Dno ASA

OSE:DNO

Earnings Call Transcript 2021-Q2

[Jostein Løvås]

So I guess we're ready to open this meeting. Welcome to DNO's second quarter earnings call. My name is Jostein Løvås. I am the Communications Manager of DNO, and I will share some practical information. [Operator Instructions] We will start with a brief presentation of the second quarter 2021 results by Executive Chairman, Bijan Mossavar-Rahmani; and CFO, Haakon Sandborg, after which we will open up for questions. Managing Director, Bjorn Dale; Chief Operating Officer, Chris Spencer; Exploration Director, Nicholas Whiteley; Head of Group Accounting, Baton Haxhimehmedi; and Investor Relations Manager, Gudmund Hartveit are also present on the call. [Operator Instructions] With that, I leave the stage to the Executive Chairman.

[Bijan Mossavar-Rahmani]

Good afternoon to those of you in Europe. Good morning to those in the United States. We've timed this meeting to allow as many of our shareholders and analysts across several continents to participate as is possible under the circumstances. My colleagues and I are spread out across several countries, mostly in Norway, but in other locations as well. Our hope had been, and I'm sure yours as well, that pandemic conditions would have allowed us to do this physically rather than virtually but here we are again with another virtual meeting. I see we are close to 90 participants in the session, so thank you for joining us. As we've done always, both virtually in the last 1.5 years or longer since the pandemic and before that through our regular meetings, Haakon and I will go through these slides quickly that were released this morning and then have an opportunity to -- he and I and my other colleagues to give a bit more color but also to try to respond to as many of your questions as we can. As you see from this cover of our presentation, we have a -- we're celebrating our 50th anniversary as a oil company, oil and gas company. We are Norway's oldest oil and gas company and we have been in continuous operation for the last 50 years. It's quite a milestone and one of which we are proud. And of course, those of us in the presentation today have only been along for the ride in the last decade or 1.5 decades. And we've had many predecessors who contributed to the history of the company, and we recognize their contributions to DNO's operations and DNO's success over its history and through its longevity. Before I go into the slides, just a quick comment. The story of DNO and DNO's operations and results in the last year, 1.5 years is not very different than that of the industry overall. The industry, of course, was hit by the pandemic, the collapse in demand, the collapse in oil prices and our first response as an industry, and DNO included, was to protect our balance sheets to cut cost, cut dividends in many -- in most instances and to scratch our heads a little bit about the headwinds we're facing, including the growing interest in and concern about climate change and what role the industry should play in addressing some of those challenges and what each company can do strategically, tactically and otherwise. So we were engaged in some of the same actions and some of the same thought processes as our peers, large, largest, medium sized across the oil and gas sector globally. With time, of course, the conditions of the market have changed. Demand picked up. OPEC+ was able to stabilize, raise and stabilize prices, which has meant that we've been able to repair and then to begin to strengthen our balance sheet, as DNO, again, much very similar story to that of the industry overall. We expect this to continue. We were -- and our peers in Kurdistan, as well as other companies operating in some of the developing countries, were hit by nonpayment problems, building up arrears in Kurdistan. Our arrears, in terms of several months of entitlement and override payments not having been made for the period in the latter part of 2019, 2020, built a very substantial arrears for DNO, which is now being paid down. So that has a bit of a multiplier effect in that our receipts from Kurdistan. Moving forward, we'll have a component and has had a component of arrears payments, which means we'll be -- the payments will be higher than what is -- what the underlying production numbers would suggest. That's positive. The number is still large but it's, through payments over the last several payment cycles, we're now down to something of just over $200 million, I think it's $214 million in principal arrears. And we hope to continue to chip away at that in the coming months and perhaps reach an accommodation with the government to accelerate those payments. And of course, that would be very welcome, and it would be another means by which we will continue to strengthen our balance sheet and our results as well and allow us to do more. The challenges of COVID, again, aren't over. The challenge has posed to us as a company and as an industry involved the safety and security, but importantly, the health of our teams that are on the ground, whether offshore or onshore. That takes up a lot of our efforts to make sure our people are safe and, knock on wood, we've been successful in managing that process. And while there's occasionally COVID cases, we moved quickly to contain them and have not been had any major illnesses or deaths across the company, and that's obviously a great priority for us in terms of protection of our colleagues and our staff and our contractors. But the COVID challenges to supply chains over the -- continue. This has meant delays in some projects, higher costs in other projects. And we try to again address those the best we can but that overhang continues. And with the delta variant and perhaps other variants totally out of our control, we expect those challenges -- we will expect it. We will remain -- have to remain vigilant and diligent in managing the COVID-related challenges for the foreseeable future. So that remains, again, cloud over all of our heads, not just in the oil and gas industry but in our private lives and across so much of the global economy. Going to our operational highlights for 2021. Again, we've shown our production in Kurdistan and the North Sea since the first quarter of 2020. And effectively, the numbers have held pretty steady. The lower darker green, represents Kurdistan, has held pretty steady. North Sea has had some movements up and down but really no surprises and no significant changes to our production volumes. The gross Tawke license production has averaged just over 110,000 barrels a day in the second quarter, is essentially flat, down just a tiny bit from Q1. And the net interest -- DNO's net interest has been a robust 84,000, 85,000, 83,000 barrels a