International Petroleum Corporation (IPCO) Earnings Call Transcript & Summary

Okay. So welcome, everybody, to IPC's 2025 First Quarter Results Update Presentation. I'm William Lundin, the CEO; and joined today by Christophe Nerguararian, our CFO; as well as Rebecca Gordon, our SVP of Corporate Planning and Investor Relations. I'll start with the highlights and provide an operational update across our assets, then Christophe will expand on the financial detail. Following the presentation, we'll take questions, which can be sent online or through conference call. So getting right into the highlights for the quarter. It was a strong quarter for the company. The portfolio delivered 44,000 barrels of oil equivalent per day through Q1, which was in line with guidance. We are maintaining our full year 2025 production guidance of 43,000 to 45,000 barrels of oil equivalent per day. The operating costs for Q1 were $17.30, in line with guidance or marginally below. However, no structural changes observed to our overall operating cost base, and we maintain our full year OpEx guidance per unit production of $18 to $19. On the organic growth front, our 2025 CapEx forecast is maintained at USD 320 million, which is the same as we put out at Capital Markets Day earlier this year. We spent just shy of $100 million in Q1 with $77 million of that allocated to the transformational Blackrod Phase 1 project. Cash flow for the first quarter was $75 million in OCF and the full year operating cash flow for 2025 is expected to be between $240 million to $270 million, between $60 and $75 Brent for the remainder of the year. Q1 free cash flow, in line with expectations at minus USD 43 million when taking into account all the growth capital expenditure. The full year forecast for free cash flow is between minus USD 135 million to minus USD 110 million at Brent $60 million to $75 million for the rest of the calendar year. Our liquidity, we have a net debt position of USD 314 million as at April 1, 2025, and gross cash resources of USD 140 million. We also have access to a fully undrawn revolving credit facility in Canada to the tune of CAD 180 million. On the hedging front, we have about 50% of our WTI to WCS differential exposure hedged at $14 a barrel. And roughly 40% of our Canadian crude is hedged at a WTI price of $71, and as well as around 40% of our Brent exposure is hedged at $76 million a barrel for the remainder of the year. So good downside protection with respect to those hedges being implemented. Health and safety, no material safety incidents through the first quarter, which we're pleased to announce. And on the share repurchase front, we've made great progress there, where we bought 5.7 million shares since the program was renewed in December of 2024 up to the end of 2025, which represents just under 3 quarters of that buyback program. Moving on to the first quarter production. So as can be seen on the production chart on the right-hand side of the slide, we had relatively flat production through the first quarter, with really strong performance across all the assets in the portfolio, and I will touch on more detail on each of the assets as we get in further to this presentation. Full year production forecast again is 43,000 to 45,000 barrels of oil equivalent per day. So we feel well positioned to be able to deliver within our original CMD production guidance. Our measured base business capital investment activities, these additional production contribution from Onion Lake Thermal infills as well as the Malaysia drilling and workover campaign, which should offset our very low decline portfolio for 2025. Our production mix is weighted to 55% in Canadian crude, which is largely tied to WCS pricing, 1/3 natural gas and the balance being international Brent-linked production coming from Malaysia and France. Operating expenditure per unit production is maintained for the full year at $18 to $19. Operating cash flow for Q1, again, was a healthy quarter of cash flow generation from the portfolio being $75 million and the differentials for the actuals in that quarter from Brent to WTI was $4 and WTI to WCS was $13. So it's a pretty tight level for the winter period for that WTI to WCS diff relative to historical seasonal standards, largely thanks to that pipeline, TMX pipeline, providing ample egress capacity for the Western Canadian Sedimentary Basin. So our full year operating cash flow forecast has tightened relative to the Capital Markets Day forecast, thanks to the strong first quarter OCF and oil benchmark hedges that are in place. So between $60 and $75 Brent, we expect to generate between $240 million to $270 million in operating cash flow for the full year. So at $75 a barrel, we assume a $5 and $15 diffs, respectively, between Brent to WTI and WTI to WCS. And for the $60 level, the differentials are assumed to be $3 and $10 per barrel, respectively. So a little bit tighter, but in line with what we're seeing currently and also a common feature when flat price drops, as we're observing at this point in time, so do those differentials. So capital investment, inclusive of decommissioning for 2025, is maintained at USD 320 million. Nearly 1/3 of this CapEx has already been spent in Q1, and we anticipate to have around 2/3 of our total CapEx program spent by the end of Q2. So very much a front-end loaded program this year when taking into account the base business activity as well as the Blackrod spend. And to note, this is the final major growth spend year for the transformational project at Blackrod, and I'll expand on the great progress later on. Free cash flow for Q1 before Blackrod capital expenditure was just under USD 40 million, and when taking into account all the CapEx spent at Blackrod, it was minus USD 43 million for the end of Q1. Again, similar to the OCF, we have tightened our outlook for the full year for free cash flow. When excluding any capital spent at Blackrod, we expect to generate between $95 million to $120 million in free cash flow between $60 to $75 Brent. And when taking into account all CapEx spent at Blackrod, the total full year free cash flow is projected to be between minus $110 million to minus $135 million, between $75 and $60 Brent. Moving on to our share repurchase highlights. So the company has purchased 75 million shares since inception, at an average price of SEK 77 per share or CAD 10 per share, which is significantly below our current share price. So a tremendous amount of value created through the buyback programs. And as I had noted on the beginning highlights slide, we made great progress on the '24/2025 NCIB program, where we're just shy of 75% complete. And it's within the full intention of the company to fulfill the remaining shares available to be purchased under that program before expiry in December of 2025, provided our