NACCO Industries (NC) Q3 2026 Earnings Call Transcript

Newer contracts and investments made over the past several years are increasingly contributing to our results, demonstrating real progress in our value creation strategy. This is important because our strategy is centered on building a strong base of long term earnings and cash flow. We are creating value by adding new long term contracts and investments to the contributions from our established businesses and long term customer relationships As those newer contracts and investments ramp up, we expect them to contribute increasingly to earnings and cash flow. Turning to our individual businesses, utility coal mining operating profit continued to improve.

As we have discussed in prior quarters, challenges at our customers' power plant have affected Mississippi Lignite Mining Company's operations and resulted in delayed payments. I am pleased to report that the customer's power plant operated more consistently during the third quarter And I am encouraged that we have seen improvement in collections of outstanding receivables. Payments are not yet fully current, but the situation has improved from last quarter. We continue to monitor pay plant performance closely since that directly affects customer liquidity. Looking ahead, we see potential for improved results in 2027. If the customer's power plant operates more consistently. At our unconsolidated coal operations, results remain stable, which is what we like to see.

Beginning October 1, the owner of Sabine Mining Company assumed responsibility for the final stages of reclamation activities. So we will no longer receive the reclamation fees Sabine has earned in the past. We currently expect higher earnings from Coteau and Falkirk to largely offset the absence of Sabine related in 2027. Turning to contract mining. I continue to be very pleased with the progress the business is making to expand its business model and profitability. NACCO Natural Resources remains our primary growth platform for mining and we continue to see significant opportunity for growth. During the quarter, our new dragline services contract in Palm Beach County, Florida continued to ramp up and contributed to the improved segment operating profit.

This growth more than offset lower customer requirements in certain limestone operations. We continue to monitor customer activity and broader construction market conditions closely. Looking beyond the quarter, we reached another important in October when our contract mining team began operations at a limestone quarry in Arizona under a new dragline mining service contract that extends for more than a decade. This contract expands our GFR geographic footprint and further adds to our portfolio of long term agreements within contract mining. At Thacker Pass, our customer, Lithium Americas, is targeting mechanical completion of phase 1 of their lithium processing plant in late 27, followed by ramp up commercial production through 2028.

As our Sawtooth Mining team prepares for production of lithium rich clay, we expect to invest approximately $16 million in mining equipment during 2027. As a reminder, under our contract, the customer is obligated to reimburse us for these capital equipment investments over 5 years. Beginning the year after investments are made. The Arizona and Lithium Americas contract are great examples of how we are growing contact mining. We are taking capabilities we have developed over decades and applying them across different minerals, customers, and geographies under long term agreements. Our success with that approach gives us confidence that contract mining can continue to be an important driver of earnings growth.

At Minerals and Royalties, third quarter operating profit was comparable to last year. The current commodity environment is a good reminder that our results are influenced not only by commodity prices, but also by the mix of production across our portfolio. While our recent investments have increased our oil exposure, natural gas is still a significant part of the portfolio. The strong results for our investment in Eiger Resources offset the effect of lower natural gas production and pricing in the third quarter. We continue to manage this business with a long term view.

Our portfolio of mineral and royalty interest and our investment in Eiger Resources provide multiple sources of earnings, and we remain focused on building the portfolio of thought thoughtfully over time. At Mitigation Resources, we continue to build the business through expansion of our reclamation and restoration services and development of mitigation banks. Mitigation Resources now has 13 mitigation banking projects spread across several states. These projects are expected to generate stream and wetland credits that can be sold over an extended period, generally 10 to 12 years, providing a long term revenue stream. We have already realized credit sales from some of our earlier banks with future sales occurring as the portfolio develops.

We expect mitigation resources to generate a profit in the fourth quarter and in 2027. Results could vary from quarter to quarter because of permit and project timing, Although we expect the business to become a more consistent contributor to NACO's results to the portfolio in which matures. Before turning the call over to Liz, I want to provide an update on solar. As we discussed last quarter, changing market conditions, regulatory developments and project specific challenges caused us to reassess certain solar development investments. We continue to evaluate strategic alternatives. Including potential project sales, contract amendments, and other transactions. Our overriding objective is to minimize our exposure while advancing strategies to monetize these projects.

During the third quarter, we incurred approximately $3.4 million in additional costs and may incur further costs associated with these projects in future years. However, the amount and timing of such costs will depend on ongoing discussions with counterparties on our efforts to transfer ownership of or otherwise monetize the projects. More broadly, this experience reinforces the importance of a disciplined investment approach focused on opportunities with clear strategic advantages attractive potential returns, and strong long term cash generation. This approach has led us to actively pursue strategic alternatives for the solar projects with a focus on limiting future exposure and preserving value where possible.

From a capital standpoint, we expect to invest up to $32 million during the remainder of 2026 and up to $56 million in 2027. Both amounts include our $20 million annual budget for minerals royalty growth investments. 2027 estimate also includes the $16 million of Sawtooth capital expenditures discussed earlier. With the remaining $20 million budgeted for ongoing operations and other business development opportunities. Growth investments will only be made when opportunities meet our investment criteria. Overall, I am very encouraged by our year to date results. Our businesses are delivering strong performance, more recent contracts and investments are starting to deliver meaningful contributions. We expect our recent investments to support improving earnings and stronger cash flows. As they mature.

With that, I will turn the call over to Liz to walk through the financial results and outlook in more detail. Liz?

Elizabeth I. Loveman:Thank you, JC. Building on JC's operational discussion, I will review our consolidated third quarter results and then provide some additional information on our segments, outlook and liquidity. Overall, our third quarter operating results were very strong year over year. Specifically, consolidated gross profit increased 18% to $11.8 million and operating profit increased 37% to $9.3 million even after recognized the $3.4 million of solar curtailment costs. Consolidated adjusted EBITDA, which is 1 of our key metrics for evaluating the operating performance of our businesses, increased 63% year over year and 28% sequentially to $20.4 million. We also had some significant non operating activity this quarter.

We recognized a $4.5 million gain related to the settlement of an excess pension funding liability with Sabine Mining Company's former customer. This, combined with higher operating profit, led to income before income taxes of $12.5 million compared with $6 million last year. We also had a substantial increase in our income tax expense year over year primarily due to a change in our estimated annual effective income tax rate, and the resulting year to date adjustment recognized in the third quarter. As a result, we reported net income of $10.9 million or $1.44 per diluted share compared with $13.3 million or $1.78 per diluted share last year.

Turning to the segments, utility coal mining operating profit increased to $6.6 million from $5 million in the prior year quarter. While segment adjusted EBITDA increased to $8.9 million and from $7.1 million The improvement was the result of better contractual pricing and lower inventory impairment charges at Mississippi Lignite Mining Company. For the 2026 full year we continue to expect utility coal mining operating profit to improve over last year. Fourth quarter operating results are expected to be lower than the prior year period because an anticipated reduction in customer demand and higher diesel fuel costs at Mississippi Lignite Mining Company along with lower contributions from the unconsolidated operations following the transition of Sabine's reclamation activities effective October 1st.

Looking ahead to 2027, we expect overall coal demand to remain consistent with 2026 and profitability to improve. At Mississippi Lignite Mining Company, more consistent operation of the customer's power plant would support improved results. At the unconsolidated operations, higher anticipated results at Coteau and Falkirk are expected to largely offset the absence of Sabine reclamation income. Moving to contract mining, operating profit increased to $900 thousand from $1.9 million last year. And segment adjusted EBITDA increased to $7.6 million from $4.7 million Revenues, excluding reimbursable costs, increased 75% reflecting the continued ramp up of the Palm Beach County Dragline Services contract. Contributions from that contract more than offset lower customer requirements at our limestone mining operations.

We expect substantial year over year growth in contract mining operating profit and segment adjusted EBITDA in both the fourth quarter and full year 2026. We also anticipate continued operating profit growth in 2027 including a full year of contributions from the Palm Beach County and Arizona contracts. In minerals and royalties, operating profit was $7.7 million and segment adjusted EBITDA was $8.7 million both generally comparable with the prior year quarter. Higher earnings from our Eiger investment largely offset lower royalty revenues primarily from lower natural gas production and pricing. Looking ahead, Minerals and Royalties fourth quarter and full year operating profit and segment adjusted EBITDA are expected to be below the comparable 2025 periods.

Primarily because of lower anticipated royalty income partly offset by higher expected income from Eiger Resources. In 2027, we expect minerals and royalties to continue generating meaningful earnings and cash flow, although operating profit is expected to moderate from 2026 levels. At the consolidated level, our performance through the first 9 months has positioned us for a substantial year over year increase in full year adjusted EBITDA. We currently expect full year operating profit to be comparable to 2025 even with approximately $15 million of solar related impairment and curtailment costs recognized through the first 3 quarters. Income before income taxes and net income are also expected to increase year over year.

For fourth quarter 26, we expect net income to increase year over year primarily because the pension settlement charge reported in the fourth quarter of 25 will not repeat. Consolidated operating profit and adjusted EBITDA could be lower than the prior year quarter depending on the timing of additional solar project curtailment costs. We expect meaningful year over year improvements in operating profit net income and consolidated EBITDA in 2027. Continued expansion in contract mining and mitigation resources, along with improved operating performance across our other businesses, is expected to contribute to this growth.

Turning to liquidity, we ended the quarter with $124.8 million of debt and total liquidity of $115.2 million consisting of $56.5 million of cash and $58.7 million of availability under our revolving credit facility. We expect cash generated from operations to increase moderately in 2026, Because of our planned investment activity, cash flow before financing is still projected to be a use of cash for the year. Although we expect that to improve modestly from 2025. In 2027, cash flow before financing is projected to improve as recent investments contribute to earnings. With that, I will turn the call back to JC for some closing remarks.

John C. Butler Jr.:Thanks, Liz. Overall, I believe our third quarter performance provides strong evidence of the progress we are making across NACCO. Our established businesses generated solid results Contract mining continues to build momentum as newer contracts ramp up, we are beginning to see the benefits of new contracts signed and new investment made over the past several years. We believe the contributions of our established businesses and the expected contributions of our growing portfolio of long term contracts and newer investments provide a strong foundation for continued earnings and cash flow growth. As these investments mature, we expect meaningful improvements in operating profit net income and consolidated EBITDA in 2027.

We remain focused on execution, improving liquidity, reducing debt over time, and investing selectively in opportunities that can generate attractive long term returns. Overall, our reject. Our objective remains straightforward. Build a strong, durable portfolio of businesses that generate increasing cash flow and create long term value for our shareholders. I think our third quarter results show that we are delivering on those goals. We will now turn to any questions you may have.

Operator:At this time, I would like to remind everyone, in order to ask a question, simply press * then 1 on your touch tone phone. Again, that is *1 to ask a question. I will pause for just a moment And our first question comes from the line of Douglas Weiss with DSW Investments. Please go ahead.

Douglas Weiss:Hi. Good morning.

John C. Butler Jr.:Good morning.

Douglas Weiss:On the coal segment, you able to say or give some sense of how large the Sabine contract was and so how much you lose when that goes off?

John C. Butler Jr.:So you know, when we were still mining, actively mining, it was, you know, a decent contributor to earnings. As it went into reclamation, which we have now been doing for 2 or 3 years, it is been, you know, a much reduced amount. that is sort of the way our contracts work. When you are operating the mine, it is a higher fee. And when you get into reclamation in our in our management fee contracts, it goes to a smaller more modest fee. So as we said, you know, we expect growth at Falkirk and Coteau to offset the decline we get from the loss of the reclamation fees that we were getting at Sabine. Right. Okay.

Douglas Weiss:And to this, what drives the growth at Coteau and Falkirk? At the present time?

John C. Butler Jr.:Well, I mean, it is a covenant. So the way those contracts work, right, it is a combination of volume and fee. And the fees generally increase with, you know, CPI, PPI inflators. And we are also looking at, you know, increased deliveries. At those operations. And, you know, as you watch us for a long time, you know that annual delivery schedules, particularly at the larger management fee mines, are largely the biggest effect in there is do they plan a big outage in a given year or not. And 2027 is a year when we are expecting you know, pretty strong deliveries at both of those operations. Mhmm.

Douglas Weiss:Okay. Because they are not planning a big outage. Can you say that again?

John C. Butler Jr.:No. You said the biggest factor. Okay. Okay.

Douglas Weiss:And then on diesel, is diesel a net neutral over time as your pricing contract at MLMC incorporates those costs, or is it. Does it remain a net headwind, or does it even become a tailwind?

John C. Butler Jr.:Yeah. So I missed the first part. How does diesel affect MLMC?

Douglas Weiss:Oh, diesel.

John C. Butler Jr.:Yeah.

Douglas Weiss:Is it net neutral?

John C. Butler Jr.:You know, it is a combination of it is really based on electron demand from TVA. So there is some seasonality, but, you know, across The United States, as we have seen increasing demand for electrons regardless of the season. You know, it is no longer just driven by heating and cooling needs being the swing. You know, I think we are seeing smaller effects of seasonality in demand for electrons, which ultimately translates into what do we think TVA will be looking for from this power plant with respect to dispatch.

Douglas Weiss:Right. And then to diesel specifically, because you mentioned that was a bit of a headwind, but I know that figures into your reimbursement payments. Is there is there a time lag there? Or yeah, does that. Do you sort of catch up once the formula picks up those higher diesel prices?

Elizabeth I. Loveman:So diesel impacts our expenses right away, but it goes into the calculation of our sales price over a different time period. So there is a mismatch between when diesel impacts the sales price versus when it impacts our actual expenses.

Douglas Weiss:Yeah.

John C. Butler Jr.:Sorry, Douglas. I thought you said seasonal, not diesel, obviously.

Douglas Weiss:Yeah. that is okay.

John C. Butler Jr.:Good to get even more background.

Douglas Weiss:On I have a question. Kind of a big picture question on your SG&A. The people working on MLMC are the-- well, the people working on utility coal, are they also working on contract mining? Is that you know, do you make somewhat of a qualitative assess of how to assign that SG&A to the 2 segments, or are they totally different? Status?

John C. Butler Jr.:So it is a combination. You know, there is a team of people that work in the office at the mine site. You know, at our at MLMC. And so, you know, they are obviously you know, charged towards that business. We also you know, have people in Dallas that provide some support services that gets billed to the utility coal mining segment. They also have expenses. there is SG&A expenses in contract mining. As well. The other side of the story is we very much operate the company with a 1 team approach. And so if anybody needs help with anything, everybody's willing to jump in and help.

And we have got a system for, you know, allocating costs for that. But we find that we can be more efficient and more effective if we are really leveraging all the talents we have got across the company in each of the businesses as opposed to having people really siloed into any part of the business. In a scenario where MLMC did not renew after 2032, How much flexibility would you have to reduce associated SG&A to reassign those people, or in other words, how much how much of the SG&A is specific to MLMC, and how much of it is gonna be necessary for the unconsolidated operations. Yep.

So you know, the folks that are, obviously, at the mine site, some of them would be needed during a reclamation period but it would be-- you know, it would reduce over time. As the mine was reclaimed. And eventually, you know, would not be needed. The other people you know, we now have a very diverse business. So if you look at people in Cleveland, people in Dallas, you know, more supporting a whole collection of businesses. And as those businesses grow, I mean, they have grown a lot in the last 10 years. They are going to grow a lot more between now and 2032.

You know, they will have plenty to do, but we do operate a pretty lean operation. So to the extent that we have got excess that is not deployed somewhere, we will we will certainly address that. Yeah. Okay.

Douglas Weiss:On the solar operation, in terms of the cost you have called out, are those is that just a write off of previous investment? Is that noncash?

John C. Butler Jr.:You know, the impairment that we took in the second quarter was largely noncash. The charges we took this quarter were a combination of both. I am going to hand this to Liz here in a second. Get into the details of that. But, you know, as of the end of the second quarter, we believe that the best the best path forward at that time was really to unwind the projects and exit, you know, the agreements that we had, and our $7 million estimate at that time was based on that.

We knew a $7 million estimate of future cost Since then, you know, as we have studied this more over the last few months, we found that there is multiple paths forward for these that you know, allow us to work on strategies where we limit our exposure We advance strategies that could monetize the project. As opposed to just straight up exit them and perhaps you know, keep some passive upside in those. So as we have been going down that path, in some instances, that is led us to a decision to make some additional expenditures. So that is how that is been evolving.

I would say it is a more dynamic situation now than it was of the end of the second quarter. We thought it was a pretty clear break, and we now see more opportunity there to improve on our situation through alternative path forward.

Elizabeth I. Loveman:And the $3.4 million expense was specifically related to the termination of power purchase agreement, a PPA that we had in place. And so that was terminated in October 2026. We have that amount recognized as an expense and a payable at the September 30 balance sheet date. And then subsequent to that, it increases our outstanding debt. So you will see an additional $3.4 million on our revolving credit agreement in Q4.

Douglas Weiss:Okay. So you had a commitment to deliver that power? Is that the issue? And so now you are you have to make good on the absence of the power?

John C. Butler Jr.:We did have because there was a power purchase agreement tied to 1 of these solar projects. Right. We issued it was in our best interest to end the PPA. Right. So the PPA's gone away. However, you know, there is still other aspects of that project that we think could be attractive to a potential buyer. Okay.

Douglas Weiss:Okay. And any thoughts on the timing of when you will have clarity on the upside scenarios there?

John C. Butler Jr.:Well, I can tell you we would all love to know that. Like, today. But, you know, this. To be honest, this is something that is going to play out over the over the coming quarters. Could, you know, could expand. Could extend a year or more, but, you know, we are we are trying to get these things buttoned up. You know, in as orderly a way as possible. But we are not gonna rush it. I mean, We have all watched companies over the years that decide they are going to exit something, and they just blow it up and spend a whole bunch of money and we are.

We tend to be more cautious and opportunistic than that. So you know, the path we are down is how do we limit our exposure and try to get as much upside as we can. And our outlook that we provided for 2026 and 2027 includes our best estimate of how that plays out today.

Elizabeth I. Loveman:Yes, good point.

John C. Butler Jr.:We have included our estimated cost in our outlook. In our forecast, which is reflected in our outlook.

Douglas Weiss:Okay. Okay. But you have not you have not you have not really figured in it. I mean, how you probably wanna say that, but is there any way to sort of give a range of what you think the upside opportunity is?

John C. Butler Jr.:I would love to. But I do not think I should. You know? Look. If we thought this was going to be really bad, our outlook would be worse. And if we thought that there was you know, a total bonanza on the backside of this, our outlook would have been really high. So Yeah. You know, we are. We think this is this is something that is you know, not a big number either direction. But it is just really. Where we are right now, it is really hard to predict that. Okay.

We did a little bit of time over the last week trying to figure out how to how to give our audience a number or a range, and we ultimately decided we cannot.

Douglas Weiss:Yeah. Okay. Fair enough. On the contract mining, I think your guidance implies somewhat of a step down in the fourth quarter But you do have the Arizona work coming online. So is that conservatism, or do you see a pretty substantial seasonal step down in Florida? what is behind those numbers?

John C. Butler Jr.:So the background story means, obviously, we have got Palm Beach coming online. We right now have 3 draglines operating there. 2 smaller ones and 1 larger 1. These are the electric M-TECK draglines. We are bringing a 4th drag line that should be up and running you know, in the next few months. And so, you know, we get into 2027, gonna have that dragline running, and 2027 is gonna have the benefit of all of the IRR you know, full year of operation in Arizona, which would be great. What. The other part that is going on is there is some 1 off that I really can tell you they are 1 off.

Temporary things happening at various customer quarries primarily in Florida. You know, most of our operations in Florida, so that is not surprising. You know? We have got a customer that is reducing the inventory on-site. Once they get their inventory reduced to the level they want, obviously, we will be producing again to, you know, match production. And there is, you know, there is some 1 off things that are sort of slowing down production right now. Which is not reflective of any overall macroeconomic changes. However, you know, there is a little bit of softness particularly in Florida.

Elizabeth I. Loveman:Well, there is softness. I will say we it mostly in Florida because that is mostly where we operate.

John C. Butler Jr.:I think it is probably some uncertainty around the I think it is some interest rates. None of the customers are. None of our customers are telling us that they see any major economic downturn happening. Florida is still growing. it is not growing as fast as it was. But you know, that is kinda what the are the dynamics that are driving the contract mining business right now as we see it in the future.

Elizabeth I. Loveman:So just to add some clarity to that, we did say in the third quarter that new Palm Beach contract kind of offset some softness in the remaining limestone operations. But for Q4 and 2027, we did say we expect substantial year over year growth in the overall segment.

Douglas Weiss:Right. Right. Okay.

Elizabeth I. Loveman:And I know.

Douglas Weiss:I guess you did not address the sequential growth in your most recent update.

Elizabeth I. Loveman:Sequential from Q2 or from No. So Q3 to Q4. In our outlook, said we anticipate substantial year over year, but we did not compare to Q3. that is correct.

Douglas Weiss:Yeah. Okay. Let's see. So next year, I think you have mentioned the cash outlook is getting better. You have been generating--sorry, you have been allocating your free cash flow to investment. I am just curious the stocks pulled back quite a bit. I am just curious how you think about capital allocation and share buybacks versus investments at this juncture, especially as you begin inflecting to more positive free cash flow?

John C. Butler Jr.:Yep. So if you know. I wish there was a line in the cash flow that was somewhere between cash flow from operations and cash flow before financing, the growth investments. And, you know, it is 1 of the reasons we expanded our CapEx explanation. If you look at cash flow from operations, less capital that we are really committed to spend, and that would be the $16 million that is going to sawtooth and, you know, sort of the maintenance CapEx piece of 2027. We said maintenance plus growth was $20 million. Out of the out of the $56 million total. Part of that is maintenance.

So we need to spend the $16 million at Sawtooth, and we will spend that. We have got you know, the other portion of that 20. So if you did cash flow from operations less those 2 things, you know, we generate a lot of cash. It really then turns into what do you do after that. Obviously, you know, we have been paying a dividend since 1.99 thousand and we are gonna continue to do so. We have stated our intentions to strengthen our balance sheet. I think that is a really important thing for us to do and we are gonna. We are doing a lot of things that I think are gonna help that.

Over the course of the next year. So then, you know, you start to think about what is left. Right? You have got share repurchases and you have got opportunities for growth. Both of those contribute to shareholder value. I think our primary focus is we have been growing the company. Is you know, let's go after new business opportunities that really give us what we are looking for, long term earnings growth, long term cash flow growth. With strong stable customers. it is you know, it is the flywheel that really has built this business to where we are today. We wanna continue doing that. So that is kind of how we think about that.

I will say we are, you know, we are looking at ways that we can get more growth out of each dollar of investment in growth. Or how do we get how do we get the same growth with less investment? So in other words, saying, how do we how are we more capital efficient with our growth dollars? that is something that all the leaders of our businesses are thinking about and looking at and, you know, I think we got some opportunities there.

Douglas Weiss:Right. And when you say you are taking some steps next year you think will be helpful to the balance sheet, Are you indicating a focus on receivables or inventory? What are you referring to there?

John C. Butler Jr.:I mean, it is really just a whole range of things. From. I mean, it is all the stuff anybody would look at. Right. it is it is some working capital. it is, you know, the capital intensity of each of our businesses how do we think about best what should we have on our balance sheet? What should we not? How do we think about that? it is a it is a study that we are in the middle of right now, so I do not I do not really wanna provide much more color on it. But I think we have got some interesting opportunities ahead of it.

Douglas Weiss:Right. Okay. Okay. Last question is just. I think in your slide deck, you indicate that your book value understates the market value of the land associated with mitigation resources. Are you able to frame that in terms of what you think the market value is and what the timeline is for realizing that land value?

John C. Butler Jr.:Well, the short answer is no. But I. No. I am not gonna give you that. But I will I will I will tell you our logic. So when we identify an area to build a mitigation bank, you wanna be in a high growth area because that is where there is gonna be a lot of demand for real estate development. You know, people, Department of Transportation, expanding roads and expanding roads, people building apartments, putting in shopping, putting in schools. it is all the sort of development that comes in a high growth area. So we wanna buy a piece of land that is in the same watershed as the high growth area.

But we need to buy it at a price that makes it economically attractive for us to develop a mitigation bank. So, generally, we are finding a piece of property that is got an opportunistic price for us, attractive price for us, because we are gonna we are gonna go in and improve the streams, wetlands, and put a conservation easement on the part of the land that is relevant for that work. But then the rest of the land is available for you know, for sale. Well, actually, all the land is available for sale, but the land that is most attractive is that does not have a conservation easement on it.

So if you think about the fact that you have got growth and development coming in the direction of your mitigation bank, and you bought it early and you bought it at a good price, the investment thesis there is the value of that land should go up possibly in a very meaningful way.

Douglas Weiss:As development advances.

John C. Butler Jr.:As growth advances in that area. So that is why we feel pretty strongly that we have got some underlying hidden value in the land that we have acquired for these mitigation banks.

Douglas Weiss:Right. Are you able to put any numbers in terms of acreage, anything that would help you know, size the asset?

John C. Butler Jr.:We have not disclosed any of that yet, but Douglas, it is an interesting question that we will we will talk about. Like, is that something we should think about? it is a good question.

Douglas Weiss:Okay. Great. Thanks as always. Congrats on another great quarter.

John C. Butler Jr.:Once I give you the entrance, then you are gonna ask me for the price too.

Douglas Weiss:Maybe I can Google it? I can ask ChatGPT. Okay. Thanks as always for the time, and congrats on another good quarter.

John C. Butler Jr.:Yes. Thanks, Douglas, for calling in. We appreciate your ongoing interest. Bye.

Operator:And with no further questions in queue, I will hand the call back over to Christina for closing remark.

Christina Kmetko:Okay. Great. We will conclude our Q and A session. And before we wrap up the call, I would like to provide a few reminders, a replay of today's call will be available online later this morning. We will also post a transcript on our website when it becomes available. And if you have any questions, please reach out to me My phone number is included in the earnings release. Thanks for joining us today. I hope you enjoy the rest of your day, and I will turn it back to Tina to conclude the call.

Operator:Thank you. Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.

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