Enservco Corporation
Q1 2017 Earnings Call Transcript

Published: 11 May 2017

[Operator:]

Greetings and welcome to the ENSERVCO Corporation 2017 First Quarter Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I’d now like to turn the conference over to Mr. Jay Pfeiffer of Pfeiffer High Investor Relations. Thank you, Mr. Pfeiffer. You may now begin.

[Jay Pfeiffer:]

Hello, and welcome to the ENSERVCO’s 2017 first quarter conference call. Presenting on behalf of the company today are Ian Dickinson, CEO; Bob Devers; Chief Financial Officer; Austin Peitz, Senior Vice President of Field Operations. We’re also joined in the call today by Rich Murphy, Chairman of the Board. As a reminder, matters discussed during this call may include forward-looking statements that are based on management’s estimates, projections and assumptions as of today’s date and are subject to risks and uncertainties disclosed in the company’s most recent 10-K as well as other filings with the SEC. The company’s business is subject to certain risks that could cause actual results to differ materially from those anticipated in its forward-looking statements. ENSERVCO assumes no obligation to update forward-looking statements that become untrue because of subsequent events. I’ll also point out that management’s ability to respond to questions during this call is limited by SEC Reg FD, which prohibits selective disclosure of material non-public information. A webcast replay of today’s call will be available at ENSERVCO.com after the call. In addition, a telephone replay will be available beginning approximately two hours after the call. Instructions for accessing the webcast or replay are available in today’s news release. With that, I’ll turn the call over to Rich Murphy. Rich, pleased go ahead.

[Rich Murphy:]

Hello, everyone. On behalf of the Board of Directors of ENSERVCO, I want to open the call by formally introducing our stockholders and employees to our new CEO, Ian Dickinson. We couldn’t be more pleased with the selection of Ian leading ENSERVCO into the future. He brings a wide range of relevant experience and accomplishments to the table. And we believe he has the energy, focus and vision to build on what we are convinced is a very solid foundation for growth. In my role as Managing Director of Cross River Partners, I not only serve as largest shareholder, but I’m one of the company’s most committed supporters. I believe deeply in surface [ph] potential and the addition of Ian seems only strengthen my commitment to the company. So with that, I’ll turn the call over to Ian.

[Ian Dickinson:]

