Civeo - Q2 2024

Transcript

Operator (participant)

Ladies and gentlemen, good morning, and welcome to the Civeo Corporation Q2 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Regan Nielsen, Vice President, Corporate Development and Investor Relations. Please go ahead.

Regan Nielsen (VP of Corporate Development and Investor Relations)

Thank you, and welcome to Civeo's Q2 2024 earnings conference call. Today, our call will be led by Bradley Dodson, Civeo's President and Chief Executive Officer, and Barclay Brewer, Civeo's Interim Chief Financial Officer and Treasurer. Before we begin, we would like to caution listeners regarding forward-looking statements. To the extent that our remarks today contain anything other than historical information, please note that we're relying on the safe harbor protections afforded by federal law. Any such remarks should be read in the context of the many factors that affect our business, including risks and uncertainties disclosed in our forms 10-K, 10-Q, and other SEC filings. I'll now turn the call over to Bradley.

Bradley Dodson (President and CEO)

Thank you, Regan, and thank you all for joining us today on our Q2 earnings call. I'll start with some key takeaways from the Q2 and then give a brief summary of our Q2 2024 performance. Then Barclay will provide a financial and segment-level review, and I'll conclude our prepared comments with updated comments on our full year 2024 guidance and the underlying regional assumptions. Then we'll open the call for questions. Key takeaways from our call today are, our Q2 results demonstrate the initiatives that we have undertaken to position the company for growth that can be seen in our Australian results.

Our Q2 2024 revenues and free cash flow improved year-over-year, with Adjusted EBITDA relatively flat, despite the expected headwind that we experienced from Canadian LNG mobile camp activity, which decreased our Adjusted EBITDA by $6.9 million year-over-year. Australian Adjusted EBITDA increased by 10% compared to the Q2 of 2023, due to continued strength in our billed rooms at our own villages and increased activity in our integrated services business as we expand existing customer relationships. Our Canadian segment performance was stronger than we expected for the quarter due to the pull forward of some customer turnaround activity from the third quarter of 2024 into the Q2 of 2024. We also returned $10.3 million of capital to shareholders through our quarterly dividend and share repurchases during the Q2 of 2024.

Lastly, we will maintain our revenue and Adjusted EBITDA and CapEx guidance for the full year 2024, and I'll discuss that later in our prepared comments. We take a brief moment to provide a business update across our two segments. Australian segment performed well during the quarter, and the team continues to execute on our previously stated goal to grow our Australian integrated services revenues to AUD 500 million by 2027. We experienced year-over-year growth in both our own villages business and the integrated services business. Our integrated services business growth was particularly strong due to the impact of recent competitive wins, as well as the expansion of an existing customer relationship.

In Canada, as expected, our Canadian segment revenues and adjusted EBITDA decreased year-over-year due to the wind down of LNG-related activities, specifically the mobile camp activity, in the Q2 of 2024. Our Q2 Canadian results were actually stronger than we expected initially due to the shift again of the timing of turnaround activity in the oil sands region. With that, I'll turn it over to Barclay for some financial review and segment-level comments.

Barclay Brewer (Interim CFO and Treasurer)

Thank you, Bradley, and thank you all for joining us this morning. Today, we reported total revenues in the Q2 of $188.7 million, with net income of $8.2 million, or $0.56 per diluted share. During the Q2, we generated adjusted EBITDA of $31.3 million, operating cash flow of $32.4 million, and free cash flow of $30.9 million. Q2 adjusted EBITDA increased year-over-year due to increased activity at our Canadian lodges, Australian-owned villages, and Australian integrated services business, partially offset by the expected wind down of LNG-related Canadian mobile camp activity, which decreased adjusted EBITDA by $6.9 million year-over-year, including $1.4 million in mobile camp demobilization costs. Let's now turn to the Q2 results for our two segments.

I'll begin with a review of the Australian segment performance compared to its performance a year ago in the Q2 of 2023. Q2 revenues from our Australian segment were $108.6 million, up from $82.5 million in the Q2 of 2023. Adjusted EBITDA was $21.6 million, up 10% from $19.6 million last year. The increase to revenues and adjusted EBITDA was due to increased billed rooms at our own villages and increased integrated services activity related to recent competitive wins, as well as the expansion of existing client activity. This shows our continued and steady growth in the segment. Australian billed rooms in the quarter were 625,000 rooms, up 6% from 588,000 in the Q2 of 2023.

