Suncor Energy Inc. (SU) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining us on today's Ithaca Energy Strategic Acquisition of Offshore Canada Assets. My name is Drew, and I'll be the operator on the call today. [Operator Instructions] With that, it's my pleasure to hand over to Yaniv Friedman, Executive Chairman, to begin. Please go ahead when you're ready.

Good morning, everyone, and thank you for joining this call on a short notice as expected with what we're coming out with. With me today on the call are Luciano Vasques, CEO; Iain Lewis, CFO; and Odin Estensen, our COO. And if you jump right in and look at the first slide, you're seeing the photo of the Terra Nova FPSO. And I think this transaction is kind of our Terra Nova as it's a strategic acquisition of the Suncor assets offshore Canada, a deal with sound metrics, but also with significant strategic value that we will be happy to share. So it's our first international step-out in a basin that we like that supports our scale, stability, strength story. It's a transformational acquisition of the operational Terra Nova field and the nonoperated White Rose area from Suncor for a consideration of $860 million with an effective date of 1 July 2026. And as Iain will elaborate later, obviously, with our robust liquidity, this will be financed by new and existing debt facility. It has scale and diversification with 2 operating hubs and supporting our enhanced pool production potential. And we're targeting 140,000 to 150,000 barrels a day of production in the medium term. And long life, low decline 2P reserves, we'll talk about our significant upside resource that we're seeing in these assets and highly accretive transaction metrics of $8 BOE 2P. We're expecting this to be immediately cash flow and dividend accretive, and this is underpinned by near-term production growth mainly from West White Rose with over 20% of compounded annual growth in production from 2026 until 2030. If you move to Slide 3, I think people use the transformational loosely, but this is truly a transformational deal for us. It gives us operatorship in a new basin with a very strong team as well with high-quality assets, 103,000 barrels of 2P reserves with 17 years 2P reserve production ratio, 30,000 barrels a day of production over the course, on average over the course of the next 5 years, so from 2027 until 2031, with peak production between 35,000 and 40,000 barrels a day expected in 2029 as West White Rose peaks. 200 million barrels of additional resource potential. We'll cover that in depth later. That puts us as one of the largest operators and producers in the basin. If you'll move to Slide 4, so it kind of shows you the evolution of Ithaca through acquisitions. And it's exactly, I think monthly today, but the 2-day miss on our Eni business combination closing. And we've presented our strategy in our Capital Markets Day in March 2025. And our first pillar was international expansion. And you can see since the Eni closing, we've done 2 additional acquisitions in our home market, the UKCS, adding Seagull and Cygnus working interest increase to our portfolio. And now we're at a focused international expansion, which was kind of our fourth pillar on strategy. So a very nice trajectory and journey of disciplined growth in Ithaca. And if you move to Slide 5, we've been asked a lot about how would this international expansion look like in the past. And we kept saying we'll be disciplined and active, and we will not be overly exotic. And I think this slide just demonstrates how we're ticking the boxes on our international growth strategy. So on the kind of top line, you have what we said, which is inorganic growth strategy, we'll focus on and we'll cover that and then what we've delivered, and that's aligned with our investment parameters. So we said we want to retain focus in no more than 3 regions. Clearly, we're expanding now to a new hub, a new basin, which will hopefully be a key basin of interest for us. We would like to be in places that offer us expansion opportunities and growth opportunities, not just a one-off. So we'll have a runway to grow organically and inorganically. So this creates a platform, also an operated platform for further potential M&A in North America. We said we will look for regions that offer stable and fiscal regulatory support. And we look at Canada, and we have a slide on this later. It offers strong support for investment in the region with a very decent fiscal regime. We look at transactions that would offer both yield, cash flow, but also growth potential. Again, ticking the box on this with highly cash-generative portfolio that's supporting distribution and growth. And delivering balance across the oil and gas life cycle sustainable production and cash flows. And here, we have significant organic opportunity that we will cover later. And all of this while maintaining our disciplined capital allocation framework and leverage position ceiling. And here, again, this transaction will be financed and Iain will talk about this with a combination of existing and new facilities, but this all sits comfortably within our leverage parameters. And this is a story that started actually quite a while ago, about 2, 2.5 years ago when Ithaca was looking at the Holdco process offshore East Canada. So we looked at this then, we like the assets, our subsurface team really like the assets. And this is developed through the discussion with Suncor to what we've announced today. And we'll move to Slide 7. So again, strategically, this is a transformational strategic basin entry into offshore East Coast Canada. I think what's important here, it provides us with diversification, and we think diversification is important for a company like Ithaca. And not less importantly, it gives us exposure to what we see and especially in the geopolitical world we live in, premium northern OECD barrels. This is a disciplined transformational entry into a well-understood basin, very similar in many ways to our UKCS and even to Aberdeen with an attractive fiscal and regulatory regime, as mentioned, both at the federal and provincial level that provides strong support for additional investments in the basin. High-quality, low-decline assets in a well-understood basin. It's shallow water, lower life conventional assets. There is significant operational history in a well-developed, low complexity operating environment. And these similarities really play into Ithaca's expertise and capabilities, including really FPSOs. And as you all know, we're really experts on operating FPSO. 2P reserve life of 17 years, estimated production of 30,000 barrels per day over the course of the next 5 years. And this is an important point that's been a material recent investment across the portfolio, including FPSO refurbishments. We can spend more time on this that really provides a solid foundation for next phase field development, both in Terra Nova and White Rose. This is coming with a very strong operating team. We've done a lot of due diligence on this. So we're adding 400 person of operating team and really a lot of capabilities that we're bringing in and a proven track record of delivering safe, environmentally responsible and efficient operations offshore East Coast Canada. There's also expertise in exploration, development, production, and we're seeing a lot of potential upside in optimizing this portfolio as we go further. And also relationships with really blue-chip partners across the basin here. If you look to Slide 8, again, material organic and inorganic growth potential. I won't go in depth into this. Iain will mention it later. But again, just the current base case for us without any further expansion takes us to 35,000 to 40,000 barrels a day peak production as West White Rose peaks, establishes a platform for further M&A in North America or organic growth opportunities, but also expected to be immediately cash flow and dividend accretive, but also adds to a debt capacity. In Slide 9, this is fully aligned with Ithaca's growth strategy and supported by clear rationale, well understood and developed basin, low decline projects similar to our operating environment in the U.K. Significant resource potential for organic growth opportunities, attractive fiscal and regulatory regime. And this encourages more active investments in the basin and also further consolidation potential at the, obviously, at the right value. And we move to Slide 10. Again, this is the map, but this just shows the breadth of assets and players in the basin. This is a well-understood basin with production and operators dominated by a small number of fields and companies, and we believe this is a great place for us to really replicate the Ithaca model offshore Canada. A few words on regulatory and fiscal regime on Slide 11. I would call it we're seeing a very practical and pragmatic Canadian government with fiscal regime that is, that works closely and collaboratively with the offshore industry. There's a low effective tax rate definitely compared to the UKCS with a 30% corporate tax rate. Recently announced productivity mega deduction that really enhances further development through a reduced marginal effective tax rate on new capital investments. And there's also a royalty regime that is a negotiated one that is agreed by the partners in the assets and the provincial government. And the government has in the past as well provided royalty relief and renegotiated to reduce burden in low-price environments. The regulatory side, increasingly energy-friendly federal and provincial government, I think reinforces long-term investment confidence. Canada-Newfoundland and Labrador Offshore Energy Regulator, C-NLOER, a very catchy name, is responsible for licensing round, resource management, emissions and environmental compliance. And overall, a very refreshing environment for us to do business in. So this is the introduction. We'll dive into a bit more detail, and I'll hand over to Luciano to talk us through more about it.