Thanks, Rich. I’d like to welcome everyone to the call today. As recently announced, I joined ENSERVCO as CEO and as the Board Member on Tuesday of this week. Today, before getting into some positive first quarter financial results, I thought it might be useful to share with you some of my background, along with my reasons for joining the company. I have a fairly extensive background in helping emerge and grow companies, grow their businesses. I have particular strength in two areas that are pertinent to my role at ENSERVCO. What is my background as President and CEO of Premier Oilfield Equipment, which is a leading manufacturer of equipment used by oilfield services, providers, as well as exploration and production companies, essentially the same customers that ENSERVCO caters. I’ve worked with a great team at Premier and together we were able to rapidly expand our customer and geographic footprint, while driving record profit margins. We launched several new product lines and partnerships that enabled us to meet the needs of our most demanding customers. I should take a moment here to say, I believe, no company performs at its best without strong – without a strong culture, organized around accountability, respect, open communication, and a fierce determination to outperform the competition. It all starts with our team in the field. They are, as I’d like to say, our fearless frontline and we will be focused on supporting their efforts. I attribute the success we had at Premier to a team that was dedicated to these principles and I see those same attributes in the people here at ENSERVCO. During my tenure at Premier, I was very active on the customer acquisition side of things. So I have a good understanding of what it takes to win and keep new business in this area. I was also able to afford strong relationships with our customers and suppliers, relationships, that I think will prove to be beneficial for us going forward. I’m a hands-on executive and I intend to work closely with Austin and his team to support their efforts and strengthen our sales and marketing processes from end-to-end. Another strength I bring to ENSERVCO is my background in finance, which includes a wide range of assignments, including capitalizing and recapitalizing growth companies. I understand that some of our stockholders who are concerned about the accelerated maturity of our revolving line of credit and I want to assure you that our refinance – refinancing effort, that line is a priority for me in the company. Under the current circumstances, we have more than enough assets to secure such refinancings, and Bob Devers and I are working diligently to get it done in a timely manner. I hope that this in turn will elevate any concerns related to our debt and enable our staff to get back to focusing exclusively on growing the business. One final comment about my intentions here at ENSERVCO, I believe in a higher degree of transparency when it comes to communicating with stockholders, we will strive every day to earn a level of trust between management, our employees and stockholders, that’s only possible through honest open and balanced communications. In the process, I hope to engender an uncommon level of royalty among the shareholders to whom we are accountable to and with whom we share a common goal of value creation. That’s what I expected as stockholder and you deserve nothing less. I’ll close my introductory remarks by thanking Rick Kasch for his years of service in ENSERVCO. Rick has been around from the beginning and has worked tirelessly on behalf of stockholders. He has been a great support and resource for me through the transition and I’m personally grateful for that. We all wish him well in his retirement. Now onto first quarter highlights, with the headline is ENSERVCO has turned corner and produced its first quarter of year-over-year revenue and adjusted EBITDA growth since the fourth quarter of 2014. Back before the decline in commodity prices and related cutbacks in drilling and completion activity took such a heavy toll on our industry. To be sure, no oilfield services company or E&P escaped the debilitating effects of the downturn. It’s a credit for the entire ENSERVCO team that this company weathered the storm and emerged intact, not only that, but in midst of the downturn the company pulled off a pretty dramatic geographic expansion into the Eagle Ford and launched a new service that is growing rapidly and generating solid cash flows, accomplishments that really set us apart from our direct competition. As described in our earnings release this morning, first quarter revenue increased 56% year-over-year to $13.8 million from $8.3 million due primarily to increased activity by E&Ps related to higher oil prices. Our core well enhancement and water transfer services segments both generated significant revenue increases year-over-year and produced solid gross margins. This drove our first quarter adjusted EBITDA increase of 281% year-over-year to $2.5 million from $661,000. Again, this is a welcome return to a profitable growth for ENSERVCO and its stockholders. I want to touch on a few key themes as they relate to our prospects for building on our first quarter momentum through 2017 and beyond. First is the growing strength of our core well enhancement services, comprised of frac water heating, hot oiling and acidizing. Our increased revenue in this segment has resulted from higher commodity prices, which in turn have driven increased activity in drilling and completion, as well as the new down purchase on maintenance work. You’ll recall that our fleet size has essentially doubled following an aggressive CapEx program that began before the downturn. That left us with a much larger relatively young fleet that gives us a lot of options in terms of rapid asset deployment to areas where demand is highest. By the way our largest fleet has the capacity to support significantly higher revenue levels. We effectively, as I mentioned, doubled the size of the fleet as compared to 2014. So we have ample capacity for growth which is minimal with just a minimal amount of CapEx. The second theme I want to address involves our expansion initiatives, both in terms of geography and service funds. We recently announced that we have deployed our first equipment into the Permian Basin, which is already I believe the hottest expansion area for E&Ps in the Continental U.S. We made the decision based on legacy customers asking us to move into the Permian, as well as new customers who have been impressed with our rapid growth in Eagle Ford. Our other major expansion initiatives, this one involving our services portfolio, with the addition of our water transfer business which has enjoyed exceptional growth in the early going. To reset, water transfer revenue has grown from no revenue in Q3 to a $153,000 in Q4 to $752,000 in Q1 of this year. Right now all of that business is happening in Colorado, so we think we have significant opportunity for growth in the other areas of operation. We have equipment capacity to support much higher run rates in the business and are also lining up rental equipment to handle planned geographic expansion of services. My point again is that, while other companies were standing path and/or just trying to survive the downturn, ENSERVCO was making opportunistic moves to develop new revenue streams. Based on these successful ventures, we will continue to pursue other expansion opportunities to augment our growth strategy. Finally I want to talk about our continued focus on building revenue and profitability in our traditionally slower second and third quarters. As you know, our first and fourth quarters are historically our strongest due to the increased demand for frac water heating during cold months. In order to smooth out our revenue slice, we need to strengthen and add to our year-round revenue streams and there is two initiatives I mentioned above are a good start. Our work in the Eagle Ford and Permian is predominantly year-round maintenance activities and our new water transfer business supports frac projects no matter how warm or cold it is. Right now we feel good enough about these initiatives, as well as an overall increase in activity. But we can say our second and third quarters this year should perform better than last year in terms of revenue, cash flow and EBITDA. And by the way, we’ve also been benefiting on the frac water heating side with colder weather lingering longer than spring. So, with that, I’m going to turn the call over to Austin, who will provide some color on what he is seeing out there in field. Austin?

