Good morning. My name is Sylvie, and I will be your conference operator today. At this time, I would like to welcome everyone to Whitecap Resources and Veren Combination Conference Call. Note that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star and number one on your telephone keypad. If you would like to withdraw from the question queue, please press star and number two. I would like to turn the conference over to Whitecap's President and CEO, Mr. Grant Fagerheim. Please go ahead, sir.
Thanks very much, Sylvie. Good morning, everyone, and thank you for joining us. Before we get started today, I would like to remind everybody that all statements made by the company during this call are subject to the same forward-looking disclaimer and advisory that we set forth in our news release issued earlier this morning. There are five members of our management team here with me today: our Senior Vice President and CFO, Thanh Kang; our Senior Vice President, Business Development and Information Technology, Dave Mombourquette; our Senior Vice President, Production and Operations, Joel Armstrong; our Vice President, West Division, Joey Wong; and our Vice President, East Division, Chris Bullin. We are also joined by Craig Bryksa, President and CEO of Veren.
Together, we announce today that our two very successful companies, Whitecap and Veren, are combining to create an industry-leading light oil and condensate producer focused on profitability and long-term sustainability to drive stronger shareholder returns. We are excited about the opportunity to consolidate our highly prolific assets in unconventional Montney and Duvernay, as well as expand our free cash flow generating capabilities in Saskatchewan, where there is significant asset overlap. I commend Craig and the entire management team and staff at Veren for what they have done over the past several years to arrive at a place where this transaction makes the most sense for each respective company. The combined company will be approximately 370,000 BOE/d, 63% oil, condensate, and NGLs, and have an enterprise value of approximately CAD 15 billion.
This moves Whitecap into a large-cap category, and we become the seventh largest oil and gas company by production size in Canada. Our significant land holdings in the Montney and Duvernay total 1.5 million acres, with current production of 220,000 BOE/d. We have a best-in-class unconventional portfolio, and we will look to leverage the combined team's experience and expertise to improve the already robust economics and capital efficiencies in the area. Our combined conventional asset base has current production of approximately 150,000 BOE/d, consisting of high-netback and low-decline light oil opportunities across Saskatchewan and southern Alberta.
With 40% under secondary or tertiary recovery, the decline rate less than 20%, our team has done a great job of improving inventory duration and type curves on our conventional assets over the past few years, and we expect that leveraging the wealth of experience across both teams will provide many opportunities for inventory enhancement into the future. The combined company will reap the benefits of increased data flow, technical analysis, and operational experience to immediately strengthen capital programs, improve efficiency, and increase profitability for shareholders. The transaction metrics provide an attractive step-off point for the combined entity with 10% accretion on funds flow per share and 26% accretion on free funds flow per share. There are significant opportunities for corporate operating and capital synergies to further improve free funds flow and returns to shareholders.
We have initially identified over CAD 200 million of cost synergies, which we expect to realize over the 6-12 months period of time from closing of the combination, and we look to expand those opportunities through an integration period. We are targeting annual capital cost synergies of CAD 100 million driven by optimization of the combined company's technical workflow, supply chain management, and drilling completions program. Operating cost synergies are targeted to be CAD 75 million derived from workforce consolidation, supply chain efficiencies throughout the asset base. In addition, we anticipate corporate cost synergies of CAD 30 million from reduced go-forward G&A as well as lower cost of debt through an improvement to our credit profile.
Whitecap has a track record of improving asset-level performance to drive higher returns and profitability of acquired assets, and the combined technical and support teams will have the technical expertise to integrate and unlock additional value beyond what has been initially identified. Our balance sheet is in excellent condition with forecast debt to funds flow of 0.9 times at closing. Given the free funds flow profile of the combined company, we forecast net debt to further strengthen to 0.8 times or better by year-end 2026. Whitecap will continue to pay a CAD 0.73 per share annually. The sustainability is further strengthened by the stronger cash net back and free funds flow profile of Veren's assets. Veren's shareholders will begin receiving the dividend at closing.
Combined production is approximately 370,000 BOE per day, and based on a $70 WTI and a CAD 2 AECO price, is expected to generate run-rate funds flow of CAD 3.8 billion on annual capital expenditures of approximately CAD 2.6 billion, resulting in CAD 1.2 billion of free funds flow. Over the next couple of months, we will optimize the second-half capital program and plan to provide detailed 2025 guidance on close of this transaction. I'll now pass it off to Craig Bryksa, President and CEO of Veren, for his comments on the transaction. Craig?
