Earnings call transcript: Tourmaline Oil misses EPS forecast in Q1 2025

Investing.com

Published May 08, 2025 11:46AM ET

 Earnings call transcript: Tourmaline Oil misses EPS forecast in Q1 2025

Tourmaline Oil Corp. reported its Q1 2025 earnings, revealing a notable miss on earnings per share (EPS) expectations. The company posted an EPS of $0.56, falling short of the projected $1.54. Revenue, however, surpassed forecasts, reaching $1.89 billion against an anticipated $1.75 billion. Following the announcement, Tourmaline Oil's stock experienced a decline of 1.92% in after-hours trading, settling at $63.68. According to InvestingPro analysts, sales growth is anticipated in the current year, and the company is expected to remain profitable, supporting its ambitious expansion plans. Long-term production is projected to reach up to 850,000 BOEs/day by 2030, supported by potential LNG export growth.

Executive Commentary

CEO Mike Rose emphasized the importance of securing high-quality assets for sustained profitability, stating, "Securing Tier 1A is really the name of the game right now for longevity and profitability." He also expressed optimism about natural gas prices, noting, "We expect natural gas prices to go up."

Risks and Challenges

  • Volatility in natural gas prices could impact revenue.
  • Execution risks associated with large-scale infrastructure projects.
  • Potential regulatory changes affecting the energy sector.
  • Fluctuations in demand for oil and gas products.
  • Integration challenges from recent acquisitions.

Q&A

During the earnings call, analysts inquired about Tourmaline's strategic M&A approach and its focus on core geographies. The company confirmed its commitment to stock-based acquisitions and discussed expectations for long-term natural gas prices, aiming to reassure investors about its strategic direction.

Full transcript - Tourmaline Oil Corp. (TOU) Q1 2025:

Conference Operator: call is being recorded on Thursday, 05/08/2025. I would now like to turn the conference over to Scott Kirker.

Please go ahead.

Mike Rose, President and Chief Executive Officer, Tourmaline: Thank you, operator, and welcome everyone to

Conference Operator: our discussion of Tourmaline's financial and operating results as of 03/31/2025 and for the three months ended March 2024. My name is Scott Kirkland. I'm the Chief Legal Officer here at TurnLean Well. Before we get started, I refer you to the advisories on forward looking statements contained in the news release as well as the advisories contained in the TurnLean annual information form and our MD and A available on SEDAR and on our website. I also draw your attention to the material factors and assumptions in those advisers.

I'm here with Mike Rose, Termley's President and Chief Executive Officer Brian Robinson, our Chief Financial Officer and Jamie Heard, Termley's Vice President of Capital Markets. I'll start with Mike speaking to some of the highlights of the last quarter and our year so far. After his remarks, we will be open for questions. Go ahead, Mike.

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Mike Rose, President and Chief Executive Officer, Tourmaline: Thanks, Scott, and good morning, everybody. Thanks for dialing in and being online. So we're pleased to review our first quarter 'twenty five results, update ET activities and update the outlook. A few of the highlights. First quarter 'twenty five average production was 638,000 boes a day, up 8% over first quarter of 'twenty four and slightly ahead of our first quarter 'twenty five expected production range.

First quarter 'twenty five cash flow was $963,000,000 on total CapEx of $825,000,000 EP spending was about $800,000,000 and that generated free cash flow of $150,000,000 for the quarter. As you've seen, we continue to consolidate the Northeast BC Montney, 1 of the most profitable gas plays in North America. We're doing that in concert with our Northeast BC infrastructure build out, and we're doing it ahead of the expected improving natural gas markets, which to some extent has already started to happen. Board of Directors has declared a special dividend of $0.35 per share payable on 05/26/2025, and the company intends to declare a quarterly dividend of $0.50 per share payable on June thirty of twenty twenty five. A little on production.

March 2025 average production was 645,000 BOEs a day, so higher than the quarterly average. The full year forecast production range remains the same, however, at between six and thirty five thousand and six hundred and sixty five thousand boes per day. And production actually averaged 660,000, so the high end of the range for the April as we finished off our completion activity from the winter. And then the volume came down for the second half of the month, given weaker prices. We expect second quarter 'twenty five average production in the six and fifteen thousand to six and twenty five thousand BOE per day range as we've moved a significant amount of maintenance into Q2 given weaker prices currently and particularly at Station 2.