[Austin Peitz:]

Thank you, Ian. Before I would begin, I’d like to also wish Rick well on his retirement. I worked with Rick for 11 years and I know how much he put into this company on behalf of our people, our customers and our stockholders, good luck sir. And speaking of our people, now would be a good time to recognize our regional and area managers that have consistently pursued the opportunities and managed the business very well, which led to much of our improved first quarter results. We are well positioned with our team to take advantage of additional upcoming opportunities and have a tremendous team in the field from top to bottom that we honestly believe is the finest group in the industry. I personally wanted to thank each and every one of you, great job. And now building on to what Ian just told you, our Permian Basin expansion is indeed underway with our first hot oiling units now staging out of Midland Texas. Our initial plan is to offer hot oiling services to customers with whom we’ve worked in the past in other operating areas, as well as new customers we’ve been pursuing. We have secured our first few customer commitments and are kicking off as we speak. From Midland we can easily move west or east in the Permian and go where opportunities take us. Judging from initial indications of interest from our customers, we think we have potential to replicate our Eagle Ford expansion over the medium-term, but we will proceed judiciously and let the word dictate our continued deployment of equipment. We expect this business to generated good margins, particularly in the areas of Midland where operating expenses are lower and compensation for employees is less intense. As Ian indicated, this is year around work that should help us generate cash and EBITDA in the middle two quarters. Eventually we think we’ll win opportunities in the acidizing business in the Permian, just as we did in the Eagle Ford, but right now our acidizing fleet is already operating at high utilization, so we’d be hard-pressed to free up equipment, a good problem to have, [make sure it’s not to] [ph] return to higher capacity utilization again. We’re also seeing increased activity in the Eagle Ford which is leading to new business opportunities and the potential for margin recovery has already began. Utilization is high for our hot oiling fleet there and we think that will contribute to an improved second and third quarter performance. Turning to our water transfer service, we continue to add new customers to the schedule and are starting two new projects in Colorado and Wyoming. We are hopeful of closing another nice piece of business in North Dakota where we’ve had promising discussions with several potential customers and recently locked down a sizable new project that will commence in mid July and continue for approximately three months. We are also expanding the water transfer service to the Marcellus Shale where we are in the process of hiring an area manager and additional staff to support a launch of the service there. Regarding our well enhancement segment, we continue to emphasize superior service to maintain our existing customers and to pound the pavement in an effort to win new customers and grow our market share. Iron ore prices increased activity, certainly are helping. I’ll share with you a couple of highlights, we’ve won some new frac water heating business recently, including jobs in Wyoming and North Dakota in conjunction with frac design and colder northern climates for second and third quarter were worried. We’ve never been real active in these areas with our frac water heating businesses, so there is a welcome expansion opportunity for us that should extend our service further into the years and normal. All-in-all, we are pleased to be able to talk about tailwinds in our industry, again we are encouraged about our prospects and especially pleased with the energy and enthusiasm of our teams in the field. Obviously there is still much work to do, there is still commodity price risk, but right now we feel pretty good about the state of things we can control. With that, I’ll turn it over to Bob Devers to summarize financial results. Bob?

[Robert Devers:]

