Karoon Energy Ltd (KAR) Earnings Call Transcript & Summary

Thank you, and good morning, ladies and gentlemen, and welcome to the 2023 Annual General Meeting for Karoon Energy Ltd. My name is Bruce Phillips, and I'm your Chairman today. Firstly, I have a couple of housekeeping matters for those of you in the auditorium. Please ensure that your mobile devices are now set to silent mode, please. And in the unlikely event of an emergency, you should proceed down the stairs through the side entrance here and exit the building whilst at all times following the direction of the RACV staff. As you are aware, the meeting today will be held as a hybrid meeting. This allows shareholders, proxies and guests to attend the meeting virtually. All attendees can also watch a live webcast of the meeting. In addition, shareholders and proxies have the ability to ask questions and submit votes. Online attendees can submit questions at any time. [Operator Instructions] Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting. Please also note that your questions may be moderated or if we receive multiple questions on one topic, they will be amalgamated. [Operator Instructions] Voting today will be conducted by way of a poll on all items of business. If you are eligible to vote, once voting opens, press the vote icon and all resolutions will be activated with voting options. To cast your vote, simply select one of the options. There is no need to hit a submit or enter button as the vote is automatically recorded. You'll receive a vote confirmation notification on your screen. You can change your vote up until the time I declare voting closed. And to provide you with enough time to vote, I will shortly open voting on the Resolutions 1 to 4 inclusive. I'm advised and I can see that a quorum of members is present. I therefore declare the meeting legally constituted and open. Before proceeding with the formalities, I'd like to introduce participants joining the meeting today in front of you, firstly, the independent nonexecutive directors of your company. Mr. Peter Botten, if you could acknowledge yourself, please, Peter. Thank you. He's Deputy Chairman of Karoon and a member of the Audit, Risk and Governance and the Sustainability and Operational Risk Committees. Mr. Botten will, subject to being reelected today, become the Chairman of Karoon at the conclusion of today's meeting. And we have Mr. Peter Turnbull. Peter is Chairman of the People and Culture Committee and a member of the Audit, Risk and Governance and the Sustainability and Operational Risk Committees. Then we have Mr. Clark Davey, who is Chairman of the Audit and Risk and Governance Committee. He's also a member of the People and Culture Committee. Ms. Luciana Rachid is Chair of the Sustainability and Operational Risk Committee. And Mr. Tadeu Fraga is a member of the Sustainability and Operational Risk Committee. The remaining member of the Board is Dr. Julian Fowles, who, as you know, is Karoon's Chief Executive Officer and Managing Director. Also participating in the meeting today is Mr. Ray Church, who is our Chief Financial Officer; and Mr. Daniel Murnane, our General Counsel and Company Secretary. I'm chairing the meeting today from the RACV Club in Melbourne. Our Senior Vice President of Communications and Investor Relations, Ms. Ann Diamant, will moderate questions submitted during the meeting. And Mr. Julian Muzzin from our registry Computershare will also be supporting the meeting as the returning officer. Mr. Graeme McKenna, in the front row here, is from our company's auditors -- the company's auditors, PwC, is also present to answer questions later in the meeting. Ladies and gentlemen, as the Notice of Meeting has been made available to all shareholders, I will take it as read. As we progress through the meeting, first, we will have my Chairman's address, followed by a presentation by Julian Fowles. We will then proceed to consideration of the formal resolutions as outlined in the Notice of Meeting. Our proposed incoming Chairman, Mr. Peter Botten, will also address shareholders towards the end of the meeting. Okay. So now to my Chairman's address. The 2023 financial year was a very busy one for Karoon. We successfully completed the Baúna intervention campaign and the Patola development as well as drilling 2 control wells on the Neon field. These projects were delivered safely and within budget and resulted in a 52% increase in production for the company and an even larger uplift in profitability compared to the prior year. Before I talk about our strategy and priorities going forward, I'd like to say a few words about the macro environment in which we're participating. Brent crude oil prices remained volatile over FY '23, falling from $112 per barrel in July '22 to $75 a barrel by the end of the fiscal year. This sharp drop reflected increasing concerns about the outlook for global economic growth together with ample oil supply. In addition, the oil and gas industry, like many other sectors, experienced considerable cost inflation during the year. The cost of many services, particularly drilling rigs, increased significantly as activity levels and global inflation increased in parallel. This dynamic is being incorporated into our future investment decisions, whether they be associated with our ongoing operating business, growth investments or capital returns to shareholders. Over the past few months, volatility of the oil price has continued with the contrasting forces of OPEC+ supply cuts and increasing geopolitical tensions in the Middle East. This volatility and high inflationary cost environment highlight the importance of maintaining a strong financial discipline throughout the oil price cycles, something which Karoon remains very focused upon. I'd also like to make a brief comment about the operating environment in Brazil. In November 2022, a new left-wing administration led by President Lula da Silva was elected and took office in early 2023. While we, like the rest of the industry, were disappointed with the sudden introduction of a temporary export tax for our crude oil, we welcomed the decision to end the tax in line with the original stated timetable. In addition, the reduction in royalty rate, which applies to incremental Baúna production resulting from our recent investments, provides a good incentive for further investment in mature and marginal fields. In FY '23, Karoon contributed more than USD 140 million to the Brazilian economy through employee benefits, payments to governments, our environmental and social projects. We look forward to continuing to work closely with the regulatory authorities to maximize the benefit of our activities for all our stakeholders, including the people of Brazil and Karoon shareholders, under a continuing stable regulatory and fiscal regime. As already mentioned, the Baúna interventions and Patola development helped Karoon deliver significant production growth in FY '23. This resulted in a 70% increase in the year's underlying net profit after tax from just under $90 million up to USD 146 million. The statutory net profit after tax for FY '23 was USD 163 million compared to the $64 million loss in the prior year in FY '22. Karoon ended FY '23 in a good financial position with net cash of USD 45 million. This was despite a significant $238 million capital investment program over the year. As highlighted in our latest quarterly report, our balance sheet is continuing to strengthen as we enter a period of more modest capital requirements and significantly higher revenues. Julian will go through the FY '23 results in more detail in his presentation. Following completion of the intervention and Patola projects, Karoon now has a substantial and cost-effective production base in Brazil. This is providing a solid foundation to pursue value-accretive organic and inorganic growth. We are making steady progress on advancing the potential Neon development located approximately 60 kilometers north of our current operations offshore Brazil. In addition, over the year, we continued to explore inorganic opportunities in both Brazil and the deepwater U.S. Gulf of Mexico. This culminated in the acquisition of a 30% interest in the Who Dat and Dome Patrol oil and gas fields located offshore Louisiana in the Gulf of Mexico, which we announced just last week. These assets provide the key attributes we have been seeking for some time, including value accretion to our shareholders, risk diversification, increased reserves and resources, additional reliable production, potential infield and near-field expansion opportunities and a low-cost structure, all in a stable and fiscally attractive regime. Importantly, even after the equity capital raise, the assets will be cash flow and earnings accretive to Karoon, with planned and potential exploration and development activities being self-funded from the asset. More information about this exciting acquisition will be provided in Julian's presentation shortly. Turning now to ESG matters. The company's sustainability strategies consist of 5 key pillars: health, safety and security; climate; people and culture; community; and obviously the environment. These guide our decision-making. Progress was made on all 5 pillars during the year, but I'll highlight just 3 today. Health and safety are Karoon's highest priorities. And it was pleasing, the total recordable injury rates in FY '23 were lower than FY '22. Nonetheless, we believe all incidents are preventable, and this will continue to be the first thing we think of every day. As an oil producer, we also recognize the need to take responsibility for our greenhouse gas emissions. We achieved carbon neutrality on our Scope 1 and 2 emissions from Baúna in FY '22, and we are on track to be the same carbon-neutral position for FY '23. A key attraction of the Who Dat assets is that their emissions intensity is lower than Baúna and that the acquisition adds lower-carbon gas to our product stream. Despite an increase in absolute emissions reflecting the higher production, we are targeting to remain carbon neutral for all our operations, including Baúna and Who Dat, and our ambitions for being net zero for Scope 1 and 2 emissions by 2035 remain unchanged. Karoon's Board and management believe that a successful business should not only add value for shareholders, the employees, contractors and governments, but also help improve the lives of people in our local communities. In FY '23, Karoon provided funding to 22 social and community projects in Brazil. I was fortunate to see some of these projects firsthand when the Board visited Brazil in July, and shareholders should be proud to see the positive impacts that these investments are having in our local communities. The company during the year delivered most, but not all, of its strategic and operational milestones. As a result, the remuneration of our people was adjusted accordingly. So only 60% of the possible short-term incentive outcome was awarded to our key management personnel. The results reflect the completion of the Baúna intervention and Patola projects successfully, which were delivered on budget and on time, as well as the positive results of the Neon drilling campaign, but also appropriately taking into account the adverse impact of the 6-week unplanned production shutdown in March this year. In the longer term, 100% of the 2020 long-term incentive plan vested, based on an absolute 3-year total shareholder return of 49% per annum, relative to the maximum 18% per annum hurdle rate and Karoon's relative shareholder return position in the 80th percentile, so again, a full vesting of that LTI. Karoon believes these remuneration outcomes are well deserved and reflect significant value added for our shareholders. Pleasingly, all of the major proxy advisory firms share the Board's view and have recommended voting in favor of the FY '23 remuneration report. We congratulate the management and their staff on their many achievements during the year. On the topic of capital management, while we ended FY '23 with a strong balance sheet, cash on hand was negatively impacted by that unplanned production shutdown. As a result, the Board decided not to pay a dividend in respect of FY '23. I'll talk more about that later on. Our capital management priorities remain in order: firstly, for stay-in-business CapEx, we have to keep our equipment in tip-top shape; then debt servicing, we realize that we're taking on debt with the Who Dat acquisition; and then value-adding growth investment balanced with sustainable returns for shareholders. The recent Gulf of Mexico acquisition will diversify our asset base and add reliable long-term production, which should enhance our ability to pay dividends in the future. The Board will closely monitor and reassess potential capital management options in early 2024. As announced in March this year, I will be retiring as Karoon's Chairman at the conclusion of today's meeting. As such, I'd like to take a few moments just to reflect on the changes that have occurred over that 5-year period. In January 2019, when I joined Karoon, we were a pure exploration company with assets located in Australia, Brazil and Peru. Since that time, Karoon has refreshed its strategy and refined its focus. We've become a material oil producer and operator with a pathway for further growth through both organic and inorganic opportunities. This was delivered by a revitalized Board and management team who have brought new and different perspectives and expertise, let's say, to navigate a successful transformation of Karoon. Equally significant is the change in our shareholder base. In 2019, only 40% of our shareholders were professional institutional shareholders, and the balance were retail investors. Institutional investors now represent 70% of the share register. Their support, together with a near threefold increase in Karoon's share price over that period, underscores the collective belief by the market in the strategic direction of Karoon. I'd like to take this opportunity to commend the entire Karoon team, and I would stress past and present people, for their hard work and dedication in delivering the transformation of Karoon over the last 5 years. Last but certainly not least, I also thank you, our shareholders, for your continued loyalty and support. I'll miss being part of the Karoon team. However, I'm really confident, with Peter Botten, if reelected today as the new Chair of the company, providing Julian and the rest of Karoon with leadership and support, our company, your company, is in very, very good hands and well positioned to continue to deliver value into the future. I'd like to now thank -- hand over to Julian who will speak further about the company's operational performance. Thank you.

