Earnings Call: Q3 2020

Nov 5, 2020

Good afternoon, and welcome to the California Resources Corporation Third Quarter Earnings Conference Call. All participants will be in listen only mode. For CRC and Francisco Leon, Executive Vice President and Chief Financial Officer as well as several members of the CRC executive team. I'd like to highlight that we have provided slides in our Investor Relations section on our website at www.crc.com. These slides provide additional insight into our operations and 3rd quarter results, plus additional information. Also, information reconciling non GAAP financial measures discussed to the most directly comparable GAAP financial measures is available in the Investor Relations portion of our website and in our earnings release. Please note that our Q3 information is being issued as a debtor in possession and our emergency share count and basis of accounting will change due to CRC implementing fresh start accounting in the Q4. As a result, the 4th quarter results will not be comparable to the 3rd quarter. As a reminder, we officially withdrawn any and all guidance that relates to 2020 in our operations due to our emergence in the fresh start accounting. Today's conference call contains certain projections and other forward looking statements within the meanings of federal securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ from those expressed or implied in these statements. Additional information on factors that could cause results to differ is available in the company's 10 Q, which will be filed later today. We would ask that you review it in the cautionary statements in our earnings release. A replay and a transcript will be made available on our website following today's call and will be made available at least 30 days following the call. I will now turn the call over to Todd. Thanks, Scott, and thank you to everyone for attending CRC's 3rd quarter earnings call. We're glad to be back reporting our results and look forward to discussing significant value opportunity within CRC. CRC has always had a low decline, stable, high margin, world class asset base to deliver affordable, reliable and sustainable energy to Californians. With Chapter 11 behind us, CRC now has a strong balance sheet and one of the best leverage ratios in its peer universe. Even in the face of market volatility, we are exceptionally well situated to thrive and create substantial value for our shareholders. First, I want to acknowledge and welcome our new Board of Directors, whose members share our values of character, responsibility and commitment. The Board has already shown keen insight into our business, market dynamics and governance. We are excited to work with the Board in setting CRC strategy to create and deliver value for investors in 2021 and beyond. For those of you who are new to CRC, let me give a short introduction as we are quite advantaged over most companies in our sector. CRC is a differentiated energy business known for our low decline conventional oil production, low capital intensity and exposure to the Brent crude oil markets, which benefits our realized pricing. In addition, CRC has an integrated midstream infrastructure, highly efficient power plants, successful marketing and trading function and enviable suite of sustainability projects that strengthen our ability to generate free cash flow through our value creation metric. With a solid financial foundation, we are confident that we have the right portfolio and team in place to deliver value to our shareholders and meet consumer needs and investor priorities. We invite you to track our efforts to drive down costs, maintain a strong balance sheet and deliver solid returns and cash flow. Let me first talk about our new balance sheet. Our restructuring process has simplified our balance sheet and eliminated the midstream JV at Elk Hills. Additionally, we've also taken the opportunity to further improve and optimize CRC's cost structure to be competitive and profitable in the current Brent price environment. Our balance sheet and credit metrics now reflect a crossover credit right on the crest of investment grade that matches our high quality portfolio of assets. We will continue to utilize our capital discipline to maintain the strong financial foundation, which we believe is a major differentiator for CRC. Through 2020, we flattened CRC's cost structure and made it leaner. All told, cost cutting efforts have achieved a reduction of well over $300,000,000 in lower production costs and G and A, annualizing the difference between the Q3 of 2019 2020. These actions promote our ability to operate profitably in a $40 Brent environment, maintain crude oil production and deliver free cash flow. However, we are never satisfied. We will continue to focus on ways to decrease our cost structure, enhance our revenues and drive further efficiency. Our unique asset base provides CRC and our new Board with multiple levers to drive free cash flow for the company as we develop our 2021 investment plans. We have also continued to demonstrate strong capital discipline. Year to date, we have invested a total of $131,000,000 with $37,000,000 of CRC capital and $94,000,000 of capital from our joint venture partners. The vast majority of that amount was vested during the pre pandemic period with only $7,000,000 of internally funded capital invested in the 2nd 3rd quarters. We will have limited capital investment in the 4th quarter. Let me now give you a deeper dive into what we see as the major investment attributes of CRC's business and the elements of our strong and sustainable foundation. 