Polaris Infrastructure Inc

TSX:PIF

Earnings Call Transcript 2020-Q1

[Operator]

Thank you for standing by, and welcome to the Polaris Infrastructure Inc. First Quarter 2020 Earnings Call. [Operator Instructions] I would now like to hand the conference over to Anton Jelic, CFO. Please go ahead, sir.

[Anton Jelic, Chief Financial Officer]

Thanks, Sheryl. Good morning, everyone, and welcome to the 2020 Q1 earnings call for Polaris Infrastructure. In addition to the press release issued earlier today, you can find our financial statements, MD&A and earnings press release on both SEDAR and shortly on our website at polarisinfrastructure.com. Unless noted otherwise, all dollar amounts referred to are denominated in U.S. dollars. I'd also like to remind you all that comments made during this call may include forward-looking statements within the meaning of applicable Canadian securities legislation regarding the future performance of Polaris Infrastructure Inc. and its subsidiaries. These statements are current expectations and as such, are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties include the factors discussed in the company's annual information form for the year ended December 31, 2019.I'm joined this morning, as always, by Marc Murnaghan, Chief Executive Officer of Polaris Infrastructure. As well, before I begin, I would just like to share Polaris' hope that all of you are managing through these unique circumstances and trust you and your families are staying well during these challenging times. At this point, I will walk through our 2020 Q1 financial highlights and then comment on our recently paid quarterly dividend, after which, I will return the -- turn the call over to Marc for additional commentary.Power generation. Consolidated power generation for the 3 months ending March 31, 2020 and 2019 were 182,408 megawatt hours and 147,602 megawatt hours, respectively. These production figures are all net of debt plant downtime, both planned and unplanned. With respect to Nicaragua, we saw total megawatt hours of 135,344 in the first quarter of 2020 versus 138,823 in the same period in 2019, just slightly down.In Peru, total megawatt hours for the 3 months ending March 31, 2020, were 47,064 versus 8,779 in the 3 months ending March 31, 2019.Revenue. We reported revenue of $20.3 million for the 3 months ending March 31, 2020, compared to $18.6 million in the same period last year. On a year-over-year consolidated basis, we realized $1.7 million additional revenue driven by an additional 17.5 megawatts net production in Peru, notwithstanding previously reported incident at the end of February at El Carmen that is being repaired and that Marc will address further in his comments.Net earnings. We recognized earnings attributable to us of $4.4 million for the 3 months ending March 31, 2020, compared to the $3.4 million for the same period in 2019. The $1 million increase in earnings was driven primarily by the increase in revenue, coupled with the increase in other gains and losses recognized in the period and partly offset by the addition and depreciation charges due to the Generación Andina facilities coming online.Adjusted EBITDA. On a quarter-over-quarter basis, adjusted EBITDA increased to $17 million from $15.7 million, principally as a result of the $1.7 million increase in revenue, partly offset by a $0.2 million increase in direct costs recognized during this period.Cash generation. Cash flow from operations during the 3 months ended March 31 increased by $0.8 million to $11.6 million from $10.8 million due to the increase in revenue, coupled with lower interest paid when compared to the same period in 2019, partly offset by increase in direct costs.And finally, dividend. I would just like to note that we intend on paying our 17th consecutive quarterly dividend on May 29 of $0.15 per share to shareholders of record on May 15. This continues the Board and management's commitment to regular positive distributions to shareholders of Polaris.With that, I will turn the call over to Marc, who will elaborate on current business matters as well as on our year-end -- our quarterly results, apologize. Thank you.