On financial results, our first quarter earnings were $213,000,000 or $0.56 per fully diluted share. As mentioned, first quarter EP CapEx was $800,000,000 so a little less than originally forecast. We expect EP capital spending during Q2 of $560,000,000 as activities are always a little lighter during spring breakup. And that should yield an estimated first half 'twenty five free cash flow in the $430,000,000 range. We do expect commodity prices to improve in the second half of this year with the start up of the LNG Canada facility on the West Coast, and that should result in higher free cash flow in the second half of 'twenty five relative to the first half.

On the 'twenty five capital program, the full year 'twenty five program remains unchanged at between 2,600,000,000.0 and $2,850,000,000 Given the weak Station two gas prices, we will defer some of the planned Q2 frac activity into the third quarter of this year and we'll continue to match planned production growth to the anticipated increasing natural gas price curve in the second half. We will release the updated multiyear EP plan, including the full Northeast BC Montney gas and liquids infrastructure build out and incorporation of the recent acquisitions. We'll do that in the second half of this year, Inclusive of projects not yet incorporated in that plan and the recent acquisitions, we're looking at very strong production volumes heading into the next decade as high as 850,000 per day. And you'll see that full plan the second half of this year. Just looking at the two acquisitions that were announced yesterday.

In the North Montney, we've entered into an agreement to acquire the balance of the jointly owned Macrij Conroy assets through the acquisition of Saguaro Resources. And in the South Montney, we've entered into an agreement to acquire assets in the Greater Septimus area from a third party. Both transactions are expected to close in June. Our forward guidance and EP plan will reflect these acquisitions in the next update. In aggregate, the two transactions add approximately 20,000 BOEs per day of current production, an estimated three sixty three million BOEs of current 2P reserves and approximately four ten Tier one future net drilling locations.

Production and reserves from these assets are expected to experience significant future growth as each asset is systematically developed as part of the Northeast BC Montney build out. And real Tier one inventory is scarce in North America, and we've been systematically ensuring we have decades of Tier one inventory, Tier 1A, if you like, secured at Thermoline. The La Prairie's Conroy asset is the key component of the North Montney Phase two project, and the Greater Septimus asset is complementary and adjacent to our planned ground merch, 400,000,000 a day, 20,000 barrels per day, two phase gas plant development. The South Montney transaction also included land and high quality inventory in the Northeast Basin. We'll issue a total of approximately 13,000,000 common shares as consideration for the two transactions, leaving the balance sheet in a very strong position for potential further acquisition in our core areas going forward.

Briefly on marketing, our average realized natural gas price in the first quarter was CAD 4.3 per Mcf, so meaningfully ahead of the April 5 benchmark price, which was CAD 2.19 per Mcf. So we continue to benefit from the expanding diversification portfolio and our strategic hedging program. From Q2 to Q4 'twenty five, Tourmaline will average 2.1 Bcf per day of natural gas sales that are not exposed to floating local market prices at AECO and Station two. And we have an average of 1.16 Bcf per day heads in 'twenty five at a weighted average fixed price of CAD 4.95 per Mcf. We continue to be highly encouraged by the growing demand driven natural gas price outlook in all of North America, and that includes the Western Canadian gas trading hubs.

The company, though, continues to remain disciplined so as to not over supply these local hubs. And just to remind that the natural gas growth that we achieved in 'twenty three and 'twenty four was almost entirely matched up with new export contracts out of the Western Canadian sedimentary Basin. And for the approximately 200,000,000 a day of gas growth that will occur during calendar 'twenty five, 95,000,000 of that or about 50% will actually commence flowing to the Gulf Coast in November of this year. On E and P, we had very strong EP performance across all of our operated complexes in the quarter, and we set production records in all three complexes. In BC, we have a series of pads that are well ahead of performance type curve and they're detailed in the verbiage in that bullet.

The strong 24 well performance that we delivered in the Alberta Deep Basin in 2024 continued in the first quarter of 'twenty five with record March average production of 330,000 boes per day from the total Deep Basin complex. Notable exploration successes were realized in the South Deep Basin in the Greater Williston Green area. Our first Valley River horizontal tested at 700 barrels per day of oil, less than 1% water testing and about $1,000,000 a day of natural gas and several new wells and pads in the Down Dip Glock play where that inventory continues to expand, and you'll see that well performance unfold over the next few quarters. And I think that's it for the formal remarks, so we can move into Q and A.

Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two.

If you are using a speakerphone, please lift a handset before pressing any keys. One moment, please, for your first question. Your first question is from Aaron Blakowski from TD Cowen. Please go ahead. Good morning.