leverage ratio and net debt to EBITDA stays less than or equal to 1.75x in line with our bond covenant. And if you look at the waterfall chart, only 1% dilution since the company was formed from a shares outstanding viewpoint. So we're getting very close to that original number of 113.5 million shares, which will mark for quite a special moment in time for the company when you take into consideration the incredible enhancements that's happened over time with us now producing 4.5x the amount of production we were doing back in the beginning days in 2017, we've seen a multiple of 17x increase on our 2P reserve. Added 23 years to our reserve life index, greater than 1 billion barrels of contingent resources and in excess of $2.5 billion in net asset value relative to the beginning of the company's formation in 2017. Moving on to our net asset value. So our NAV 10 based on our reserves as at year-end 2024 is in excess of USD 3 billion, which translates into a NAV 10 per share of SEK 287 per share or CAD 37 per share. So a material discount relative to where we're trading today, and this doesn't take into account any value associated with our greater than 1 billion barrels of contingent resources. So buying back our cheap stock in combination with materially growing our business through the Blackrod investment is going to translate into what we firmly believe to be a winning formula for our shareholders. So moving on to the Blackrod Phase 1 development progress update. This project is very much on time and on budget, and $77 million of growth capital was spent on the Phase 1 development through the first 3 months of 2025. And recall the original guidance that was set upon sanction in 2023 of this project remains unchanged, which is $850 million to First Oil, which is expected in 2026. So as at the end of Q1 2025, approximately 80% of the total CapEx has been spent on this project, and we feel very well positioned to deliver within our original guidance. So engineering, procurement, fabrication is substantially complete. Around 90% of the modules have been delivered to site. There's a lot of activity ongoing, which I think you can appreciate through the pictures on this slide. A lot of people there doing pipe interconnecting work. There's a lot of cable pulling, electrical and instrumentation work. On the bottom right-hand side of the slide, you can see some of the well pad facilities that were recently installed and construction remains one of the key scopes outstanding prior to starting up this facility. The midstream connection projects as well are progressing very well. All pipelines have been installed, which again, as a reminder, are the input fuel gas pipeline as well as the diluent to blend with the heavy crude and the blend pipeline. So 3 separate pipelines, all installed. There's also been a batching station that's been installed. We're just waiting on the LACT unit to come to the CPF. So everything is tracking in line with expectation with respect to those connection projects. Very exciting times ahead in summary here, and unlocking the value of this huge resource by executing the responsible development of a 30,000 barrel per day SAGD facility. Very impressed, with no material safety incidents happening since development activities began. So hats off to all the team in place managing the activities at site. Moving on to the schedule, again, which remains unchanged. We're pleased with the level of progress that's taken place, as we're seeing the civil-related scopes and structural works are largely complete where we're at today. So really constructions, some remaining modules to be delivered to site, continued drilling, finishing of the -- execution of the third-party transport pipelines are some of the remaining activities that are expected to be carried out through the remainder of this year. And we anticipate first steam in Q1 of 2026, with First Oil to follow by late 2026. Moving on to the producing assets. Onion Lake Thermal delivered stable production through the first 3 months of 2025. We completed the drilling of 4 infill wells as well as the final wellpair on Pad L, which is shown on the plot on the right-hand side of the slide. So the plan for the remainder of the year is to ramp up those wells that had been recently drilled, and we look to sustain relatively flat production at this asset for 2025. Moving on to the Suffield area assets, really low decline production from the producing assets at Suffield, Alderson and Brooks. Here, we do see typically some winter freeze off periods happening in Q1, which can impact some of the gas production. It wasn't too extreme through this first quarter of the year, but largely came within expectations. So that production usually come backs through flush production once the conditions warm up. The other assets in Canada, we've seen good production growth from these assets combined, which the map on the right-hand side of the plot shows which assets are included in plots, it's really Ferguson, Mooney, Onion Like primary as well as the Blackrod pilot here. So good production delivery in excess of 4,000 barrels per day on average through Q1 2025, and no major development activity planned at any of these assets for the remainder of the year. Moving on to Malaysia, another great quarter of facility uptime achieved in excess of 99% facility uptime through Q1 2025. Drilling and the workover campaign is underway now. We have the NAGA 6 jack up rig, which recently showed up to the Bertam field. So that is an exciting program, where we see well being drilled as well as a workover, which should bring production levels to boost back up for the remainder portion of this year. And we also have some planned maintenance activity set out in Q3 of 2025. So quite an active year overall in Malaysia, and we very much look forward to the additional production contribution from the campaign that is underway there. And on to France, we had stable operations through Q1 of this year. We have some well workovers that are ongoing. We see a recent spot rate that's increased in production as we've gotten through some of the backlog of workovers on those wells. Overall, a lot of intriguing development opportunities in the France business, a notable theme across all of our assets. There's a deep inventory of robust investment opportunities ready for the sanction at the discretion of the group. Notably on the map here, showing Fontaine-au-Bron field, where we see minimal well penetrations into that area, which has also never had any horizontal well drilling. So when prices improve and things look to stabilize in terms of the macroeconomic conditions, this will be one of the first projects most likely to come into our Pro capital investment program. And with that, I will hand it over to Christophe to go into the financial highlights for Q1.