Thanks, Yaniv, and good morning, everybody. So we'll talk about the assets. So what attracted us to this opportunity diversify first and foremost, the quality of these assets. Terra Nova is an alternated long-life field with strong reservoirs and considerable further potential. Importantly, the FPSO recently undergone a major refurbishment, around CAD 900 million of gross investment. And that investment improves the reliability, provides a strong foundation for the next phase of the field development. White Rose is a high-margin, nonoperated asset, an extensive producing infrastructure and further development and exploration opportunity and also the FPSO has benefited from significant recent investments. And West White Rose has a major near-term growth component with the first production expected before the end of the year. With this operation, we are acquiring high-quality, substantially derisked production base following significant capital investment with the infrastructure and the capabilities already in place. At these assets, we understand they are in an operating environment, which is similar to the U.K. continental shelf and in shallow waters, where our offshore subsurface and FPSO experience is directly relevant. The opportunity though goes well beyond the current production. There are options for further infill drilling, field extensions, step outs and exploration. And the combination of existing production, near-term growth and future development potential resource really makes this portfolio particularly compelling. In short, these are very good assets with significant investments already behind them and meaningful opportunities ahead of them. If we go to Slide 13, talk a little more about the organization. And the acquisition is equally compelling for the quality of the asset and the organizational fit. Now bear in mind, this is not a merger between 2 companies. So we're not required to combine corporate organization. We are acquiring self-sufficient operating portfolio supported by an established skilled team of around 400 people, as Yaniv mentioned, with regional expertise across exploration, development, production and optimization. And the transaction gives us operational capability in the basin from day 1, together with partner relationships and operational continuity. The local team brings the capability to operate the assets safely and efficiently and provide a solid base for future development. And Ithaca adds our capital discipline, technical expertise and a proven approach to developing value around existing infrastructure. So we are confident about this. We are confident about the integration. Ithaca has completed, as you know, large-scale transactions and integrations, most recently, of course, bringing together the Ithaca and the U.K. businesses while maintaining operational continuity and building scale. That experience provides a framework for what must be integrated, what should remain locally managed and where central support can add value without disrupting performance. So our objective is to retain and empower regional capability while providing disciplined investment, technical support and access to Ithaca's experience. This will create a strong platform to optimize production to progress development opportunities and build further options around existing infrastructure. This transaction, therefore, opens up the possibility to replicate the successful UKCS Ithaca model in Canada, combining high-quality assets, capable teams and realize the full potential of these assets. With that, I let Iain come in talking about some numbers.