Thanks for taking my question. I guess the fear of my question is related to capital allocation. Would you be able to talk about the benefits and drawbacks of spending capital on these and maybe future acquisitions relative to allocating that capital to our tenant group?

Mike Rose, President and Chief Executive Officer, Tourmaline: Sure. Yes. Thanks, Aaron. Well, we're actually doing both. So the Northeast BC Montney development is underway.

We spent $200,000,000 on facilities in 'twenty four. There's $300,000,000 in that build out allocated in 2025, which we're not going to cut. The first plant in that build out comes on stream in the second half of twenty twenty six. That's in Aitken. So we're well into that plan, which ultimately involves four plants, a series of regional pipelines and a whole liquid infrastructure build out associated with the gas build out as well.

On acquisitions, they're vendor driven. And so we're not out seeking anything, but we've been tracking, as you know, what fits and what doesn't for years. And over the past couple of years, a number of people have come to us, and it's right in the middle of where we're going to develop. And we know we can grow the volumes, and we know we can improve the efficiencies and drop the cost on those assets. And so we think it's quite prudent of us to consolidate ahead of, a, our build out and b, much improved pricing, which I think we're all expecting to happen here over the next few years in Western Canada.

Does that help? Yes. That's perfect. Can I ask you a quick follow-up question?

Conference Operator: Sure. This is something that maybe I should already know. But can you remind me what the total incremental production from Ground Birch expansion would be and the North Montney phase two expansion would be?

Mike Rose, President and Chief Executive Officer, Tourmaline: Sure. In Ground Birch, the acquisition we did actually changes the configuration of the plant a little bit. We've been eyeballing $400,000,000 a day of growth that will probably be a little bit more than that now. And you'll see that in the release in the second half of the year when we update the plan. I mean buying Seguero, obviously, we bought the first half of Seguero back during COVID.

And ahead of developing Laprise Conroy, we always wanted to have that at 100%. They finally decided they were ready to sell. So that actually changes the timing on that because that 50% is sort of sat at the end of the various series of projects we have in the North Montney. All of a sudden, at 100%, it's one of the lowest capital cost wedges of resource we have to develop up there. So it probably moves up as well.

But the total production volume from the North Montney growth will be between 250,000 boe a day if you extend this out to 2,030.

Conference Operator: Perfect. Thanks, Mike. I appreciate that.

Mike Rose, President and Chief Executive Officer, Tourmaline: Yes. You bet. Thanks for the questions.

Conference Operator: Your next question is from Eli Ekman from Bank of America. Please go ahead.

Mike Rose, President and Chief Executive Officer, Tourmaline: Hey, good morning, guys. Mike, Brian. I guess for my first question, it's kind of a follow-up on one of the previous questions. I want to ask about that long term production outlook. It seems like the new messaging suggests that the new plateau is around 850,000 DOEs by 02/1930.

Just trying to get a sense of what the bridge looks like from 2025, I. E, how much can you grow into current capacity? How much do new projects add? And how much do new acquisitions add? And when you look that far out, do you see a need for more infrastructure, be it pipeline egress on the crude oil side or more LNG in order to accommodate the growth plan that you've laid out?

Well, on a basin scale, even filling the two Bcf a day of LNG Canada phase one is probably going to take industry just based on the pace of how quickly new volumes can be brought on stream into the infrastructure, probably going to take three years plus. You'll see all the elements of that full development and adding 34,031 and much elevated production volumes that are associated with Ground Birch and the North Montney Phase two. You'll see that whole series of projects and plans when we release the full plan in 'twenty five. And as I mentioned, the acquisitions actually changed the cadence and the costs and the volumes in that whole plan. Mike.

For my second question, I want to go back to M and A. And look, I don't know if that's what the market is responding to today, but this is how you built the business over the last twenty years with kind of the sustained commitment to picking up good assets and geologic setups that you do believe in. In any case, the two acquisitions, I think, have strong industrial logic. It's on your weak line in an area that you plan to grow. Just can you kind of help us understand whether these are unique situations or if there are other opportunities to do similar deals under the same context?

Or if M and A does take place, it would be more of a step out from areas that you're currently that you currently consider core? Yes. No, thanks for that question. We don't plan to step out from our existing core geography and never have really for the full seventeen years of Tourmaline's corporate existence. So we know what fits and what doesn't.