Thanks, Grant. First and foremost, I echo everything that Grant said about this transaction. By combining Veren and Whitecap, we have made a stronger and more resilient organization, creating further value for all our shareholders. We are combining two safe operators with top-tier assets and joining very talented people from both companies. We expect to continue delivering robust results and drive increased efficiencies. Both companies have been strategic and disciplined in their approach to building and developing these great assets. I truly believe the combined company, with an enhanced excess cash flow profile, strong financial position, and compelling return of capital, is perfectly positioned to be more competitive and create further shareholder value. Before passing it to Joey, I want to thank every employee of Veren for their commitment and dedication over many years as we continue to strengthen our company.
It's now time for the next chapter, with the combined company leading the path forward. I will now pass it off to Joey Wong, Whitecap's Vice President, West Division.
Thanks, Craig. As noted, over the past number of years, our two companies have firmly established themselves as premier operators with complementary positions in the Alberta Montney and Kaybob Duvernay. This has been achieved through a combination of acquisitions and organic growth on these world-class unconventional plays. These plays represent some of the highest quality remaining untapped unconventional potential in North America. The combined company now owns an impressive 1.5 million acres in the Alberta Montney and Kaybob Duvernay, of which two-thirds of the total are in the Montney and the other one-third the Duvernay. The size and scale in these two high-impact plays will provide accelerated opportunities for continuous improvement to our respective capital efficiencies.
Initiatives such as rig line and program optimization, market efficiencies through our ability to make larger commitments with our service providers, and the application of best technical practices from both Whitecap and Veren's technical teams are expected to yield premium returns as we progress our development. We anticipate further synergies can be obtained through utilization of the combined infrastructure footprint, with streamlined operations and optimization opportunities to improve net backs. The consolidation of these assets will also unlock long-term infrastructure solutions on a more cost-efficient basis to enhance profitability. We will apply our unconventional development workflows to these joint lands to quickly identify technologies or approaches, whether those be established or emerging, that can be applied to our operations.
Opportunities including well spacing, vertical benching, completions technology, real-time frac optimization, and reservoir-tailored production strategies will all be investigated, and shared learnings from both technical teams can be expected to come together to provide optimized and predictable results in our development of the combined assets. The Whitecap and Veren land positions, which contain adjacent and in places overlapping assets, will give rise to geographical synergies in both the near and longer term. We will look to leverage this position to optimize development across this land base with opportunities to shift capital based on localized or regional considerations. The combined entity also provides impressive diversification across a wide range of product mixes.
From the liquid-rich gas to condensate to the volatile oil window, our exposure to the full spectrum of products in both the Alberta Montney and Duvernay will provide the opportunity to strategically move with commodity price signals, capturing the maximum value at the right time on these lands. With over 4,800 inventory locations, of which over 2,600 pay out in less than a year and a half for what we call premium inventory, we have the ability to grow this business for decades to come. Also, of those 4,800 inventory locations, we will only have 19% booked, providing a long runway of predictable growth into the future. With that, I will now pass it over to Chris Bullin, Vice President of our East Division, to talk about the combined conventional assets.
Thanks, Joey. The conventional division becomes an extremely robust entity that brings together over 150,000 BOE/d a day of high net back, 81% liquids-weighted, light oil-focused volumes that drive corporate free funds flow generation. The combination of Whitecap and Veren lands in Saskatchewan provides an ideal opportunity as these lands complement each other exceptionally well, which has further solidified our position as the premier conventional producer in Saskatchewan with the largest producing volumes per day when excluding heavy oil thermal operations. We continue to be the most active conventional driller in Saskatchewan, and now with our combined activity become even more significant with approximately 200 wells planned to be drilled in Saskatchewan for 2025.