Thank you, Austin, and hello, everyone. Total revenue in Q1 increased 66% to $13.8 million from $8.3 million in the same quarter last year. The increase was due to an uptick in drilling, completion and maintenance activity, which resulted in higher demand for our well enhancement services, and pretty impressive growth in our water transfer business. By segment, our year-over-year revenue and gross profit comparison were as follows. Well enhancement revenue increased 67% to $12 million from $7.2 million. Gross profit in the segment was $3.5 million versus $2.2 million a year ago. All well enhancement components achieved year-over-year increases; including frac water heating up 104%, with almost no benefit; from the Marcellus region, where temperatures remain unseasonably high throughout the season; hot oiling, up 12%; and acidizing, up 272% on the strength of the Eagle Ford expansion and general resumption of maintenance work by E&Ps. As you’ve just heard, the Water Transfer segment turn in great performance with sequential quarter growth of 393% to $752,000 from $153,000 in the fourth quarter. Gross profit was $76,000, or margin of approximately 10%. Keep in mind that the lower gross profit margin reflects additional costs in the segment that are associated with the prospective HydroFLOW product line, which has not contributed to revenue yet. Going forward, we expect gross profit margins from actual water transfer activities to be in the 20% to 30% range. Although, we will incur some additional incremental startup costs in this segment with our plan moved into the Marcellus and potentially into other areas as well. Construction services revenue was $154,000 versus no revenue in this segment in the year ago first quarter. Remember, we added this revenue segment due to large dirt hauling project we started in Q2 last year and substantially concluded in the fourth quarter. Gross profit in the Construction Services segment was $10,000 in the first quarter. Our Water Hauling segment produced revenue of $885,000 in Q1 versus $1.1 million in the corresponding quarter last year. As we’ve been telling you for a while now, this is a lower margin business segment that we’ve been deemphasizing in favor of focusing on a more profitable services. Again, our new segment report, excuse me, again, with our new segment reporting, I’d encourage you to look at the specific numbers on the face of our income statement to get a better feel for our growth and profit metrics. Total operating expenses in the first quarter were up 36% to $13 million from $9.6 million year-over-year. The increase primarily reflected an additional labor cost incurred in our more active core services. General and administrative expenses decreased 3% to $995,000 and patent litigation and defense costs increased slightly to $43,000. Depreciation expense declined to $1.6 million from $1.7 million year-over-year. We reported net income of $50,000, or less than $0.01 per diluted share in the first quarter versus a net loss of $1.1 million, or $0.03 per diluted share in the same quarter last year. Adjusted EBITDA increased 281% to $2.5 million from $661,000 in the same quarter last year, primarily reflecting the significant increase in our core well enhancement service revenue. As of March 31, stockholders of equity totaled $14.6 million and our total liabilities to stockholders equity came in at 2.1 to 1. At March 31, we had approximately $4 million available under our line of credit and we were in compliance with our debt covenants, which should be – should continue to be the case through March 31, 2018, although, as Ian said, we hope to refinance – finance our debt before this. Our fleet remains essentially unchanged from last quarter. Our capital spending through the yea-end will be primarily related to maintenance CapEx. Although, we may make some modest investment in certain ancillary equipment to support the growth in our water transfer business. And with that, I’ll turn the call over to the moderator for questions. Moderator?

[Operator:]

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] And our first question is from Bhakti Pavani of Euro Pacific Capital. Please go ahead.

[Bhakti Pavani:]

Thank you, guys.

[Ian Dickinson:]

Hello, Bhakti.

[Bhakti Pavani:]

Congratulate on the quarter and welcome onboard Ian.

[Ian Dickinson:]

Thank you very much.

[Bhakti Pavani:]

A great quarter from the margin standpoint looks like the gross profit margin has finally began to improve. Would that be, I mean, would it be fair to say that the pricing is improving across all the product line – business product line, or – I mean, do you anticipate further improvement in pricing, if you could provide some color?

[Ian Dickinson:]

You bet. So one of the things that’s driving our gross profit margin would simply be, starting with utilization, our utilization is improving dramatically. However, we are seeing some margin improvements in a few geographic areas. So that’s definitely contributing as well.

[Bhakti Pavani:]

But nothing on the pricing standpoint, right? It’s – I mean, has it improved?

[Ian Dickinson:]

Pricing improvements, yes, in certain geographic areas are improving, as well as some of our frac water heating business as well, some of that is improving as well, which is helping our margins quite a bit.

[Bhakti Pavani:]

Perfect. With regards to hot oiling and acidizing fleet, could you maybe remind us how is the currently allocated across different geographies?

[Ian Dickinson:]

You bet, and I don’t have this specific numbers in front of me, Bhakti. However, the hot oiling fleet right now is primarily focused in a few areas. It’s probably around a third of our fleet is in the North Dakota region. Probably across there’s 20, 22 units in the State of Texas between the Permian and the Eagle Ford then we’ve got approximately eight units in Colorado and two units in Wyoming. And in our acidizing fleet, it’s allocated between Wyoming, Kansas and Texas right now. However, I can get back to you with more specifics on exact allocation.

[Bhakti Pavani:]

Yes, that would be great. So, considering the opportunity in the Eagle Ford and Permian, do you have any plans of relocating the fleet from the different geographical areas in to the areas?

[Ian Dickinson:]

Yes, ma’am, we’re in – we’re having internal discussions about, how do we allocate assets as opportunities arise in the Permian. So, we’re under discussions internally to try to distinguish how that’s all going to unfold.

[Bhakti Pavani:]

With regards to acidizing fleet, I believe, you have seven fleet and you’re almost at the capacity constrained. So do you have any plan for maybe doing further acquisition in the fleet, or do you think you guys are well equipped enough?