We learn as we drill more wells. We figure out how to make more money off these assets. And as I mentioned, almost all of these deals are vendor driven. They come to us. Pod was a great example, the New Zealand mothership, if you like, approached us in the fall and said, you know, we're we're ready to sell the Canadian portion of our operations.

Well, we own the other half, and that was very liquid rich tier one rock that just made sense to buy. So similarly with the Guerrero, mean, we're obviously very friendly with them. We've been jointly developing LaPrie that are pretty modest pace really for the past four years. And then now, we can accelerate that into what I think, hopefully, we're all right, but we also expect a much improved Canadian natural gas pricing environment. So as I responded to Aaron's question, we're doing both.

We're building the infrastructure, and we're very excited about it. And as these opportunities come along on the M and A front, if they make sense, and they can improve our free cash flow yield, which is one of our key screening criteria, then we'll act on them.

Conference Operator: Your next question is from Gene Cubic from CIBC. I've got a couple here, just curious on liquids volumes in Q1. These were a bit lower than the range that Termline provided with its Q4. Can you just comment on some of the nuances in the quarter that drove that and how you expect these to recover in the coming quarters?

Mike Rose, President and Chief Executive Officer, Tourmaline: Jamie, it's Jamie here. We actually have seen liquids continue to push higher through the quarter. This quarter had a feature where we started at basically the base we executed on exit in 2024, and then volume steadily ramped quickly higher into March. And then if you hit that six sixty in April, and in April, we were doing well over 150,000 barrels of liquids and really happy with where liquids are today. One of the other things that accentuates mix at Tourmaline is our storage assets.

So we obviously sell gas out of storage in winter and then inject in the summer. And I think sometimes that catches people a little bit off guard that I'll add some natural gas to to winter period. But from our perspective and how we see the rest of the year, we see no deviation to our original thoughts on how liquids are trend. And I think you're gonna see great liquids rates through q two to q q four and 2025.

Conference Operator: Okay. And then maybe just circling back to the capital allocation question. Slide six of your presentation does show most of the free cash flow expected on strip for 2025 is largely spoken for through the base and base dividend and special. Can you just talk about how you're thinking about capital allocation for the balance of the year with respect to that? Sure.

Mike Rose, President and Chief Executive Officer, Tourmaline: Well, the five year plan update that we released yesterday, we're consistent with our methodology. So we picked the strip on the 15 the month prior to the release of the quarter. That was a particularly bad strip to use. So we're happy to report that if you ran it today, '25 and '26 free cash flow, we're both up a couple of hundred million dollars or more already. So we've got a little bit more of that capital to allocate.

But as it stands right now, maintenance is about 1,900,000,000.0 Growth is in the sort of six hundred to eight hundred million dollars this year. And then the balance is going to the base, which remember, we increased the base and reduced the size of the vessel with our March release, and we'll continue with that program through the balance of 2025. Anything you want to add, guys? No. That's okay.

Does that help, Jamie?

Conference Operator: Yes, you bet. And then last one from me. Just there's been obviously a lot of commentary on LNG projects in North America throughout the news. Can you talk a little bit about your part in Rockies LNG, how that project is progressing in the background and things of that nature?

Mike Rose, President and Chief Executive Officer, Tourmaline: Sure. Well, the leader of the project, Western, did secure a significant amount of capital to do the full engineering, so $150,000,000 So they're proceeding with that. They continue to seek landed deals to put them in a position to FID. I mean, you'll have to check with them when they really think that FID is going to come. We're I think all the participants on the supply side are expecting perhaps in the first half of twenty twenty six.

So we're excited about that one. There is the opportunity to make it larger. I'd say the credit quality of the producer group has steadily improved. So there's multiple large producers lined up on the supply side, and we have more than enough supply. And hopefully, there's Canadian momentum to start approving these projects because I think we're aligned on our thinking, Jamie, on just how important LNG is to Canada because it's great for the economy of the entire country.

It reduces emissions in the global atmosphere, and it's a great opportunity for improving indigenous prosperity.

Conference Operator: Okay. Thank you. That's it for me. I'll hand it back. Your next question is from Josh Silverstein from UBS.

Please go ahead. Yes, Ben. Good morning, guys. Sort of an M and A question as well. I was curious about the financing of the transaction.

You should stop for this. Why stock versus cash given where the balance sheet is? You mentioned, Mike, that you wanna leave a strong balance sheet for further acquisitions. So do you have appetite for a large acquisition here? And, like, you also just mentioned that you ran the current strip, cash flow is a couple hundred million dollars higher.