day of production, which is very substantial, of course, for a company of our size. Our North Sea assets contributed almost 10,000 barrels a day of oil equivalent per day in the second quarter. That was down from just over 15,000 boepd in Q1, much of that due to planned maintenance and infill drilling in Norway and in nonoperated fields. So we ride those numbers up and down depending on the operators' decisions and actions with respect to maintenance and other activities that, on a quarterly basis, may move the numbers around a bit. We expect that our Tawke license operated production will remain. Our guidance remains at about 110,000 barrels of oil a day in 2021 for the year. North Sea production, we expect will recover in the second half of the year. And we're giving a production guidance on a net to DNO basis of about 13,000 barrels of oil equivalent per day. Next slide, please. Of course, Haakon will go over the financial results in much more detail in his section, but I just want to touch on couple of financial highlights. And I think the -- those bar diagrams on the right of this slide tell the story. In the pandemic year, our operating profit, obviously, was down as negative, but we've now had 2 consecutive quarters of operating profits, have held essentially steady in the $60 million range, and so that's been obviously a positive. We have reduced our bond debt. We're chipping away at our bond debt. We reduced it by about -- by $100 million in Q2, following a partial redemption to bring bond debt down to $700 million. In terms of our receipts from Kurdistan, where both our entitlement production, our override and payment towards our arrears totaled almost $160 million in Q2. That led to an exit cash balance of just over $450 million at the end of Q2. Our net interest-bearing debt is just shy of $400 million, which is the lowest level since the fourth quarter 2018. And also another important figure is the $57 million we received just this week from Kurdistan. It's an after-quarter payment, but it just speaks to the continuing strong cash coming in from Kurdistan in the $55 million, $60 million a month rate, which, again, is a significant figure for a company of our size and continues to help improve our results and continues to build and strengthen our balance sheet. And again, the arrears figure now is, after this last payment, is $214 million in terms of the principal amount of those arrears. The next slide shows our Kurdistan operations. In Q2, as I indicated, the gross operated production level was 110,000 barrels a day, of which Peshkabir, the Peshkabir field and the license represented 63,000 barrels of oil per day, slightly up from the first quarter. And Tawke, just over 47,000 barrels a day, down slightly from the first quarter. We're actively drilling new wells at Peshkabir. We have 5 wells scheduled this year and that program is well underway. But we've also been doing workovers and other well interventions at existing wells in Peshkabir, which, again, have resulted in the robust number and slightly improving number in terms of Peshkabir's contribution. On the Tawke side, there have been some delays in approvals of work programs. We're trying to work through those and to be able to get back into a drilling of new wells at Tawke, the Tawke field, but the lack of drilling of new wells has meant that Tawke production has been trending downward, given the natural field decline, although we have arrested that somewhat through our Peshkabir gas to Tawke field gas reinjection campaign, which is to be put into place probably 4 years ago, long before the current climate change concerns and actions by other companies. We did so because we don't like the flare. And we felt that the investment will also help provide additional reservoir support, pressure support for Tawke and has been, in fact, the case. But we've also been doing workovers and interventions at Tawke. We'll be doing some sidetracking. So we've been able to do quite a bit at Tawke even in the absence of additional drilling of new wells, which we expect will pick up as soon as the approvals are in place. And we'll see more activity at the Tawke field, hopefully, towards the end of the year and going into next year. Some of these delays and deferrals and government approvals or work program and budgets has meant that we will be deferring around $50 million net to DNO of 2021 spending into 2022. So our capital program and budget will go down by around $50 million from what we had expected for 2021. But it's also meant that some production that we'd hoped we'd be able to record this year will be deferred into 2022 as well. In the North Sea, I only referred to the reduction in our share of production from our North Sea assets. Notwithstanding that drop in production during the summer, we are very actively drilling in the North Sea, including 2 appraisal wells on previous discoveries and 3 exploration wells, the first of which has already been drilled and led to a 2021 discovery. So we are very active in the North Sea. And in addition to the appraisal and exploration wells, we've been drilling and have additional development wells, 4 at Fenja and 6 infill wells at Ula, Oda, Tambar and the Brage fields. And the Bergknapp discovery has been undergoing a drill stem testing and now is undergoing sidetracking. So start the 2021-2022 exploration and appraisal drilling in our North Sea core areas and more detail as to our interest in those wells and our expected gross volumes and sense as to what's unrisked resources, we are targeting through this drilling program. Those numbers are -- again, they're unrisked resources but they speak to our ambition and to our view of the prospectivity of these permits and the targets of our wells. Again, my colleague, Nicholas Whiteley here if there are specific questions about the specific wells. We can try to address those for those of you who might be interested in doing so. The final slide for this portion gives some information about the Brasse development, which we had flagged previously, and we said we are trying to meet the 2022 PDO submission target for Brasse. And we are moving aggressively and robustly ahead with that with our partners. We've made a concept -- a development concept selection to tie this back to, and use as a host, the Equinor-operated Oseberg facilities. And we feel that is the lowest-cost, fastest turnaround option and would allow us to get -- to meet the PDO submission target of 2022 and get the field on production by the middle of the decade. And we're targeting initially 22,000 barrels of oil equivalent per day, and the DNO interest in the Brasse is 50% and we are also the operator. With that, I turn to Haakon and the financial discussion in detail, please. Haakon?

