NuVista Energy Ltd. (NVA) Earnings Call Transcript & Summary

Thank you, Carrie. Thank you, Ryan. Ivan, is there any discussion or questions submitted from any registered shareholder or proxy holder?

Mr. Chair, there are no questions on that motion.

As voting has now been enabled for all previous motions, if a shareholder has not voted yet, please do so now. I will pause briefly to allow final voting. [Voting]

Voting is now closed. I will pause for 30 seconds to receive voting confirmation from the scrutineers. I have been advised by the scrutineers that all resolutions have been approved by more than the requisite majority, and that those nominated have been duly elected as the directors of NuVista Energy Ltd. I declare the motions carried and the nominees for the Board of Directors elected. Final voting results will be published on SEDAR following the meeting. Ivan, are there any additional questions submitted on the formal business of the meeting?

Mr. Chair, there are no questions on the formal business of the meeting.

Then the Chair would entertain a motion to terminate the meeting.

Mr. Chair, I am Tanya Dickison. I am a shareholder and I move that this meeting be terminated.

Mr. Chair, I am [ Ryan Thompson ] and I am a shareholder. I second the motion.

The meeting operator is activating a poll to vote on the termination of the meeting. For those attending the meeting in person, please signify by raising their right hand. The motion to terminate the meeting has been carried. I therefore declare this meeting terminated and invite our President and CEO, Jonathan Wright, to deliver his remarks. Thank you.

Thanks, Pentti. Good afternoon, everybody. Thank you for coming. Great to be here. So great to do it in person after so many years. We were just doing it virtually, not a lot of fun doing that. So yes, I just want to say Pentti was right when he said what a great year 2022 was. And I just want to say all the staff that are here and all the ones out in Grande Prairie, you really knocked it out of the park, right, and we're going to keep doing it. It's -- we're lucky to have tremendous assets and the kind of results you put in last year, as I'm going to summarize here on your behalf, feels great to be up here and be able to talk about it. So I'm going to start with a quick update just on the wildfires. Obviously, it's a very present situation. I'm happy to say that our operations have restarted in the Grande Prairie area and our able field staff are on top of things monitoring. Now we have to be careful because the winds and the weather and the rain could turn again to hot and windy in the wrong direction. So we'll make some announcements publicly once things are stabilized and we're fully back rocking and rolling. But as of last night, we started up successfully. And I'm sure there'll be a few wobbles on the way back up, but that's great news. We're not aware of any damage. And of course, most importantly, we're not aware of any injuries, and we're keeping all of our staff and the public out of harm's way. So that's just a quick update on the wildfire situation. I want to turn quickly to quarterly results next. And so we put out our press release, it would have gone out just a few minutes ago at 3:00 and so you have a chance to [ produce ] that later. I'll just hit a couple of highlights before I go to the actual corporate presentation, which we have a shortened version out for you today. And so first of all, we produced just about exactly what we thought. We were going to produce about 71,200 BOEs per day. Of course, that includes the previously announced 1,500 BOEs a day of downtime that we had prior to wildfires in Q1 as a result of unplanned third-party outages at 3 different facilities. So the underlying production in the wells are doing tremendously. That was just some temporary downtime. And so that's a great start to the year. And then in terms of adjusted funds flow, we actually had a very good adjusted funds flow given the slightly reduced production and that came in about $207.5 million of adjusted funds flow. And I'll talk a little bit about why that was stronger than you might have expected. We had positive free adjusted funds flow after capital spending of about $28 million, and we had a very successful capital expenditure program. We invested $196 million in wells and facilities. Actually 12 gross wells and the completion of 17, 12 were drilled, 17 were completed in our condensate-rich Wapiti Montney play. And so at the same time, we also received cash proceeds of about $26 million for the sale of a nonoperated, underutilized compressor station in the area, and then we're reinvesting half of those proceeds into an ongoing expansion at our Elmworth facility, which will create -- recreate that same throughput capacity and more for our continuing debottlenecking and expansion. So we're basically taking nonoperated, underutilized production into operated lower operating costs, higher utilization production. So a nice little trade that our team was able to put together there. And so that's how the net capital expenditures ended up as they did at the -- what was the number, 100 and I'm going to show my age here, $169 million. Okay. So in terms of commodity prices, I think