Excellent. Thanks, Luciano. Let's move to Slide 14, please. And let me take you through some of the numbers around the potential of the deal and the resources and how that fits into our current business. So Slide 14, you have a stacked chart of the resource potential that we are acquiring in this deal from the base in the blue and light blue that's the 2P production profile that has been expressed already, peaks through in 2029 at the West White Rose ramps up with wells being drilled through the next couple of years. So that is the base activity, and you can see that it's long dated and it's growing in the short term. What is exciting about this portfolio is not just the base and capacity that we acquired but the optionality beyond. You can see the light green stack on top on the 2C, that's the Horst 2C in the Terra Nova area and the Northern White Rose 2C in the West White Rose area. And then you have the dark green where we have prospective resource beyond. You can see the kind of material resource that we're looking at. One of the exciting opportunities here is how we evolve that resource in the 2C and 2P in the coming years, and this is part of what excited about this deal. So 103 million barrels of estimated 2P reserves and given the low production presently relative to where this is going, 17-year reserve to production ratio and there's 200 million barrels of additional resource beyond 2P that we're looking to work hard in the coming months and years. Now in terms of some breakdown on that Slide 15 gives a little bit more detail. And obviously, in terms of our current resources capacity, reserve capacity, there's another 22% additional reserves on top of the reserve base. And that is well-understood reservoirs, well-understood assets and the West White Rose new asset ramping up. But then beyond that, we get into the 2C in Terra Nova, the Horst development, FID coming in 2027. Again, a couple of wells, subsea development tieback in Terra Nova looking to bring 6 million barrels of net 2C resources back to the vessel. And then 2C in the White Rose area, the Northern White Rose extension, the next phase of White Rose development following West White Rose to bring back volumes to the SeaRose FPSO. And then beyond that, we have this stack of prospective resources significantly in Terra Nova with 78 million barrels, but even more in the White Rose area with the Knight Island and Strong Island prospects in view there. So what we have is a pretty deep resource base here to work through. We believe there's a lot of opportunity to mature these and that will be a focus in the coming months and years. Slide 16 shows you how that builds on to our current business. And really, what I would say about this is it's taking our current longevity and capability and it's adding to that uplifting every metric. So you can see that currently, we're at an expected base production of over 120,000 barrels a day. That was a kind of 10-year over 120,000 look ahead. We're uplifting that today in the medium-term outlook to be 140,000 to 150,000. So we're targeting to maintain production. And you can see from the stacked chart ahead of us here that there is a potential for that to go beyond 10 years as we move these resources through into reserves and production. So it's about longevity and it's about increasing scale with that additional 22% reserve contribution from the East Coast Canada portfolio that we're acquiring. You can see the stack there of base Ithaca Energy 2P in blue, East Coast Canada 2P in dark green and then the 2C and the upside resource potential beyond, including our U.K. projects, high-quality available 2 FID projects that we often talk about like Tornado and Fotla and assets beyond the gas basin West of Schiehallion and Cambo, but now into the Eastern Canada basin with additional opportunities in new fields to look at that compete for capital alongside. So an attractive long-term portfolio that has optionality. That's really the key word to take away from this slide. It's optionality across our asset base now with strong development potential competing for capital. Now in terms of the capital allocation framework, Slide 17 shows us really how that impacts on the anchor point for our investments and for returns to shareholders. So as always, we come back to this slide and underpins everything and answers a lot of questions that people have on how we run our business. So high cash flow from operations on the left-hand side. Now post deal, we expect this, of course, in the U.K. and in Canada to be delivering high post-tax cash from operations. We then invest to sustain production at 140,000 to 150,000 barrels a day. That will be about the timing of opportunities, FIDs timed from first CapEx to first oil. It will be about the investment returns of each project. We have very clear project metrics, which we'll come on to shortly that our projects need to meet our U.K. ones do. We can see a good number of the Canadian ones coming in to exactly the same framework, helped indeed by the additional tax relief that was announced in the last couple of months in terms of super deduction for capital accelerate relief on CapEx projects. So strong investment pipeline, sustained