National Fuel Gas Company (NYSE: NFG ) Q3 2015 Earnings Conference Call August 07, 2015 11:00 AM ET Executives Brian Welsch – IR Ron Tanski – CEO Dave Bauer – Treasurer and Principal Financial Officer Matt Cabell – President of Seneca Resources Corporation Analysts Becca Followill – U.S. Capital Advisors Holly Stewart – Howard Weil Chris Tillett – Jefferies Operator Good day, ladies and gentlemen, and welcome to the Q3 2015 National Fuel Gas Company Earnings Conference call. My name is Halley, and I am your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I’d now like to turn the call over to Mr. Brian Welsch, Director of Investor Relations. Please proceed, sir. Brian Welsch Thank you, Halley, and good morning. We appreciate you joining us on today’s conference call for a discussion of last evening’s earnings release. With us on the call from National Fuel Gas Company are Ron Tanski, President and Chief Executive Officer; Dave Bauer, Treasurer and Principal Financial Officer; and Matt Cabell, President of Seneca Resources Corporation. At the end of the prepared remarks, we will open up the discussion to questions. The third quarter earnings release and August inventor presentation have been posted on our Investor Relations website. We may refer to these materials during today’s call. We would also like to remind you that today’s teleconference will contain forward-looking statements. While National Fuel’s expectations, beliefs and projections are made in good faith and are believed to have a reasonable basis, actual results may differ materially. These statements speak only as of the date on which they are made, and you may refer to last evening’s earnings release for a listing of certain specific risk factors. With that, I’ll turn it over to Ron Tanski. Ron Tanski Thanks Brian and good morning everyone. Operating earnings are $0.55 per share for the third quarter or $0.18 per share lower than the last year’s third quarter. If you look at the drivers of that decrease that we breakout on page 11 of the earnings release it’s easy to see that three items in our exploration and production segment explain most all of the year-to-year decrease. Those items were lower commodity prices, decreased production and offsetting the first two items the reduction in our DD&A rate. The decrease in production is largely a result of our shutting in wells in Appalachian when the spot prices are too low. We continue to look for opportunities to sale our spot production at acceptable prices but there is simply too much gas and not enough pipeline infrastructures to move those supplies to attractive price points. As we pointed out in the release we curtailed approximately 12.5 Bcf of production during the quarter. Lower commodity prices have obviously been the story for most energy companies this earning season and we’ve seen some firms make major reductions in their capital expenditure budgets. We’re watching our spending too, but I’ll remind everyone that our CapEx plans have always been relatively conservative. Our current rig scheduling and drilling programs are designed to bring on enough production to fill the pipelines that we’re building to move their production to better pricing points. We continue to move forward with our plans to build the pipelines to help move production out of the basin both for owned Seneca Resources and for third party producers. Construction is underway on three of our interstate pipeline projects. Our West Side expansion project along our line and corridor, our Tuscarora Lateral project in the more central portion of our system and our Northern Access 2015 project, all of these projects are moving along on schedule and we expect that they will all be in service in the last quarter — calendar quarter of this year. The Northern Access 2015 project will allow Seneca to move140,000 dekatherms per day of gas to Canada at the Niagara interaction with TransCanada and the West Side expansion will allow Seneca to flow an additional 30,000 dekatherms per day, a portion moving to Canada and the remainder to Texas Eastern. We have shown Seneca’s transportation capacity graphically on Page 24 of our Investor Relations slide deck on our website. When combining this 170,000 dekatherms of near term capacity with the 490,000 dekatherms per day of capacity, that Seneca has in our Northern Access 2016 project you can see that we’ve got a substantial growth trajectory moving forward from our current productive capacity of 150,000 dekatherms per day in our western development area. Both Matt and Dave will give some more color on our marketing activities and hedging positions. But I am pleased to say there ongoing approach of regularly layering in hedges has put us in good shape with respect to revenue certainty for a good portion of our firms sales for the rest of this year and next fiscal year. Lower commodity prices have obviously cut into our earnings but our diversified model continues to produce healthy cash flow. Our balance sheet is in good shape but I don’t see any need to alter our strategy to build more pipelines and drilled the wells necessary to fill those pipelines. These investments help us accomplished two goals they generate significant cash flows for at least the next 15 years and they provide Seneca’s with the ability to move gas to our market with significantly better pricing. This integrated approach to developing our assets combined with the flexibility offered by our