[Ian Dickinson:]

This is Ian. We will be evaluating those strategies on a continuous basis, but it’s certainly an area that we will be in active conversation. But we rely heavily on Austin’s perspective and our own analysis of the markets. But we will look to deploy our fleet in the most advantageously way. That requires additional acquisition of equipment that will be on a business case analysis.

[Bhakti Pavani:]

Okay. And with regards to utilization, could you maybe provide some additional color in base of percentage as to how much the fleet is currently utilized when it comes to hot oiling, acidizing and even frac water heating since you have some opportunities there?

[Rich Murphy:]

Okay. So utilization right now, as we all know, we’re coming out of the season for our frac water heating division. Right now, we’re running – we still have a small utilization. In fact, I’m going to estimate on the top of my head, probably around the 15%, 20% utilization just right off the cuff; for May, we’re very encouraged about still having any utilization in that division. Our hot oiling division, as a whole, right now we will try approximately 60% to 65% utilized in the hot oil division. However, the Permian expansion initiative will help to hopefully increase that in the near-term. We’ll reallocate assets which we hope to increase that utilization number shortly. Our acidizing division, I’m going to – probably around 80% utilized, half or some of those are some specialty projects that you see trend, ups and downs by extending utilization. So the utilization, I would estimate around 80% at this time.

[Bhakti Pavani:]

With regards to hot oiling you said the expansion in the Permian should help improve the utilization. What percentage or how many percentage more do you think you can add there when it comes to utilization?

[Ian Dickinson:]

So, we’re hoping that we can maintain as 75% to 80% utilization to the second and the third quarters.

[Austin Peitz:]

Yes, Bhakti, I think one thing too is, as we expand into the Permian, the utilization will pick up over time, it takes a little bit of time for those units to get up and going, but there is a little bit of build in the utilization as we expand into that area so, but…

[Bhakti Pavani:]

Since you guys are planning to expand there, when it comes to the fleet storage, what are your plans in that area? I mean, do you intent to open another facility or something?

[Ian Dickinson:]

Are you referring to in the Permian, Bhakti?

[Bhakti Pavani:]

Yes.

[Ian Dickinson:]

Yes, that is – our plan is to open a whole another facility and hopefully replicate what we’ve accomplished in the Eagle Ford.

[Bhakti Pavani:]

Okay. And is that going to be done in Q2 and Q3, because that will push up some of the initial setup cost, right?

[Ian Dickinson:]

Correct. What we’re still internally discussing, while we’re geographically within the Permian are going to be placed. So the actual facility itself is still undecided. So right now we’re operating out of the facility that is, we don’t have any direct overhead cost, so we’ll make that decision as opportunities come. So the timing could be second quarter or early third quarter.

[Bhakti Pavani:]

Got it. With regards to water transfer services you have about eight crews. If you could maybe comment on the utilization of those crews currently and how do you see that changing over the next two quarters as you expand into Marcellus?

[Ian Dickinson:]

You bet. So, yes, our total assets right now will make up approximately about eight crews. Our current utilization right now is about 15% to 20% some of our efforts right now that were for the geographic expansion is going to drive that immediately. However, the Marcellus, we’re working some deals with some rental companies, so we have the ability with the renal aspects over to go north of eight crews. However, we’ll incur some rental cost. In turn we were determining how much of that we want to do versus mobilized assets which will take some of the eight out of the Rocky Mountain division. There are some opportunities in North Dakota that should start here in the near-term. So as of today, right now we’re approximately 15% to 20% utilized and should be moving north of that immediately.

[Bhakti Pavani:]

So let me ask, there is 20% to 30% margins that Bob mentioned, but margins can be achieved at what percentage of utilization?

[Ian Dickinson:]

Bhakti, I think the margins that we gave you there are pretty dependent upon location, the length of the push et cetera, so they vary quite a bit. But that’s a tough question to answer I guess, but I would say probably in the 75% to 80% range. A lot of it depends, right now as we’re building into this segment, you’re seeing we don’t have a – as we get more job to get more consistency of those jobs, you’ll see that improve and that’s what you’re going to see. So, I think the 20%, 30% is probably in that 70% range.

[Bhakti Pavani:]

Got it. With regards to water hauling services, I know you mentioned that that’s the business line that you plan to de-emphasize. So the revenue of $885,000, how should we think about when it comes to modeling? I mean, is that going to be the level of revenue that we should consider for the remainder of the year or do you think it’s going to phase out by the end of this year?