This is due to increased customer demand at our own villages, as demonstrated by our recent contract awards. The day length room rate for our Australian-owned villages in U.S. dollars was $78, which increased from $75 in the Q2 of 2023 due to CPI escalation in the recent contract. Turning to Canada. We recorded revenues of $79.5 million, as compared to revenues of $95.5 million in the Q2 of 2023. Adjusted EBITDA in Canada was $17.2 billion, a decrease from $19.8 billion in the Q2 of 2023. The year-over-year revenue and adjusted EBITDA decrease was primarily driven by the expected wind down of LNG-related mobile camp activity.

During the Q2, billed rooms in our Canadian lodges totaled 752,000, which was up from 724,000 in the Q2 of 2023, despite the sale of McClelland Lake Lodge. This increase was primarily driven by stronger turnaround activity during the quarter related to a shift of customer activity from the third quarter of 2024 into the Q2 of 2024. The day length room rate for the Canadian segment in US dollars was $96, which decreased from $100 in the Q2 of 2023 due to the mix of occupancy between lodges and contracted rate incentives for increased occupancy at select lodges. On a consolidated basis, capital expenditures for the Q2 of 2024 were $5.3 million, compared to $6.9 million during the same period in 2023.

Capital expenditures in both periods were predominantly related to maintenance spending on our lodges and villages. Our net debt on 30 June 2024, was $40.1 million, a $21.8 million decrease since 31 March 2024. Our net leverage ratio for the quarter decreased to 0.3 times as of 30 June 2024. As of 30 June 2024, we had total liquidity of approximately $159 million, consisting of $151.5 million available under our revolving credit facilities and $7.4 million of cash on hand, giving us the strength and flexibility to opportunistically pursue growth vectors in 2024 and beyond, while maintaining prudent leverage ratios. Turning to capital allocation.

In line with our previously stated goals for 2024 and the Q2 of 2024, we repurchased approximately 274,000 shares through our share repurchase program, for a total of approximately $6.6 million. As Bradley mentioned, we returned $10.3 million of capital to shareholders through the quarterly dividend and share repurchases in the quarter, bringing our total year-to-date return of capital to shareholders to $17.2 million. This morning, we announced that our board of directors has declared a quarterly dividend payment. Shareholders of record as of 26 August 2024, will receive a $0.25 per share cash dividend, payable on 16 September 2024. With that, I'll turn it over to Bradley to discuss guidance for the full year 2024. Bradley?

Bradley Dodson (President and CEO)

Thank you, Barclay. I'll now talk about our full year 2024 guidance on a consolidated basis and look into the outlook for each of the two regions. We are maintaining our full year 2024 revenue and adjusted EBITDA guidance ranges of $625 million-$700 million for revenues, and $80 million to 90 million for adjusted EBITDA. We are maintaining our full year 2024 capital expenditure guidance of $30 million to 35 million. Based on these adjusted EBITDA and CapEx guidance, coupled with net proceeds from the sale related to the McClelland Lake Lodge, that's management sale, which totaled about $6 million in the Q1, expected full year cash interest expense of $6 million, expected working capital inflow for the full year of $10 million, and expected Australian cash taxes of $10 million for the full year.

We are maintaining our 2024 free cash flow expectation of $45 million to 60 million. I'll now provide the regional outlooks and corresponding underlying assumptions. In Canada, I'd like to acknowledge the forest fires that are impacting Western Canada, including our Canadian operating region. I want to thank our employees who have been working around the clock to ensure the safety of our guests, the first responders staying with us, and the safety of our assets. While this is a fluid situation, we do not currently anticipate any material financial impact, positive or negative, from the current fires. The wildfire situation around Fort McMurray and our operations has significantly improved over the last few days, but we will remain vigilant throughout the balance of the fire season.

Starting the Q2 in Canada, as we discussed earlier, our quarter was stronger than expected due to planned third quarter customer turnaround occupancy shifting into the Q2. We expect more modest results in the latter half for Canada due to that shift of turnaround activity. But overall, our full-year Canadian forecast is largely in line with what we expected coming into this year. Starting on mobile camps, the majority of our mobile camp rental activity is complete, and we're continuing the demobilization process. We expect the demobilization to be completed in the third quarter, earning our third quarter adjusted EBITDA by approximately $1.5 million for the final demob costs. As a reminder, this was all contemplated in our full-year 2020 guidance.