Thank you very much, Bruce, and good morning to everyone joining us here in the auditorium and obviously on the call today. So I have a number of slides I'm going to go through, which will outline our progress through the year and talk a little bit also about our current position. As you've just heard from Bruce, FY '23 was one of the busiest years for Karoon. During the year, we successfully completed the Baúna intervention campaign and the Patola development. Most importantly, these projects were delivered safely and were also within budget. The intervention and Patola programs were undertaken to ensure we're able to extract the maximum value from the Baúna project acquisition. The excellent results have set us up with a solid foundation for future growth. We also drilled 2 very successful control wells at Neon, which I hope in time will become a core part of that growth. Most recently, we announced a new acquisition in line with our long-flagged M&A strategy with our entry into the U.S. Gulf of Mexico. We're acquiring a 30% non-operated interest in the Who Dat and Dome Patrol oil and gas fields located offshore Louisiana as well as interests in some neighboring exploration leases. But before I go into more detail about Neon and the Who Dat acquisition, let me provide an update of our current base business. So the September quarter saw a significant lift in production and in our revenue as we started to reap the rewards of our Baúna project programs. Operations maintained an excellent safety performance. And in the 3 months to 30th of September, Karoon generated USD 107 million in cash -- of free cash flow, taking net cash at the end of the September quarter to USD 152 million. By the end of October, this had increased to USD 251 million. Last week, we finalized a new $340 million debt package with our existing lenders. The Gulf of Mexico acquisition was funded by a fully underwritten equity issue by drawdowns from our new debt facility and from cash. After the transaction, our balance sheet remains strong with pro forma gearing of 14%, providing us with the ability to fund future growth as well as potential returns to our shareholders. Slide 13 here summarizes the outcomes of the intervention and Patola projects. Even with the increased work intensity and managing a multitude of different work fronts, our teams delivered significantly improved safety outcomes. Production peaked at over 40,000 barrels a day in late March, higher than our original expectations, prior, of course, to our unplanned shutdown. Total CapEx spent on the projects was just over USD 300 million, well within the original sanctioned budget. We also announced a significant uplift in our reserves and resources at Baúna with a reserve replacement ratio of over 200% since we took over the assets on the 9th of November 2020. The unplanned shutdown, of course, was a result of a leak in the gas flare system on the FPSO. And while the repair of that gas leak was undertaken within 2 days, safety and integrity are our top priorities. So Karoon, together with our FPSO operator, Altera&Ocyan, decided to undertake a comprehensive inspection of the FPSO's pipework. A number of repairs and pipe replacements were made, and production restarted in May. As a single-asset operator, FPSO uptime is key to Karoon's profitability. And going forward, we expect that efficiency at the FPSO to be 90% to 95%. This is lower than the historical levels that we've seen, and that reflects the fact that we now have less redundancy in our system as the Baúna project is processing more fluids than before and is now fully utilizing the equipment on the facility. In March 2024, we are planning a 2-week shutdown for substantial maintenance activities. The operator is also conducting a higher degree of inspection and maintenance work than previously in order to avoid any repeat of the April unplanned shutdown. Assuming no unforeseen outages, the asset uptime performance is taken into account in our production forecasts for Baúna of 9 million to 11 million barrels guidance for FY '24 and, looking at calendar year '24, 8 million to 10 million barrels. Reservoir and well performance is tracking as expected, and approximately a 15% blended decline rate is expected for the 3 Baúna project fields. We're currently undertaking initial desktop studies to extend the life of the Baúna project beyond the current contract life of 2028, which is assuming we take up available extensions to the current contract, and the reserve life of 2032. The studies are looking to identify the scopes of work required and are planned to be finalized over the next 12 months. The potential life extension is important as it could unlock a further 11 million barrels of 2C contingent resource in the asset and extend the life potentially to as long as 2038. Beyond Baúna, we've made considerable progress on our 100% owned potential organic growth project at Neon. During FY '23, we drilled 2 control wells, which have improved our understanding of the resource, and they led to a 14% increase in the 2C contingent resource at Neon. And that now sits at over 60 million barrels. The results there have also helped us derisk a very exciting new prospect at Neon West, just 2 kilometers from Neon. Detailed technical and commercial feasibility studies on the potential Neon concept are currently underway. The potential Neon concept under consideration include a stand-alone FPSO development or a subsea tieback. Our teams are evaluating the advantages and disadvantages of each of these 2 concepts. We plan to provide an update on Neon in the first quarter of calendar '24 when we shall also be in a position to make a concept select decision. Assuming the project meets internal technical and commercial hurdles at each decision gate, first oil is potentially targeted for late 2028 or early 2029, potentially providing a peak rate of 30,000 to 50,000 barrels of oil per day of new production. The Neon concept currently focuses solely on the development of the 60 million barrels of 2C contingent resources at Neon. However, on this slide, we highlight several promising near-field opportunities that could be unlocked if Neon is developed. These include the 27 million barrels of 2C contingent resource already booked at Goiá as well as the low-risk 14.8 million barrels of 2U undiscovered resources at Neon West that we're currently investigating to potentially bring in to the Neon foundation project. The 2C and 2U resources in the area amount to a potential total volume of more than 100 million barrels. As we announced last week, Karoon is acquiring a 30% interest in the Who Dat and Dome Patrol oil and gas fields in the U.S. Gulf of Mexico. We are very excited about this entry into one of the world's leading offshore oil and gas-producing regions, which provides a platform for Karoon's further growth. It also partners us with LLOG, known as one of the best operators in the Gulf with an excellent operational and safety record, as well as Westlawn, a relatively new oil and gas company staffed by highly successful and experienced upstream professionals. The acquisition exceeds our internal return hurdles and will generate immediate positive cash flows. It also meets our much-flagged strategic objective to diversify our asset base by acquiring a value-accretive producing asset with expansion opportunities. As well as providing a long-term stable production base, there are near-term, low-cost infill development opportunities. In addition, the Who Dat acquisition brings a range of relatively low-risk prospects located within tieback distance of the Who Dat production facility, and they offer material potential upside. This slide shows the location of Who Dat and Dome Patrol, which are approximately 90 kilometers off the coast of Louisiana. This sits in the highly productive Mississippi Canyon area of the U.S. Gulf of Mexico. The water depth is approximately 800 meters, and the Miocene age reservoirs are 4,000 to 5,000 meters subsea. The current production rate is approximately 42,000 BOEs per day but is expected to rise over the next few months as 2 new planned development wells are brought into production, getting up to between 49,000 and 50,000 BOEs a day. Operating costs are very low at less than USD 6 per BOE in FY '23, making this a very high-margin asset with a pretax operating margin of 65% to 70%. This compares to the $15.75 per barrel that we saw for Baúna in the same period where we have a still very attractive pretax operating margin but somewhat lower at approximately 50%. The acquisition of Who Dat is transformational for Karoon. It lifts our working interest reserves by 75% and our production by some 60%. The significant contingent and low-risk prospective resources close to the production facility in Who Dat East, West and South are expected to ensure Karoon has a long pipeline of tiebacks and future developments to maintain production from this asset long into the future. Our work to date suggests there may still be more resources to delineate as potential drilling targets within the leases we have purchased. The next slide outlines our priorities for allocating capital. Our priority remains safe, reliable and responsible business operations. Operations, sustaining CapEx and debt service remain our highest priorities, as the Chairman has already pointed out, ensuring that we maintain a healthy balance sheet. Firming up the potential development of Neon is a high priority while we also seek additional near-field opportunities to complement our asset base in Brazil. Potential inorganic growth opportunities will continue to be ranked against returning capital to shareholders. The capital allocation waterfall you can see is aimed at maintaining liquidity and balance sheet health while supporting growth as we build scale to higher future levels of operating and long-term free cash flows. The Board is committed to ensuring shareholders see capital returns from these long-term sustained cash flows as well as the potential for continued share price appreciation. Now on sustainability, carbon management remains a key area for Karoon, and our strategy in this area remains unchanged. Through the implementation of a number of emissions reduction projects and by the acquisition of offsets, we were carbon neutral for FY '22, and we intend to continue to be carbon neutral going forward. Our first priority continues to be investing in opportunities to remove emissions from our own operations, but we have also entered a number of agreements to expand our acquisition of offsets while also continuing to pursue direct investment in nature-based projects to remove atmospheric carbon, importantly, in projects with social co-benefits. FY '23, of course, saw an increase in our carbon footprint due to our extensive work programs. However, both the absolute volume of CO2 emitted and our carbon emission intensity have now dropped away significantly, as you can see in the chart on the top right. In addition to taking responsibility for mitigating our emissions, Karoon also makes significant investments in projects to improve the lives of the people in the communities where we operate, and the Chairman has just touched upon those. In summary, Karoon has made great strides over the past 12 to 18 months in delivering our strategic objectives. With the full delivery of the Baúna project and the new acquisition at Who Dat, we have more than tripled our production base while maintaining very low gearing. We are well positioned to take advantage of the continuing prevailing strength in oil prices with our modest CapEx commitments and our high-margin production. We continue to pursue opportunities to extend the life of the Baúna FPSO as we progress the promising potential Neon development. While we shall spend some time ensuring we're positioned to get the full value from the Who Dat acquisition, we shall also continue to seek value-adding new opportunities in each of the 2 world-class basins where we are now present, balanced with the commitment to initiate cash returns to shareholders. I should like to express my sincere appreciation to all of our staff and contractors for their dedication to ensuring safety and reliability sit at the top of our priorities while pursuing our strategic growth opportunities during the year. The results reflect the unwavering commitment, the professionalism and the expertise of our teams in both Australia and in Brazil, whether they're working onshore or offshore. Finally, I want to thank you, our shareholders, for your continued loyalty to our business and for your support of our strategic objectives. Thank you for your attention, and I'll now hand back to our Chairman.