[Marc Murnaghan, CEO & Director]

Thanks, Anton. So I'm going to just make some comments here. So the first thing I would say in terms of the dividend, the payout ratio, in the quarter, we had sort of cash available for distribution of around $9.3 million on an actual basis, the way that we calculate it, but that doesn't include certain items that you would, call it, normally accrue for that would happen in other quarters. So I think that number is closer to 7.5% if you accrue for those items. So which means the payout ratio has certainly been in the low to mid-30s, which I still think is quite conservative for the quarter. I would -- one thing that I did want to mention here, which is interesting, is we did have a small savings in the quarter on our interest costs of about $120,000 on a apples-to-apples comparison basis from Q4 to Q1, it's not huge, but it's a small benefit. And we'll see where this current quarter ends up, but the calculation is of March 15 to June 15. Calculations to when we put the pain in the interest rate for our senior debt at San Jacinto, this is what I'm talking about right now. But if it stay where it is, we're getting the savings that actually start to be reasonable between sort of $400,000 to $500,000 a quarter. Now that's not going to bump your EBITDA line, obviously, but it is a reasonable quarterly improvement in your cash flow, given the fact that LIBOR has come down pretty significantly since the end of the year.Major maintenance. So at San Jacinto, we normally -- where we had planned to do major maintenance in April of this year, given COVID that obviously couldn't happen. It's actually not a -- there are certain parts that you need, spare parts, but it's more of a personnel issue. We have technical people coming from Japan and actually Colombia. The latest is, given that, if things do open up, we're hoping to do it in July. That's what we've been discussing with Fuji. But I would put that at a coin toss because July does seem close. And so the other date that we're talking about is November.The reality is, as soon as things truly open up and technicians can fly, we'll try to schedule it, but it's going to be hard to really give anybody guidance on that at this point. All we can do is, I think once we have confirmed when it's going to be, we will, in some form, communicate that with the market. Just because that does naturally have a negative impact on that quarter. So we'll try to make sure that the market knows when that's going to happen. But that -- this is something that we can easily wait. This is not -- there's no urgency to do that right now. So it is something that can be postponed for a period of time.I will want to mention El Carmen. So as people know, it was February 25, we had an incident, it's been out of service since then. El Carmen is the 8-megawatt plant in Peru. We had originally targeted, call it, sometime in May to have it back in service. That is now looking like early July. There's just certain impacts of the lockdown in Peru that we cannot avoid. For instance, there's people who are set to go to site. There's different -- again, different technical people that need to go, but now the rule is that they need -- they can go, but they need to be quarantined for a period of sort of 8 to 14 days. So there's just certain things we can't avoid. So that's looking more like early July and now to be back in service.We did get the proposal from the insurance adjuster for an initial advance of $550,000, which is some combination of insurance for cost repairs, but also for lost revenue. So at least contractually, we are covered for both of those. And it's looking okay on that front so far, and we'll hope to provide more updates on how that ends up, not just getting in service, but obviously, how the insurance comes in, in terms of that coverage, which is obviously very important.In terms of the Peru contribution, it was around $1.5 million in terms of EBITDA for the quarter. It would have been, call it, about -- based on how El Carmen was producing up until that point, it probably would have been more like $1.75 million for the quarter. And in terms of -- it is early, given that it's only been a quarter, really, that Q1 normally would be a good quarter relative in terms of the rainy season versus the dry season. So typically -- and now I'm talking calendar. So Q1 and Q4 would normally be the best quarters, Q2 less and then Q3 is normally your low quarter. That's the dry season. I would say that we would be -- our availability because 8 de Agosto which is a 20-megawatt plant was put into operation literally December 25. So it just started, and our availability for the quarter was around 82%. And normally, it should be sort of mid- to high 90s once you've kind of worked out all the teething issues. So I would say that the quarter assuming you're back at, call it, once you get to which we seem to be now in terms of -- April was 95% availability in terms of the plant operations. So I would say Q1 was -- it's probably representative of a year in the sense that those teething issues kind of offset the fact that it was the rainy season. So that's sort -- they sort of balance out.Now Q2. Given that El Carmen is not going to be in operation now until Q3, that will be negatively impacted, and it's probably going to be in the $500,000 range -- $500,000 to $750,000 for the quarter based on El Carmen being out of service for the whole quarter. So that's sort of the operational comment. I think the main sort of where we are as a business comment is that other than the El Carmen, I'd say the other 3 plants have been operating quite well. Things are -- we've maintained very good production. We have taken measures to ensure operations given that we are an essential service, and it's very important that we keep running. So that's been very good. And we continue to have measures in place to ensure the safety of the operators and the continuity of the operations.In terms of growing the business and moving forward, I would say that there's, for sure, delays because there are things we can do in terms of analyzing even legal documentation that we have already been working on. So you can do a lot of that remotely. But it for sure delays it somewhat. And it's hard to comment exactly when, but we do want to see some -- at least travel restrictions start to lighten up to be able to, what I would call, truly execute. We can move the pipeline forward and continue to get that pipeline moving, and we can -- but in terms of executing on it, it's going to be somewhat delayed. So it's hard to comment specifically as to what that means until we see how the world opens up here. But what I would say is I think the net -- the net-net is it's likely going to be a bit slower, but the niche that we're looking in, I think the economic opportunity is going to be better given the shakeout of all this. So the opportunities we're looking at typically, we're looking for capital, looking for partners, and I think that's going to just get harder here. So I think we are positioned quite well to take advantage of that in the next, call it, 3 to 6 to 9 months. So that's it for my comments, so we can open up for questions now.