we all know it was a very highly fluctuating quarter, especially with natural gas prices coming down. But because we're connected to Malin, California, the benefits of our gas diversity and sales really shined through at times like this. Sometimes in Chicago in the winter. This time, it was California in the winter, and we had tremendously good natural gas prices there because of the shortage they had in the cold winter that they had. And as a result, we averaged natural gas price for Q1 was $7.02 in Mcf, which is 62% better than the monthly average AECO price, and that's only 11% of our gas goes to California. So just another tremendous showcasing of the strength of that natural gas diversity. And that's what underpinned our cash flows being so strong. So we exited the quarter with $66 million in cash deposits and 0 drawn on our $440 million credit facility. We improved our financial flexibility, and we're really pleased to say that we moved to a reserve-based lending facility now. That's a 3-year lending facility -- sorry, we moved from our reserve-based lending facility, which is a 2-year to a 3-year covenant-based facility. So this is just another trapping of a larger company, which we are becoming. We have stronger cash flows and much more stable and much more cushion. So I want to thank CIBC and all of our banking syndicate for working with us to get us there. It's another excellent milestone in our continued growth. And so that's a $450 million facility with $300 million accordion feature on top of that. So very, very flexible and undrawn financial position. We did repurchase and subsequently canceled another 1.1 million shares in the company as part of our buyback program with our free cash flow. And as a result, we're now over 91% finished on our annual NCIB. So adding more value per share on the upper -- the top line as well as the denominator of that equation. Operations, I'll cover when we go through some of the slides, and I'll just say quickly that we didn't change our guidance. Our guidance is still intact for the year. You'll see when I go through the presentation, there is a still continued bit of pressure on inflation. So we're watching that, but no reason to change anything at this point. And of course, from a production point of view, things are looking really good for the year. We just have to have sort of get through this wildfire situation and understand if there's any major impact there, but we do expect that to be short term. As you already heard, we're back up and running. And hopefully, can stay there, but that's going to be up to mother nature and not up to us. So I'm going to now go through the corporate presentation. We've done a shortened version here for you today. And then I'm just going to walk through a couple of additional comments I'd like to make afterwards. So we'll jump right into that. You can see here on the slide in front of you there, 75,000 BOEs a day and growing once we get everything back up to full here post wildfires. And you can see the numbers before you there. Really pleased to see that most of these numbers are going upwards into the right except for the share count, which is going downwards to the right. And so this is all the correct directions you want to see for these things. And so I won't reiterate the numbers you can read for yourself there, but extremely pleased to be in the position we are in. And you can see there that NCIB, we've already returned $192 million to shareholders. Last year, we grew 30%. We paid down $300 million of debt and we bought back a whole ton of shares at the same time. So this is something that I find rare when I look back at my entire career. It's not something you see very often and something we're very, very happy with. I do want to remind you, we're talking about forward-looking information, so please take the advisories into account as we always need to do. So just a quick word on inventory. We're very fortunate to have a deep and high-quality inventory. And to give you an idea, obviously, there's a lot to digest here. So it's best digested at home with a coffee in your hand and the presentation in your hand. But the punchline is we've got 4 different zones. That's why we show the map 4 different times. So up to 4 layers being drilled, for example, at Pipestone North, we drill all the layers. We drill 3 of them and frac into 4 of them. And it's from the bottom up. So the blue on the left is our land base. And if it's light blue, that's contingent resource. If it's dark blue, that's 2P reserves or 1P or production. And same thing on the red, the light color red is contingent resource and the dark color is booked reserves and onwards up through the zones to the top zone, which is the dezone on the far right. And where it's yellow, it's just NuVista land that we haven't actually booked any reserves or contingent resource on yet. And the punchline is in the bottom right, which is 1,400 wells, and we've only drilled 300 of them. We've been in here for more than a decade now. We have highly repeatable, high-value results, and we have about 1,100 more wells to go in our contingent resource and in our 2P reserves. And in order to prosecute this plan, which grew us 30% last year and 20% this year, we're drilling 