These sustainability-driven assets are further enhanced in aggregate as overall base declines are reduced to less than 20%, bolstered by the increased weighting in EOR volumes from both of Veren's dominant positions in the Viewfield Bakken in eastern Saskatchewan and the Shaunavon in southwest Saskatchewan. With approximately 60,000 BOE/d under secondary or tertiary recovery within the division, 80% of which resides in Saskatchewan, Whitecap is the dominant conventional EOR producer in Saskatchewan. The overlay with the existing Whitecap lands provides an optimal opportunity to realize the benefits of the combination. Conventional synergies are expected to drive drill, complete, equip, and tie-in savings of approximately CAD 25 million on an annual basis. This primarily comes from program rephasing and savings related to size and scale.
From an inventory perspective, the conventional division has strengthened with this high confidence and repeatable portfolio that now increases to approximately 7,000 locations strong, including over 2,600 premium locations to support over 15 years of running room. Our conventional division is the foundation for free cash flow generation, and the team continues to find opportunities to enhance our already robust inventory duration. When combined with the unconventional division, this complementary asset portfolio is able to deliver both sustainable cash returns and long-term growth for our shareholders. I will now pass it to Thanh to discuss the financial details of the transaction.
Thanks, Chris. The pro forma company is more resilient and financially strong with strengthened funds flow and free funds flow generating capabilities. At $70 WTI and CAD 2 per GJ AECO, Whitecap's funds flow net back increases by 9% in 2025 and 14% in 2026, given better commodity price realizations and lower cost structure of the pro forma company. The combined entity will have CAD 10.1 billion of tax pools, of which CAD 900 million are non-capital losses. In addition to the cost synergies previously mentioned, we are also able to accelerate the use of these non-capital losses and reduce the expected taxes payable by the pro forma company by CAD 65 million in 2025. At 370,000 BOE/d, the pro forma company has run-rate funds flow of CAD 3.8 billion based on $70 WTI and CAD 2 AECO.
After annual capital spending of approximately CAD 2.6 billion, we generate a robust CAD 1.2 billion of free funds flow to support cash returns to our shareholders. The pro forma balance sheet is in excellent shape, with net debt forecast to be CAD 3.5 billion on closing or 0.9 times debt to funds flow. Of the CAD 3.5 billion, we anticipate approximately CAD 1.9 billion drawn on the credit facility, CAD 200 million of legacy private placement notes, and CAD 1.4 billion of investment-grade bonds outstanding. Concurrent with closing of the combination, we will look to expand our bank credit facility to approximately CAD 3.5 billion, which will provide us with CAD 1.6 billion of unused capacity. The pro forma company is expected to have an improved credit profile with the potential to reduce our go-forward cost of debt.
Long-term, we are targeting net debt between CAD 2.5 billion and CAD 3 billion, which at $50 WTI and CAD 2 AECO represents a debt to funds flow ratio of between 1-1.2 times to improve our already strong financial position. Given the strength of the balance sheet, low leverage, improved credit profile, we maintain the flexibility to continue to execute on share repurchases to enhance our per-share growth and improve our capital structure longer term. With that, I'll turn it back over to Grant for his closing remarks.
Thanks very much, Thanh. We are excited to merge the two world-class assets under Whitecap umbrellas to create a best-in-class technical, operating, and financial team with the objective of providing sustainable, top quartile returns to shareholders. The pro forma company will be more resilient and better able to manage the current macro environment, including the ongoing threat of tariffs and commodity price volatility. I would like to sincerely thank Craig, his management team, and board of directors for recognizing the strength of the pro forma entity and making this merger happen for the benefit of both shareholders. We are very excited about the potential of the combined assets and look forward to executing on our capital, operational, and financial plans to drive superior shareholder returns. With that, I'll now turn the call over to Sylvie for any questions. Thank you.
Thank you, sir. Ladies and gentlemen, as stated, if you do have questions, please press star followed by one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to withdraw from the question queue, simply press star followed by two. We do ask that if you're using a speakerphone, to please lift your handset before pressing any keys. Please go ahead and press star one now if you have any questions. First, we will hear from Patrick O'Rourke at ATB Capital Markets. Please go ahead.
Hey, guys. Good morning and congratulations on this very transformational transaction here. I guess first question with respect to the CAD 200 million in synergies, you sort of unpacked a little bit there. Just wondering, as you look out at the combined pro forma entity here over the next few years, where that possibly could trend to at the upside and beyond what you've named here, what would sort of be the first things you target?