fee mineral acreage position is allowing us to deal with the current pricing challenges and puts us in a great position for continued growth. Our financing requirements for 2015 and 2016 are meaningful but our outspend is driven almost entirely by our investments and our long term midstream infrastructure. Dave will talk about the debt financing we completed in June to cover our 2015 capital program. And looking ahead in next fiscal year as we’ve said in the past the MLP structure is an option that we’re evaluating for our midstream business and given the right market condition we think it’s a very good option. The MLP market and frankly the entire energy space is under pressure right now but markets go up and down and just because there is a dislocation today doesn’t mean it will continue forever. And MLP is not only option, there are number of ways to finance our business. We’re certainly aware of our capital needs in fiscal 2016 and we’ll pick the financing option that we think is best for our shareholders. One thing is clear, there is lot of capital looking to be put to work in the midstream space. We have a great set of assets a great management team and a great plan to grow the business. In the end those are key to attracting the best sources of capital. Now I’ll turn the call over to Matt Cabell to give Seneca update. Matt Cabell Thanks Ron and good morning everyone. For the fiscal third quarter Seneca produced 36.2 Bcfe which is 11% or 4 Bcfe less than last year’s third quarter. However during this year’s third quarter we sold only our firm volumes in the Marcellus and curtailed 12.5 Bcf or approximately 140 million cubic feet per day of potential spot sales due to low prices. Absent those curtailments production would have been up 20%. In California our 2015 drilling programs have had good results and provide attractive returns even at today’s low prices. At $50 oil we earn returns of 30% to 40% on wells we drilled in the North Midway, South Midway and East Coalinga areas which represents the majority of our current and fiscal 2016 capital budget. We are also feeling good about our opportunities to grow California production over the next several years due to opportunities we see at East Coalinga and add two additional farm-in deals that are near in completion. I hope to have these two deals inked by the next call and we’ll provide some details then. Moving on to the Marcellus development in the Clermont Rich Valley areas is going well with 52 Clermont area wells drilled in the first nine months of fiscal ’15 and 24 completed. Our most recent completion in the North half of our E9E pad came on at rates ranging from 8.5 million to 10 million cubic feet per day. IP rates and EURs have been remarkably consistent in the CRB area. We also continue to drive down drilling and completion cost. Our average fiscal 2015 development well cost was $5.8 million for a 36 stages well with 7,000 foot lateral length. On the marketing front we continue to take a portfolio approach to our marketing arrangements. Optimizing the value of our firm transportation while minimizing risks through a series of firm’s sales. For example this November the Northern access 2015 project will go into service we have 140,000 dekatherms of firm transport capacity locked up under firm sales contracts with Dawn Index pricing. Dawn continues to trade a premium, so we were able to convert a portion of the Dawn sales contracts to NYMEX plus $0.35 per MMBtu for November 1 through March 31. In addition, we recently requested proposals to purchase a portion of the gas we will transport in the Northern Access 2016 project. We were pleased with the diversity and number of parties that participated and are currently negotiating a mix of Dawn Indexed and fixed price deals tied to a portion of our capacity on the project. Our active marketing and hedging program has gone long way to insulate Seneca from low natural gas prices. For the third quarter our average after hedging sales price was $3.32 per Mcf, which is over a $1 higher than the pre-hedged price. Looking forward to fiscal 2016 we now have a 114 Bcf of our gas production locked in both physically and financially at an average price of $3.50 per Mcf so we are well positioned should low prices persist in to next year. Moving now to the Utica, I am sure that many of you saw the high rate test that we announced by our peers in Westmoreland and Green Counties. We have two Utica test planned that should connect the trend between these recent wells and Tioga County where our recent Utica well tested 22.7 million cubic feet per day. As I mentioned on our last call the planned wells will be drilled in conjunction with our ongoing Marcellus development in the Clermont area. The rig is just moved to the E9-M pad where we plan to drill 10 Marcellus wells and one Utica. This will be a 5,500 foot lateral with an expected total cost of about $12 million. We expect to frac this pad in the third quarter of fiscal ‘16 and should have a test rate shortly thereafter. Given our larger contiguous fee acreage position a successful Clermont area Utica test could have a major impact on Seneca’s overall resource potential. In summary, our development program continues to show consistent predictable results. We are driving down costs and locking in margins through firm sales and hedging, although we’re dropping a rig early in ‘16 and reducing our capital spending from 2015 to 2016. We are on