40 to 50 wells per year, and that drops to between 30 and 40 wells a year once we flatten out at 100,000 BOE per day plateau. So a very long, deep inventory of wells to choose from as we go forward. And this is the value of those reserves. So this just shows you our 2022 year-end reserves report. And I won't go through all of the numbers here. But just to summarize, you can see we grew our PDP reserves, our producing reserves, 17%. That's over 30% debt adjusted and per share because of the shares we were buying back and paying down debt. On the right-hand side, recycle ratios of 2 are very good. 5 is unheard of in my book. So fantastic results. That's your netback divided by your F&D. It's the value of what we're finding, divided by the cost to find it. And you want to be way over 1.5 or 2, and I've never seen numbers like that. So congratulations to the team. A 45% increase in PDP and 2P NPV and in case you're squinting trying to do the parallax there on the $30 a share -- it's $28 a share to be now, is what you're seeing there for our 2P reserves. And of course, that ignores all of our contingent resource. So again, lots of room to run, lots of value attached to that room. The 2023 budget is kind of summarized here. I'll just flash it up for a moment there. When we first started the budget, we had $400 million of free cash flow planned. Now we're spending about the same amount. We've got about $300 million planned because commodity prices do move around, but it's tremendous to have this flexibility that we do have, we're entrusted. We haven't changed our capital program, and we can keep driving on, and we have that flexibility with free cash flow moves up and down. So we just buy more or less shares. But typically, when commodity prices are lower, the share price is a bit lower. So you're buying them back a little bit more cheaply than anyway. You can see the rest of the numbers there, and I'll just leave you to digest that. I've really covered some of these. I did want to quickly show the assets because these are somewhat eye-watering numbers, if you really stare at them. So on the left-hand side, that's Pipestone North and South, our flagship properties that we acquired in 2018 and as you can see, we're in a very orderly manner just drilling pad beside -- a new pad beside an existing pad with known production, with offset competition, with known production, and that's why we're getting such highly repeatable results and continuing to drive our costs down. We're not getting surprises. But of course, there are variations. The rock does vary a little bit and the cost vary per pad. And so you can see that on the right-hand side. So high repeatability, but that range you're seeing at $85 oil and $4 gas. Now these are payouts, so we're looking backwards. So that's pretty close to what pricing was last year. And we just flattened the pricing at $85 and $4, so it's apples-to-apples for all those pads. And this is not a highlight [indiscernible] every single pad we have drilled in Pipestone since inception. And each of those pads rounding off is like $50 million. It's a 6 or 7 well pad on average. And so what this is telling you is we invest $50 million for each 1 of those green bars, and we get back 1.5 to 3x that much money in the first 12 months of production. I have never seen numbers like that in my career. This is how we're able to deliver 30% growth and buy back a bunch of shares at the same time as pay down $300 million [Audio Gap] In our southern properties, we've been drilling in here for 12 -- I think our first well was 13 years ago, started very slow. We were in learning mode. Now we're in absolute steady development mode. And you can see we're drilling all over in Elmworth, Gold Creek and Bilbo. You can see on the radio buttons there, where we've been drilling and the ongoing results that go with that. So continuing to have great results there as well. And in this case, we're now refilling facilities that we allowed to decline a bit during the original pandemic era. And then after that, our [indiscernible] spending increase was first in Pipestone, our brand new area, and now we've leveled out and we're spending also for regrowth in the Wapiti area and getting some great results. And you can see really good results, not quite as good as Pipestone, this is a little cheaper to drill, and mother nature is a little kinder up at Pipestone, but still tremendously in that sort of 1.5 plus times your money back in the first 12 months is what that graph is telling you. The lower -- you can see tremendous results from that lower Montney pad. Sorry, it's the pad into 2 layers, and that's the Lower Montney well, which is the new zone. So the relevant one. And we're really pleased. As you can see, we're off to a great start with the orange colored line there above type curve and the green one just under type curve. But of course, both of those are 25% above type curve for kind of, say, gas ratio, which is where the real money is in these wells. So this is a tremendous result. And we're not surprised. We have some good wells up at Pipestone North and at Bilbo in the Lower Montney. So we had a pretty good hunch that was going to work here from our geological analysis. Of course, Paramount has been