Turning to Australia, customer activity in our own villages remains very strong, and we expect that to continue at similar levels moving forward. We are currently full at three of our five Bowen Basin villages and very healthy occupancy through the balance of the portfolio in Australia. As it relates to our integrated services business, we are continuing to experience the increased demand from recent contract wins, as well as expanding existing customer relationships. We have continued to see substantial growth in recent years in the integrated services business, and we're excited about further growth potential in Western Australia for that business. Now that we have made strides in our inflation mitigation plan, we can now shift back to winning work and growing the business. And to repeat, our team has set a goal, growing our Australian integrated services business to AUD 500 million by 2027.

Before I wrap up our prepared comments, I'd like to thank Barclay for stepping into the interim Chief Financial Officer role for the past few months. Thank you for all your efforts and working seamlessly over this transition period. As previously announced, Collin Gerry will transition into his new role as CFO on August 1st, and Barclay will serve as Chief Accounting Officer moving forward. Collin Gerry has been with Civeo since May of 2014, serving in various executive positions across our Canadian operations and our corporate development and business development teams. I look forward to working with him in his new role. So in closing, we continue to execute operationally and on our strategic growth initiatives, and our results are demonstrating solid progress on these initiatives as we have laid out previously this year. With that, I'm happy to take your questions.

Operator (participant)

Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star and one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we poll for questions. Our first question comes from the line of Stephen Gengaro with Stifel. Please go ahead.

Stephen Gengaro (Managing Director of Oilfield Services and Equipment stocks)

Thanks. Good morning, everybody, and congrats, Collin, on the new role. So I think a couple of things for me, Bradley. First, can you talk a little bit about what you're seeing in Australia as far as sort of the back half of 2024, 2025, and kind of what we should be paying most attention to, kind of from a potential growth perspective in Australia right now?

Bradley Dodson (President and CEO)

Absolutely. In terms of the back half of the year in Australia, I expect occupancy in our own villages to remain relatively consistent through the third quarter. And then, as always, we'll see a slight downtick in occupancy in the fourth quarter with the holiday downtimes. But generally speaking, expecting occupancy in our own villages in Australia to remain fairly consistent throughout the year. On the integrated services side, I've been very pleased, we've been very pleased with the operational execution of the team. You can see that in the margins of the integrated services business, and the expectation is that will continue through the balance of the year. You know, you saw a big uptick in terms of top line in the integrated services business, Q1 to Q2, in 2024.

And then I expect the performance from a top line perspective in integrated services to remain fairly consistent through Q3 and Q4. So then the attention for that business kind of transitions to winning additional work. So the team has several prospects that we're working on, and again, this is all moving towards our goal of $500 million top line by 2027, and believe there's a tangible pathway to achieving that. And so as we look into 2025 for Australia, I expect the trends to continue. We see selective opportunities to enhance our existing operations, and they're really twofold by the business lines. In the owned villages, looking to potentially add a little bit of capacity on the order of magnitude of maybe 100 rooms to the Bowen Basin. That's contingent upon a couple things.

One, we get the customer commitments to support the investment, and two, we get through the permitting process. So hopefully we can get that teed up late in the H2 of this year and benefit us in 2025. In the integrated services business. Sorry, go ahead, Steve.

Stephen Gengaro (Managing Director of Oilfield Services and Equipment stocks)

Oh, no, go ahead, please. Go ahead.

Bradley Dodson (President and CEO)

And then in the integrated services business, it's continuing what the team is doing. We've got to go out there and win additional work. I think we've established ourselves as a tier one operator in Australia, where the customers own the assets, and we provide the hospitality services for them, and I think the team's done a great job there. So now it's just what's next. Got a handful of opportunities we're working on right now, and we'll have to see how those play out.