1st, we have reinforced our long standing value focus. We have maintained the same CRC DNA that investors have come to respect over the past 6 years. We'll continue to live within our cash flow, focus on reducing costs, enhance margins and utilize our VCI metric, which supports disciplined capital allocation to generate attractive returns on investment through the cycle. Recall that our value creation index is a cash on cash return metric or present value index that we utilize to test every new investment we consider ensuring we are maximizing returns. In this commodity price environment, we rely heavily on payback metrics as well. As the largest producer in California with over a 2,000,000 acre land position, we are well situated to focus on growing value from the Golden State prolific yet underdeveloped 5th largest economy. Finally, CRC's culture is built upon a commitment to ESG leadership, which is detailed in our 3rd annual sustainability report that we released last month. This report illustrates the longstanding commitment and dedication of our workforce to apply ingenuity and technology to meet California's need for sustainable, affordable and reliable energy and to contribute to our communities. This report also summarizes our progress on our 2,030 sustainability goals for carbon, methane, water and renewables, which aligns us with the state's climate goals. As I noted, CRC has an industry leading portfolio of sustainability projects and our 2019 Convent disclosure was recognized by CDP earlier this year with an A- ranking at their leadership level. I encourage you to read our sustainability report. Our 2,030 sustainability goals aren't mere aspirations. Achieving annual sustainability project milestones and HES metrics is directly tied to the annual incentive compensation of our management and workforce. We believe CRC's sustainability strategy exemplifies ESG leadership that is directly aligned with the State of California. Further, I want to provide a specific example from the Q3 that demonstrates the diligence of our workforce in helping our fellow Californians overcome the current challenges. In August, California was hit with a heat wave and significant wildfires that jeopardize the state's electricity supply. Our operations team responded rapidly by restarting a dormant cogeneration plant and reducing our electricity demand during peak demand hours to conserve electricity for our communities. Our state's challenges with energy liability have shined a spotlight on California's needless dependence on import for more than 70% of our oil, 90% of our natural gas and nearly a third of our electricity. To meet California's climate goals, we believe it is essential for California leaders to apply the same safety, labor and environmental standards in the production of imported energy that we adhere to in every day in our operations. Doing so would ensure that California's leading policies and ambitious goals improve the global environment and would encourage more producers worldwide to implement leading sustainability goals in ESG practices like CRC. I would like to thank all our employees for their dedication, focus and efforts throughout 2020. They have simultaneously preserved and protected the business and delivered significant cost savings while maintaining record safety performance during the pandemic. I'm particularly proud of our plant and field workers who have delivered every day the energy that is needed day in and day out during this challenging year. I'd also like to thank all of California's essential workers who continue to meet our state's daily needs for food, water, medical care and energy. As economies are struggling to restart around the world, we have seen a partial return of petroleum demand, but is a long road to full recovery. We anticipate that progress on COVID-nineteen vaccines or treatment will eventually restore economic activity and further support petroleum demand. It's been an instrumental part of restructuring and cost reduction efforts. Francisco will summarize the core elements of our emergence and 3rd quarter results. Thanks, Todd. Good afternoon, everyone. First of all, I am honored to participate in this call as CRC's new CFO, and I'm grateful to help