So I'm just curious why it should stock again for this. You did it for ground birds versus a cash transaction to further kind of leverage the potential for rising natural gas prices.

Mike Rose, President and Chief Executive Officer, Tourmaline: Well, both vendors for these transactions wanted stock. So that's probably the simplest answer. And yes, there may be other opportunities that arise. Is a busy market out there. Obviously, it's got a fit.

And we talked about our screening criteria already. So we are preserving that pristine balance sheet for potential other opportunities that might come along.

Conference Operator: Alright. And then maybe just a And they

Mike Rose, President and Chief Executive Officer, Tourmaline: won't be large. Sorry. Because you said saving it for a large you know, our MO over the the decades is we don't do anything extremely large. I mean, the largest we do is sort of one to 1,300,000,000, and we're not looking at anything of that size right now either. So just so you know, when we don't do merger of equal style deals, that's just not what we wanna do.

Conference Operator: Yeah. And and then may maybe just, I guess, a follow-up financing question on that. You know, you guys already have decades of inventory. Why not maybe sell some of the the noncore stuff to to finance this to to further high grade the the portfolio?

Mike Rose, President and Chief Executive Officer, Tourmaline: We don't really have much that doesn't fit in the long term. So, I mean, the Deep Basin produces about the same as the BC Montney right now. But, I mean, you know, the M and A we're doing right now is really ensuring we have a third decade of Tier one. And I do point to what's happening in North America, particularly in south of the border. There's less Tier one available than there used to be.

And we see the Western Canadian sedimentary basin becoming much more important for supplying the whole North American gas complex, including the Gulf Coast in The U. S. And a growing, hopefully, LNG industry on the Canadian West Coast. And so securing Tier 1A is really the name of the game right now for longevity and profitability. And we take a very long term look at Tourmaline and the overall natural gas business.

So it's hard to break out something and sell because it actually all fits in the long run. And when it didn't, we did. Like, if you recall, after we acquired one of us, so we quickly sold the Duvernay. So if there ever is a dry building asset, we we're quick to, you know, get the position back to work or to meet core in drilling it.

Conference Operator: Yep. Got it. Okay. And then my my separate question was just on the launch amount that you guys put out there, you know, volumes are up a hundred thousand BOE per day. Your spending drops 400, you know, $25,000,000 and yet the the free cash flow outlook goes down.

Is there anything that I I I obviously, you know, strip price is is changing there. But is there anything else that we should be thinking about in the forward that forward outlook that has lower free cash flow to it? Is there some costs that go up at a certain time or anything like that, that we should be thinking about? No.

Mike Rose, President and Chief Executive Officer, Tourmaline: I mean, the main reason that free cash flow drops in the out years in the five year plan is strip backwardation. And what we also haven't put in that plan is as we execute the Northeast DC infrastructure build out, it will drop our op costs. And just that wedge of sediment that we're developing in Northeast DC, it is our lowest cost, both capital and operating and the most liquid rich. And so all of Tourmaline's operating metrics are going to improve in that sort of 'twenty seven through 'twenty nine timeframe as this wedge of lower op cost production comes into the base. And even at it will be at least a $0.50 per BOE OpEx reduction.

We haven't put that in the plan yet. That's at least $150,000,000 of free cash flow per year in the back half of the plan. And if we make it larger, the overall Northeast DC development, that operating cost reduction and the result in free cash flow will realize increases as well. The other thing that we fully burdened the plan with there, Josh, is taxes. 2026 forward, cash taxes are towards $400,000,000 a year.

But of course, in reality, as we execute acquisitions on an annual basis here or there, that often has a tax benefit. And so this year's cash tax will be much lower than that, know, 4 to a hundred million dollars depending on the strip we're running. And so we don't forecast acquiring tools, but that is something that will probably result in additional cash flow and free cash flow in each annum as we're in it.

Conference Operator: Got it. Thanks, Jeremy. That's fine.

Mike Rose, President and Chief Executive Officer, Tourmaline: You bet.

Conference Operator: Your next question is from Fair excuse me. Faili from Autumn Brown. Please go ahead.

Autumn Brown: Hi. It's Fai from Autumn Brown. Mike, I just wanna get your thoughts if if, you know, if you wanna share hope you share them on long term natural gas prices, you know, as you mentioned, the strict and documentation. It looks like in the other years, you know, NYMEX gas prices are around $3.50 and implied by the strip, somewhere in that range. How do you view that kind of price level in the context of, you know, rising demand data centers, LNG export terminals?