[Operator]

[Operator Instructions] Our first question comes from David Quezada from Raymond James.

[David Quezada, Equity Analyst]

My first question here, just a quick clarification, actually. The $500,000 to $750,000 you mentioned, was that the -- was that the effect of El Carmen not running during the quarter?

[Marc Murnaghan, CEO & Director]

Yes, yes.

[David Quezada, Equity Analyst]

For 2Q?

[Marc Murnaghan, CEO & Director]

Yes. So it was just -- just to clarify that, was that in Q1, we had it for basically up until Feb 25. So it depends on what you're comparing it to. But -- so for Q1, we kind of lost about 250 to 275 in revenue, call it, already.

[David Quezada, Equity Analyst]

Okay. Okay. Got it. And then sticking with El Carmen, maybe just -- is there any more detail you can provide on where the repairs are? Like when you get the technicians back on-site in July, is there a fair amount of wood still to chop there? Or is that -- are you pretty close to being complete?

[Marc Murnaghan, CEO & Director]

No. We're -- I mean because it happened sort of end of February, the first part was literally clean up, got done. And then because what happened is we had literally water and mud get into the turbine house, we had to open up the generator, the turbines, the electrical equipment, the monitoring equipment, et cetera, and basically dry it out. And then you clean it and then you got to run test, et cetera. So we've done everything up until -- we actually have done tests on the generators. They're fine, same with the turbine. So everything on that part, like the cleanup was probably -- in terms of time, that's long because it's just opening things up and making sure they dry out before you can start running diagnostics on it. So that part is basically all done. And now it's sort of what I would call that there are some small similar works to repair the site, both on the hill, just some cleanup there and actually replacing the valve that was ruptured. So -- and we're actually just moving it like literally 1.5 meter. So -- but that needs technical people. So that we don't see as really a lot of time. And so I don't think the risk to that is big in terms of it's not a lot of time to do that. We just got to get people there.

[David Quezada, Equity Analyst]

Right. Okay. Great. That's helpful. And then maybe just at San Jacinto, the -- since you're delaying the maintenance, is there -- I know we've talked in the past about some of the lower CapEx items that you could do there. Is there any chance that you could bundle those? Are you still considering some of those items or maybe putting those on hold considering you can't even get people to the site just yet?

[Marc Murnaghan, CEO & Director]

Yes. Those are all -- it's on hold, for sure. So it's -- our actual -- actually, I didn't even look, I apologize, at this number, but I don't know what our CapEx number was for Q1 at Santa Jacinto, but it would be very close to 0, like in the hundreds of thousands. So probably $250,000 to $300,000. And I think we'll keep it -- there's not much else we can do.

[David Quezada, Equity Analyst]

Okay. Great. That's fair enough. And then just maybe 1 last 1 for me. If you do see that maintenance extend out to November, and I appreciate that you mentioned that it's something that can easily be deferred, will you see a little bit of an impact on capacity or the net generation that you expect there, the longer it runs? Or is it -- any thoughts there?

[Marc Murnaghan, CEO & Director]

You mean in terms of before then or during?

[David Quezada, Equity Analyst]

So I guess, I mean, as you lead up to it, would you expect the facility to not run as efficiently because you still need to do the maintenance?