track to fully utilize the 700,000 dekatherms of firm transportation that we’ll have in 2017 and in addition to thousands of de-risked Marcellus well locations. We are optimistic about the potential for Utica development across a broad swap of our acreage. With that I’ll turn it over to Dave. Dave Bauer Thank you, Matt. Good morning everyone. Ron hit on the major drivers for the quarter’s earnings and other than the impairment charge there really wasn’t anything unusual on the quarter. Last night release explains the major variances in earnings, so I won’t repeat them again here. Instead I will focus on our expectations for the remainder of the fiscal year and our initial guidance for next year. With respect to 2015 our updated earnings guidance is $2.90 to $3 per share excluding ceiling test impairments. That’s up from our previous range of $2.75 to $2.90 mostly due to lower expected DD&A expense. As a result of the third quarter ceiling test charge we expect Seneca’s per unit DD&A rate for the fourth quarter will be in the $1.35 per Mcfe area. That will lower the full year DD&A rate to about $1.55 per Mcfe at the low end of our previous guidance of $1.55 to $1.65. Production for the year is now expected to be 155 to 160 Bcfe. The midpoint is the level should achieve assuming we don’t sale any spot volumes in August and September. We haven’t produced above our level of firms sales commitments for the better part of the calendar year and based on the prices we’ve seen thus far we don’t think it’s likely we’ll have meaningful spot sales in the remainder of the fourth quarter. However should prices improved, we have the ability to produce about 4 Bcf per month into the spot markets. In terms of pricing we’re assuming Henry Hub price for natural gas of $2.75 per Mcf. However because all of the 2 Bcf of our firm sales for the quarter are hedged changes in natural gas price saw minimal impact on our earnings. For crude oil we’re assuming WTI price of $50 a barrel. That’s little higher than the current IMX [ph] prices, we are better than 60% hedge for the fourth quarter. Looking to next year our preliminary earnings guidance for fiscal ‘16 is a range of $3 to $3.30 per share excluding any ceiling test impairment charges. In terms of pricing we’re assuming a Henry Hub gas price of $3.25 per Mcf and a WTI crude oil price of $55 a barrel. In addition we’re assuming we’ll receive $1.75 per Mcf for Marcellus spot buy-ins. There has been considerable volatility in commodity prices particularly with respect to crude oil and we expect to refine our pricing assumptions as we move into the fiscal year. Seneca’s production forecast of 158 to 232 Bcfe has a wider than normal range which reflects the uncertainty around Appalachian gas pricing and our ability to sell spot volumes at an acceptable price. We’re optimistic that Seneca will have spot sales, but want to manage expectations given our recent experience. Therefore, we’re presenting a full range of potential outcomes. If we saw a 100% of our expected spot volumes will be at the high end of the range, if we don’t sale any spot volumes will be at the low end. From an expense standpoint the ranges you see on page 25 of last night’s release are all based on the 195 Bcfe mid-point of our production forecast. The improvements in per unit LOE, G&A and production tax expenses compared to our third quarter rates are attributable to the expected increase in Seneca’s production volumes. As you’d expect our DD&A rate will decrease sharply as a result of the ceiling test impairments. So we excluded our future ceiling test charges themselves from our earnings guidance. We have tried to estimate with the DD&A rate will look post impairments. However given number of variable that go into that calculation it’s possible the range will change meaningfully in the coming quarters. As you can see from pages 56 to 57 of our new IR deck we’re well hedged for fiscal ’16 and as Matt said earlier, we’ve locked in 114 Bcf of natural gas production at a price of about $3.50 per Mcf. And that equates to about 80% of our firm sales volumes and at the midpoint of our production forecast about 65% of our expected natural gas production. On the oil side we have about 1.3 million barrels hedged at $93 barrel which represents about 45% of our expected oil production. Together the excitement earnings and cash flow should track the increase in Seneca’s volumes. For fiscal ’16 assuming the midpoint of Seneca’s production forecast we expect the gathering excitements revenues will be about $95 million up from the 75 million to 80 million we forecast for fiscal ’15. As we add compression to Clermont system operating and depreciation expenses will increase meaningfully relative to their current levels. But a large portion of the revenue increase should fall to the bottom line. Turning to the regulated businesses fiscal ’16 should be a good year for the pipeline and storage segment. This fall the Northern Access 15, West Side expansion and Tuscarora Lateral projects go into service adding $27 million of incremental revenues in 2016. However that increase will be likely offset in part by a variety of smaller items including some typical re-contract again both pipeline system and a decrease in short term transportation revenue is somewhat weather related and recall the last winter was significantly colder than normal. Our forecast for 2016 assumes normal weather. Considering those items we