drilling directly to our east. I see we've got some Paramount colleagues here today. And they've got great results with all those blue-colored wells off to the east of us. And so we had a number of data points from ourselves and from competitors that we are able to use and go in here with confidence. So that's about 100 of those 1,100 wells, where 700 in contingent resource, about 100 of them here that are making their way now into reserves. So [indiscernible] from not booked to contingent, to 2P, to 1P and on to production. So it's very exciting and pleased to see that continuing to grow our future. In the interest of time, I won't spend too much on the cost slide. Short story. We've been bringing our cost down structurally since 2012 by drilling faster, fractioning better and just ingenuity and basically understanding the play better and repeatability and the great efforts of all the people out in the field and in the room here today, actually. And then now inflation, yes, is kicking in a bit. So we're doing really well, continuing with the underlying reduction. So we're mitigating [indiscernible], but we can't completely avoid it, and that's why you see the curves tip off a little bit again to the right. So a little bit of pressure on this year's budget, but so far, no reason to change it, and we will monitor that through to August. Why? Well, because we're also seeing quite a bit of moderation. We have seen steel inventories and sand inventories sort of come back, the very cost of the fuel that we sell, which we make money from. That's the fuel we burn in order to move trucks and move frac and rigs and all those things, the fuel we use at our plants. And so that very fuel is now a lot cheaper as well because natural gas has come down. So there are several elements of our capital and operating costs that are back on the way down, others that are stabilizing. Others were still watching. So it's -- we'll say more about that in August once we see a little bit more water under the bridge. This is that growth plan, which you're very familiar with, if you've been with us for a while as a shareholder, and I think most of you have looking around the room. So as you can see, it grows us to a capacity of about 105,000 BOEs per day. So this is all facilities that we've already contracted for, including all the downstream molecules to market, creates great molecules as we always call it. And capacity of 105,000 BOEs probably means run rates in the range of 100, right? You never run right on the pin. So that's our current growth plan. It's a measured growth plan. This year, 20% growth and then tapering because we're going to keep with our sort of 3-rig strategy here and very happy to be having cushion in every direction, both on our balance sheet, but also in terms of lots of cushion on the contracts room to grow, but lots of room over and above minimum volume commitments as well. So this is what happens to the cash flow when you put it all together. On the right-hand side, spending in that $450 million range this year. You can see, for forward years, we've put a bit of a white [indiscernible] up there to 475 or 500 just assuming all of our previous forward estimates might need a little bit of inflation in there, but we'll do our plan for 2024 in November and announce it once we have a better lock on next year's prices, but basically no real changes there. And on the left-hand side, the thing that's changed, of course, is prices are a little bit lower than the last time I would have spoken to investors about this. So we're -- we ran this one, as you can see here, at 75 and 3 for this year and then 85 and 4 in the out years, and we have a sensitivity so you can look at what if it's more or less than that. But bottom line is the left-hand track there. That's free cash flow net of capital and as you can see, the free cash flow per share cumulatively getting to $9 a share very quickly there. So obviously, prices will do what they're going to do. We'll continue adding value as long as the economics of wells are not threatened and prices would have to be well below anything we've seen this year in order for the [indiscernible] and that's our best way to fight the supply chain and retain our high-quality field crews and staff and rigs is having [indiscernible] program. A quick 1 on the balance sheet. Ivan would cane me if didn't say something good about the balance sheet. Directly, there's a slide. Yes, it's tremendous to have very low -- like nothing drawn and very low net debt because we do have those outstanding senior notes. And so the numbers pretty much speak for themselves, kind of 0.2x net debt to cash flow kind of levels. And our target on that, of course, is to be sort of under $200 million-ish as a maximum at any time. That number could even be a bit bigger now because we're bigger as a company. But the way it was picked was, if we have another pandemic pricing, $45 oil and $2 gas, NYMEX for a whole year, we have enough production now that, that would still keep us under 1x net debt cash flow in that disaster scenario, which is a very comfortable place to be, if our debt is sort of under originally $200 million. Now that calculation because we've grown, would mean it's okay to be under $300 million. But $200 million is our soft ceiling target and obviously, already nicely below that with lots of good stuff in front of us. So I did link California and [ Kevin Azman ] is probably in the room here. Summer does a great job with Todd managing this business for us. We are very diversified, all those colors at the 5 points of North America we always talk about. So we're talking about a little bit of gas phase in AECO, and most of it goes out and that's to Chicago; Dawn, Ontario, to the U.S. Gulf Coast and to Malin, California on the border of Oregon. Great place to be last winter, as I was mentioning. And of course, on the oil side, we're quite bullish on the future of oil. I'll talk a bit about that in my -- after presentation remarks here. And so that's why we haven't been hedging, 2 reasons. Prices have been volatile and low -- maybe 3 reasons. We have a lot of flexibility. So we don't need it from a risk protection point of view. And the backwardation cost has been very high to lock anything in. So no reason to lock that in. But on the gas side, we've been opportunistic with some pretty good trades there. And as you can see here, we're only about 1/3 sort of -- we are about 1/3 exposed to gas there -- sorry, hedged on gas in the range, as you can see there with [indiscernible] by about $7 and then through the following years there. I've got to get my glasses. I got a micro 1 here. Yes, through to 2025, it turns into swaps, as you can see, at a pretty favorable price, and that's taking away our AECO exposure. So all good moves and we continue to deliver to all the points. So who knows we'll have that cold winter and hot summer, but we'll be connected to it. Okay. A quick word about ESG. So to most people, ESG means GHG. And we've really done well. I'm not going to go through all these numbers. In fact, there's a 40-page report on the Internet for those that are very interested. I'll just say it's an important part of our business to just continue to get better and reduce our emissions per BOE as we continue to grow. And this team has done a fantastic job doing that, both on the greenhouse gas emission side and also on the methane side. We're down more than 60% on both since about 2012, and we've got more projects executing to continue that into the future. The next big 1 for us is the cogen project at Wembley. So very pleased to be able to continue to do our part there and stay ahead of the regulations as well, of course. So that's the end of the actual formal presentation, and I just wanted to make a couple of remarks, and I'm calling this a quick walk down memory lane for NuVista. So -- and we did a little bit of this last night at Sheldon's farewell dinner. We're sure going to miss having Sheldon on the Board, but certainly welcome Mary Ellen, great to have you on the Board and getting to know you, but it's funny because Sheldon was on the Board a decade, and I've been with the company 13 years and -- 12.5 actually, and the company has been in the Montney for 13. So the company was in the Montney but we had 1 well, and we had a lot to learn, a long ways to go, and we had a lot of questions. So at that time, we were about a 20,000 BOE per day company, and we had this huge Montney position and it seems that the odds, looking back now, you might have said the odds were against us. In fact, I had a couple of investors say that to me. And here's a couple of stats for you. Wells are costing $13 million each in a total capital budget of $160 million. So when 1 well doesn't work, Jonathan doesn't sleep. So that's kind of the place we were at. And they were taking 2 months just to drill the well, not to complete it, not to do a pipeline, just to drill the well. Would the condensate flow through the tight rock? Could we get our costs down enough to make it economic? Would the play be as big as we thought? And would we be able to sell our noncore assets in order to fund the launch into the Montney? Those are all some pretty big questions discussed by our leadership team, our staff and our Board through the many meetings. And I'm very pleased to say the answer was, of course, yes. And we've done it, and it feels really good, and we've done it as a team. So at the time that Sheldon joined us, I looked it up and we had a press release which -- so about a decade ago where we had put out -- we had learned enough from drilling that we told the world we think the contingent resource, not the reserves, but the contingent resource, less certain than reserves, should be in the range of about 200 million BOEs on our property, maybe more. And our year-end '22 reserves that I just showed you, reserves, much more certain than contingent resource was over $600 million BOEs today. And of course, the contingent resource towards that today. So awesome job and an awesome outcome. But of course, it was done one, carefully risked, analyzed step at a time, and we all did it together. So feels really good, and I hope you all feel very good about it as well. So by last year, our well costs have dropped into half despite 13 years of inflation. And 2022, the year-end book reserves, I just gave you $600 million BOEs were booked. I'll say this company and our Board have always taken very seriously any promises that we make to