[Marc Murnaghan, CEO & Director]

No. No. I think it's a good -- actually, it's a good question because what we did do is that there was one piece of maintenance that we do. There are certain things that you try to time it, right? So that aren't necessarily the turbine maintenance, but there's other maintenance that requires you to shut down parts or one of the turbines. And so the one thing that -- was cleaning out the condensing units on our -- 1 of the 2 units. We did do that about 3 weeks ago. Because that was the 1 component that we didn't want to wait because that does affect our basically efficiency of converting steam to megawatts and the concern was that, that could worsen. And so that was, call it, a 24-hour shutdown of one of the turbines in Q2. But that's the only one. That's the only one that we see.

[Operator]

Our next question comes from Mac Whale from Cormark.

[MacMurray Davidson Whale, Analyst of Institutional Equity Research]

I think my questions have been answered, but I was wondering, Marc, if you could -- with delays on development, do you see any change, like does it impact your development costs of those projects at all? Like do you end up spending like materially more because things are sort of 6 months delayed as you're doing that work? So you might be able to get the work done. You still see the opportunities, but the delay actually makes everything a little bit more expensive. Is that possible?

[Marc Murnaghan, CEO & Director]

I'd say absolutely possible. So for instance, the key one we're looking at, we've been working with, call it, the partner there, let's just call it the partner to do a full assessment of that, exactly that issue, I see one of the big risks being -- because we're seeing at El Carmen, there's 2 key things. You have local providers of both services and parts, but that's never 100% one of these projects. So you need international providers of services or parts. And parts seem to be okay in terms of cargoes moving, for sure, maybe some slight delays, but we're not really seeing much there. It's really the people, whether it's a turbine technician, a generator technician. So even like the penstock -- the tubing for the penstock is pretty technical. So that's where -- so we -- those conversations are happening as we speak in terms of every one of the areas of a project is, okay, what is that risk? And is there anything we can do? Or are you just subject to hoping that the restrictions don't either stay or get worse?So I would say that we are absolutely worried that, that there is cost overrun risk on these. It's hard to quantify how much. And I would say that we're going to do everything we can to kind of understand what the risks are. If we have to air on, let's say, waiting 3 months versus starting something, we're likely going to wait 3 months. I think the nice thing is, now we've got -- we don't need to rush a project by 3 months and take the risk. So that's at least the thinking now is, there's stuff that we can probably technically start in the next month. But I think we're just going to have to wait and see to make sure that when you mobilize, you feel very comfortable that you've really done the analysis, but that things are working.

[MacMurray Davidson Whale, Analyst of Institutional Equity Research]

Right. Okay. Okay. Now do you -- have you changed how perhaps you screen for projects? Let's suppose you -- say, you're developing some projects, there's some delays. So you can kind of put it off to the side a little bit. Do you then say, well, let's build up a pipeline, let's advance things that are really early stage? Have you started getting to the point where you say, well, you know what, if we expect some delays, let's go in further up the pipeline and get some work done on that? Like is that -- like I'm just wondering how you're managing that? Like -- because you don't want to get in a situation where you just pushed everything off. Perhaps there's a way of utilizing that kind of downtime, if you will, on the stuff that's not immediate, like, yet. You know what I mean.

[Marc Murnaghan, CEO & Director]

Yes. I mean and that's basically where we're living right now. And I would say, easy -- right now, it's easy to fill up the top part of the funnel with opportunities. And we are doing that. So you absolutely can go through data rooms and even have technical people reviewing designs and we can review numbers. So that is all happening. And even on the ones that are, call it, you're getting ready to stay at the bottom of the funnel that you want to execute on, you might delay the real sort of full mobilization a little bit. But you're spending this time sharpening your pencil on how you're going to execute it. So there are things that you can do. So for instance, this is one of these ones. It was okay. Well, let's take a look at the designs; spend, call it, small dollars with an engineering firm. We've made some tweaks, very minor in terms of dollars, but I think some very good improvements in the design. So you're doing that. We've even -- the team in Nicaragua is looking at the social program in conjunction with the people on the ground there. And we've made edits to it, and we think we've improved it. So you are spending the time, I think, increasing your likelihood of execution at 100% once you mobilize.