Yeah, Patrick, it's Thanh here. With respect to the synergies that we've initially identified here in excess of CAD 200 million, what we're looking at is approximately CAD 35 million from a corporate perspective. Of that, CAD 25 million, we're expecting to be able to reduce from a G&A perspective, and then potentially CAD 10 million of that associated with an improved credit profile going forward here. The CAD 100 million of capital synergies that we're looking at, that's roughly broken down, I would say about CAD 25 million of that would be from our conventional assets and CAD 75 million of that on the unconventional. We've got about CAD 75 million that we've additionally identified from an operating cost perspective there. There's obviously going to be more upside potential that we see.
Once we bring the teams together for them to do a deep dive on the assets there, not only the infrastructure side but across our asset base there to look at ways to improve upon the initial CAD 200 million that we've identified. Between now and closing, our objective here is to look at the second half program there and really build out an optimized program both on the capital profile as well as the production profile there. Very comfortable and confident around the ability to achieve the initial CAD 200 million. Give us a little bit of time here. We just announced it today. We'll provide more color here over the next 6-12 month period of time.
Okay, great. I guess when you think about the combined portfolios here, there's a lot to look at. Are there any potential areas of disposition in the future here?
Patrick, at this time, I think that Veren has done a very good job of disposing of non-strategic assets as we have. We will certainly look at that in conjunction with the two management and operating teams to see if there are any other assets that we would like to dispose. At this particular time, we have not assumed that there would be, but we will obviously look at it. If there is not value that can be created on the combined assets, we can look at that particular time to dispose of. We are not active on that file at this time.
Okay. Congratulations again, and thank you very much.
Thanks, Patrick.
Next question will be from Michael Harvey at RBC. Please go ahead.
Yeah, sure. Good morning, guys. I guess just a couple of quick ones. I guess mostly just on the capital allocation. When you take a look at the assets, and I know obviously you'll probably do a deeper review, how do you see the allocation changing between just the sum total of what the companies were previously? Would you expect to spend more on the Montney, more on the Duvernay, et cetera? Just that type of thing. On the return of capital, it looks like I would expect to continue with the existing-based dividend, and then the rest goes to buybacks. Maybe if you could provide a bit more color on how that might change or increase over time would be helpful. Thanks.
Yeah, hey, Mike. It's Thanh here. In terms of our capital allocation, I would say on a preliminary basis, what we've provided in terms of guidance, that remains unchanged. Similar with Veren as well. I would say we would add the two together. That's the base case. As we've talked about here, give us a little bit of time between now and closing. Take a deep dive, bring the team here and really look at ways to optimize not only the back half capital program here, but also in 2026. We'll provide a little bit more color on that on closing here, Mike. I would say base case, use what we have in terms of guidance to the market at this time. I would just combine the two. I expect that it would look better once we close the transaction.
In terms of the return of capital framework here, I mean, the balance sheet is in excellent shape. 0.9 times debt to cash flow, lots of liquidity that's available to us here. I think our objective as we think about the balance sheet longer term is to get that debt down to somewhere in that CAD 2.5 billion-CAD 3 billion, which we see ourselves at $70 WTI being able to achieve that sometime in 2026 there, which is, again, at a stress-tested low price of $50 WTI, is between 1-1.2 times. In terms of the dividend, it's a healthy dividend at this time here for both of our shareholders. Feel very comfortable that it's sustainable through commodity price cycles. I think the ability for us to have the flexibility around share repurchases is going to be important, especially considering how strong the balance sheet is.
I would say priorities from a capital allocation, number one, the balance sheet, number two, sustainability of that base dividend. The rest we'll look at executing on the NCIB on an opportunistic basis.
Yeah, that's perfect. I just wanted to follow up on Patrick's question just on the synergies. You did kind of address this one, but is there kind of just like one or two things in there that folks could kind of hold on to in terms of these are going to be a significant part of the synergies, whether it's shared plants, et cetera, or is it going to be mostly a whole collection of smaller things? Just kind of one or two things that folks could kind of hold on to there.
Yeah, when we're looking at the synergies on the operational and the capital side, kind of broke that into three groups there. We're looking at our ability to first commit to our programs on a longer-term basis with a bit of scale there. Being able to utilize our rig lines and optimize throughout those. We're talking about the purchasing power that's associated with that, larger contracts with preferred services, tubulars, prop and frac, those types of things. Then it's the application of our joint technical best practices. As we get the two teams together, see how the execution has gone to date and see how we can kind of torque that to improve that into the future. That all kind of makes sense?