Thank you very much, Will. So as you mentioned, a very good quarter in terms of operations and financial delivery. All the assets were performing very well. In the short term, so we're excited with the activity in Malaysia; and in the short to medium term, we're very encouraged with the strong progress at Blackrod. So the production for this first quarter was in line, slightly above guidance, just above 44,000, right in the middle of the annual guidance, which is maintained. And with slightly lower operating cost at $17 compared to our annual guidance of $18 to $19, which again is maintained for the full year, it translated into a very healthy operating cash flow, just shy of USD 75 million and an EBITDA of USD 71 million. As mentioned by Will earlier on, in 2025, the CapEx is front loaded. We've had some drilling activity at Onion Lake Thermal and also spent $77 million on Blackrod Phase 1 alone. So we've already spent in excess of 30% of the full year capital guidance, which is maintained at USD 320 million. So with a negative free cash flow of $43 million, again, in line with expectation, and net -- actually slightly better, and a net result of $16 million, it was a good -- it was a solid quarter. The net debt increased by roughly USD 100 million, and I'll show you on the graph in a couple of slides how this cash was used to create more value for stakeholders. In terms of realized prices, so it's -- there's a stark contrast between Q1 and after the world was liberated by Mr. Trump. The Brent prices were in line with our base case, slightly above $75 per barrel, and Malaysia and France were selling oil above or in line with that Brent price, respectively. I think what's important to notice is that the Western Canada Sedimentary Basin starts to really see the benefit of the TransMountain pipeline extension, which has really resulted in the tightening of the WTI to WCS differentials. So even during Q1, when WTI was above $71 per barrel, the WTI to WCS differential was lower than $3. And I think it's really worth mentioning that in the current context where we stand today at lower oil prices, the WTI to WCS differential is even tighter. It's actually a single-digit differential as we speak. So it's a long way of saying that all of the oil -- heavy oil was selling in Canada at the WCS heavy oil Canadian benchmark is not impacted by the full reduction in Brent or WTI prices, thanks to this tightening of the differential. In terms of realized gas prices, we see some progress there as well. The realized gas price for the first quarter was CAD 2.4 per MCF. It's still reasonably weak, but at least stronger than the last 6 months. So it's really a positive. And there's always a seasonality when gas prices tend to be higher in the winter. Now this year might be different, actually, because the Canada LNG plant is expected to start in this summer this year. And if you believe the forward curve, clearly the expectation -- the market expectation is that gas prices are going to get stronger and stronger over the next 6, 12 and 18 months' time. In terms of financial results, both on the operating cash flow and EBITDA, the -- with slightly lower production than a year ago, you can see that the operating cash flow was lower at $75 during this first quarter compared to close to USD 90 million a year ago. The operating cost, so we're maintaining our guidance of USD 18 to USD 19 per barrel of oil equivalent for the full year. As expected, we were slightly below this first quarter. With the activity going on in Malaysia, with less production, while we're getting ready for drilling and having some underwater inspection as part of the usual business there, we anticipate operating costs to be slightly above that guidance in Q2 and at the high end of that range in the third quarter. But overall, we feel very good about our ability to deliver the operating cost per barrel this year between the guidance of $18 to $19. In terms of netback, I let you read this graph. I think important to remember that we are generating operating cash flow or EBITDA netback of around USD 18 to USD 19 per barrel of oil equivalent. I was mentioning that during this first quarter, we increased our net debt by USD 100 million, and that was really driven by 2 main spending here, the Blackrod project, obviously as well as the share buyback. And if you look here on this graph with $75 million of operating cash flow, that was fully covering -- almost fully covering our Blackrod Phase 1 spend during this first quarter. And then the