore customers to sell propane? Well, we've had some of those contacts already. We haven't been aggressively pursuing an export terminal option ourselves, simply because we just feel like there's other opportunities for us, and we know other companies are pursuing those alternatives. We are trying to extend our infrastructure at Hull in order to be able to take propane by rail to Hull and then from there into Mont Belvieu so that it's available for export. Those are some of the things that we're looking at to try and improve the value chain. You might market overseas through a third party's export terminal? That's a possibility, Steven, but that's still well down the road. It's not something that we're looking at imminently. Well, thanks. I've had more than enough questions. Again, if you would like to ask a question, press star, then the number one on your telephone keypad. There are no further questions at this time. I'll turn the call back over to the presenters. Thank you everyone for listening today. This completes our year-end 2015 conference call. If you have any other questions, please feel free to contact either Nick or myself. Our contact information is in yesterday's release. Thank you and have a good day. This concludes today's conference call. You may now disconnect.