[Haakon Sandborg, Chief Financial Officer]

Good. Thank you, Bijan. And hello, everybody. Welcome again to this earnings call. My task now is to give you a quick summary of the main Q2 financials. As normal, we start with these key figures. And as you can see, revenues increased now from $170 million in Q1 to $184 million for the second quarter. This increase was, as you know, driven by stronger oil and gas prices but we had a partial -- or partly offset then by reduced revenues because we had lower production in the North Sea and also we had under-lifting in Q2. If you look at revenues on a business unit level, Kurdistan revenues were thereby up by $18 million to $141 million in Q2, mainly on the higher oil prices. But for the North Sea business unit, the revenues were down by around or just under $4 million to $43 million in the quarter. That was primarily on the lower production and the annual lift for this period. As Bijan has discussed, the lower production in the North Sea was mainly due to the planned shutdown for maintenance at the Marulk and Alve gas fields. And we are now happy to say -- to confirm that the North Sea production will recover in the second half of this year, following this maintenance program. Let me show you here the netback, a metric we like to follow. This is an after-tax cash flow before working capital changes. And the netback this time for this quarter increased to $153 million. And that was primarily due to good operational results again but also another additional $16 million higher tax refunds than we had in Q1 this year. To the right, we see the operating profit. It was $61 million, a bit down from the previous quarter. That was mainly due to higher expense exploration and impairment charges. I will come back to that shortly. Next one, please. Here, we show our P&L in more detail and you see the Q2 numbers to the left on the slide. And here, we see the increase in revenues from Q1 to Q2 that I have discussed. If we go further down on the P&L under cost of goods sold, the lifting costs in Kurdistan increased by $4 million from various workovers and field work. You see that the movement in underlift is almost at the same level as we had in Q1. And we see that we have DD&A, depreciation primarily, reduced by $4 million from the previous quarter. That reduction comes from the lower North Sea production. And with that -- with those movements, we have a fairly stable cost of goods sold from Q1 into Q2. Going on further down on the cost side, expense exploration increased, as mentioned in Q2, and that is primarily mainly due to purchase of seismic data, sort of an investment, if you want, that we have expensed. So it's a positive as we see it. And we also have the impairment charges of $12.6 million. But that is a revised cost estimate for the -- also of our decommissioning. That is the background for the impairment we have taken this time. So as mentioned, Q2 profit -- operating profit thereby amounted to close to $61 million. You may wonder why we have a higher net finance expense this time in this quarter, and that is mainly around the partial redemption of the DNO02 bond effects to that, but also some effects from weakening or estimate changes we have made on the payment of the KRG arrears. You also see that tax income is increased now, that comes from higher exploration expenses and the tax effects of the impairment on the Oselvar project. So all in, we delivered another strong quarter with an increase in our net income to $56.7 million. As noted in the bullet points, we also now have a material North Sea underlift position of 1.1 million barrels at the end of Q2. This will be realized or reversed, if you want, going forward. But the timing of that will depend on a quite dynamic lifting schedule for our various producing fields. They tend to move around and they vary from quarter to quarter. But of course, we do expect this to be realized next half year and then maybe some will slip into next year. Next one, please. No, I'm sorry, go one back, I was a bit too quick. I wanted to mention the year-to-date P&L to the right on this slide. Just to be brief on that, we have basically recovered from the weak market conditions that we had last year. We have a $76 million increase in revenues, and that's provided by the sustained high production in Kurdistan and the higher oil and gas prices that we have seen so far this year. And we also have, year-to-date, a significant reduction in our cost of goods sold. That comes mostly from lower estimated DD&A charges per barrel in Kurdistan this year and also reductions from the lower North Sea production. We have significantly reduced impairments, and they contribute to a very substantial increase in our year-to-date operating profit to a solid level of $127.3 million. So after finance and tax, we are pleased to