CapEx and sustained production at 140,000 to 150,000 barrels a day level. Net debt below 1.25x. So again, one of the key things that we have consistently said is we're looking to be high liquidity and to be moderate to low net debt to EBITDAX. We've been 0.5x leverage now for some time, and we've had very significant liquidity available. That is to give us opportunity that was to enable us to do deals just like this. So lots of the work we've done in the capital markets has been enabling us to execute this kind of deal with comfort. And we do that today as we announced the deal. If you just take the headline price and EBITDAX on the low production over the last year, that's before West White Rose ramp-up. If you just apply that to 0.5x net debt to EBITDAX at 30th of June, you come with about 0.8x leverage number adding this deal build on. So we are well within our capital ceiling on net debt to EBITDAX, and we have significant capacity beyond. That allows us to continue with our distribution rates, 20% to 35% post-tax cash from operations. You can see the fact that's levered off of post-tax cash from ops, which will increase with this deal that we expect will be dividend accretive. But really, this is just about us doing what we said we would do and protecting the business at a higher level as we distribute to shareholders and invest across the piece. Now in terms of protection, we obviously hedge and we hedge material volumes in the U.K. and that will now become part of our pattern in Canada as well post completion, particularly. However, we're also [ disinvesting ] on the deal transaction, which I'll explain when we come to the headline price in a moment. Slide 18, please. And let's look at some of the high-level metrics that we apply to every organic and inorganic deal, so the bottom of this slide, we have our 5 core, 6 core metrics rather of investment criteria. This deal on its base case without the wave of production potential resources beyond comfortably above 20% IRR and over 1.3 DPI payback within 4 years and operating cash margin accretive. We expect OpEx per barrel on a clean basis post the investments and the ramp-up to be $20 a barrel and as we get below our U.K. portfolio at that time in the next few years. So cash margin accretive. NPV10, we are highlighting here, we aim for a $50 per barrel breakeven for NPV10 returns. This is in and about that area. So it's just marginally above $3 a barrel, which in the current environment and oil price environment is, we believe, a very attractive metric set. And obviously, emissions targets, we will have to expand now to beyond the U.K. where we are a highly credible and top-tier emissions performer in this basin. These assets take us into a good place in our new basin as well, and we'll develop our target compliance for the new basin in due course. So really, as you can see here, it meets our investment criteria, all of them credibly. We get into the top of the slide, you can see illustratively how the post-tax cash from ops uplifts, and clearly that feeds through into dividend potential as we keep our policy today as it has been since this last year when we uplifted the metrics 20% to 35% post-tax cash for ops, all within 1.25x leverage ratio. In terms of the deal contingent hedging, I will just comment on that today. We signed this deal early evening last night. And when the Asian markets opened for Brent at 11 p.m., we entered into hedging agreements for the next several months around the cash flows that will run the interim period to protect pricing. As you would expect, we invest, of course, on a forward curve at a moderate oil and gas price from where oil is today and an opportunity to hedge to protect and enhance value in terms of the deal and in terms of the close out cash flow. So we have opportunistically stayed up late, having done the deal and signed it in the early evening and executed some nice hedges in the market with collars taking us up to $110 a barrel and swaps in the high 90s. Finally, Slide 20, please, before I hand back to Yaniv. This is just summarizing the acquisition price structure. We are in a high commodity price environment. All deals in this environment tend to have commodity price-based contingent mechanisms involved, and this is no different. So we have an $860 million headline price, and then we have 27 months from 1 July, so just about 24 months from today, where we will be sharing upside on prices above $80 a barrel for '26 and then $74 to $73 for '27 and '28. Sharing that 50% with Suncor, cap of $50 million on all paid post-tax and post royalties. Key to us is a fair sharing of the upside, and we believe that this represents attractive consideration and upside metrics on the deal. In terms of financing, the expectation is that we will secure lending on the assets in Canada. There are many ways to optimize that. We're looking at various options at the moment. But as market participants will know we have significant liquidity, $1.9 billion of immediately available liquidity at the end of June and therefore, there is no difficulty in meeting this transaction and its payment mechanism on day 1 from current liquidity. With that, I will hand back to Yaniv to close out.