Thank you, Julian. Ladies and gentlemen, we now move to the formal business of the meeting. As I mentioned earlier, voting is open on Resolutions 1 to 4. I remind you that you do have the ability to change your vote up until the time I declare voting closed. Proxies have been received from 295 shareholders, representing over 346.7 million ordinary share votes, being approximately 61% of Karoon's issued capital, so a very good turnout in the voting. Thank you for everyone involved in that. As we proceed through each resolution, the proxy votes for that resolution will be shown on your screen. I propose to vote all available open proxies given to the Chairman of the meeting in favor of Resolutions 1 to 4 inclusive. Results of the polls will be available after the close of meeting and will be announced on the ASX and posted on the company's website. I appoint Mr. Julian Muzzin from Computershare's Investor Services as the poll scrutineer. The first resolution for voting is the reelection of Ms. Luciana Rachid as a director. In accordance with the ASX listing rules and the company's constitution, Ms. Rachid is seeking reelection as a director at this meeting. Luciana's profile has been outlined to shareholders in the Notice of Meeting. She has over 40 years' experience in the oil and gas industry, in technical and commercial senior leadership roles in Brazil, including 20 years in the exploration and production division of Brazil's national oil company, Petrobras. Ms. Rachid was first appointed to the Board as a director in August 2016, and the Board strongly supports her reelection. I now invite Luciana to address the meeting.