expect pipeline and storage revenue for fiscal ’16 will be in the range of $300 million to $310 million. We expect ONM expense in this segment will increase to about $85 million to $90 million part of that increase relates to higher operating cost associated with our recent expansion projects and part relates to an expected $4 million increase in the retirement benefit cost which is driven by some anticipated changes in our plans actuarial assumptions. Lastly with respect to the utility, we’re expecting a decline in that segment earnings in fiscal ’16 for two reasons. First as I just mentioned our forecast assumes normal weather. In fiscal ’15 colder than normal weather contributed about $0.05 per share at earnings. Additionally, as you recall in the second quarter of fiscal ’15 an audit in the New York division of the utility resulted in an adjustment to benefited earnings by about $0.04 of share. And we don’t expect that adjustment will recur in 2016. Turning to capital spending page 7 of our new IR deck contains our updated capital spending estimates for fiscal ’15. We narrowed our consolidated guidance to a range of 990 million to 1.045 billion at the midpoint of $55 million decrease from our previous guidance. About half of the decrease is related to the timing and spending between fiscal years in the E&P gathering and pipeline segments. The other half relates to the utility Dunkirk project at the timing of which is become less clear. The owner of the power plant that would be served by the project is facing some legal and regulatory challenges with respect to its repurchasing of the plant. We stand ready to build the project once those challenges are resolved but given the uncertainty we are removing the project form our capital budget. For fiscal ’16 our consolidated range is now 1.1 billion to 1.3 billion, up modestly from our previous guidance. There aren’t any major changes in our spending plans the variation are mostly attributable to timing. Given the changes in our earnings and capital spending guidance we now expect and outspend in fiscal ’15 that’s just under $400 million. In June we issued $450 million of long term debt to fund that outspend. Looking to next year we expect our capital expenditures and dividend, we’ll exceed cash from operations in the range of 500 million to 600 million. We have short term credit facilities to initially finance that outspend if it’s necessary and as you know we’re evaluating longer term financing alternatives. As a place older our earnings guidance for fiscal ’16 assume we use terms we used short term debt and we’ll obviously updates that guidance we refine our ultimate financing finance. With that, I’ll close and ask the operator to open the line for questions. Question-and-Answer Session Operator [Operator Instruction] Our first question comes from Becca Followill, U.S. Capital Advisors. Please go ahead. You are now live in the call. Becca Followill Couple of questions for you, one I know that you sounded you’ve taken off some of the list in the short term in the Dawn hedges in favor of a higher NYMEX price. What we’re seeing so far is what we have tried to estimate with the DD&A rate will look post impairments. However given number of variable that go into that calculation it’s possible the range will change meaningfully in the coming quarters. As you can see from pages 56 to 57 of our new IR deck we’re well hedged for fiscal ’16 and as Matt said earlier, we’ve locked in 114 Bcf of natural gas production at a price of about $3.50 per Mcf. And that equates to about 80% of our firm sales volumes and at the midpoint of our production forecast about 65% of our expected natural gas production. On the oil side we have about 1.3 million barrels hedged at $93 barrel which represents about 45% of our expected oil production. Together the excitement earnings and cash flow should track the increase in Seneca’s volumes. For fiscal ’16 assuming the midpoint of Seneca’s production forecast we expect the gathering excitements revenues will be about $95 million up from the 75 million to 80 million we forecast for fiscal ’15. As we add compression to Clermont system operating and depreciation expenses will increase meaningfully relative to their current levels. But a large portion of the revenue increase should fall to the bottom line. Turning to the regulated businesses fiscal ’16 should be a good year for the pipeline and storage segment. This fall the Northern Access 15, West Side expansion and Tuscarora Lateral projects go into service adding $27 million of incremental revenues in 2016. However that increase will be likely offset in part by a variety of smaller items including some typical re-contract again both pipeline system and a decrease in short term transportation revenue is somewhat weather related and recall the last winter was significantly colder than normal. Our forecast for 2016 assumes normal weather. Considering those items we expect pipeline and storage revenue for fiscal ’16 will be in the range of $300 million to $310 million. We expect ONM expense in this segment will increase to about $85 million to $90 million part of that increase relates to higher operating cost associated with our recent expansion projects and part relates to an expected $4 million increase in the retirement benefit cost which is driven by some anticipated changes in our plans actuarial assumptions. Lastly with respect to the utility, we’re expecting a