Thank you, Iain. Just very quickly, just to run through the highlights of this presentation before we open for Q&A. So transformational strategic entry into offshore East Canada with creating another hub operations for us with a very strong operating team, complementary to our international growth strategy, as mentioned, kind of ticking all the boxes on our investment criteria. High-quality assets, adding 5-year average 2P production of 30,000 barrels a day, barrels of oil equivalent in the next 5 years and 103 million barrels of 2P reserves, established an experienced operating team, operating stability and regional expertise, really strengthening our medium-term production outlook to 140,000 to 150,000 barrels a day with material upside potential from organic growth opportunities as Iain covered in depth. It's a scalable platform for future inorganic growth as well with ambition to build further scale in the basin and in North America, and we're happy we have this opportunity to create this platform and expect it to be highly accretive and executed on attractive metrics against our strategic investment parameters. Before I open for Q&A, I'll take this opportunity, as always, to thank the Ithaca team for a job well done. This was obviously across the business, supporting us on this transaction. As I keep saying always a work of many. So for those listening to us, thank you, and also thank you to all of our advisers on this transaction. With that, we'll open for questions.

[Operator Instructions] Our first question today comes from Cian Evans-Cowie from Bank of America.

Can I just start off quite high level, please, and ask about your thinking in terms of the funding of this deal. So in particular, I wonder why you've chosen to use cash and not thought about using equity at least as part of the funding mix for this deal? And then could you possibly give us an estimate for what you think the quantum of the cash settlement will be after accounting for the interim cash flows between the effective date and completion date, please? And then just if I can be a bit greedy, please, I'll ask one more. So on Slide 18, I know it's not quite the purpose of the presentation, but I can't help, but see that the existing Ithaca cash flow from operations bar increasing to 2029. So can you perhaps it would be helpful for you to remind us what the assumptions are behind that chart in terms of what commodity prices you're using there and which projects you're assuming are on stream by then?

Do you want to start, Iain?

Yes, I agree because we never share our internal metrics on price...

But a good try. It is a good try. A good try.

Yes, in terms of the deal funding, look, we've always said that acquisitions in the kind of $1 billion range, we can do within cash liquidity. Shares are valuable, but precious. And I would say that this kind of deal is well within our capacity to execute and therefore, for existing shareholders without any dilution or expansion to add value to what was arguably an underlevered business. Well, arguably it's underlevered after this as well, but it's certainly within our capacity to execute. So I think in terms of the deal and the structure, that's the rationale. It's certainly within what we said we would do of deals in the kind of $1 billion range within our cash perimeter. In terms of closeout, obviously, it depends on several things between now and the end of the interim period. In terms of cash, there is obviously CapEx ongoing at West White Rose and there's also CapEx as we consider it, what's called the WISE project at Terra Nova, which is a well-integrated investment program that's expensive. and get the wells into the kind of same shape as the FPSO in terms of longevity for the future. So it depends on the ratio to capital spend to production and pricing. Now what we did actually last night in the Asian markets at 11:15 p.m. exactly with some of our banking partners, is we spent a bit of time derisking oil price across the interim period cash flow. So that will take some of the price risk of a drop out of the market, that leaves us upside as I said up to $110 a barrel. So neutral to increasing marginally is probably what we're looking at, but it depends on a number of factors as always with operations. Suppose as you are waiting for more on our price assumptions, Cian, you are not going to get them. But yeah, thanks for asking.