Dear shareholders, good morning. Thank you for the chance to speak to my reelection, my candidacy for reelection. As you know, I had the privilege of joining the Board of Karoon in 2016 during the first attempt to acquire the Baúna asset. Over the years, as member of an exceptional team, I had the opportunity to participate in the guidance and oversight of Karoon's transformational journey, a growth story that is starting a new chapter through the recently announced value-accretive acquisition in the Gulf of Mexico. In the last 7 years, not only Karoon have evolved but also the oil industry and the global energy landscape have changed a lot. Governments, companies, society in general are pursuing a fair and inclusive energy transition pathway in which oil will still be a significant part of the energy mix in the decades to come, according to various forecasters, including OPEC and International Energy Agency. This scenario brings challenges and opportunities for junior E&P companies like Karoon committed to producing oil in a socially and environmentally responsible way. Safe, reliable, low-cost operator with high standards of corporate governance, good risk assessment and management practices can thrive in a dynamic and very competitive market in which good opportunities permanently become available. I'm excited by the current achievements. I'm enthusiastic about the future of the company, and I would be honored to keep on serving in this Board. I have the experience in the oil industry and a good understanding of the energy market. I have lengthy experience in governance and risk management. I have time and energy to dedicate to the company. I remain committed to providing positive contributions to Karoon's strategic direction and management, and I remain focused on creating value for you, shareholders, owners of the company. Thank you.

Thank you, Luciana. Details of the proxies received for the resolution to reelect Ms. Rachid are up on the screen. Of those received, 98.11% are for the resolution, 1.75% against and 0.14% others. Do we have any questions from the floor on this resolution? No? Thank you. Moderator, do we have any questions online?

Yes. We have a question from Mr. Stephen Mayne. He asks, institutional placements have inherent governance challenges because there is no disclosure as to who gets the stock, and existing shareholders often get diluted. Could Luciana please comment on how much visibility and involvement the independent directors had when it came to who our underwriter Macquarie allocated the $170 million worth of new placed shares? Also, why was the placement such a large proportion of the overall $480 million raising? And did the Board seriously consider any alternative structures such as a PAITREO?

And he specifically has asked for Luciana to answer that question?

I think that he asked that Luciana please comment on the feasibility and involvement of the independent directors on who the stock was allocated to. But maybe, Bruce, you can take the question about whether we considered any alternative structures.

I'm not sure I quite understood the question, but of course, as an independent director, we are all involved in all those discussions regarding whatever subject relates to the company, and our voices are heard. So I think that's all I have to say.