other $100 million which we used from our cash was really used to fund the rest of the CapEx, some minor G&A, reasonably low net financial items and mostly the share buyback. And as Will mentioned, we've made huge progress because at the end of April, we've already delivered almost 3/4 of our share buyback program. We believe it's a fantastic opportunity right now to continue doing the buyback given the hefty discounts where we're trading. And so I think it's also worth mentioning that we've used up more than USD 100 million of cash during this first quarter. But again, that was a fairly heavy quarter in terms of Blackrod spending and share buyback. So you cannot assume that this burn rate is going to continue during the year. It's going to slow down quarter after quarter this year. In terms of financial items, very stable, as I mentioned at $19 million for the quarter. And in terms of G&A, really in line with prior quarters, and the G&A stand for roughly just above $1 per barrel of oil equivalent. So in terms of financial results for this quarter, at 44,400 barrels of oil equivalent per day production for this first quarter, we generated USD 180 million of revenues or cash margins, so really revenues less production cost was $75 million, gross profit of $44 million and a net profit of $16 million. As expected, really, the main changes on the balance sheet between the end of last year and the end of the quarter was a reduction in our cash position and an increase in the value of our oil and gas properties. Maybe the only second comment I would make is that the economic environment has changed quite a bit between the first quarter and where we stand today, namely the Canadian dollar was reasonably weak against the U.S. dollar during the first quarter at around CAD 1.43. It's no longer the case. It's still reasonably weak, but it's appreciated against the U.S. dollar at CAD 1.38. And as you know, Brent prices went from roughly $75% down to $60. So that has 2 impacts on the balance sheet, it -- at the end of March, you can see a negative mark-to-market of our FX hedges at a negative $13 million. This is closer to 0 or a couple of million at the end of April. So we are not losing or not expecting to lose much on our FX hedges for the rest of the year. While the situation has improved, I would say, almost unfortunately on the commodities hedging front, we were smart or lucky enough to hedge 40% of our Brent and WTI exposure earlier on. And that really moved the needle because during -- at the end of the first quarter, our mark-to-market was close to 0 on our balance sheet. If you looked at the same position at the end of April, we really have a mark-to-market production -- a mark-to-market value of our commodity hedges in excess of USD 35 million. So that was my 2 important points: reduction in cash, increase in Oil & Gas value properties and a positive move on the mark-to-market valuation of our underlying FX and commodities hedges. In terms of the capital structure, we have $450 million bonds outstanding. We're out of the non-call period, so we have really 2 years 20 months to refinance these bonds. So we are following carefully what's happening on the high-yield market front to be ready to seize market opportunities between, say, now and 12 months from now to refinance when we see good market opportunities. We still have a fully undrawn and fully committed and available Canadian revolving credit facility of CAD 180 million that is maturing next year in May 2026, and we're in the process of extending the maturity by 12 months as we do every year. So really no changes, but extending the RCF and following market conditions for future refinancing of our bonds. Here is on the next slide, 29, a recap of our hedging position. So 40% of our exposure to WTI and Brent hedged at, respectively, USD 71 and USD 76 per barrel. 50% of our exposure to the differential hedged at minus $14. And as I said, currently, that differential is single digit between $9 and $10. We added some gas hedges during the first quarter to benefit from the better forward curve, so we were able to secure some gas prices between CAD 2.3 and CAD 2.6 per MCF for the rest of the year. We've not added, not changed any FX. The bulk of our FX hedges are on the Canadian front -- Canadian dollar front, and we've hedged at CAD 1.36, the current market is CAD 1.38, which is why our mark-to-market now is still slightly negative, but only by a couple of million dollars. Thank you very much for listening in and I'll let Will conclude.