lead this tremendous organization of women and men who continue to showcase the resilience of our assets. We will continue to provide safe, affordable and reliable energy for California by using our technological innovation and our environmental leadership. We began trading on the New York Stock Exchange with the CRC ticker on October 28 after emerging from our restructuring process, the details of which I will elaborate on shortly. As Todd noted, CRC's solid foundation encompasses our strong financial fundamentals, disciplined value focus, sustainable operational excellence and ESG leadership. Our financial performance will be defined by our continued sustainability projects into our core oil and gas operations. Even after emerging with peer leading balance sheet metrics, we are not done strengthening our balance sheet. In fact, we will target at least a one time leverage profile even in the current price environment. I would like to provide high level details of our restructuring process was completed in 3 short months during the pandemic. Today, we have approximately 83,000,000 shares and 4,000,000 warrants in total with a 4 year term. These warrants have an exercise price of $36 As Todd mentioned, we view ourselves as a crossover credit. At Emergence, we had $535,000,000 of net debt consisting of a $300,000,000 note with Ares, which is secured by our Elk Hills power plant and associated gas processing facilities and a $200,000,000 second re note with the remainder on our revolver. Our RBL has a commitment level of 5 $40,000,000 providing ample liquidity of $350,000,000 at emergence. Simplified balance sheet will significantly improve our ability to generate free cash flow. We conducted a thorough review of our costs during the restructuring process and streamlined our organization to strengthen our margins and drive further efficiencies. When comparing to the Q3 of last year, we were able to reduce our operating and G and A cost by well over $300,000,000 annualizing the difference between the Q3 of 2019 and twenty 20. We expect to retain over half of these reductions going forward. Our actions favorably position CRC to succeed in the current price environment with peer leading industry financial metrics, a competitive cost structure and a stellar balance sheet. While we expect to retain the majority of our savings achieved during the recent downturn as we focus on our margins, we will return higher yielding wells to service, thereby modestly increasing our operating costs. This leads us to capital investment. In my previous role, I supervised CRC's capital allocation across our large portfolio of assets. We have always used strong capital discipline in allocating to the highest return projects in CRC's portfolio. This will not change as we will continue to live within our cash flow and rely on our vast high quality asset portfolio with an average NRI of approximately 87%. Turning to this quarter's financial and operational figures. I would like to remind you that the 3rd quarter results were significantly impacted by bankruptcy related charges and also reflect our pre bankruptcy share count. We expect to finalize fresh start accounting in the Q4, which will be reflected in our 2020 10 ks. As Todd noted, with the commodity price downturn from the double impact of COVID-nineteen and the Saudi led oil price war during the Q2, we curtailed our capital investment program to a level that maintains the mechanical integrity of our facilities, while operating them in a safe and environmentally responsible manner and preserving cash through the restructuring process. Net production for the Q3 was 106,000 barrels of oil equivalent per day, leading to a quarterly adjusted EBITDAX of $103,000,000 and an adjusted EBITDAX margin of 25%. Our strong rent linked oil realizations together with robust capital California natural gas market dynamics and our consistent capital discipline, partially offset by bankruptcy costs, resulted in 3rd quarter free cash flow of $44,000,000 after internally funded capital. For the Q3, we reported an adjusted net loss of $55,000,000 In the Q3, our operations team continued to focus on safely protecting the base, controlling the controllables and building inventory. On OpEx, we added 3 maintenance rigs during September to return higher margin wells to service. Also during the Q3, CRC invested internally $4,000,000 of capital with no additional JV capital contribution during this period. For a more detailed look at the net production, we produced a net average of 106,000 BOEs per day during the quarter, consisting of 64,000 barrels per day of crude oil production, 14,000 barrels per day of NGLs and 168,000,000 cubic feet per day of natural gas. The San Joaquin basin produced 78,000 net BOE per day. The Los Angeles basins produced 22 1,000 and both the Ventura and the Sacramento basins produced 3,000 BOE per day respectively. At the start of the pandemic, due