Well, look, I think it's appropriate for me to add a little bit to that, too. The Board appointed a due diligence committee to go through the acquisition process. That committee consisted of 3 directors as chaired by Mr. Peter Turnbull. Clark Davey and Peter Botten were also on that committee. So they did the heavy lifting on the due diligence work. I think we had something like 12 different independent experts ranging from legal to subsea to topsides to marketing, pipelines, you name it, insurance, et cetera. We had quite a lot of external experts that have worked with us on different acquisitions over the last couple of years involved in that. All of the directors attended the last 2 or 3 due diligence committee meetings to ensure that they were up to speed on that. Part of that was the underwriting process and the agreement thereto. And all directors had quite significant discussion and input into what process we eventually went with. The idea of the PAITREO is a good idea, Stephen. Don't worry, we thought about that, and it probably gives the best outcome eventually for all shareholders in terms of equality. But given the nature of our register, we think that the way we went about it actually delivers fairness to virtually all shareholders except the directors. And so no one is more diluted in this than me personally. And so I had to come to grips with the fact that the mechanism we went with was in the best interest of the company. And that was because we're put on a very, very strict timetable by the vendor of the assets, and they didn't think that we would necessarily be able to complete this deal. So they really struggled, to start with, to even get Karoon as a serious candidate to purchase the assets. So we had to complete the fundraising and the debt raising quickly. And speed was of the essence, and a PAITREO was excluded on that basis.

There are no further questions online.

All right. Do we have any questions from the telephone?

There are no phone questions.

Thank you. Okay. As there are no more questions, the resolution on the screen is now put to the meeting. The second resolution for voting is the reelection of Mr. Peter Botten as a director. In accordance with the ASX listing rules and the company's constitution, Mr. Botten is seeking reelection as a director at this meeting. Peter's profile has been outlined to shareholders in the Notice of Meeting. He has over 40 years' experience in the international resources sector, covering all aspects of the upstream petroleum sector, working in projects in PNG, Australia, Africa, the Middle East and North America, dominated by his 26-year tenure as the CEO of the successful Oil Search company. Peter was appointed to the Board as a director in November 2020. In March '23, he was appointed Deputy Chairman of Karoon and will succeed me as the Chair of the Karoon Board at the conclusion of this meeting, if reelected. The Board strongly supports his reelection. I now invite Peter to address the meeting.

Well, good morning, everybody. It's good to be able to provide you with a little summary of what I believe I can contribute to Karoon and its very exciting future. Thank you, ladies and gentlemen, for providing me with the opportunity to speak to my candidacy for reelection to the Karoon Energy Board for a second term. It's a real privilege to stand for this position, and I humbly seek your support for my election. It's been a really stimulating and exciting time in the company since I joined the Board in November 2020 as the company has continued to build a portfolio of quality development and production assets whilst building the operating capabilities and governance processes to further build shareholder value in the future. As our Chairman has described, I have over 40 years' experience in the oil and gas and energy sectors dominated by over 26 years as Managing Director of Oil Search. During my time at Oil Search, the company grew from 7 staff on a market capitalization of just over $200 million to a significant regional oil and gas operator and producer, reaching a peak market capitalization of over $15 billion with the systems and processes to operate on behalf of companies such as ExxonMobil, TotalEnergies and a number of national oil companies. In delivering this growth, the company also delivered over 12 consecutive years of top-quartile shareholder performance. I learned a lot about what is necessary to deliver responsible, sustained growth in an energy company. I also learned what doesn't work, what not to do, and frankly, I remain having the scars of things that I got wrong or we got wrong in an organization. And that experience, I believe, is invaluable in input to Karoon's ongoing strategy development and ongoing value growth. Luckily, in Oil Search, we got more things right than wrong, as the results show. I do believe that my broad experience in the industry is helpful and applicable to positively contributing to Board governance and input to Karoon's exciting future. I also can contribute considerable experience from involvement in a number of Boards, including those of large, medium and small ASX-listed companies, providing guidance in relevant strategy, governance, markets, investment and risk management. It's a real privilege to stand and, if elected, serve Karoon shareholders for a further term as a director. I absolutely commit to do my very best to serve the interests of all Karoon shareholders to the best of my ability should you support my election. Thank you very much.

Okay. Thank you, Peter. Details of the proxies received for the resolution to elect Mr. Botten are up on the screen. Of the proxies received, 76.72% are for the resolution and 23.13% against, with 0.15% others. Do we have any questions from the floor on this resolution? We have one over on the left, if we may have a microphone for the gentleman, please.

My name is Henry Stephens. I'm from the Australian Shareholders' Association. I just got a question about the high vote against Peter Botten. Can you just comment on that? 23% against is very high.

Yes. Henry, I'm glad you asked the question. Thank you very much. Look, it's nothing to do with Peter's personal capabilities. It was 1 proxy house out of 4 of the major proxy houses who recommended to their clients to vote against Peter as a male that was coming up for election or reelection at this AGM because the company doesn't have more than 30% female directors on the Board. So I want to make it very, very clear, this was not a vote against Peter's talent or suitability for the role. It was about the Board's position that we've stated publicly that by the end of -- by 2025, so at the end of next year, so just over 12 months' time, we will have more than 30% participation of females on our Board. So that's the reason for it. It's unfortunate that it fell on Peter's shoulders. I wish it were on mine, but that wasn't the case. He was the target this year. Are there any other questions from the floor? Ann, do we have anything from online?

Yes. We have another question from Mr. Stephen Mayne, which is actually very similar to the question he posed to Luciana so I believe has probably been answered comprehensively by yourself, Bruce, but I'll just direct it to Peter. As the most experienced Karoon director when it comes to capital raisings, could Peter Botten explain why Karoon did not do a PAITREO capital raising that treats all shareholders equally and compensates nonparticipants rather than the placements and non-renounceable which dilutes retail shareholders?

I think we've answered that question already. So I don't think we need to hear Peter repeat the words that Luciana or I said. So...

No, I'm happy to do that, Bruce.

Go ahead then, Peter.

Look, I mean there was considerable discussion at Board meetings leading into the capital raising about endeavoring to absolutely look after as -- all shareholders through the process. As Bruce has said, unfortunately, in many occasions, the time frame of raising capital to actually achieve the acquisition was not set by ourselves. It was set by the vendor. And that did restrict our ability to use a number of capital-raising techniques and structures. And we chose the best to deliver a risk-averse acquisition and one that I believe was the only one open to us to actually deliver this acquisition.

Okay. Thanks, Peter. And hopefully, Stephen, that answers your question for a second time. Do we have any questions over the phone?

There are no phone questions.