Thanks very much, Christophe. Indeed, a great quarter shown through the financial highlights of Christophe's section. Just to summarize for Q1 on the capital investment side, just under $100 million was spent and $77 million of that was spent towards the Blackrod Phase 1 project. Production in line with expectations at 44,000 BOEs per day. Full year production guidance maintained at 43,000 to 45,000 BOEs per day. Operating costs, Q1 at $17.30 and full year OpEx per BOE maintained between $18 and $19. Cash flow through Q1, very strong at $75 million. and free cash flow for the quarter was minus $43 million. Balance sheet, net debt at $314 million and gross cash resources that we have directly available is $140 million. Sustainability focus, again, very pleased. No material safety incidents took place during Q1. And making great headway on our share repurchase program, which we fully intend to complete before expiry this year. So with that, I will hand it over to the operator to take questions. Thank you.

[Operator Instructions] And now first, we have a question from Teodor Nilsen from SB1 Markets.

Congrats on yet another strong quarter. A few questions for me. First, on the macro environment, since last time we met, there has definitely been some turmoil may be triggered by the new administration in the U.S. I just wonder how your thinking is around the current macro environment? And how you plan for spending going forward? And secondly, on that topic, does the current uncertainty impact you're thinking around Blackrod Phase 2. Second question I had is on the hedging. What's your hedging strategy after Blackrod's First Oil? And my third and final question that is around the first gas for Blackrod, I see that is planned for January 2026. I just wondered, does that timing represent any weakness at all, I think rather than the conditions and winter please.

Okay. Thanks for the series of questions, Teodor, I'll try to answer those to the best of my ability here. So macro pricing outlook, definitely a volatile period. I think it's as uncertain and as ever right now with the whole tariff situation created by the Trump administration, which is really creating shock waves through the world in terms of weakened global economic growth, which, of course, GDP growth is a big parameter as it relates to oil prices. So with not as much growth anticipated if the tariffs are going to remain in full force, especially against China, that has potential implications with respect to the demand side. And of course, in the oil world, there has to be a double whammy when things hit. And we have OPEC, of course, unleashing more barrels onto the market a bit more than expected from one of their voluntary cuts. So that's adding to the supply growth right now. So with those 2 features, that's resulted in the weakened pricing situation that we're in right now. As we look forward, I don't think $60 oil pricing scenario is going to last for a very long time, at least looking through the last 20 years of oil prices. It's typically very short lived, below $60 Brent pricing and typically corresponds in times of a recession. So the general thematic, we are still bullish long-term oil and gas given emerging markets developing nations, growing demand and generally weak inventories as we see right now, but definitely going to be volatile for the months and potentially quarters ahead here. And as if we think about our portfolio, this year is, again, the final major growth spend year for us. So with a lower oil price hitting us this year, silver lining, it's not hitting us when we're at plateau production rates at Blackrod and we're doing close to 70,000 barrels per day slowly in a few years from now. So with that silver lining, we also did some hedges that we implemented earlier this year, as Christophe expanded on in his section, and we didn't do zero-cost collars, we did swaps because we wanted to protect the downside to the best possible ability that we could. And those are hugely in the money right now. So that really means that we're quite resilient even at these lower pricing levels through 2025. And what we also did as a company, of course, which was prudent, was to raise a lot of cash in bonds, which we didn't necessarily need at the time, but we've kept that in case of strategic opportunities presenting themselves, or in a case where a stormy situation prevails as we're witnessing right now. So having the liquidity availability, having some hedges being in the final major spend year for 2025 on the Blackrod project puts us in a great position to be able to weather this storm and come out the other side strongly. And so Blackrod Phase 2, that's something that we are working towards internally in terms of maturing up that development concept. The primary focus, of course, for the company is to get Phase 1 on stream. However, we are spending small dollars towards maturing future resource. And what we essentially want to do is put the company in the strongest position possible to be able to sanction a future phase expansion as quickly as possible, with keeping our liquidity in mind as well. So I don't have any specific time lines to provide on Blackrod Phase 2, but we definitely believe there's a lot of value beyond Phase 1 associated with the contingent resources at that major asset. The hedging strategy, mainly opportunistic. Typically, as also Christophe and I have mentioned in the past, when there's major debt maturities or major CapEx involved, we're a bit more open to hedging. Right now with the forward curve being as weak as it is, we're not entertaining that thought at all for 2026 at this point in time. But provided if there is a spike that happens from geopolitical tension or some events happening, we would be open to implementing some hedges for downside protection later on in the year and following into the next year. For Blackrod Phase 1 first steam, as you noted there. So it's in Q1. We haven't said January 1 first steam. There's some movements there, and we expect around -- sometime in Q1, it could be around mid-Q1 first steam, we're well positioned to be able to deliver within that. But as a company, the last thing we want to do is update the market and overpromise and underdeliver and move the goalpost on this project. We are extremely pleased with the level of progress that's taken place to date. However, there still is a lot of activity in the field. There's a lot of manpower out there. Electrical and instrumentation is always such a key scope for cable pulling as well as getting all your facilities fully started up. So with the bulk of work in front of us, we feel it's prudent to maintain our original time line. But we feel really well positioned to be able to deliver within that. But with any major project, of course, there's still some risks that exist. So case in point, we're maintaining guidance at this point in time.