to economic conditions, we started shutting in certain wells to enhance our cash flows. During the Q3 of during the Q3, we had 3,000 BOE per day of shut in production. Excluding the shut in production and the effect of significantly reduced well repair activity, our assets continue to perform within our industry leading decline rate. For those of you who are new to CRC, California is an energy island with approximately 72% of its crude oil being imported from outside the state, primarily via foreign supertankers. As a result, our commodity realizations tend to reflect trends and have continued to be relatively strong versus the rest of the Lower 48. CRC's realized crude oil prices within the 3rd quarter of 2020, excluding the effect of settled hedges, registered 96% of Brent. Hedges enhanced our realized oil price by $0.32 per barrel during the Q3, for an average realized price of $42.15 per barrel. Turning to NGLs, prices for the quarter averaged $25.16 per barrel and came in at 58% of Brent. Prices for NGLs increased slightly for the 3 months ended September 30, 2020 compared to the same period in 2019 due to improvements in negotiated sales differentials along with stronger NGL values relative to crude. These levels are still our premium to our peers across the U. S. Natural gas markets saw seasonal strengthening during the Q3 of 2020 and CRC's realized prices averaged $2.22 per 1,000 cubic feet or 115% of NYMEX. As of October 31, 2020, CRC has hedges in place that protect approximately 64% expected Q4 2020 oil production. This includes 75% of our this includes 75% of our oil production for both November December. For further information on our hedging program and volumes, please see our slides posted earlier today. Production costs for the Q3 of 2020 were 141,000,000 dollars or $14.52 per BOE. Due to our team's continuous efforts and our focus on safely controlling costs, we were able to lower our 3rd quarter production costs both on an overall basis by 36% and on a per BOE basis by 23% compared to the same prior year period, which averaged $18.82 per BOE. The decrease in production cost was primarily due to lower well repair and surface operations activity across our fields as well as cost savings from the Q4 2019 and Q3 2020 workforce reductions. Excluding PSC effects, our Q3 2020 production costs would have been $13.37 per BOE. During our restructuring, we further streamlined our organization for CRC to succeed and profitably operate in a lower commodity price environment. We reduced our staffing in the Q3 of 2020 by approximately 12% when compared to year end 2019. As a result, we anticipate ongoing employee related cost savings of approximately $40,000,000 annually, with approximately 75% of the reduction in G and A expenses and the remainder reflected in production costs. Our Q3 2020 general and administrative cost averaged $6.59 per BOE, dollars 0.16 below the previous quarter, primarily due to ongoing cost savings efforts and the 3rd quarter workforce reduction. These savings were partially offset by higher incentive and retention awards, which were made with court approval during our restructuring process and the effect of lower production. Q3 2020 general and administrative costs excluding incentive and retention payments decreased by $11,000,000 year over year or by $1.13 per BOE. Taxes other than non income, which are largely comprised of ad valorem taxes based on the value of minerals in the ground as well as our greenhouse gas costs came in as we expected at $42,000,000 in the Q3. In the Q3 of 2020, we reported a net loss of $29,000,000 attributable to our common stock. Adjusting for the non controlling interest in our Elk Hills Midstream JV, we had income of $2.20 per diluted share. When also adjusting for unusual and infrequent items and other non cash items, such as reorganization and restructuring, together with severance expenses that are generally excluded from core earnings by investment analysts, our net loss would have been 55,000,000 dollars Adjusted EBITDAX for the Q3 of 2020 was $103,000,000 compared to $278,000,000 from the prior year quarter, primarily due to 38% quarter over quarter decline in realized oil price driven by the ongoing pandemic. As commodity prices modestly increased from April lows, our adjusted EBITDAX margins recovered to 25% in the Q3 of 2020 from 7% in the Q2. This increase in 3rd quarter adjusted EBITDAX was largely driven by higher commodity prices. Despite the challenging commodity markets, our trailing 12 month EBITDAX remains healthy and stands at $681,000,000 CRC reported cash flow from operations of $48,000,000 in the 3rd quarter of 2020, which was significantly higher than the 2nd quarter, primarily due to recovery to the recovery in commodity prices. In the Q3, we generated approximately $55,000,000 in discretionary cash flow and $198,000,000 for the 1st 9 months of the year, which compares favorably to our