Just, you know, if you have any thoughts about that long term gas prices and where you think you might sell into that, I'd appreciate it. Thanks.

Mike Rose, President and Chief Executive Officer, Tourmaline: Sure. Well, we expect them to go up because we do agree with, I think, where you're going by that there's a bit of a disconnect there. That being said, you know, we'll continue to ensure that our base business makes money at 1.5 to $1.75 MCF. And I think consistently, that's been our messaging. Strips are improving quite rapidly actually, even April, which is surprising, but it put on $0.50 for $26 and Jamie has it for $27 as well.

It's coming up. It's coming up. So it's starting to improve kind of right now, and we think that's in advance of first volumes showing up on Coastal GasLink. And I'd like to try a big picture, just speaking about what we've seen over the last three months, you've seen LNG plants continue to announce FID. You saw kind of the Woodside plant in in Louisiana, and that was actually a bit of a surprise to everyone.

You've also seen production outlook thin, you know, in a slightly lower oil deck, especially with the comments offered by some of our peers in United States. It looks as though associated gas production might be smaller than previously anticipated. And yet, the expectation for power, LNG, and industrial gas demand is as stable as ever and looks to be something that will, you know, markedly outpace some of the years prior. We're gonna be in the, call it, three to four, sometimes 5,000,000,000 cubic feet per day of demand annually growth. And that also echoes here up here in Canada with LNG Canada and our own domestic demand story.

So we do see a a ton of demand coming into market. And then all of a sudden, a much more reluctant supply dispatcher to The United States on the associated gas side, but also on the dry gas side. They want ever more higher prices to grow their basins, and that's gonna create margin expansion for us at Permalene. As as Mike mentioned, our supply costs under $2 here at one fifty, those are stable and they're not going up. And so if realized prices can navigate themselves higher on this S and D outlook, that means more free cash flow for us.

Autumn Brown: Okay. Can I ask just a follow-up, if

Mike Rose, President and Chief Executive Officer, Tourmaline: you may? It sounds like reading between the lines here that $3.50 in your mind is

Autumn Brown: probably too low as it's a longer term price. If you have to put a peg, like, a specific number on what that price might be given

Mike Rose, President and Chief Executive Officer, Tourmaline: the dynamics, where would you put it? Well, I I think, Phoebe, you followed up for our whole existence. You know, we're pretty much we're always wrong on our price predictions, I think, quite consistently. But we expect AECO next year, particularly in Atlanta, to be 4 to $5. How's that?

Because it's almost there now. If the diff comes in from a buck 80 to a buck 20, then you're there.

Autumn Brown: Okay. That helps. Thank you.

Mike Rose, President and Chief Executive Officer, Tourmaline: Okay. Thanks.

Conference Operator: Ladies and gentlemen, as a reminder, if you do have any questions, please press the star key followed by the number one. Your next question is from Peter Cooks from Tourmaline. Please go ahead. Hey, I

Mike Rose, President and Chief Executive Officer, Tourmaline: was just curious on your any thoughts on the impact of tariffs in The U.

Conference Operator: S. Under you guys? And with all the political going on, it's been sort of a bit of a mess. But I was curious what impact that might have on gas you sell into

Mike Rose, President and Chief Executive Officer, Tourmaline: The U. S. Market and so on? Yes. Well, we don't, Peter.

I mean, there aren't tariffs on Canadian energy at the current time. So there's no impact there. Perhaps a little bit of cost inflation on steel, tourmaline, in particular, we don't source very much of our tubulars from The U. S. Might be a modest impact on sand, on our fracking business, but nothing material at this point.

And I will reemphasize, there are tariffs on energy, which makes nothing but sense given how intertwined the energy systems in the two countries are. They really don't make sense. And we should be working together to grow the the North American Energy Complex. That's for sure. Anyway, hopefully hopefully, they get this

Conference Operator: whole thing squared away at some point soon.

Mike Rose, President and Chief Executive Officer, Tourmaline: We're all friendly. Yeah. We're with you. Thanks, Peter. Okay.

Conference Operator: Ladies and gentlemen, as a reminder, should you have any questions, please press the star key followed by the number one. We'll pause a moment for further questions. There are no further questions at this time. Please proceed with closing remarks. Thanks, everybody, for attending.

We look forward to chatting with you in the next quarters. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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