then now be able to show a year-to-date net profit of $108.1 million, and that compares to the loss we had for the same period last year, so a big improvement and in reversal now. Good, move on, please. This is a look at our operational spend. It's something we'd like to discuss on a quarterly basis, the outlook for that and the movements. So as Bijan mentioned, we have adjusted our guidance for the operational spend from $700 million that we talked about for the last quarters to a level of $650 million for the full year in 2021. And as noted, this is due to the $50 million reduction of projected spend in Kurdistan. And they're coming from the delays that we have seen in securing government approvals of our work programs and budgets. The revised operational spend level is now split between Kurdistan with $200 million and the North Sea with $450 million. And the North Sea number is shown before the North Sea tax refunds that you are aware of. You might notice that compared to previous guidance, so there is some change in the projected spend level between each category of the operational spend. But I would say that the reduced CapEx in Kurdistan is the main item. As we can see on the quarterly spend graph to the right, the year-to-date operational spend is at $300 million, roughly. And we have an additional spend of $350 million and plan now for the second half of the year, so quite an active program continuing on into the second half. Moving on to the next and my favorite topic. The operational cash flow strengthened substantially in Q2 to a solid level of $160 million. Here, we had a strong pretax profit adjusted for the noncash items. And in addition, we had positive working capital changes in total of about $38 million for this quarter. And the working capital change came primarily from increased trade and other payables for the North Sea business unit. In Q2, we have received 3 monthly payments from the KRG compared to the 2 monthly payments we received in Q1. So as you may recall, we had a buildup in receivables in Q1 and a negative working capital change in that quarter. So just to point out that certainly, these working capital movements or changes are also important behind the increased operational cash flow in Q2 from the first quarter. But looking at the graph here on the slide, we have also $31 million of North Sea tax refunds that add to our cash flow in Q2. And if you look at the spend items we have here, we have been able to finance or fund the investments of $93 million from cash flow and also finance from cash flow of the various finance outflows totaling $121 million. That includes the bond redemption of $100 million that we have mentioned. And all that has been done from cash flow with only a modest reduction in our substantial cash balances. So I think in my mind, that fact that we have cash flow financed most of our activities and finance items in the second quarter is a key achievement. Not shown here, but if we summarize cash flow for the first half of this year, we are pleased to show an operational cash flow of $228 million for the first 6 months. And we continue now to expect strong cash flow through this year supported, as before, by higher production and the current oil and gas prices. We do expect now a further $130 million in North Sea tax refunds in the second half of this year, which, of course, is a significant addition to the cash flows expected for the full year. And the next one and the final slide for our capital structure. As has been discussed, we are clearly making very good progress on strengthening our balance sheet as we have retired bond debt last year of $160 million, followed up now, as we have seen, by another $100 million of bond redemption in Q2 and doing all that and still maintaining intact our solid cash balances. So on this basis, as you can see in the middle graph here, where our net interest-bearing debt has been reduced to $396 million. And with our bond maturities, we have 2 bond facilities outstanding. They are out -- maturities are out 2 to 3 years. So with this sort of net debt level seen in combination with our high production and strong cash flow generation, I think this debt structure is very manageable for DNO. Happy to note that we have also strengthened our equity ratio this year, as you can see on the right-hand side here, and that comes through our much improved profits, and thereby, retained earnings year-to-date. So we are now at a level of 34% on the equity ratio. To finish up, we are on a good track here. We have been able to further strengthen our financial position. And thereby, we see a good foundation, a good platform for future growth in the company. So I hope we're on time, yes, it's not too bad. So I'll finish up there. I think we're now ready to go into a Q&A session. Do you want to head that, Jostein?