Our next question today comes from Werner Riding from Peel Hunt.

Just noticing that production on current assets you're acquiring is about 16,000 increases to 35,000 to 40,000 around 2029. Iain, I know you ran through some of it, but I'm interested, I'm not sure whether Odin is on the call, but interested to hear more about the subsurface opportunities, whether you could describe any ongoing or future drilling programs that are required? And can you quantify the CapEx as well needed to deliver the production profile on Slide 14? Is there an annual run rate you could share?

Yes, I'll pass to Odin for more details. But essentially, in the next couple of years through '29, it's about $100 million net on West White Rose per annum. This is the drilling program that takes the gravity base structure of West White Rose, the drilling program up to full well stock. That's really what you're seeing in the base there. It's pretty much the drilling of West White Rose and the bringing out of the wells from first oil at the Q4 this year through 2029. So it's pretty, I guess, standard well ramp-up as we drill through the project and say about $100 million of kind of CapEx across West White Rose in that period, not a huge amount in Terra Nova. We consider on the base, that is excluding the WISE project, about $350 million of investment across the next couple of years, '27, '28 around in the well stock at Terra Nova. But that's I guess the big assets and then beyond.

Yes. And I think the most obvious candidate for us to accelerate is the Horst opportunity, which sits there, which is a very clear and good opportunity that currently is not in the sanction plans, but something we definitely look very close and see if we can accelerate forward.

Our next question comes from James Hosie from Shore Capital.

Congratulations on the deal. And a question on a couple of topics. Just obviously, on the prospective resources you're outlining are quite substantial for both Terra Nova and White Rose. Just wondering if you can give some context on whether the prospects are targeting new plays? Or is this just you following the same geology that's already proven in the existing production assets? And would be right to assume that any discovery would be a tieback rather than a stand-alone development? And then a second question, just could you talk about the future spending commitments you're taking on with these assets. Suncor's announcement of the deal referenced abandonment liabilities larger than the upfront cash consideration you're paying. So I know this is over a decade away. But do you need to prefund the decommissioning costs over the coming years or secure additional of credit?

Yes. So let me, then Odin can comment afterwards with more details. Let me answer this because they are related, James. In terms of the ABEX, we expect liabilities, the book liabilities of decom pretax to be less than $1 billion in that kind of range on our books at close. Now those decom liabilities are, first of all, they are largely wells and FPSO. So there are decommission liabilities that we understand we know and we, in fact, have done subsea wells and floating structures this year and continue to do that well. It's also in the mid 2030s, but that depends on the investment that gets tied back to these assets. So this is one of the great opportunities here is that the base numbers work. So as we talk through the numbers there, the deal on its face makes sense in a base delivery, but the opportunity beyond in relatively underanalyzed and undermatured resources is really key here. So the potential to push out those liabilities materially is there and is part of what we are working on. So in fact, the reference to the PR, for example, I mentioned the 2 White Rose related, SeaRose related prospects in Knight Island and Strong Island, there's PR around Terra Nova, which is more organic or kind of step-out infill type position. So this is about reservoir management post the WISE project and it's about new field and prospects in the area that have not been drilled. In terms of taking on liabilities or investment, I would call it twofold liabilities, yes, the decommissioning pretty standard for a deal of this size, especially when decom is far away. There's next to no decommissioning in the next kind of 10 years. But then the WISE project, which I say is a combination of well integrity investment and reserves upgrading is ongoing right now. So that is an execution of a program agreed with the regulator around well integrity and also productivity and resource development. So as I said, that's about kind of $350 million thereabouts in the next couple of years, million net dollars. And that's the main kind of committed, that is the committed expenditure really in Terra Nova. And then in White Rose, there is about $100 million a year of drilling, largely CapEx that is now ongoing. The GBS is in place and the rig is drilling. First oil expected Q4 '26. I don't any more specifics on that.