[Operator Instructions] There appears to be no further questions over the conference call at the moment, so I'd like to hand it back for questions via the webcast.

Thank you. We have a few questions from the Internet. Maybe I'll start with the bond refinancing questions for Christophe here. Regarding the bond refinancing, would it be reasonable to assume it would be of a similar amount? Or will you consider the refinancing with a larger bonds due to increased future production and cash flows?

Yes. No, that's a very good question. I think it's fair to assume that we would contemplate a refinancing in the range of the existing bonds, whether it's a little less or a little more, I think, $450 million to $500 million is usually where the market likes to play. And there's a reason for that. When you issue bonds around $0.5 billion, it's a so-called benchmark size in the U.S. market. So the bonds tend to be a bit more liquid, which in turn tend to make the bond coupon a bit lower, which is in our interest. So everything considered, you should expect something in line with the current level of the bond. At least that's the current thinking. Of course, oil prices may influence that lower or higher.

Okay. thanks, Christophe. Will, a question for you. I think we know the answer, but it's always good to ask it. If oil prices continue to slide, will management authorize startup with Blackrod production?

Absolutely. Blackrod is the single most important project within our portfolio. And given where we're at now and significant progress, and we can see the light at the end of the tunnel here in terms of the overall start-up, and as I had commented on the previous question, the company feels well positioned even through lower oil pricing environment to be able to get this project on stream. So very much intend and fully planned to get Blackrod started up no matter what. And if there is a very deep contraction further from these levels on flat price, if it is to drop, we have been in situations before as a company, notably in 2020 where oil priced averaged $40 a barrel to go into vicious austerity modes. However, even if we were to get in that position, everything would be preserved around Blackrod to ensure start-up of that facility.

Perfect. Thanks, Will. And the final question from Mark Wilson from Jefferies. What happens with returns once you reach 0 dilution on the share count, would you just continue with buybacks? Or would you alternatively consider a dividend?

The infamous buyback/dividend debate, it's a great question as always. And we are getting very close, so it does appear that we're going to get to this 113.5 million share count, actually slightly below that through completing our buyback program. And we're -- as we always do, we're going to evaluate what's going to create the most value for all of our stakeholders. And we feel at this point in time, while we're trading at a material discount, and even with the share price being hit a little bit due to oil prices being down, it creates an incredible opportunity to take out our cheap stock because we have a high degree of conviction that the shares are going to appreciate our stock price in the coming years ahead. So down the line, we will always evaluate whether to implement a dividend or to keep the buyback strategy in place. Traditionally, we would like us trading at a premium relative to our net asset value, given the quality of our portfolio, the execution, delivery. And then again, of course, the billion barrels of contingent resources that aren't even factored into our net asset valuation. So that's one of the core considerations to start dividending, is to be trading closer to our NAV. However, we'll continue to evaluate as time passes in terms of what's the most effective method of distributions to maximize shareholder value.

Okay. Great. That's the end of Internet questions for today. So thanks to everyone.

Thanks, everyone, and we will continue working away and look forward to connecting on the next quarterly update in August. Thank you.

Thank you.