internally funded capital investments of $37,000,000 through the 1st 9 months of the year. CRC has a high level of operational control over our diverse portfolio, which continues to allow us to pivot our organization during these volatile periods and to also rapidly adjust our activity to an expected change in cash flow. Historically, we have a proven track record of focusing particularly on value driven projects and staying nimble with our operations. As such, we will continue to respond and to adapt quickly and decisively in order to succeed throughout the price cycle. We believe our operational knowledge and financial discipline are demonstrated by our track record, even during an unprecedented sector downturn and an ongoing pandemic to operate within our means while generating free cash flow. Finally, please note that we have provided detailed analysis of adjusted items in the attachments to our earnings release. Due to continued market uncertainties and implementation of our fresh start accounting, we will not be providing our normal guidance for the Q4. I will be happy to take any questions you may have on our results during the Q and A portion of this call. Thanks. And I'll now turn the call back over to Todd. Thanks, Francisco. As we emerge from with a new capital structure, we have taken steps to enhance CRC's resilient foundation and invite you to invest in a conventional, low decline, value focused energy company with an enviable ASG track record. We are looking forward to creating value for our shareholders. We believe our recent emergence with top quartile leverage metrics provides a very attractive value proposition compared to our peers. We have a history of generating free cash flow and look forward to updating you on the investment program and opportunities at CRC. I will now open the floor to any questions. The first question is from Steven Wagner with Wagner Financial. Please go ahead. Hey, Todd and Francisco. Nice presentation. I've been a long time investor in CRC and obviously we know what has occurred over the last few years, much of it out of your control. I guess one of my biggest questions is it's a 2 part question. Number 1 is, you guys have navigated a much needed reorganization. Quite frankly, many of us were dumbfounded in the spin off from Oxy that you were settled with so much debt in the 1st place. So much needed reorganization. And clearly, we shareholders got wiped out as a result of it. Now you guys reorganize, come out at 19% and now you're at 12% or high 11% right now as a result of this earnings report in a good market, even with other energy companies doing fairly well. So I would like you to address that. Generally, I never like to address stock price with executives because generally folks have no control over the day to day stock price movements and I don't expect you to have and no good investor does. But it seems to me in this situation timing was everything. Again, the bad taste is still very much there on behalf of our shareholders and my clients, by the way. I'm an RIA here in Ventura. So I'd love you to address that. The other thing is, you mentioned your renewable goals. It seems like a rebranding. I'd like to talk I'd like you to kind of expand on that a little bit more. We always view you as a natural gas and oil play. It's nice that you're rebranding yourselves. I went to your website, looked at it, very, very nice. But maybe be more specific on this whole idea of, hey, we're a renewable company now. So I'll let you folks Yes, the first one, I think we just emerged. We have a different shareholder base and we have 3 very large shareholders. So it's highly illiquid shares. I think the way I would look at it is, it's almost like those folks who always talk about direct listings. When you come out of a restructuring, this is like what a direct listing looks like. It's highly illiquid. We have no analysts following. We're trading maybe a few 100,000 shares a day. And a lot of the folks who in the restructuring built up their positions, they did so because they see a valuable alternative here at CRC that's highly competitive and they appreciate it long term. So they're not going to be so willing to part with their shares. So when you think about it as highly fairly liquid right now and until that trading starts, it won't change too much. But yes, I view it really as what a direct listing looks like because there's just not a lot like that. On the and so that's really what I can say is that we have a bunch of very large shareholders. There's 3 of them, Golden Tree, Ares and Fidelity who almost 2 thirds or more of the shares. So it's a lot. On the other part, is kind of always been a part of our CRC DNA. We are big believers in all of the above and using all of our resources to create value. Oil and gas obviously is a huge part of our business, but complementing that with renewables, particularly when you look at how the electricity