[Ian Dickinson:]

No, the first quarter we didn’t expand on too much. The first quarter was actually down a little bit, because we had some rain during the first part of it that lowered our revenue and also had – put us in a negative margin for the first quarter. That being said, over the last several quarters, we’ve had positive gross profit with respect to that. So we expect that to improve going forward. We’ve also and I’ll let Austin expand on this a little bit. We’ve also expanded and we’ve had a customer that we’ve added there that is at a higher margin and we’re going to be expanding that revenue a little bit going forward.

[Bhakti Pavani:]

All right.

[Ian Dickinson:]

You want to talk briefly, Austin, about the…

[Austin Peitz:]

Yes. You bet. We have an opportunity to do some water hauling work in the North Dakota that we’re in the process the performing – we’re easing into the opportunities, I’m going to evaluate it as we go. However, it is a higher margin opportunity. So we’re kind of evaluating that, as we speak. And our traditionally water hauling geographic area in Southwest Kansas activities has started to increase with the maintenance activities, which is driving also some of our revenue numbers in the water hauling division. So as some of those activities pick up, we’ll capture those opportunities within that geographic area as well.

[Bhakti Pavani:]

Okay. Two more from my side, sorry, guys. With regards to depreciation, it came down a little bit in Q1, so is that sort of the go to run rate for the remainder of the year?

[Austin Peitz:]

I think between the $1.6 million and $1.7 million, that – yes, that should be fair, is probably in that $1.6 million range.

[Bhakti Pavani:]

Okay. And lastly, on the capital expenditure side, you did mention that you guys plan to add some ancillary equipment. So what it kind of the expected CapEx for this year?

[Ian Dickinson:]

The primary focus on maintenance CapEx is where the majority of what we have and that’s usually in the $1.5 million to $2 million range on maintenance CapEx. A lot of that depends upon how much work we’re doing and how much we have to expand with respect to the equipment. So equipment utilization kind of drives that a little bit, but it should be in that $1.5 million to $2 million range. On the other CapEx, we’re just going to have to evaluate that as jobs comes along, as jobs come along, if it makes sense to acquire additional equipment then we’ll do that. But that that’s what that comment was there is basically that we have opportunities that come up and make sense, we’ll look at buying that equipment.

[Bhakti Pavani:]

Okay. Perfect. Thank you, guys. I’ll hop back in line.

[Ian Dickinson:]

Thank you, ma’am.

[Austin Peitz:]

Thank you.

[Operator:]

Thank you. [Operator Instructions] Thank you. The next question is from [Greg Mitchell] [ph] from [indiscernible]. Please go ahead.

[Unidentified Analyst:]

Yes, good job gentlemen, sounds very impressive. Can you hear me, okay?

[Rich Murphy:]

Yes, sir. Yes.

[Ian Dickinson:]

Yes, sir.

[Unidentified Analyst:]

I just had a quick question. And if I’m way off base just shut me down and we’ll move on. But there’s been a lot of talk about lithium Brines in the water that’s being injected recovery wise. Have you been approached at all with selling your water supply or having access to that, or am I in the wrong section here for lithium?

[Rich Murphy:]

You might be in the wrong section. We don’t really have none to do with that and we don’t as far as sell in water and stuff, we don’t sell the water.

[Unidentified Analyst:]

Okay. All right. That’s simple enough. Keep up the good work. I was an investor in Aspen Exploration many, many, many years ago. So I’m a big fan, so.

[Rich Murphy:]

Thank you for your support.

[Ian Dickinson:]

Yes, thank you for your continued support.

[Unidentified Analyst:]

Yes. Say hello to Mr. Bailey, if he is still up and kicking some.

[Operator:]

[Operator Instructions] Okay. With that, we have no further questions in the queue at this time. I’d like to turn the conference back over to management for closing remarks.

[Ian Dickinson:]

This is Ian. I want to again thank you for joining us today and for hanging there during the prolonged downturn. I really couldn’t be more excited about joining ENSERVCO at a certain pivotal time in history, I’m eager to start addressing our top priorities to make a difference. We believe we have a wonderful opportunity to build on our solid foundation and fast start to 2017 and restore shareholder value. We hope you’ll join us for that endeavor. Thank you very much.

[Operator:]

Thank you. Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time, and thank you for your participation.