shareholders. And I'm very, very pleased to say that due to the team here and in Grande Prairie, and the steady leadership of our Board who are here today, we have done just that. That is of primary importance to us. I would like to take a moment to thank all of our staff here today, to thank our leadership team who work so hard to try and keep things between the pipes as well. And of course, our Board who have always been supportive but not afraid to ask tough questions either. And that is much appreciated. The integrity and the leadership carried us to this port in our journey. I'd also like to thank all those shareholders that stuck with us. Some of you have been here right from the start and some are new, all are welcome by the way, just in. So we appreciate that. And I also -- it's a real pleasure to see our legal and our banking community here. I noted all of you that came and I do appreciate that support. We often say it really does take a village, and that is really true at NuVista. We need the support of our community of vendors, contractors, partners out in the field and particularly here in the business community. So thank you for being here, and more importantly, thank you for being there through the years. So despite the many peaks and valleys and challenges in our industry at NuVista and for our industry in general, we all know we've had a big macro challenge coming out us in an even bigger way over the last decade, and that's called climate change. It is real and NuVista has certainly done our part to make sure that anthropogenic impacts are minimized. And I mentioned that we've had a 60% reduction in emissions intensity since 2012. That's how you do it. But I do want to say the climate change is not an emergency despite what our industry detractors might tell you, it is not an emergency. It is an important issue for the world to deal with. But you cannot turn off what you're using every day until you have logically and carefully built up the replacement alternatives that you need to build up. And I know the detractors of our industry will probably never believe that, but they don't have to believe us. We have physics and economics on our side. And we're going to see that prevail over time. And if you're not sure what I'm saying is true, you need to only look as far as Germany or the U.K. or California to see what happens when you get energy policy dead wrong. So unfortunately, citizens there are learning all about what it takes and all about what we take for granted in most parts of the developed world; energy availability, energy affordability and energy reliability. And even as our detractors criticize our product, they demand more of it inexorably. So when a family's energy bill goes from $200 a month to $2,000 a month or when the lights black out, and this is happening in the places I mentioned. There will be change. There will be change of attitudes and balance will reenter the energy dialogue. This is not theoretical. This is physics and economics. So when you put this all together, I firmly believe it adds up to the best setup in our industry that I've ever seen in my 34-year career, never before have I -- and this is really true. Never before have I been able to look ahead 10 or 15 years and know actually just about exactly where every well is going to go in 10 or 15 years. That is the luxury we've never had in this exploring industry. And while the opposition to our industry is leading to chronic underinvestment in growth, which means undersupply. And while demand for our product continues to grow, and therefore, we have a supply-demand imbalance, which is unfortunate for consumers and needs to end, but very fortunate for oil and gas companies who continue to deliver the product that is needed. So as we grow our company and reduce our emissions, I believe this mismatch is going to lead to an energy super cycle, I'm very bullish about it, but we're not dependent upon it. And we have the resilience to just keep producing and growing as we watch things unfold. So with our bulletproof balance sheet, the other thing is we do have the strength to withstand the great volatility that we seem to be having and probably are going to continue to have for all the same reasons that I've summarized. So I think you could tell I have a fierce pride in my life's work. And in your life's work, the energy business, it's very important, and it's needed by the industry. It's needed by the world. And so energy has improved the world. It has improved lives. It saved lives and it's lifted lives from poverty. And 80% of the world's energy today -- still today comes from oil, gas and coal. So there is nothing but growth for natural gas as it is needed, along with the intermittent renewables, solar and wind and others, to back out coal, which means significantly less emissions as we deliver what the world badly needs. So I just want to thank you all 1 more time for being part of NuVista's ride. The ride has been a lot more fun lately. I will admit. We will continue to grow while delivering significant value to the energy hungry world and to our shareholders. And thank you all for coming. Have a great night. Now we're happy to answer any questions if anybody has any. There's 1, far away, please.