prices in California are at some of our locations that aren't fortunate enough to be tied into our Elk Hills power plant with our lower cost electricity, you can take advantage of that DUC curve during the day by having complementary renewable energy. And I think we have to continue to look at things that are going to add value and oil and gas is clearly our number one item. But if we can be complementary and it competes for capital, we're going to look to do that too, whether it be geothermal, hydrogen or some other things that people are contemplating. And a lot of times we look at this with JVs with other people's money who want to come and look at our assets. We already have received quite a few lease rentals and payments for people putting solar on top of our mineral acreage and allowing us allowing that to happen. So it's not something that I think is brand new, but I think we probably highlighted it a little more here than we have historically, particularly in our sustainability report we just put out. Okay. I guess the biggest thing is that I would and I appreciate that. So back to the share price, and again, I hate to hark on this because honestly it is out of your control, but you're right, it is illiquid, but who the hell is selling? I don't know. I mean we've gone from 19 to 12. I mean, maybe I need to look at these 3 large shareholders and see what it is they're doing and maybe look at the covenants and the way the loans are arranged and I'll probably need to do that and I will. I've got a weekend ahead of me to do that. I mean, look, we see the opportunity, all right? I accept what you guys are saying in terms of, as you said it earlier, quote unquote substantial value opportunity. Okay. So I mean that means a lot when the CEO of But I mean honestly, I've seen a lot of these deals before fall apart. And it's like, okay, you've only got these 3 major shareholders. There really is no other shareholder base. So why are some of these people selling shares? I guess I'll have to figure that out for myself because somebody is selling. We've gone from 19 to 12 in a week. And that again after the fall off a cliff that all of us have been through in the last 6 months, it continues to leave a very bitter taste. Thanks, Steve. We appreciate that. And clearly, it's thinly traded and there's a bunch of shareholders out there that were that are trading it, but it's very thinly traded. The next question is from Chris Jerand with Depper. Please go ahead. Hi. Can you hear me? Yes, loud. Hello? Okay, great. So I'm just when you were spun off from Oxy, like 5 or 6 years ago, you had a PV-ten of around, what, dollars 16,000,000,000 and you had about 5, dollars maybe $6,000,000,000 in debt against that. And so I was wondering, you just got a similar I guess you have guess that's my big philosophical question. Guess that's my big philosophical question. Yes. I think the big difference is the capital structure. We are obviously when you thought about the debt equity split, we were given debt for a much different price environment, kind of $100 plus oil and that quickly the rug was pulled out from under us in early December 2014. And dealing with that millstone and trying to chip away at it, our peak post spin debt was $6,800,000,000 We were able to chip that down to about 4.9 at the end of at the beginning of this year. But it was just too big of a millstone for the absolute value. Now our PV-ten, if you look at 731 strip, it's about 4,700,000,000 We have great conventional reservoirs with low capital intensity. I think the opportunity set here is different because you don't have the millstone of that debt. You can look at creative ways with the type of asset base we have through return cash to shareholders or reinvest in the business or do different things that really weren't ever an alternative for us when we were spun off from our former parent. Okay. And prior to the bankruptcy, you guys were scrambling to sell stuff. Are you still trying to sell stuff? I wouldn't say we're scrambling. We're always looking at ways to create value. Like I tell people, everything's for sale at the right price, except Elk Hills, you have to buy the company if you want to own Elk Hills. But we're not going to conduct a fire sale If someone wants to pay us PV-twenty five and two times cash flow or something like that, it's better for us as a company to retain that free cash flow and invest it in the business, return it to shareholders in some fashion that's yet to be determined as we just met with our Board of Directors recently. We're still working out forward strategy from that standpoint, but we know that we're value focused. We're focused on creating a lot of free cash flow and how we and how and what we do with that, we'll let you know in short order. Okay. Prior CRC never bought back a single share or paid a dividend to shareholders. Do you anticipate changing that policy? Wouldn't say we never