Perfect. Appreciate the color, guys.
Thank you. Next question will be from Travis Wood at National Bank Financial. Please go ahead.
Yeah, thanks for taking my question. Joey, this one's probably for you. Just wondering, as you think about larger scale integration, and I know there's some synergy capture across the infrastructure side as well, are you long processing capacity right now kind of on a pro forma basis? Is there opportunity to integrate some of the Veren assets into the Lator facilities through expanding out infrastructure?
Yeah, thanks for the question there. Yeah, in terms of infrastructure, there are going to be places where there's a decent amount of adjacent properties or even a little bit of overlap. Kaybob is an area that comes to mind for that where we do have the infrastructure that we're right in each other's backyard there. The question about Lator specifically, as it stands right now, the Lator facility is built and custom tailored for that Lator development. At least immediately, we don't see bringing development from outside that area into Lator.
With the passage of time and again, getting the technical teams together, understanding the asset bases, understanding what levels of infrastructure buildout we have planned and processing agreements we have arranged, we will look to incorporate both of those and see not just from an infrastructure point of view in terms of the pure buildout, but then how we fill the white space that we have already kind of got rolling. As has been talked about a bunch on both sides, both Veren and Whitecap had some pretty good plans laid out in front of us to support our respective five-year plans. Again, we will look to see what makes the most sense once we start from the bottoms up, start to see where we want to allocate that capital and fill in the gaps there.
Okay, perfect. My second question kind of relates to the five-year plan, I guess. Maybe this is for Chris for the eastern side of the portfolio. How do you see the waterflood or more of the broader EOR program starting to impact that decline? I know you've kind of earmarked the conventional portfolio, I think, at around 20%. What could that look like through the five-year plan? As you integrate some of the waterflood out of Veren and potentially I'm asking this a little bit too early as you integrate the assets, just thinking about the free cash potential out of that conventional portfolio longer term?
Yeah, thanks for that, Travis. It's Chris here. Obviously, the EOR is a big focus for us. I mean, incorporating the dominant positions from the Veren positions of Bakken and also Southwest Saskatchewan, I mean, this definitely helps to bolster our decline. As we had mentioned in the script there, it's actually lowering our decline. We're less than 20% now. When we take a look at everything that Veren's done there and kudos to Craig's team, they've spent a lot of money on injector conversions based on what they had presented there last year at the Investor Day presentation. They've implemented over 1,000 injectors. Really, this doesn't come without having extensive technical knowledge. We're going to continue to build on that.
Really, the way that we look at EOR and the way that Veren has looked at EOR, it seems like it's going to be a seamless culture really of continuous improvement. We are going to do whatever we can to keep moving forward on that decline mitigation advancement. I mean, that is one of our key goals. When you think about things in the context of sustainability, I mean, that is our vision. Of course, when coupled with the unconventional side, I mean, that's the growth side of our business. We are going to keep finding ways to bolster that and push that down. A lot of the inventory that we brought into the portfolio now is very much weighted towards EOR. As we get some time here to bring together the technical teams, we will better understand that and be able to quantify those opportunities going forward.
That is definitely our goal. That is our target to keep on sustaining that best-in-class free cash flow from our side of the business.
Okay, perfect. That's all for me. I'll turn it back. Thank you.
Thank you. Next question will be from Michael Spyker at HTM Research. Please go ahead.
Good morning, guys. Congrats on the deal. This is huge for both sides. I just have one question on the long-term growth, not on the kind of short-term integration of the assets. Standalone Veren long-term plan was kind of 250,000 BOE a day by 2030. The Whitecap standalone was kind of 230 with the accelerated growth and then 250 plus with the Lator phase two. Going forward kind of 2028 onwards, are you guys still looking to combine hit the 500,000 BOE a day mark, or will there be some kind of moderation in terms of growth dispatch from each portfolio?
Thanks very much, Michael. It's Grant. Just on the growth profile, I mean, over the next five and seven and ten-year periods of time, I mean, putting the teams together, I think we both have very achievable and attainable five-year plans in front of us at this time, as you've referenced, 250 and 230-250 on our side. We want to put and be most efficient with our capital moving forward. Once we get the teams working together and come forward with a new five and seven-year plan, we can come forward with that. The assumption is, I would make the assumption at this time that we would be able to achieve those types of growth metrics putting the two companies together.