[Technical Difficulty] say that in the recent [indiscernible] press to the industry over financing [indiscernible] the capital. So given that, I was wondering like so important [indiscernible] also given that the last federal budget, [indiscernible] for increase in capital gains [indiscernible] dividend that perhaps shareholders [indiscernible] excess cash flow [indiscernible].

Thanks for the question, Bill. Were you able to hear that down that, no. So the question was about a world that's defunding, financing for oil and gas. Because of the threats to our industry, why are we buying back shares when we could be perhaps looking at debt and certainly looking at dividends? I think that captures it so. Yes. Thanks. So -- yes, no, it's a great question, and the Board here knows. We talk about this pretty much every board meeting. So it's definitely on the radar screen. I guess there's a couple of things there. First of all, we were doing all debt reduction while our debt was at elevated levels because of the pandemic. So that's a risk decision, and I think it was the right one. We were buying back any shares until we knew that we had our debt at very, very comfortable levels. And then we stepped into it slowly, just to remind everybody, we kind of went to 50% of free cash going to debt reduction and 50% towards buying back of shares after the debt was below target #1. And then we got bulletproof target #2, and that's when we elevated it to 75% after a good discussion with the Board. Obviously, that's a Board decision, not a leadership team decision. So that's kind of the starting point of how we got there. And so we are still reducing debt. We're just doing it more slowly than we were before because we're at such comfortable levels. On the dividend, it's a fair question, and I think a day might come, but the way we think about that is currently, our shares are trading at a very low level compared to our [ 2P NAV ] and I think you saw from the presentation, even if you ignore our contingent resource, the kind of confidence that we have in our 2P now. We have a lot of confidence in our contingent. We have very high confidence in our [ 2P NAV ]. And so as long as we're trading well below that level, even at the prices that we're at now, that, to us, says that there's much more value to buy a share, and it's a permanent improvement to the metrics per share. And then if we go to a dividend at some point in the future -- so there is a bit of a link there. And the other thing is it's also a very flexible thing. Dividends don't tend to serve very well for companies that are in a high-growth mode. Now we've taken a very measured approach to our growth plan. 30% last year was because we were paying -- we were running our 3 rigs and playing catch-up after the no-spending pandemic period. This year, the same 3 rigs is giving us about a 20% growth rate and next year a 10% growth rate. And so as we taper that growth, as we move to a covenant-based facility, as we become close to 100,000 BOE per day company very soon here, those are all trappings of a larger company and a dividend once we finish paying down debt, which there isn't much further to go, you're not going to go below 0. It's certainly something that has been in our dialogue and will be in our dialogue, but I don't think it's likely to be an immediate thing for the reasons stated around the trading value versus [ 2P NAV ]. Any other questions? Okay. Great. Well, thank you again, everybody, and I look forward to seeing you -- some of you along before next year, otherwise next year. Take care.