[MacMurray Davidson Whale, Analyst of Institutional Equity Research]

Okay. Yes, I understand what you're saying. Okay. So in some respects, would you think that the net is a positive in a sense that, because I know it seems that there was a lot of things coming your way. And I could imagine when you were looking at them a year ago, without having El Carmen, like the 2 assets that you guys were responsible for bringing online, those weren't online yet, and you hadn't gone through a ramp-up with your own built assets. I would imagine this actually, you're probably feeling more comfortable with the way you develop this next set of projects, given what you've been through and been forced to sort of slow down, if you will. Is that fair?

[Marc Murnaghan, CEO & Director]

Yes, that's very fair. But we had -- in Peru, we did have a time line, which was a bit of a gun to our head, right? And so we were kind of launching and doing certain designs, a redesign on the fly, we're not going to do that this time, right? So there is -- so I would say the net -- it's both the execution, but I do see just some of the opportunities we have been looking at, I really -- that -- let's just call it -- say, if there is a bid-ask spread, I think that's going to close as well. So just there's the execution, but also I do see opportunities becoming better for us. That might take a couple of months for it to really happen, but I think it is going to happen.

[MacMurray Davidson Whale, Analyst of Institutional Equity Research]

Yes. I was going to just add that I would imagine your ability then to argue with some -- if someone you're buying a project off, who's less sophisticated or experienced as you are, you can actually now go in and articulate why your offer is the way it is because you know what those risks can be. Like you know that you can't -- there are certain things you just don't know how it will turn out, but you certainly know it's something to be concerned about, whereas I think 2 years ago, you didn't really have that ability. So I'm wondering of how you're positioned -- yes, like how you're positioned. You're seeing new opportunities, and you probably are feeling more confident in your ability to bring those -- like to get the returns you're aiming because all of this is coming down to the fact that you're -- you see a return and the risk is, are we missing something? And is our return actually a lot smaller?

[Marc Murnaghan, CEO & Director]

Yes. So I think the ability to get the returns we want has gone up and is going up. And those are the -- in the long run, those are the bigger positives. I think the only negative is we might have to wait 3 months to -- not to actually, for instance, highlight to the market what we're doing. But in terms of when you mobilize, it might take an extra 3 months than our original plan. But in the long run, I think the returns are going to be more achievable.

[MacMurray Davidson Whale, Analyst of Institutional Equity Research]

Okay. And just lastly on -- just on San Jacinto, are you -- what's the latest thinking on decline rate there? Any changes at all? Or does everything look -- like the oscillating, I imagine, is still a factor, even though it wasn't as bad this quarter, just I'm wondering if you see anything different there at all?

[Marc Murnaghan, CEO & Director]

No, not really. I mean I think this Q1 was, like, again, we did about 60 Q3, 60 Q4, 62 net. I don't -- I think that was just because it was almost perhaps abnormally low cycling, but that was really stable. I think that sort of 60 is probably the good number, at least for this year. That's what we're seeing. Very stable. It's -- yes, I think that's a reasonable number to look at. And it's still -- it kind of ties in with the numerical model that was done a year ago now. It's in agreement with that.

[Operator]

[Operator Instructions] Our next question comes from Naji Baydoun from Industrial Alliance.

[Naji Baydoun, Equity Research Analyst]

Just wondering, as you're working through that pipeline of investment opportunities that you have ahead of you, I'm just wondering if you can quantify the magnitude of what that looks like, let's say, over the next 12 months, how much of that pipeline would you place in a high probability of execution bucket?

[Marc Murnaghan, CEO & Director]

Again, I think of it in terms of sort of a funnel analogy, there's sort of 20 at the top, coming in 7 to 10, where you're seriously working. And then I'd say there's sort of 3 to 4 that get through that phase, that actually, we could likely move ahead if we wanted to, as opposed to -- we're the gating item, not the other side. And that would all be in the next 12 months, I would say. And then there's likely one that's at sort of execution phase right now.

[Naji Baydoun, Equity Research Analyst]

And is that maybe just the range would be -- would be helpful. Is that a 10, 20, 30 megawatt type of opportunity?