All right. Thank you. As there are no more questions, the resolution on the screen is now put to the meeting. I now move to Resolution 3, the adoption of the 2023 remuneration report. This resolution will be decided in accordance with Section 250R of the Corporations Act. It should be noted that the vote on this resolution is advisory only and does not bind the directors or the company. The company's overriding aim is to ensure that executive performance outcomes are aligned with the company's stakeholders and particularly those of shareholders. As outlined in Julian's and my earlier addresses, Karoon made significant advances towards these objectives in FY '23. The reward structure for key management personnel of the group is outlined in detail in the annual report. The structure encompasses 3 main elements: fixed salary, a short-term incentive over 1 year and a long-term incentive over 3 years. In this respect, during FY '23, Karoon also reviewed and reconfirmed its new management shareholding policy. Under this policy, the key management personnel are now required to maintain a shareholding in Karoon equal to 50% of their first year's after-tax remuneration within 3 years of their initial appointment. During the year, base Board and committee fees were increased in line with inflation while fees paid to the chairs of Board committees were increased by $5,000 per annum. Notwithstanding the increase in base fees, the maximum fees payable to directors in aggregate do not exceed the threshold as approved by shareholders 7 years ago at the 2016 AGM. Our corporate strategy and all remuneration-related targets are designed and managed to improve shareholder value into the future. Looking ahead to the transitional financial year for the 6 months to 31st of December 2023, the underlying remuneration structure and approach to setting incentives for our Australian and Brazilian staff members will remain consistent with the Board, aided by the People and Culture Committee determining the appropriateness of the remuneration outcomes for transition year '23. Details of the proxies received for this resolution are up on the screen. Of those received, 98.85% are for the resolution and 1.02% against, with 0.13% others. Do we have any questions from the floor on this resolution? No? Moderator, do we have any online questions?

Yes, there's a 2-part question from Mr. Stephen Mayne. Did any of the proxy advisers recommend a vote against any of the resolutions today, including the remuneration report? If so, what reasons did they give? And have there been any material protest votes? Also, next year, will you follow the lead of many other companies and disclose the proxy position to the ASX with the formal addresses to offer more timely disclosure to the market?

Okay then. Look, I think we've answered the first part of the question already. So the only one that hasn't been really answered is, will we disclose proxy positions as early as possible to the ASX? That's something we can look at. Quite obviously, I don't have any objection to that. So that's going to be up to the ongoing directors. I'm getting nods from them that they'll investigate implementing that for you, Stephen. Thank you. Any other questions, Ann?

No.

Okay. Telephone -- do we have any questions over the telephone?

There are no phone questions.

Okay then. Thank you. Okay. So no more questions. The resolution on the screen is now put to the meeting. The next item of business is Resolution 4, the approval of grant of performance rights to the Managing Director and CEO, Dr. Julian Fowles, under the terms of the company's existing performance rights plan as approved at the 2022 Annual General Meeting. A summary of the plan and the calculation of Julian's proposed grants are set out in the explanatory notes to the notice of this meeting. The issue of the performance rights to Julian requires approval by ordinary resolution of shareholders pursuant to the ASX listing rules. The proposal is to grant, firstly, 85,176 short-term incentive performance rights based on the 60% extent to which the relevant performance hurdles in FY '23 were satisfied, which will only vest upon completion of a 1-year retention period to the 30th of June 2024. Secondly, 198,809 long-term incentive performance rights relating to the company's current transitional financial year to be tested (sic) [ vested ] over the performance period from the 1st of July 2023 to the 30th of June 2026. The quantum of these performance rights represents a 6-month period. And thirdly, 12,649 long-term incentive performance rights relating to the existing FY '23 LTI period to be tested over the performance period from the 1st of July 2022 to the 30th of June 2025. The quantum of these performance rights relate to the percentage of a fixed salary increase for Julian he received during the financial year '23 following independent remuneration benchmarking. The LTI performance rights will only vest if pre-agreed performance hurdles are achieved over the 3-year periods. Specifically, vesting conditions are split to 50% relative total shareholder return performance as assessed against a list of comparable and representative industry peer group companies whose business models and/or regions of operations are similar to those of Karoon and 50% absolute total shareholder return performance based on compound annual growth rate, with absolute TSR being in excess of 10%, resulting in the start of vesting performance up to full vesting at 18%. Julian will receive the performance rights and be entitled to the issue of ordinary shares at no cost to him only if the performance hurdles are met. No loans will be granted to him in relation to his participation in the plan. And the nonexecutive directors support the issue of these performance rights. Details of proxies received for this resolution are up on the screen. Of those received, 98.96% are for the resolution, 0.91% against and 0.13% others. I don't think I've ever seen a vote that high for a CEO getting rewarded. So congratulations on that one, Julian. Do we have any questions on this one from the floor? No? Thank you. Moderator, do we have any questions online?

Yes, we have 2 questions from Mr. Stephen Mayne. The first one is, could the CEO summarize his past LTI grants as to whether they have vested or lapsed? Also, has he ever sold any ordinary shares in the company or bought any on market without relying on an incentive scheme to build his equity position in the company? And Stephen asks if he could factually summarize the situation.

Yes, please, Julian.

Yes, I'm happy to answer those. Thank you, Stephen, and thank you, Bruce. I think there are about 4 questions in there. This is the first LTI grant this year, I think, that vested for me. So the first vesting occurred in July this year. In terms of buying shares on market, not long after I joined the company, I have bought 100,000 shares in Karoon, not participating in any particular plan, so have bought those myself. And I have, since joining Karoon, never sold any shares in Karoon. I think that answers them all.

Excellent. Thank you. Do we have any other questions, Ann?

No, not on the subject.

Okay. Do we have any other questions on the telephone?

There are no phone questions.

Okay. Thank you. As there are no more questions, the resolution on the screen is now put to the meeting. The final item of business is consideration of the financial statements and reports. The company's financial statements for the year ended 30th of June 2023, including the directors' report and the report by the auditor, were provided to shareholders in the 2023 Annual Report. Shareholders are now provided the opportunity to ask questions regarding the financial statements and reports, the operations and management of the company or questions to the auditor in respect of the audit report. Mr. Graeme McKenna representing the company's external auditor, PwC, is available today to respond to any questions in relation to the conduct of the audit and the preparation and content of the auditor's report. Do we have any questions from the floor on this resolution? Yes, I think it's Henry from the ASA.