decline in that segment earnings in fiscal ’16 for two reasons. First as I just mentioned our forecast assumes normal weather. In fiscal ’15 colder than normal weather contributed about $0.05 per share at earnings. Additionally, as you recall in the second quarter of fiscal ’15 an audit in the New York division of the utility resulted in an adjustment to benefited earnings by about $0.04 of share. And we don’t expect that adjustment will recur in 2016. Turning to capital spending page 7 of our new IR deck contains our updated capital spending estimates for fiscal ’15. We narrowed our consolidated guidance to a range of 990 million to 1.045 billion at the midpoint of $55 million decrease from our previous guidance. About half of the decrease is related to the timing and spending between fiscal years in the E&P gathering and pipeline segments. The other half relates to the utility Dunkirk project at the timing of which is become less clear. The owner of the power plant that would be served by the project is facing some legal and regulatory challenges with respect to its repurchasing of the plant. We stand ready to build the project once those challenges are resolved but given the uncertainty we are removing the project form our capital budget. For fiscal ’16 our consolidated range is now 1.1 billion to 1.3 billion, up modestly from our previous guidance. There aren’t any major changes in our spending plans the variation are mostly attributable to timing. Given the changes in our earnings and capital spending guidance we now expect and outspend in fiscal ’15 that’s just under $400 million. In June we issued $450 million of long term debt to fund that outspend. Looking to next year we expect our capital expenditures and dividend, we’ll exceed cash from operations in the range of 500 million to 600 million. We have short term credit facilities to initially finance that outspend if it’s necessary and as you know we’re evaluating longer term financing alternatives. As a place older our earnings guidance for fiscal ’16 assume we use terms we used short term debt and we’ll obviously updates that guidance we refine our ultimate financing finance. With that, I’ll close and ask the operator to open the line for questions. Question-and-Answer Session Operator [Operator Instruction] Our first question comes from Becca Followill, U.S. Capital Advisors. Please go ahead. You are now live in the call. Becca Followill Couple of questions for you, one I know that you sounded you’ve taken off some of the list in the short term in the Dawn hedges in favor of a higher NYMEX price. What we’re seeing so far is what direct reversal completion that just trying to get basis for in Chicago, can you talk little bit about your capacity going to Dawn on and how much you have hedged. In the out years thoughts which is short debt maybe 17, 18, 19? Ron Tanski You have referenced from the slide deck. Back on page 27 is our IR deck is our hedge positions going out. We don’t have a larger amount of longer term hedges in place for 2016 we have 19 Bcf at Dawn, 2017, 22 Bcf and a more modest amount financially hedged that fit on. Becca Followill Is there enough liquidity to hedge out some of this in future years? Dave Bauer We are looking at that and we haven’t looked much beyond 2018 but we haven’t had really any difficulty executing trades in the closer years. Becca Followill And what did some other spreads look like relative to historical, are they already reflecting some pressure on that basis? Dave Bauer Well, the trade that we’ve done have generally than it a premium to NYMEX, obviously you go further out the liquidity discount gets to be a bit greater so for example in the near years we may be doing at a full year NYMEX plus 10 to 20 or so but then as you’ve move towards the 18 time period that roads to more NYMEX flat type level. And as you move beyond that, we do get indicative levels but the liquidity premium tends to increase quite a bit. Becca Followill Thank you. That’s helpful. On the well cost for Utica the 12 million that you’ve talked about the new well that you’re going to drill, what’s the depth on that in some of the early wells that we’ve seen, I know you’ve drilled a couple already but some of the early ones that we’ve seen from ECTE and coming in much, much higher than that? Ron Tanski Yes, depth for our Clermont Utica well is on the order of 10,500 feet true vertical depth. So it’s a little shallower. But I would say the bigger factor is that we’re drilling this on an existing Clermont Marcellus pad. So the infrastructures there its sharing pad cost with 10 other wells. Our water handling is all in place you don’t have to truck water from the long distance. So there is a big, big benefit to developing something like this as part of an existing development rather than one-off well that’s far from everything else. Becca Followill Got you. Thank you. And then will that 12 million include some of the normal science cost that happen with early wells to drive that up a little but higher? Ron Tanski Yes, there isn’t a whole lot of additional science in this particular well and I would also say that well cost estimate is probably on the conservative side. I hope we can do cheaper than that. Becca Followill Right, thank you. And then on the financing for 2016 the short fall of $500 million to $600 million, I know maybe you said you’re going to — right now in the plan it’s short term debt, at what point or what’s