[Jostein Løvås]

Yes. We'll take questions. [Operator Instructions] I guess there's a question here from Karl Fredrik Schjøtt-Pedersen. He's one of the analysts following us on a regular basis. So we'll try to unmute you, and please remember to unmute yourselves before posing the question.

[Karl Fredrik Schjøtt-Pedersen]

The first question is, are there any -- what level of production or how do you think about production looking into 2022 and beyond kind of capital allocation between the North Sea and Kurdistan into 2022? That's the first question. My second question is regarding your balance sheet as you are generating quite a lot of cash at the current -- in the current oil price environment. How are you thinking about buying back bonds and also dividends, or alternatively, kind of aggressive growth, for example, through M&A?

[Bijan Mossavar-Rahmani]

Let me respond to the first part of that and I'll ask Haakon to respond to the second one. In terms of giving guidance on production in 2022, I think it's a little early to do that. I referred to some of the delays we've had in getting our programs and budgets approved and mentioned that some of that production and spending will be deferred into 2022. So I don't expect, certainly on the Kurdistan side, major surprises. Although as you know, we also have pending approval of the Baeshiqa license, which we had hoped to have brought on early production before the end of this year. And that -- there's been a delay in approvals for that project. The timing of those approvals will govern when the contribution from Baeshiqa will come, and that's an important part of our growth story in Kurdistan. At Peshkabir, we will continue, and there's no reason to think that our strategy with respect to Peshkabir development will change. But Tawke, of course, again, once the Tawke budgets are -- is approved, we expect to see more activity at Tawke and an uptick in Tawke production. But again, it's premature now to give guidance on that towards the end of the year. I expect we'll have a better picture. Haakon did mention, and I alluded to the fact that we are doing other things at Tawke besides drilling of new wells through well interventions and workovers. Those costs are typically categorized in the OpEx category rather than the CapEx category. So there has been some shuffling of spend in these different categories. But we -- both with the reinjection program and the other interventions, we've been able to hold Tawke to arrest, not fully arrest but significantly slow down the natural field decline at Tawke, which in the past has been on the order of 15% to 20% a year. Our team has done a terrific job in slowing that down significantly through well-by-well interventions and monitoring. So I expect once we start drilling additional wells, we'll see a better recovery of Tawke production. But again, it's premature to give you much guidance on that. In the North Sea, some of them, again, our activity is focused on existing fields, existing wells, infill drilling and so on and others are through exploration. The exploration, of course, cycle is much longer one. But that gives us an opportunity to come back to a bit later this year with some better guidance for next year. Haakon, on the bonds and debt and all that?

[Haakon Sandborg, Chief Financial Officer]

Thanks for that question. Well, on the bond side, as you know, we have been very active as a bond issuer over many years. We have been proactively, through the years, looking at managing our maturity profiles. And we've been often buying back bonds in the market ahead of time and also doing refinancings well ahead of maturities. So that is a fact that that's what we have done and we managed, I think, successfully for many years. So that will be one consideration to look at. We have the DNO02, but that is maturing only 2 years out so we have some time to think about that and the 03 bond is in 3 years out. Happy to see that these bonds have traded up quite nicely now in the secondary market. So the 02 is trading above the floor price, 103.6 or so. And the 03 is trading even higher at 105. So hopefully, that will speak for continued improvement in our coupon rate if we do more bond placements going forward. So I think, yes, we -- as before, we are very actively following the bond market, so I won't be able to comment on any commitment to do anything just now. But we do follow our strategy of actively being proactive in looking at the opportunities to special maturities and buy back bonds. On the dividend side, we had a bit of a stop in dividends last year because of what happened with our industry and our company from an earnings perspective. But we went back to the AGM and our shareholders this year in June -- or was it May, and asked for another authorization split in 2, 1 authorization for this coming half year, second half year of this year, and 1 other authorization for dividend in the first half of next year. So we do have the structure in place. We tend to look at it period by period. And if we are in a good position and we are satisfied with what we see of our capital structure and our earnings outlook, cash flow outlook, to follow up on that dividend program. But it's sort of done on a half yearly basis now with our authorization from the AGM. So this is something I'm sure that the Board of DNO will be considering through the second half of this year and the first half of next year, given what we have in place.