My question is just about oil production. I see that due to the acquisition, oil production is increasing 57% to 63% in 2024, which is a huge increase and very positive. But can you give us a little bit of a feel for the production profile from 2024 on, what this acquisition actually does to the production profile?

I'll pass that one to Julian as it's an operational one.

Yes. Thanks for the question, Henry. Look, it's a great question. We've talked to the market about our guidance for calendar year '24 where we anticipate on a net working interest basis that we'll see another 5 million to 5.7 million barrels net to Karoon. Beyond 2024, we haven't yet put any guidance into the market. We're not yet forecasting what that is likely to be, but we do have an objective to try and maintain the production levels, both at Who Dat and at Baúna as high as we can, of course, to try and maximize the benefit of both of those acquisitions. We don't yet have the figures that we're able to disclose to the market, but in time, no doubt, we will do that.

I think, Henry, directionally as well, like these fields will decline, and Julian has said that about 15% decline is likely for the Baúna fields. But in the Who Dat field, there are so many opportunities. That's actually increasing production from current levels of 20,000 barrels a day to about 50,000 barrels a day in the next couple of months. So we're going to benefit quite well from that sharp uptick. And in Who Dat, we are very excited about the potential of bringing on additional production from the prospectivity we see there near field with near-field tie-ins. And that gives us a bit more comfort that we can maintain those sort of production levels into the future. But it is subject to risk, of course. All right. I hope that answers your question. Any other questions from the floor? No? Okay. Thank you. Moderator, do we have any online questions?

Yes, we have a couple of questions from the webcast. The first one is from Mr. Stephen Mayne. Whose idea was it to cap the ability of your retail shareholders to apply for additional shares in the current share offer at just 55% of entitlement? Shouldn't retail shareholders be given an unlimited ability to take up the lapsed shares of their colleagues rather than the shortfall going to the underwriters at Macquarie?

Yes. It's a good question, too, Stephen. I like that one. It's something that was very near and dear to my heart. The principle that we were working on is a very strong one that none of our existing shareholders should be disadvantaged by any participants in the placement. And when we analyzed the register, we think that no shareholders are going to avoid any dilution from the take-up. That will, of course, depend on how many retail shareholders do take it up. Generally speaking, these sorts of things, if the share price is trading over the issue price, and I think it's today at about $2.20 when the issue price is $2.05, you generally have a very strong retail take-up. 50% to 60% was what the data shows us. On the other hand, if the market price is at or below the issue price, we find that the retail shareholders obviously don't take up any at all. So that oversubscription is -- obviously becomes more attractive to the shareholders, to the retail shareholders when the share price is considerably higher than the issue price. So that will most likely be the situation that we see here now. But I don't think there are going to be too many shareholders on the register diluted. It's going to be mainly the people like myself who have a couple of million shares, and I can't participate in any of the oversubscription whatsoever. But again, I think it's in the best interest of the company, what we're trying to achieve here. Let's see what the result comes out at the end of the day. Ann, are there any other questions?

Yes, there's a question from Mr. [ Scott Milson ]. Why was Karoon not put into a trading halt before the capital raise? Investors were trading stock on an uninformed basis, and a large fall in the share price came upon the news in the AFR paper.

Yes. That's -- I'm glad someone asked that question because it was extremely disappointing to the company that there was a leak of what we had planned to do. And that leak came the morning after we started some institutional crossings, wall crossings that's -- which is normal practice in all of these capital raisings. We were very quick to stop any trading we saw. I think it was at about 15 minutes past the hour of 10 or something like that when a news article was posted online by the AFR. And someone was immediately on the trading platform and then sold some shares. And then the algorithm selling kicked in and multiplied down. So what we did is we immediately contacted the ASX within 10 minutes of that happening and asked them to pause. And then they did that for us and then ultimately put a halt on trading. So those trades, this matter has been referred to ASIC. And if ASIC can ascertain -- because they have more powers than we do as a company. If ASIC can ascertain who was responsible for this -- we know who the journalist was, but we don't know who the person was that fed that journalist. If we get them, our Board position is we want them prosecuted to the maximum extent of the law. This sort of behavior happens occasionally in financial markets all around the world, and it's got to be stamped out. We have to make examples of these crooks. I hope that answers your question and the stance that we're taking on. But we can't say a lot more whilst the matter is under investigation. And the investigation will be thorough by ASIC, and that will not be finished in 1 week. So we will just have to be patient while the wheels of motion go through the process as they need to go through. Okay. Any other questions here?

Yes. Just one final question from Mr. Stephen Mayne. Given the interesting discussions across a range of topics today, could the Chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company website?

Yes. So I think we do that routinely, Stephen, so there's no issue with that at all. We have another question coming from the floor.

Look, I've just got a question about the tight schedule. I assume that you're posting out the retail booklet today, and it's got to be returned -- well, the application has to be returned by December 6. Well, given Australia Post's really poor performance these days, I'm just wondering, is that schedule too tight? Because sometimes Aussie Post doesn't deliver the mail for up to 10 days. And then you've got to return -- retail shareholders have to return their form. They might well miss the date. And I'm just wondering, is that too tight given Aussie Post's poor performance?

Yes. Look, we can't comment on Australia Post, but we do note your concerns there. It is a little tight. But we think that people start to go away on holidays in December, and so we wanted them to focus on this quickly. And I think a lot of shareholders these days get their information electronically. So they'll get that today or tomorrow as well. So it fairly gives them 2 weeks to put in their application. And I think that's reasonable in the modern electronic world that we live in today.

Mr. Chairman, there's no further questions from the web.

Sorry?

No further questions.

Thank you. Are there any questions on the phone?

There are no phone questions.

Good. Well, thank you. There were some good questions in there. As there are no more questions, that concludes our discussion on the items of business. Before closing, I invite Karoon's incoming Chairman to now address shareholders.