[Marc Murnaghan, CEO & Director]

Yes. Given our balance -- given, call it, our free cash flow less our dividend, we do think that there are sort of other nonequity type -- given our overall debt-to-EBITDA is quite low now for a company like this, we do think that there might be some other sort of financing available. But when you kind of put all that into the mix, it is, you're looking at anywhere from 5 to 25 -- sorry, 5- to 30-megawatt type projects, typically? Yes. Because that's sort of the equity requirement that gets spit out, right?

[Naji Baydoun, Equity Research Analyst]

Right, okay. So similar type of projects that you would have been looking at before? Maybe just if we can get your latest thoughts on the Peru development prospects, maybe specifically Karpa, but happy to also hear about some of the other development assets that -- from the UEG acquisition. I know -- have you given some thoughts to maybe potentially monetizing some of these assets if you're not expecting to develop them anytime soon? Or would you prefer to hold on to them for now and maybe slowly work your way through that portfolio over time?

[Marc Murnaghan, CEO & Director]

Yes. I mean there's not a big cost to holding on to them. So we're more in the -- let's hold on to them mode, and when the market is there for more auctions, I think it's quite easy that -- for us to be bidding in. What you want to do is get them to PPA. And then if you're going to monetize, that's a better time to do it than now, I think, one specific one would be Karpa. The issue with that one is that the time has just kind of passed on its PPA. So we're in the process of trying to get our bond back, which is $4.75 million. So we are specifically trying to monetize that one. The issue is -- just the dynamic we see is that those are more greenfield projects, whereas we're seeing later-stage opportunities in that funnel I was talking about, which are more sort of either operational or brownfield, where capital has been spent that are further along than our greenfield pipeline. So we would prefer to put capital there that's outside our pipeline, but we think it's just a better risk reward. And then in maybe 2, 3, 4 years, we'll be able to either develop or monetize our own pipeline that we have. But that's, I'd say, a little bit on the back burner right now.

[Naji Baydoun, Equity Research Analyst]

Okay. That's helpful. I know it's probably not a major focus today, but just thinking about maybe any refinancing opportunities in the portfolio going forward?

[Marc Murnaghan, CEO & Director]

Yes. It's at the front of our mind. It's just -- and there's -- things were progressing, I'd say, nicely up until March. And then it's just that has to be revisited as soon as we can, but we do need this to clear up. And then we think we're going to have in Nicaragua a pretty interesting package for that. And that's what we're working towards. But I think that's a Q4 type thing now because it's going to take some time, not just to kind of get in front of people, but for that market to be opening up, again, to look at those types of deals?

[Naji Baydoun, Equity Research Analyst]

Right. Okay. So still on the table, just a little bit delayed there. So it's not really yet -- sorry, go ahead.

[Marc Murnaghan, CEO & Director]

Yes. No, it's absolutely there in terms of discussions with, call it, internally within Nicaragua and also with, call it, a few financial advisers, but I think it's -- that's end-of-year type thing. And then it would be quite big. If we do that, that would be a big -- kind of a big impact for us, but it's just I can't promise sort of how soon that we can really get going on that.

[Naji Baydoun, Equity Research Analyst]

Yes. No, that's helpful. Maybe just last question on the dividend. I guess now that Peru projects are done, notwithstanding what's going on at El Carmen, has your process or approach to the dividend policy or the payout changed at all?

[Marc Murnaghan, CEO & Director]

No. I think -- don't forget, one thing with the Peru contracts that is unique to Peru is that they have a May 1 to April 30 sort of year for their power sector. Anything before May 1, basically from your COD to then, so in just in your first year, you don't -- you're earning the full PPA price, but you're only getting paid spot, which is much lower than the PPA price right now. So until basically, and we won't really even get paid, the May until, call it, first week of July sort of thing. So our actual cash flow situation -- and we earn all that back. By the way, we're earning it, and then you get paid sort of in the following 12 months, but it's really not going to just -- so Q3 that our cash flow position will change. And then I'd say that would be when we're really going to be assessing that as opposed to, obviously, Q1, but even Q2. We'll assess it. I think the interesting dynamic though is I still -- I believe that the pipeline of opportunities is going to get better in the next 3 to 6 months. And so that will be the counter. So we're going to have more free cash flow, but the counter is we'll likely have more opportunities as well. So that will be the tension.