Stephen Gengaro (Managing Director of Oilfield Services and Equipment stocks)

Great. Thank you. And the other big question was really your leverage is down again, your cash flow is really strong, you're obviously buying back stock. But when you think about the M&A landscape or the potential, at least, how should we think about sort of what you're looking for, kind of from a financial terms perspective, but then also, should we be thinking about it geographically? I mean, is Canada or Australia better or worse than the other in your mind? Or how do we just sort of think about what kind of could happen over the next, you know, three, four, or five quarters?

Bradley Dodson (President and CEO)

Sure. So I'll, I'll start with Australia. On the owned villages side, there are a handful of opportunities to acquire additional villages that are owned by third parties that would augment our portfolio and would be added to our portfolio. So we're, we're looking at a handful of opportunities there. In the integrated services business, it would be similar to what we did with the Action acquisition. It would be buying a market position in a geography or end market that we don't currently serve, and building off of that, based on what we see, is starting to build some critical mass in, in that business, where we're starting to get some efficiencies in terms of having the overall volumes, the overall top line support, the, the back office and the infrastructure to, to, you know, effectively be serving over 10,000 people a day.

And so those, that's really the focus for Australia. In Canada, the base oil sands or Western Canadian business remains very steady, but there's not a ton of growth in that market. So we're looking to leverage our assets and our capabilities across North America to serve a broader group of industrial projects, both end markets and geographies, with our current asset and service delivery model. You've heard us talk about it in the past. The process of marketing the McClelland assets really opened up our eyes to the value of modular accommodations and our core competency of owning them, installing them, running them for customers where it's not their core competency. So, cautiously optimistic, we'll see some growth opportunities there in the next 12 months.

Stephen Gengaro (Managing Director of Oilfield Services and Equipment stocks)

Great. Thanks. I'll turn it over and get back in line here. Thank you, Bradley.

Bradley Dodson (President and CEO)

Thanks, Steve.

Operator (participant)

Thank you. Our next question is from the line of Steve Ferazani with Sidoti & Company. Please go ahead.

Steve Ferazani (Equity Analyst)

Good morning, Bradley, Barclay. The strength.

Bradley Dodson (President and CEO)

Hi, Steve.

Steve Ferazani (Equity Analyst)

In Q2 on the Canadian billed rooms, I think you, you indicated a couple of times, there was a clear pull forward from Q3. So I'm trying to figure out how lopsided turnaround season might be this year, or how turnaround season, in general, is playing compared to a year ago, which was also very, very healthy, considering your billed rooms were up, even though you've sold McClelland Lake. I mean, that was extremely strong.

Bradley Dodson (President and CEO)

Yeah. So a couple things there. Q2 2024, Q2 2023, in the Q2 of 2023, we had the full benefit of McClelland, because we sold that or dismantled that in July of 2023. So this is kind of the last clean quarter, historically, of having McClelland in there. The replacement asset the customer is putting to work is in the process of getting commissioned. So we had some overflow benefit from the Fort Hills project into other Civeo locations in the Q2. So we'll see the full impact of the sale of McClelland in the back half of 2024. In terms of turnaround activity, yeah, quite frankly, 2024 is playing out generally in line with what we expected on a full year basis.

Some of the timing, as we indicated, shifted from Q3 to Q2. But in general, overall turnaround activity in 2024 is up probably about 150,000 room nights from 2023 on a full year basis. So it's playing out as we expected, just timing between Q2 and Q3 had shifted. So, that coupled with we had expected all the demobilization costs to be completed in the H1 of 2024. And as we mentioned, we've got about $1.5 million slipping into the H2, specifically the third quarter. So we've got some turnaround activity pulling forward.

We've got some demob costs being pushed back and, net-net, a stronger Q2, and, you know, full year in line with what we're expecting, you know, flat to up from our expectations for Canada. But the back half will be softer, for sure.

Steve Ferazani (Equity Analyst)

Fair enough. That's helpful. Even if I consider that in the Q3 will be down from Q2 in Canada, given your guidance for Australia, fair to say that your outlook sort of gets you to the higher end of your guidance range right now, unless something were to change on the revenue side?

Bradley Dodson (President and CEO)

Well, I would, I would say that there, there are probably two major factors, three major factors that could influence kind of the breadth of the guidance range. First and foremost, while I think the most important takeaway is that while the fire intensity in Alberta has been significant, and more broadly speaking, Western Canada, particularly over the last three weeks, has been 24/7 effort for our operations, safety, and HR teams. With some rain over the weekend, it's getting better. And while we don't think there's a material impact, it could swing, you know, positive or negative a little bit. That's why we didn't tighten the guidance range overall, which we typically would do around this time every year. So while we don't think it's material, it could swing things $1 million or $2 million either direction.