That's awesome, Grant. Really appreciate that. That's all I have this morning. Congrats, guys.
Okay, thanks, Michael.
As a reminder, ladies and gentlemen, if you do have any questions, please press star followed by one on your touch-tone phone. Next question will be from Dennis Fong at CIBC. Please go ahead, Dennis.
Hi, good morning. Thanks for taking my questions as well as congratulations to all. My first one, albeit a few of my questions were already answered. My first one's really focusing around the NACap marketing plan and pricing diversification. Can you talk towards some of the initiatives that you'll be exploring or working towards with kind of the combined entity to kind of move you towards the targeted exposure? Can you highlight any kind of physical, we'll call it markets that you're more focused on?
Yeah, sure. It's Grant again. Just on the combined entity being approximately 800 million a day and moving up to over a BCF a day, our objective here at this particular time is, again, it's a little bit early to tell, but what we've been focused on, and I believe that Veren have been as well, is the liquefied natural gas markets. That is a combination of both the Rockies, which we are both involved in at this particular time. Between the two, we've committed to 150 million a day of natural gas to that particular market. There is the Cedar Creek project with Pembina that we're both in negotiations on. We will combine our conversations to come forward with the best concept and best ideas of working with Pembina on that.
When we talk about other market centers, we're looking at the US Midwest as what we consider to be one of the strongest areas to advance more of our products and look for pricing centers there. Keeping a very reasonable component of our natural gas at AECO. We'll look through different derivatives, whether it's physical or financial, to do some price fixing. That's what we talk about on a fixed basis to generally have between 25% and 35% of our product under risk management strategy. That would be either on the NYMEX or on the AECO market. Price diversification is a key driver. It has been for Veren. I think without speaking to Craig, who's here with me, I think that's been one of their strategies as well as ours.
Putting the two together will give us much more pricing power, we believe, as we advance forward. The one thing we do not talk about is we have a very large land base. We have talked about it historically with Resthaven, about 14 townships of land that is a higher component of natural gas. We have not even included that in our analysis for the next five- to seven-year period of time because it is between 85% and 90% natural gas. We have another huge component of natural gas that we can bring should we be able to develop these natural gas markets in more detail as we advance forward.
Great. Really appreciate that incremental color, especially around the natural gas portfolio there, Grant. The other question that I have is both Whitecap and Veren have completed infrastructure-related transactions or partial dispositions to a variety of other counterparties. Are there opportunities within the combined asset to kind of further accelerate the leveraging through those type of transactions?
You know what? I think both companies did a very good job. I mean, both Veren and ourselves, late last year or early this year, have done a good job of working with the mid-asset stream managers and primarily aligned with Pembina and PGI. We'll look at our portfolio, but at this particular time, I don't think from Whitecap's perspective and Craig.
Yeah, no, the only thing I—sorry, Dennis, it's Craig here. The only thing I would add to what Grant's saying is basically similar for Veren. We went through, as we worked through that last year and moved off some of those assets that we had in the Montney and put together that strategic partnership with PGI. That was really everything we had of those opportunities in front of us. I know Grant and the team, when they bring our assets in and work through that, they'll adjust and see how that fits. From a Veren perspective, what we did last year was the remaining part of that.
Yeah. As I talked about, Dennis, just we talk about the Resthaven area, the very large land block just to the south of our Lator assets. That might be an area that we would have further infrastructure transactions done, whether it's with our own capital or third-party mid-asset stream manager capital going forward.
Great. Great. Really appreciate that incremental color. I'll turn it back. Thanks.
Thank you. At this time, gentlemen, we have no further questions registered. Please proceed.
Okay. Thank you very much, everyone on the line today. I do want to say I want to reiterate once again that bringing these entities together has not been easy, but it is made much easier with a very supportive Craig Bryksa on the other side working to make sure that his people, his board of directors, and his shareholders were taken care of. I do want to say thank you again to everyone on the line. Thank you for all Veren and Whitecap personnel for allowing these companies to come together. Look forward to working with everyone. Have a good day. Thank you very much.
Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines.