Black Stone Minerals LP

NYSE:BSM

Earnings Call Transcript 2021-Q1

[Operator]

Good morning, ladies and gentlemen, and welcome to the Black Stone Minerals First Quarter 2021 Earnings Conference Call. [Operator Instructions].

I would now like to turn the conference over to your host Mr. Evan Kiefer, Vice President of Finance and Investor Relations.

[Evan Kiefer, Director, Finance & IR]

Thank you, Ashley, and good morning to everyone. Thank you for joining us either by phone or online for the Black Stone Minerals first quarter 2021 earnings conference call. Today's call is being recorded and will be available on our website along with the earnings release, which was issued yesterday afternoon.

Before we start, I'd like to advise you that we will be making forward-looking statements during this call about our plans, expectations and assumptions regarding our future performance. These statements involve risks that may cause our actual results to differ materially from the results expressed or implied in our forward-looking statements. For a discussion of these risks, you should refer to the cautionary information about our forward-looking statements in our press release from yesterday and the Risk Factors section of our 2020 10-K.

We may refer to certain non-GAAP financial measures that we believe are useful in evaluating our performance. Reconciliation of those measures to the most directly comparable GAAP measure and other information about these non-GAAP metrics are described in our earnings press release, which can be found on our website at blackstoneminerals.com.

Joining me on the call today from the Company are Tom Carter, Chairman and CEO; Jeff Wood, President and Chief Financial Officer; Steve Putman, Senior Vice President, General Counsel; Garrett Gremillion, Vice President of Engineering and Geology; and Thad Montgomery, Head of land.

Now I'll turn the call over to Tom.

[Thomas Carter, Chairman & CEO]

Thank you, Evan, and good morning to you all. Thanks for joining us. We've got a lot of matters to report to you all this morning, so I'll start. We reported a 36.8 MBoe per day for the first quarter of '21 yesterday. Of that amount, the big 5 are Shelby Trough Haynesville/Bossier, Midland Delaware, Louisiana Haynesville/Bossier, Bakken and then what we generally refer to is other which is basically -- which basically consists of diverse non-resource plays.

Of that 36.8 MBoe per day, 5.7 MBoe per day was working interest, primarily in the Shelby Trough. Before the year 2020, and the pandemic, and other economic activities that took such toll on the world economy, we exited 2019 in the high 45 MBoe plus per day with about 7 of that being in working interest. Both BP and XTO had been super active in the Shelby Trough, the Permian was on par, the Bakken was very busy and the general rig count was robust. We all know that Shel came to an abrupt halt, both BP and XTO have severely cut back or have ceased drilling on our acreage in the Shelby Trough. We monetize the minority interest in our Permian acreage to clean up our balance sheet in such uncertain times. The Bakken has slowed and rig counts plummeted.

But with that -- all that said, remember that we were in the high 26 MBoe per day range in 2015 when we went public. We made great strides growing volumes up to the big event in 2020, and we are hard at work to spool back up our production in the coming years. To that end, we have been heavily focused on our high interest legacy lands. As you saw in our earnings release last night, we have made tremendous progress in striking new deals that we expect will drive additional development activity on our core acreage positions in East Texas. It has always been a fundamental strategy of ours to attract outside capital to our existing acreage through creative deal making with producers. When the pandemic struck and general upstream activity levels started to decline last year, our team stepped up its efforts on that front even more, and we are clearly seeing the results of all that hard work.

I'll start with our Haynesville and Bossier acreage in Shelby Trough, which is primarily concentrated in Angelina and San Augustine County, East Texas. Activity levels are ramping up under our development agreement with Aethon Energy in Angelina. You'll remember we signed that agreement in the second quarter of last year, which calls for 4 wells to be drilled in the first program year increasing to an annual well count of 15 by the third program year. Aethon has successfully drilled the first 2 wells under that program and expect -- and is expected to complete them in the second quarter. Aethon has been among the most active Haynesville operators in recent years and their technical expertise has been apparent in the early stages of this development program. That's one of the reasons we're excited to expand our relationship with Aethon through a second separate development agreement covering majority of our undeveloped Shelby Trough acreage in San Augustine County.

We finalized that deal yesterday and is similar in structure to what is in place and working well in Angelina County. The new agreement provides for minimum well commitments by Aethon in exchange for royalty incentive and exclusive access to our minerals and leasehold acreage in the contract area. The agreement covers over 60,000 gross acres, call for a minimum of 5 five wells to be drilled in the initial program year which will begin in the third quarter of this year, increasing to a minimum of 12 wells per year starting in the fourth program year.

The San Augustine deal with Aethon includes acreage within the Brent Miller area that initially kicked off the Shelby Trough development. In March of this year, we reached an agreement with XTO Energy, the operator, to partition jointly owned working interest in the Brent Miller development area. Under the petition agreement, Blackstone and XTO exchanged working interest in certain and proposed drilling units, resulting in each company holding a 100% of the working interest in their respective partitioned units. Our partition working interest under that deal are included in the development agreement with Aethon. Between the two deals, if the program ramps up over the next five years, we could see at least 27 wells drilled annually by our proven operator on our high net acreage position in the Shelby Trough. It should be noted that Black Stone owns significant royalty and mineral interest under both Aethon and XTO lands. Thus if and when XTO comes back to the area, the rig counts on our minerals could expand further. With over 500 potential locations across the area, we look forward to working with Aethon for years to come, indeed the long-term Gulf Coast, net gas, market LNG's, et cetera have a very significant bearing on these lands futures.

On the last call, we spoke about the potential across our Austin Chalk acreage to the East Texas. Again this is an area where we enjoy high concentration of ownership, both in terms of geologic coverage across the play and in terms of very high net ownership of these acres. The Austin Chalk has been a prolific play across Texas and Louisiana for decades, including Giddings, Brooklyn, Masters Creek, Burr Ferry field et cetera and historically has developed from vertical wells and then substantially unstimulated horizontal wells of accessing the formations natural fracture systems.

Recently, however, operators across the play in Texas have begun developing the Chalk using high intensity multi-stage completions, which have resulted in dramatic improvements in well performance. I'll speak to in just a few of the examples of this. First, EOG and SM Energy are highlighting their results from new Austin Chalk wells and Webb County in South West Texas. EOG has drilled 17 wells to date in the Austin Chalk Dorado play and plans another 15 wells in 2021. New generation EOG Chalk wells show an ER -- EUR uplift of approximately 2.7x relative to the older vintage wells in the same area. EOG calls this the lowest cost dry gas play in North America, and without tax returns of around 80% at current gas prices competes with any of their premium oil plays.

Similarly SM Energy drilled 9 wells as part of an Austin Chalk delineation program in Webb County in 2020 and plans an additional 20 in 2021, sorry for all the 20s. SM is reporting production results in the Chalk wells that are 3.5 to 4x better than the previous wells and exceed those of the modern Eagle Ford and Delaware Basin wells. SM closed breakeven prices for its new generation Chalk wells up $13 to $28 a barrel.

As we move closer to our core Austin Chalk acreage, Magnolia Oil & Gas has conducted the most significant program of high intensity completions in the formation, which includes over 400,000 net acres in the Giddings Field area in South Central Texas and focused in Grahams County and other counties, a few counties of west of our Brooklyn area, an area of high concentration. Magnolia has drilled over 30 wells with at least 90 days of production data. Magnolia's higher intensity completion in the regions are yielding results of over 2x prior generation wells. It's very significant we believe, that all of these Austin Chalk redevelopment plays are being conducted in areas that produce economically in prior cycles of the Chalk. Said differently, and importantly, we believe, we currently view this -- our current view is that this is not an exploratory play, it's an application of evolve technology and proven areas that is causing undrained reservoir quality rocks to produce at better rates and EURs than before.

Finally, we have a very strong data point on our own Austin Chalk acreage in Tyler County, Texas. The Hancock 1H well was drilled and completed in the Brooklyn field as a high intensity multistage well by Navidad Operating Company. Using the first 12 months production as a comparison, Hancock produced 303 and 1.9 Bcf of high BTU natural gas compared to its closest offset well on strike, which produced 75 and 1.2 Bcf of gas. This represents over a 2x uplift on a BOE basis for that time period.

Navidad has already spudded their second well West of the Hancock location under a development agreement deal with Black Stone that I'll discuss in just a moment. Earlier this year, we signed up our initial development deal with a large publicly traded operator to drill, test and complete wells in the Austin Chalk formation on some of our East Texas acreage, further to the East of Tyler County and primarily in Newton County. If successful, the operator has the option to expand its drilling program over a significant acreage position owned and controlled by us.

Yesterday, we announced two additional development deals covering a portion of East Texas, Austin Chalk. The first involves a consortium of existing operators on our acreage. Encouraged by Navidad success with the Hancock well, 2 other operators in the field has joined with Navidad to drill new wells on their acreage to test this concept. These operators will participate in 3 test wells targeting the Austin Chalk. Assuming the test well program is successful, we anticipate separate agreements with each of these operators to further develop the acreage.

The second agreement that we just announced is with a large private independent operator and drilling and completing multiple Austin Chalk wells on our company acreage in East Texas. Also, beginning this year, if those wells are successful, the operator has the option to expand the Austin Chalk development program on additional Black Stone acreage. In total, the test and development agreements we have entered into thus far in 2021, will help delineate over 200,000 Black Stone acres in the Brooklyn field area of the Austin Chalk, which has over 300 plus existing Austin Chalk producing well from prior generations and unlock the potential for several 100 infill wells in that field on Black Stone acreage.

We are very encouraged by our operator enthusiasm to redevelop our acreage and expand this play. It's hard to find needle moving projects for a company of our size in the mineral business. But if the Austin Chalk acreage response to the higher intensity completions, the way it has in the other areas we previously mentioned and the Hancock well, which is on our average, it could represent a meaningful new production lift for Black Stone for a long time to come. Indeed this development in the Austin Chalk is one of the big 5 and help Black Stone increase it's daily production to historic highs over time.

None of this has come easy over the past year. We've achieved some of our biggest wins in our company's history in the midst of the most difficult environment in decades. These development deals take great collaboration among our land, engineering, geology, business development and finance groups, and I want to recognize all of their efforts to position Black Stone for future growth. I can't say enough and won't go into it, but there have been countless hours of negotiation and evaluation efforts put into this project. We look forward to updating you on these strategic initiatives throughout the coming year.

With that, I will turn the call over to Jeff.

[Jeffrey Wood, President & CFO]

Well thank you, Tom, and good morning, everyone. Well, in the midst of all this recent activity, we did actually release first quarter earnings last night. So, at the risk of being a bit anti-climactic, I'll just point out a few notable items for the quarter. We reported total production of 36.8 MBoe per day, mineral and royalty volumes were relatively flat while working interest volumes declined by 17%, of course that's by design as we stopped funding that business in 2017.

We estimate the first quarter volumes primarily on the natural gas side were negatively impacted by about 1.6 MBoe per day by the winter storms that swept through Texas in February. Our realized prices before hedges for oil and gas improved meaningfully in the first quarter and gas differentials improve due both to the period of high gas prices during our February storm and due to the increase in NGL prices. As most of you are aware, we have always been active hedgers of our commodity risk. Those hedges benefited us greatly last year when prices cratered, but also tempered the impact of the dramatic rise in prices for us during the first quarter.

Our LOE and production costs were slightly below our guidance levels, so that's good news. Total G&A cost did tick up a bit in the quarter due to higher legal and professional fees and due to higher non-cash G&A, due to the increase in our unit price during the first quarter, which drives up the mark-to-market on our outstanding long-term performance units.

Overall, we generated $60 million of adjusted EBITDA and $53.8 million of distributable cash flow for the first quarter. That results in distribution coverage of about 1.5x on our announced distribution of 17 or $0.70 per unit annualized for the quarter. That excess cash flow allowed us to repay another $10 million of outstanding debt during the quarter.

Now we had good news on other fronts as well. After the end of the quarter, we finalized an extension of our existing revolving credit facility last week. We added 2 years to the maturity date of that facility, which is now November of 2024. We've always maintained a conservative balance sheet, even through difficult cycles and have great relationship with our lenders and that's pay dividends through this extension process. It's been a very difficult bank market over the past year, so we're really happy to get this extension done with relatively minor modifications to the terms of the facility and we appreciate the continued support from our long-term lending relationships.

Finally, we entered into an agreement yesterday to acquire mineral and royalty properties in the northern Midland Basin for $20.7 million of consideration in a mix of cash and Black Stone stock. We expect that acquisition to close during the second quarter. And while it's modest in size for us, generating about 200 Boe per day of mostly oily production, it's in a great area with active producers on the acreage. It does feel like the acquisition market is picking up a little steam after a long period of being disrupted due to the pandemic, and we're excited to start playing some offense in that area again.

And with that, Ashley, we're going to open the call for questions.

[Operator]

[Operator Instructions]. And your first question comes from Leo Mariani with KeyBanc.

[Leo Mariani, KeyBanc Capital Markets]

Hey guys, I was hoping to get maybe a little bit more color. I know it's maybe a tough question to answer on what the potential success case could look like. You've got this new deal here on the Chalk with this consortium that's going to drill through wells and you certainly pointed out, but could be individual deals struck for these 3 companies, if there is success. Could you maybe just try to frame up roughly kind of what the land area is that might be up; between these three companies. And I guess if these wells are successful, I mean, could we see something like each company have a rig there next year and maybe what's kind of your rough interest in that area? So, for example if I just made up a number, if 10 wells were drilled, how many net wells would that be at the Black Stone?

[Thomas Carter, Chairman & CEO]

This is Tom, I'll take a shot at that with Fab here, who has been really working on this, but we -- among the 3 deals -- actually one -- well, one of the deals has 3 different operators, one of the deals has 1 operator and other one is 1, so we would expect 8 to 12 wells on the deals that we have done in the next 12 months, assuming there is some level of success. That number would go up in development in the subsequent years, so it could be well north of that. And in addition to that, there are several other areas where we have large acreage positions that we are working on other deals that we have not completed yet.

So we're not done adding to that cycle yet. In terms of the consortium, there are over 100 plus existing units and and/or operated by those 3 operators, and the test well program is being conducted in a somewhat diverse position across those 3 operators, in such a manner that it will help delineate the play. Then once that happens, each operator will go on a continuous development cycle, if they want to keep up with the play with some 3 to 5 wells a year. So the number of acres and the amount of interest that we have in those plays, if the play is successful could ramp up into very meaningful volumes. It's going to take a couple of years, it just does. And -- but as I said earlier, it's an area that does produce, it's not a rank wildcat.

In many respects with all of the attention over the last 5 plus years on resource plays, I kind of look at the Chalk play as the original resource play, and it's had at least 3 cycles of development. I'm turning 70 years old and I was -- this year, and I was driving past Chalk wells and the Giddings field when I was in college at the University of Texas. So it's just -- it's sort of like the gift that keeps on giving.

[Leo Mariani, KeyBanc Capital Markets]

Okay, that's very helpful color. And I guess maybe just a high level, is most all of this activity focused on the oily window in the Chalk at this point in terms of all these deals you guys have?

[Thomas Carter, Chairman & CEO]

I would -- the core -- the deals that we mentioned today are in the rich gas window. And we do have some significant acreage in the oily window that we are also working on and we have a lot of acreage immediately down dip to the rich gas window that we know is perspective for gassier Chalk wells that we will be working on as well. And I think that has some similarities to Dorado, in terms of deliverabilities. I would add that it is deeper than Dorado but fortunately for us, we have just a whole lot of acreage sitting in this play and it could be extremely meaningful for us, it's going to be a very interesting year.

[Leo Mariani, KeyBanc Capital Markets]

All right. I guess, certainly noticed that you guys made an acquisition here. It seems like it's been a while since Black Stone had bought something. I think you guys obviously point out it's not a huge deal, but can you maybe talk about your appetite for incremental M&A in this environment?

[Jeffrey Wood, President & CFO]

Hey, Leo, this is Jeff. Yeah, thanks for that question. It has been a while, I mean, that our view was, during most of 2020, there were a lot of things going on, none of it good, well, just generally, but certainly not for the acquisition environment, right. So we had a stock price where we didn't really feel like the equity was a usable acquisition currency and I think sellers still had maybe higher expectations in the environment warranted. And so with prices recovering, with equity -- with commodity prices recovering with equity prices recovering and frankly where sellers sitting on those assets for another 12 to 18 months, we think that environment is just getting much more constructive.

So while this was not a huge deal for us by any means, it's the kind of deal we really like doing. This was a negotiated process not an auction process. It involve relationships that we've had for years and it was for a seller, who was willing or perhaps excited to take back equity in Black Stone. And I think that's just going to have to be the model going forward. We've done a tremendous amount of work to get the balance sheet where we want it, so we're not going to put that at risk again, and this was something that was we thought a reasonable price, Midland Basin and one that was not at all harmful to the balance sheet. So we're excited about this and excited about the opportunities to come. Definitely think it's a more constructive acquisition environment.

[Leo Mariani, KeyBanc Capital Markets]

Okay thanks.

[Operator]

Your next question comes from Brian Downey with Citigroup.

[Brian Downey, Citigroup]

Good morning, thanks for taking my questions. Solid set of new development agreements, aside from the 100 Boe per day that Jeff mentioned on the northern Midland acquisition. Do you foresee any of those agreements potentially contributing in the second half 2021 production volumes or is that more of a TBD impact to next year? I know you mentioned the 8 to 12 wells over the next year, but curious on potential timing there.

[Jeffrey Wood, President & CFO]

Yes, Brian, this is Jeff. I think it's -- I mean, maybe just some trickling in from those initial wells in the back half of this year when you talk about the deals between Austin Chalk plus Shelby Trough, but no, it's much more of a ramp. So as Tom said, look, we're very excited about the area. This is not some brand new exploratory play. We know that the resources there. We don't have a ton of data points on our acreage specifically, but we've got a lot of others in the Chalk as you look across the trend that these high intensity completions will work. But we are absolutely at the very, very early stages of the test and then build up phase in this. So it's much more kind of setting the stage for future growth in production volumes versus anything that we should expect to see that's material in the second half of this year.

[Brian Downey, Citigroup]

Great. And then in the release you stated increased producer activity across your acreage, I'm curious how you're seeing that translate in the base production levels, how current activity levels as we're sitting in early May might have compared to your expectations when you set your initial guidance for 2021?

[Jeffrey Wood, President & CFO]

Yes, so a couple of things going on there, Brian, I may add. I think the comment just is reflective of general rig activity. The biggest step up in rig activity over past couple of quarters has obviously been in the Permian, but we've seen some stability or increases in other areas as well. I will tell you that what we're kind of feeling the impact early in the year in terms of new well adds from the lack of permitting and drilling activity that we saw in mid-2020. So that always kind of lags and that's impacting us in the first quarter. And so as this activity picks up, we think it will be beneficial to volumes as we go through. I mean, we're not at a point that we're ready to make any adjustments to that original guidance, we typically do that mid-year, so I think we'll probably stick to that timing.

[Operator]

Your next question comes from Derrick Whitfield with Stifel.

[Derrick Whitfield, Stifel]

Congrats on your agreements. With regard to the Haynesville updates, do the Aethon agreement announced today fully unlock the potential of your Shelby acreage -- Shelby Trough acreage within your control?

[Thomas Carter, Chairman & CEO]

Yes, the short answer to that Derrick is, yes, right. So we had two operators [Technical Difficulty] Angelina XTO operating in San Augustine. As Tom mentioned XTO still has a meaningful position there on acreage that they hold in that original, what we call the Brent Miller area, which really kind of kicked off the entire program as we look back to kind of '15. So we certainly hope that XTO will restart development in that area at some point but that's up to them. But yes, other than that, kind of Aethon has stepped in to the other acreage that was formerly operated by BP and some of that was operated by XTO. So it's a very large position, which is why we're excited that we've got somebody really well capitalized and really, really good technically around the Haynesville to help unlock all that.

[Derrick Whitfield, Stifel]

Fantastic. And then as my follow-up regarding your Austin Chalk agreements. Could you tell me broadly what has been conveyed in the participation and development agreements to drive activity? Meaning, if I were to quote this 12 gross wells that you guys noted in your prepared comments, what would be your net exposure to those 12 gross wells?

[Jeffrey Wood, President & CFO]

Yes, Derrick, I mean look the incentives that we put in place for these operators sort of vary, but as we mentioned, it's royalty incentives in the early wells, especially in the test phase, and then it's a matter of charging reduced or very lessened upfront bonus payments. So the model for us is to get the molecules out of the ground. So for something like this where it's not the heart of the Permian, we need to work with producers. And the benefit of having such huge high net acreage positions, and I know I've talked about this before is that, we are relevant in those producer discussions as mineral owner, right, which is pretty unusual. We have a broad scattered low net interest, it doesn't matter what you do with a given producer, but since ours is so extensive we can't. So anyway, short answer to your question is that, we are -- we want people -- we want producers to spend their first dollar on the ground not on lease bonus and we will offer incentives in terms of royalty relief, especially for the upfront test wells.

[Thomas Carter, Chairman & CEO]

In terms of net exposure and I'm going to say some numbers here that I hope the guys will help me with. But, if you look at our historic well count, net well counts, which is if you add up all of the net revenue points that we have and all the wells we have drilled on our acreage, over the boom and bust cycle that we've been through in the last couple of years, you've seen numbers range from 3 of the 6 and back down to 2 net wells per year drilled in all the different basins. When you get -- that's a 100% -- 100 net revenue points in a given well we used to add them up. So that's the kind of volume of net revenue points that we've been seeing. If you take a very broad brush look at the potential for the Chalk deals that we've done, there is probably upwards of 40 to 50 net wells on that acreage, so -- that's assuming success, and you can drill that out over 5 years, you can drill that out over 10 years, either way it's meaningful.

[Operator]

[Operator Instructions]. And your next question comes from Harry Halbach with Raymond James.

[Harry Halbach, Raymond James & Associates]

I was just wondering if I could get some additional color on the Midland deal, what counties is in and who are the operators?

[Jeffrey Wood, President & CFO]

Yeah, it's Northern Howard primarily, and then there is a number of operators, for instance, since a big one...

[Thomas Carter, Chairman & CEO]

SM.

[Jeffrey Wood, President & CFO]

Yes.

[Thomas Carter, Chairman & CEO]

I believed into Gordon just a little bit.

[Harry Halbach, Raymond James & Associates]

Great, thanks. And then I guess another question on M&A. What's kind of your appetite for going outside the Permian? Would that be, assuming can get them to take equity or would that just be your primary focus?

[Jeffrey Wood, President & CFO]

Oh no, we've always been relatively agnostic to basin, other than those things that we just maybe feel like we don't have a deepen understanding on, right. For example, we haven't done a big Appalachian deal in part just because of the concerns and understanding, the full picture around takeaway capacity, just as an example. But look, what we look for our deals that are accretive to our NAV, that have solid IRRs, and what we think will return solid ROIs to our investors. And so, yeah, short answer is no, we're absolutely not limited to the Permian. One of the benefits we think to being a very large, diverse mineral holders is that gives us the ability to look at a lot of different deals in a lot of different areas and really just try to pick and choose those that we think are going to provide the greatest returns. So look, at the end of day, you kind of got to go where the rigs are so that's been largely Permian over the past few years, but anytime we can find an opportunity where we think we've got a direct line of sight on development, we're more than happy to look at them.

[Harry Halbach, Raymond James & Associates]

Great, thanks. And then the if I can just squeeze one more in. You guys kind of mentioned LOE 20% below the quarterly run rate implied in your guidance. You guys expect to LOE to kind of pick up in the coming quarters? Do you think this is some what of a run rate?

[Jeffrey Wood, President & CFO]

No, I know, we're a little below guidance on LOE for the quarter. It can get a little bit lumpy at some -- sometimes they're just workover activity, et cetera. But no, we wouldn't expect any big tick-ups and we'll be back next quarter and that's one of those things that if it continues to trend this way, we'll probably just guidance down a little bit on LOE.

[Harry Halbach, Raymond James & Associates]

Great. Appreciate you all taking my questions and congrats on a great quarter.

[Operator]

Your next question comes from Pearce Hammond with Simmons Energy.

[Pearce Hammond, Simmons Energy]

Hey good morning and thanks for taking my question, and congrats on all the news. Just a quick update, Jeff, on your thoughts on hedging. Notice you layered on some, looks like some good hedges for oil for next year, for 2022 and just your thoughts on natural gas.

[Jeffrey Wood, President & CFO]

Good morning, Pearce. Thanks for that. And yes, look, we're just going to continue to be systematic around hedging. We don't typically try to time any of these markets. So I think just in normal course as we go on through the quarter, we would look to continue to add oil and natural gas hedges. We haven't put on a gas position for '22, so that would be something in the normal course of business that we would do in the near term. So yes, no change to hedging philosophy. As I said in my remarks, right, with huge, huge help to us last year, a little bit of the other side of that coin this year, but we just generally like the additional stability.

[Operator]

And at this time there are no further questions. I will now hand the call back for closing remarks.

[Thomas Carter, Chairman & CEO]

Well, we thank you all for joining the Black Stone call today. And we're excited about this quarter and we're going to keep working hard and we'll talk to you in the next quarter.

[Operator]

That concludes today's conference. Thank you for your participation. You may now disconnect.