Thanks, Bruce. Ladies and gentlemen, as you're all aware, our Chairman, Bruce Phillips, will be standing down as Chair and Director of Karoon at the end of this meeting. And I believe it's therefore totally appropriate to say a few words to recognize Bruce's enormous contribution to the growth and performance of Karoon over the last 5 or so years. In my experience, it's rare that a Chair has had such a profound positive influence on the fortunes of a company. Bruce has clearly led a fundamental reform of key aspects of Karoon's business and has developed a platform in terms of assets, balance sheet, management capabilities and governance practices that has put Karoon in a tremendous position to deliver further value growth for shareholders. Karoon, I'm sure you all recognize, has had a long and sometimes colorful history. On his appointment at Karoon and with the full support of the Board, he set about initiating progressive changes to management, enhancing operating capabilities and governance in line with the requirements of delivering value from the company's recent Baúna, Patola acquisition. With a balance of adept negotiation and sometimes the application of appropriate force and direction, Bruce led the reform of the company with skill and aplomb with the appointment of a highly competent CEO and the building of a high-class fit-for-purpose operations team in Brazil, along with building depth in governance, technical, legal and support teams, it led to a highly successful delivery of the Baúna, Patola development program despite the influence of the pandemic and other factors, including cost inflation. And consequently, it delivered the uplift in revenues and value that we've seen reflected in the company's share price. This included high-quality governance, including excellent safety performance and environmental performance. Bruce also led a very disciplined approach for capital allocation and management with robust criteria to ensure any further acquisitions met strict risk and investment criteria. This process of new venture evaluation has been underway for well over 12 months but clearly accelerated after the successful completion of the Baúna, Patola program, with certainty of enhanced production and associated revenues. This disciplined evaluation led to the recently announced acquisition of a low-cost production base in the Gulf of Mexico with significant upside potential, as described in Julian's presentation this morning. I should also highlight Bruce's leadership in driving the company's participation in meaningful carbon offset programs, making these initiatives core business in our strategy and future. Bruce has always had and provided a laser focus for Board and management on delivering shareholder value. He leaves a tremendous platform for continued responsible value growth for Karoon as well as huge shoes to fill. He's a very genuine and grounded human being, and we'll miss your sage leadership, Bruce. We all wish you very well in your next stage of life, but be assured that you've left Karoon in great shape and with a really exciting future. So thank you, Bruce. Now just a few words about the future. I can assure shareholders that our core strategies that have delivered superior returns to shareholders over the last years will remain the same over the next 12 months. The direction of Karoon is the right one. A core focus for the company will be to bed down and integrate our recent Gulf of Mexico acquisition and ensure that the joint ventures concerned endorse the relevant development programs that address production upside that will enhance the value of our new interests. There will also be continued Board renewal over the next 12 months, addressing appropriate Board skills for the rapidly growing Karoon. We'll also use the opportunity to balance Board skills and address our stated diversity objectives through this renewal. A key discussion point, as highlighted in our Chairman's address, will be the appropriate capital management program, which will reward shareholders accordingly in various ways using various levers, which will be a focus for our Board discussion over the next 12 months. And next AGM is not far away. Because of our change in reporting years, I look forward to seeing you again in May 2024. So get ready for the scones, tea, coffee and further PowerPoints. So thank you very much for your support, and we'll look forward to see you next year.

Just a couple of [ company ] questions that [indiscernible] before that, that those queries are mostly relating to financial statements. I've just got a couple of small general questions. The first one relates to Clorita, the Clorita prospect. And I noticed that the comments in the annual report that it says to date, no material drillable leads or prospects have been identified within the block. It seems we've had that for almost 6 years. I'm wondering whether the company is considering surrendering that prospect or permit.

Bruce, I can address that if you want.

Please.

Yes. The block in the Southern Santos to the south of Baúna, the Clorita block, we are continuing to assess that block, and we have about another 12 or 18 months, I believe, in the life of the license to go. There is an opportunity, we believe, to extend the license due to COVID, which the Brazilian government has considered for a number of other licenses that went through that process. We have some other ideas that we're also applying into that block now. And we hope, sometime over the next 12 months, to be able to shed more light on what our plans will be in that area.

I noticed that when the permit was first granted that there was an obligation to get some 3D seismic carried out. Is that still on foot or still likely to happen?

I can't say whether it's likely or not. It will really depend on the prospectivity that we're able to define. I think some of the intervals at the shallower level, which were the initial entry points for that block, have not shown to be as prospective as we hoped originally. But there are some other prospective horizons that we're taking a close look at, at the moment. And that may lead to some additional work that will take place there.

One other short question relates to the Browse Basin permits and that those payments were likely to come through from Origin if the project proceeded. I noticed that, that comment in the report indicates that they're still on foot. But I'm wondering whether that's just not going to happen. I don't know whether Origin have written it off or what they've done with it, but it doesn't -- I can't find anywhere any information that, that project is likely to proceed.

So the Browse obviously doesn't sit in our hands. It sits with Origin. There is a contingent payment structure should they take that project forward. At the moment, my view would be that there are a number of other projects that would be likely to take place beforehand before that project came to fruition. So probably, if that project is likely to take place, it will be, I think, deferred. I know that Origin has written off their acquisition of it. And yes, obviously, it continues to remain on our books because it is continuing to be an asset for us.

There's no prospect under the "use it or lose it" sort of idea that it's going to get lost, is there?

Look, I can't comment on the Australian government's position on it. To be honest, I know that there's quite a bit of uncertainty at the moment around new developments in Australian offshore waters. So yes, I think where we are placed in terms of Brazil and moving into the Gulf of Mexico is a better and more secure jurisdiction for our investments.

All right. Thank you very much for those additional questions. And I'd like to just address Peter's comments there. That was embarrassing, but thank you. If I was half as good as that, I would be delighted. But thank you for the kind words. And I can assure everyone here that I got more out of my tenure as Chairman than Karoon got out of me. It's been very enjoyable, lots of really good people, talented people. And I'm delighted the way that Karoon now has a second line of management that are really, really good. And the future of the company is in their hands, of course, going forward. And I reckon this company is going to be here for a long, long time with those people coming through and replacing when others eventually leave. Okay. Well, look, ladies and gentlemen, I think that brings us to the closing of the voting system. I suggest that I do that in 1 minute, and we'll have someone come around and collect all of the voting cards now. So I'll just pause for that period of time for you to vote on Resolutions 1 to 4, please. [Voting]

Does anyone in the room need more time to lodge their votes? No? I think we don't need the 1 minute at all, Mr. Secretary. So look, thank you very much, ladies and gentlemen. Voting is -- one more, sorry. Voting is now closed. Look, there's no other business to be conducted today. Results of the poll voting will be announced to the ASX as soon as possible after the meeting and will also be posted on the company's website. I now declare the meeting closed and, in doing so, thank you for your participation today. On behalf of the Board and management team, I send our best wishes to you and your families for a safe and healthy future. For those of you who have been good enough to join us in person here today, the Board now invites you to join us for light refreshments. Thank you.