[Karl Fredrik Schjøtt-Pedersen]

And the last part of the question was regarding potential M&A or that kind of growth trajectory, is that something that you are looking at pursuing? Or is the organic opportunity sets within your company covering you right now?

[Haakon Sandborg, Chief Financial Officer]

Can start, Bijan and we can follow up or do you want to answer?

[Bijan Mossavar-Rahmani]

The answer is yes.

[Jostein Løvås]

Okay. The next question comes from Dave Round, so please introduce yourself.

[David Matthew Round, Research Analyst]

It's David Round from Stifel. Just a clarification, please, if you don't mind. Did you say you don't expect to drill another well at Tawke until the end of 2021 at the earliest? And I wonder, is there a potential for that to change and for those wells to come back into the program if you did receive approval? And maybe you could just give us a bit of information on what exactly are you trying to get approval for here.

[Bijan Mossavar-Rahmani]

The approval is for certain remaining elements of our work program and budgets. As you may know, if you've been following developments in Kurdistan, there have been some changes in the Ministry of Natural Resources, a new minister, a new team. They've taken some time to look at their strategies, looking at the sector, looking at some of their priorities and, in the process, they have held back approvals of work programs and budgets for, as I understand it, for not just for DNO but for a number of the companies. They've been looking at strategies with respect to flaring. In fact, very recently, all the companies were informed that flaring in Kurdistan has to stop. This has, of course, consequences for the companies in terms of spending, in terms of their field development programs. It's less of an issue for DNO because, again, we've put into place ourselves, starting about 4 years ago, a Peshkabir field flaring reduction and gas reinjection project. In Tawke, we've never had much gas flaring at Tawke but we've had some at Peshkabir. So for us, so this is an easier target to meet quickly and without much additional capital expenditure or time. But for other companies, this would be a substantial change in how they approach their field development programs, budgets and spending. So there's a lot going on and this has meant that some programs, whether about spending or tendering and contracting other things, have not been approved as rapidly as we have been proposing them. But once our programs are and elements of it that are still outstanding are approved, we'll hit the accelerator. We've always been, as DNO, a fast mover and once we have an opportunity and have the green light, we'll hit that accelerator and we'll start.We know how to drill wells quickly and cheaply in Kurdistan and have programs in place for even cheaper next-generation wells to reduce the timing and the cost. So we're set to go. But again, it's been an issue in terms of government policy and bureaucracy and administrative structures being put into place by a new ministry leadership structure in Kurdistan. But again, if fall into place, we have green light, both we and our partner long-standing in Kurdistan on the [ copy ] license Genel Energy, we move fast and we're prepared to do so. And we're just waiting for the green light, the light to turn from amber to green and then we'll hit the accelerator in and proceed with drilling.

[David Matthew Round, Research Analyst]

Okay. And just maybe just any chance that green light could be before the end of the year? What sort of visibility do you have over that process at the moment?

[Bijan Mossavar-Rahmani]

Well, we are in regular contact with the ministry, but as are all the other companies operating in Kurdistan so it's really a question for the ministry to decide which of the problems are easier ones to solve more quickly. And some of the companies again will have to go back and scratch their heads and consider how they want to respond to the new requirements in terms of flaring cessation or substantial reduction because that could be quite expensive. When DNO and Genel proposed to do the Peshkabir-to-Tawke reinjection project, we're looking at well over $100 million of spending, and there was no external pressure on us to do so from anyone. We just thought it was the right thing to do, both in terms of saving that gas and storing it into Tawke for future generations to use or for future uses but also getting more gas out of Tawke.So for us, it's an easier -- I think the issues we have to be addressed and approved with respect to the Tawke license are much simpler and much easier to address by the government to its approval and for our partnership, our joint venture to act on. So we're in constant contact with the ministry and the government. And hopefully, we will be able to address this because it's everyone's interest that we drill those wells and proceed with our full development program.

[Jostein Løvås]

I believe we are nearing the end here, but -- so I'll give participants or attendees a last chance of asking questions. If there's no one curious about anything else, then I think we will wrap it up shortly. Okay. It seems like we have made it all very clear and answered all questions. So with that, I think we should just thank you for attending this video conference, and we look forward to the next quarter. Or we're already way into it, so next quarter's presentation. Okay. Bye then.

[Bijan Mossavar-Rahmani]

Thank you. Bye-bye.