the timeframe if you’re looking to make a decision on whether or not you’ll financial it differently? Ron Tanski Well, as Ron said we’ve been evaluating NPL and other structures and as we move through the year and start to spend dollars on Northern Access, we’ll be announcing our definitive financing plans. Becca Followill The changes in what happened with NLPs lately and then downturn cause you in that anyway? Ron Tanski Well, not really Becca, we had just given the previous schedule we’ve talked about with respect to receiving the first certificate and when construction activity actually begin hasn’t changed. So we’ve got some time, obviously the market is going to do something, what it’s going to do we’re not sure, but we think no one is going to try to call a bottom here anytime soon but we may have already passed that, but that’s far enough out, that to talk about it in any kind of detail, would just to be able to bit premature. Becca Followill Understand. Thank you, guys. Operator We have no further questions. [Operator Instructions] We have another question and it comes from the line of Holly Stewart of Howard Weil Please go ahead. Holly Stewart Matt, maybe just one or two for you, several of your peers I guess have been talking about deferring completions as they’re heading into 2016 just to have that baseline of production growth and you’ve got quite a bit of volume curtail. But curious how you’re thinking about different completion as you kind of exit the year into ’16. Matt Cabell Yes so as I mentioned in my prepared comments at Clermont we drilled 52 wells, only completed 24. We expect to end the year — to end ’16 was about 50 wells that are drilled, but not completed. Although I think that number may include a handful that are completed and just not online at that time. Holly Stewart Is that in ’15 or in ’16 sorry? Matt Cabell The end of fiscal ’15. At the end of fiscal ’16 or best guess is about 65 wells that are drilled but not completed. Recognizing that with Northern Access 16 coming on at the end of the year we’ll probably have a fairly big slug of completion in that time frame just right after the end of fiscal ’16. Holly Stewart Okay so that kind of what bridge is that gap if you look at slide 18, I think it where it says the firm sales to future SE capacity and going from the 220 to 660. So that’s really what’s helping get you up to that rate as you enter into fiscal ’17? I’m assuming. Matt Cabell I’m finding the reference on the slide — you mean the gap between fiscal ’16 and fiscal ’17. Yes there is a big slug of completions for us. And the other thing that happens is we go from an assumption of some curtailments of spot volumes to not really having to curtail any more spot because we’ve got the firm transportation in fiscal ’17. Holly Stewart And maybe just kind of along the same lines, just kind of curious as your macro view. You’ve obviously got a lot shut in, but you also have from a spot fill standpoint, there’s the potential to shutdown lot more in 2016. So is there anything that you’re seeing out there as you look into your crystal ball and just ended 2016 from a Northeast PA standpoint, that there could be some pricing or release? Ron Tanski As we look at the projects coming on there is two projects that come on kind of late this year. Sort of the beginning of the winter that should de-bottle neck Northeast Pennsylvania to some degree. And our view is that winter spot pricing given normal weather and it may at least be acceptable such that we’ll be selling some spot this winter. It’s difficult to predict that Holly but there is our best guess. I would expect that that would be a winter phenomenon though, not necessarily for the full year. Operator Our next question comes from the line of Chris Sighinolfi from Jefferies. Please go ahead. Chris Tillett This is Chris Tillett on for Chris Sighinolfi how are you? Just a follow up on Becca’s question obviously the MLP has been on the lot of investors mind recently and given the kind of the turn-in in outlook in the market. I’d just be curious to hear your thoughts on some of the alternatives you’re considering and how you think about approaching this process in a non-MLP world. Matt Cabell I think if you obviously it’s a rather recent phenomena with respect to the MLP market. But I was thinking and really hasn’t changed all that much. And as I said it really would be premature to be talking about us pulling the trigger on any particular type of financing. Since we’ve given our schedule and given our timing we’ve have plenty of time to see how the market sort this self out. I guess that’s about all I’m prepare to say at this point. Operator We have no further questions. I would now like to turn the call over to Mr. Brian Welsch for closing remarks. Thank you. Brian Welsch Thank you, Halley. We’d like to thank everyone for taking the time to be with us today. A replay of this call will be available at approximately 3 pm Eastern Time on both our website and by telephone and will run through the close of business on Friday, August 15, 2015. To access the replay online, please visit our Investor Relations website at investor.nationalfuelgas.com. And to access by telephone, call 1-888-286-8010, and enter passcode 97670814. This concludes our conference call for today. Thank you and goodbye. Operator Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a great day. 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