So that was part of it. Secondly, we could, you know, I would say occupancy in Australia could be upside, but to your question, could move us to the upper end of the guidance range. And likewise, occupancy and margin performance and CIS can move us to the upper end of the range. I don't think the demobilization costs would, you know, they're fully baked. I don't see, that's just a matter of timing. I don't see that impacting full-year guidance. So I think overall, those are the kind of two or three factors that would influence where we end up on the range.

Steve Ferazani (Equity Analyst)

That's really helpful. Could you get one more in just on the Australian margins?

Bradley Dodson (President and CEO)

Yeah.

Steve Ferazani (Equity Analyst)

Obviously, you have these new and upgraded contracts, revenue well above what we were thinking. Margins not moving a lot yet. Do you see some room? Are you seeing any kind of reduction in labor costs? Anything you can do to move margins up a bit here? Are you comfortable with where margins came in?

Bradley Dodson (President and CEO)

I've been comfortable with where margins have come in. We are kind of running on a contribution basis at the owned, really the two components, right? The owned villages and the integrated services. On the owned villages side, I'd say the margin performance has been good. We still haven't gotten the labor situation to pre-COVID efficiencies, but we've made some improvements. I would say pricing on the owned villages has clearly an upward bias overall, given that the overall Bowen Basin is running, you know, pretty full. We're full in three of our five locations, and overall, occupancy in the Bowen Basin is strong. So, we'll see how that plays out.

In integrated services, I would say that, you know, pricing is steady, and it's an issue of volume and execution. Simple, actually.

Steve Ferazani (Equity Analyst)

Great. Thanks, [inaudible].

Bradley Dodson (President and CEO)

Thank you.

Operator (participant)

Thank you. Our next question is from the line of Dave Storms with Stonegate. Please go ahead.

Dave Storms (Director of Equity Research)

Good morning.

Bradley Dodson (President and CEO)

Good morning.

Dave Storms (Director of Equity Research)

Morning. I thought I had heard in the prepared remarks that one of the suppressors of the Canadian room rates was incentives. I was hoping you could give us a little more color on, you know, maybe the duration of the incentives and if we might see a little bit of a rebound in Canadian prices in the back half of the year.

Bradley Dodson (President and CEO)

Yeah, so most of the contracts in Canada will have tiered pricing. And so as volume goes up, there are lower prices, so it'll just be, you actually, you know, net-net, we're better off with lower prices and higher volumes. So, you know, net-net, this is a better situation. It was turnaround related, so as we see turnaround volumes start to decrease in the H2 of the year, prices will go up. But net-net, we want the volumes. We're better off with the volumes than adding some discounted pricing. It's all contracted. It's not a movement in pricing. It's really just a tiered pricing structure that we've always had.

Dave Storms (Director of Equity Research)

Understood. Very helpful. Thank you. And then just one more for me. You're about a third of the way to the low end of your CapEx guidance, and already halfway through the year. Can you give us a sense on what the kind of cadence for CapEx through Q3 and Q4 might look like?

Bradley Dodson (President and CEO)

Yeah, we had, if you'll allow me kind of rough numbers, we did about $10 million in CapEx in the H1, and the low end of the range is $30 million. I expect that will be 15-ish in the third quarter based on forecasts, and then between five and 10 in the fourth quarter. Some of it's gonna be timing. As I mentioned, we'd like to add 100 rooms to the Bowen Basin. That's dependent on two things, permitting and customer commitments. If those fall into place, I'd really love to launch that project this year, but not all that spending will get spent.

And then we're also looking at reactivating some rooms in the oil sands region that will allow us to capture some smaller clients that we can't always serve because of the commitments we have to some of our larger clients. So we'd, we'd like to get that kicked off and spent before the winter season so that we can get those commitments from the smaller players to move them into the village, the former village.

Dave Storms (Director of Equity Research)

That's very helpful. Thank you for taking my questions, and good luck in Q3.

Bradley Dodson (President and CEO)

Thank you.