[Operator]

And our next question comes from [ Alan Azanson ] from GreenFire.

[Unknown Analyst]

Yes. And congratulations on an excellent quarter. Just a couple of questions. First, any plans to drill any wells over the next 12 months in Nicaragua?

[Marc Murnaghan, CEO & Director]

There is no plans. What we're, I would say, slowly coming back around to is that -- and we've had conversations with lenders and I wouldn't even say in the next 12 months, but maybe the next 24 to 36, to the extent we want to improve production there, we do think, call it, a binder unit, it's not a fully maximized binary unit it, but like, let's say, 7 or 8 megawatts instead of 12. And there's the reason for that. But as I sit here today, I think that would be the next thing. If we were to increase any capital spending there, it would be that as opposed to drilling more wells. I think it's lower risk for sure. But also, we do think the field has reached sort of a level of stabilization, and we prefer to go a binary unit, if we do anything.

[Unknown Analyst]

Okay. Follow-on question in terms of -- you've now established a pretty successful track record on developing these smaller projects in country. Yet the market is not giving you any type of multiple as a developer, particularly with the pipeline that you can't attract. What plans do you have to try to move that ball along the side, some of your other competitors with much less EBITDA and much more pipelines are getting outrageous valuations and I still see there's kind of stuck in a very low range in terms of a multiple.

[Marc Murnaghan, CEO & Director]

Yes. So I think the best way is to: one, we can continue to do things within our own free cash flow. And then the other is we are looking to try to either partner with people, strategic or financial, to continue to grow the business outside of the market and then -- which I do think will help the public market. And then if it doesn't, then there are other ways to try to collapse that gap. I don't think, from my perspective, we're not at the point of saying, okay, let's crank up the dividend, let's start buying back stock yet. And part of the reason I say that is before the COVID, we were actually getting traction in the market and part of that was ESG interest. And I do think that will come back. So -- and it also requires me pounding the pavement and being in front of people. So I think the combination of that took us from $11 to $17. And I'm hopeful that, that will come back. I just need to be in front of people. And I also think we can deliver not just stuff in the pipeline, but some -- call it, the market -- we need to show the market that we can actually grow the business without coming to the market, and that's what we're going to do.

[Unknown Analyst]

Yes. No, that's an excellent answer, Marc. The only thing that I puzzle on is the strategy of kind of reaching with the smaller incremental projects, which significantly adds to your cash flow and minimizes delays and et cetera. I'm just wondering if you partner and reach for a larger one, whether that allows -- gets the market attention is the best way to phrase it.

[Marc Murnaghan, CEO & Director]

Yes. So I think it does. I think it is -- there's just -- there's a limit at, call it, $12. And to be clear, we have some very interesting ones that would absolutely be attention-getters that are bigger than the ones I've talked about, where you would need to either partner or you having to do some form of, call it, less dilutive preferred share financing? And so that is there. And we are -- so I agree with you in terms of getting the attention. I think -- but I think, we'd like to get back to that world of '16, '17, '18 because there are limits in terms of what you can do in terms of going after these opportunities and financing it in a way that has absolutely nothing to do with your share price?

[Unknown Analyst]

Yes, it's not accretive at the current price. I can understand that. And have you looked at the NRCan $750 million fund that the federal government announced? And it's specifically to partner with green initiatives, it's not restricted to Canada, and they are handing out big checks.

[Marc Murnaghan, CEO & Director]

That one specifically, no.

[Operator]

And that concludes the questions at this time. I'll turn the call back to management for closing comments.

[Marc Murnaghan, CEO & Director]

No, go ahead, I'm done.

[Anton Jelic, Chief Financial Officer]

Yes, thanks, everyone, for joining today. Stay safe, stay well. And hopefully, the world will return to normal sooner than later. Thank you.

[Operator]

Thank you for joining us today. This does conclude our call, and you may now disconnect.