bought back any shares, but we did pay a dividend to shareholders when we were first spun off. And we clearly as we went into 'sixteen and late 'fifteen, we had to get rid of the dividend. But yes, as we were spun off that, there was a very modest dividend paid. I would anticipate if you investing in the business, however you think about it, these are kind of the perfect assets for paying dividend or rewarding shareholders in some way, whether it's buying back shares, paying a dividend, investing in the business, however you think about it, these are kind of the perfect assets, low decline conventional, low capital intensity. And when you shut off 3,000 barrels a day of production during the COVID pandemic, what's the CapEx to turn them back on? What's the loss from is there a There's no real CapEx. When you look at where we shut in and we had more shut in during the downturn, we have a fairly sophisticated way where we can look pattern by pattern, well by well from an economic standpoint, whether it's creating value and cash flow for us. And so as the downturn continued at its bottom, we had maximum shutoff, I believe, of almost 9,000 barrels a day. And now as we come back, we use the workover rigs and the like to turn back on the production that is now economic and makes cash flow. Remember, we don't have a bunch of lease commitments or anything like that where we have to worry about keeping production flowing. We're only going to allow production to flow that's cash positive. Got you. Okay. Well, I wish you good luck going forward. And addressing the prior caller's issue, I encourage you as management also to look up north to the Canadian producers like Tourmaline and Micros and they put shareholders first and that really makes their cost of debt really low and everyone's much happier up there. So anyway, good luck to you guys and I'll jump off now. Thanks again. Thanks, Chris. The next question is from Ethan Dan with R. A. D. Investments. Please go ahead. Hi, how is it going? So just a couple of quick questions. Hoping to get a little bit of a picture on the listing strategy for the warrants coming out of the bankruptcy. I understand much higher value even though the strike price is much higher, it's like $76 versus TRP 36. Dollars Number 2, strategy and valuation on the real estate assets that CRC has. I understand there should be a huge opportunity to return cash to shareholders there. Thank you. So Ethan, I got something about the warrants. You were a little broken up there. Our warrants were part of a settlement during the restructuring with the creditors committee. And obviously, they're struck at there's 2 sets of them and they're struck at $36 The other question, we do have our real estate, we own the surface at our Huntington Beach property, which has substantial value. We continually monitor the real estate value versus the oil and gas value. As you know, building any kind of real estate, entitling that in Southern California, it can be quite a feat. So, we're looking to maximize value for shareholders and looking at ways, particularly as we come out of this pandemic to realize that value for our shareholders, whether it be some combination of that or pure real estate or oil and gas. The next question is from Tim McHugh with TDM. Please go ahead. Yes, gentlemen. I was investing in your company during the pandemic starting in March and expected to continue and then found out that you had declared Chapter 11 in June and the shares were subsequently moved to CRC QQ. And as we know today, they are basically bottomed out at about $0.02 a share. As I understand it, I have absolutely no recourse. And if this were only a few $1,000 it wouldn't be an issue, but this is major money. Is there something that can be worked out? Is there shares that can be offered? Is there anything to the shareholders like myself? Dan, I'm sorry, this is we went through the restructuring and believe it or not, we fought really hard for shareholders. We had a complicated capital structure heavily indebted from our prior parent and this is where we ended up. This concludes our question and answer session. I would like to turn the conference back over to Todd Stevens for any closing remarks. Thanks everyone. I am extremely proud of our workforce during this time of uncertainty. They have conducted themselves with professionalism as we have strengthened our ability to generate cash flow while operating safely and productively during the pandemic. CRC has many valuable assets, including our employees and the relationships we have with our vendors, state and local leaders in the communities where we live and work. We appreciate everyone's attendance on today's call and look forward to delivering results for our new shareholders. We invite you to invest in CRC as we proudly supply reliable and affordable energy for California by Californians. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.