Operator (participant)

Thank you. Our next question comes from the line of Sean Mitchell with Daniel Energy Partners. Please go ahead.

Sean Mitchell (CEO)

Good morning, guys, and thanks for taking the question. Bradley, can you take a minute, maybe? I know Steve, at the beginning of the call, talked about Australia, but could you take a minute potentially to frame what the opportunities, kind of, two to three years out, for the next couple of years maybe, on supporting kind of future LNG expansions like Cedar LNG?

Bradley Dodson (President and CEO)

Great question. So, I think there are a handful of pieces to it. To the extent that there's additional pipeline work for additional LNG projects, that would support opportunities for our mobile camp business. There'll be coastline opportunities for our Sitka Lodge, so it would be a nice return to activity for our British Columbia operations. We've had a strong H1 in terms of occupancy at Sitka relative to our expectations, but the LNG Canada project's getting very close to first production, so our activity at Sitka is winding down. As we mentioned in the prepared comments, the mobile camp activity, we're just in demob at this point.

So, additional LNG projects, if we saw Pathways project move forward, would add occupancy in Western Canada to existing assets and present opportunities for mobile camp deployment.

Sean Mitchell (CEO)

Got it. Thanks. I'll turn it back. Appreciate it.

Bradley Dodson (President and CEO)

Thanks, Sean.

Operator (participant)

Thank you. Our next question is from the line of Stephen Gengaro with Stifel. Please go ahead.

Stephen Gengaro (Managing Director of Oilfield Services and Equipment stocks)

Thanks. Thanks for taking the follow-up as well, Bradley. Just one quick one. I don't know if you want to talk about this or not, but when we think about 2025, and, like, when we were entering 2024, we kind of understood there were some puts and takes as you entered the year with the Coastal GasLink pipeline work and some other things. What are the kind of very high-level puts and takes as we think about 2025?

Bradley Dodson (President and CEO)

Well, let's see here. I would say that in Australia, it's going to be capital investment on the owned villages, whether that's buying additional locations or activating or expanding Bowen Basin capacity on the villages side, how much that comes to fruition. As I mentioned, there's some upwards bias, potentially on pricing on the owned villages. In IS, it's going to be winning work, and our Australian integrated services, it's going to be finding or winning the next contract. We've, as we set out about 18 months ago, the opportunities we wanted to win, we've won, plus some. You really saw the first full quarter of that flow through into Q24.

But right now, as I mentioned in the comments, kind of, I think, to your earlier question, Stephen, you kind of expect integrated services to be on a quarterly basis, flat from here for the balance of 2024, and it'll be dependent on new contract wins. In Canada, I think in 2024 to 2025, there'll be some puts and takes. As always, with Canada, it'll depend on turnaround activity. Don't see any major changes to base level occupancy in the oil sands region. We'll have some headwinds in terms of occupancy, in terms of comparables for H1 of 2025 versus H1 of 2024 at Sitka. But net-net, I would expect without any additional strategic wins in the Canadian business, kind of a flat 2024 to 2025.

Stephen Gengaro (Managing Director of Oilfield Services and Equipment stocks)

Great. Thank you. And then just one quick follow-up, and that is around. We talked about this in the past a bit. The source gas opportunity for LNG Canada, what's the status of that, as far as accommodations, and is there still a chance that there could be involvement on your side, or is. I'm not, I don't have a good update on kind of where that stands.

Bradley Dodson (President and CEO)

I would say on the source gas side, our entry would require an acquisition. It's unlikely we would move into it on an organic or greenfield basis.

Stephen Gengaro (Managing Director of Oilfield Services and Equipment stocks)

Okay, great. Now, thanks for all the details.

Bradley Dodson (President and CEO)

Happy to. Thanks for the interest. Thanks for your questions.

Operator (participant)

Thank you. Ladies and gentlemen, this concludes our question and answer session. I would now hand the conference over to Bradley Dodson for his closing comments.

Bradley Dodson (President and CEO)

Thank you, Ryan, and thank you everyone for joining the call today. Really appreciate your interest in Civeo, and we look forward to speaking to you on our third quarter earnings call, which we expect to happen late in October.

Operator (participant)

Thank you. The conference of Civeo Corporation has now concluded. Thank you for your participation. You may now disconnect your line.