Pembina Pipeline (PBA) Q1 2025 earnings call transcript

Thank you, Joelle. Good morning, everyone. Welcome to PEMBINA's conference call and webcast to review highlights from the first quarter of 2025. On the call today, we have Scott Burrows, President and Chief Executive Officer, and Cameron Goldate, Senior Vice President and Chief Financial Officer, along with other members of PEMBINA's officer team. I would like to remind you that some of the comments made today may be forward-looking in nature and are based on PEMBINA's current expectations, estimates, judgments, and projections.

Forward-looking statements we may express or imply today are subject to risks and uncertainties, which could cause actual results to differ materially from expectations. Further, some of the information provided refers to non-GAAP measures. To learn more about these forward-looking statements and non-GAAP measures, please see the company's management's discussion and analysis dated May 8, 2025, for the period ended March 31, 2025, as well as the press release PEMBINA issued yesterday, which are all available online at PEMBINA. com and on both Cedar Plus and Edgar. I will now turn things over to Scott.

Thanks, Dan. Yesterday, we reported our first quarter results, which were highlighted by quarterly adjusted EBITDA of $1.167 billion. This is a very strong start to the year and builds on the momentum from a record year in 2024, providing confidence in our full year outlook. As Cam will discuss in more detail, we are currently trending towards the midpoint of our 2025 adjusted EBITDA guidance range, $4.2 to $4.5 billion. Given the growth across PEMBINA's low-risk, fee-based business, and confidence in the outlook for 2025 and beyond, we were pleased to yesterday announce a $0.02 per share, or 3% increase, in the quarterly common share dividend, beginning with the dividend to be paid in June. We recognize the importance of our sustainable, reliable, and growing dividend to our shareholders, and we are proud of our long track record in this regard.

On the commercial front, PEMBINA has entered into commercial agreements with the leading Lottany producer covering PEMBINA's full value chain, including transportation, fractionation, and marketing services. The agreements include significant new and extended long-term taker pay volume commitments on PEMBINA's Peace Pipeline, Pusco Pays Systems, and Northeast BC Pipeline. The new and extended fractionation agreements are expected to support higher utilization of PEMBINA's red water complex, including RFS-4, currently under construction and the proposed RFS-3 deethanizer, if sanctioned. Additionally, the process to remarket PEMBINA's capacity on the CEDAR LNG project to third parties continues to progress well. We have now shortlisted the preferred counterparties and entered definitive agreement negotiations. PEMBINA continues to advance several in-flight construction projects to capitalize on growing WCSV volumes, diversify end market exposure, and serve our customers better.

PEMBINA has built a strong competitive advantage by effectively delivering projects safely, on time, and on budget. Further, we believe that recent and current expansions have been and continue to be executed with superior capital efficiency compared to others in the industry. In addition, PEMBINA is progressing development of more than $4 billion portfolio of potential projects that includes conventional pipeline expansions such as the Taylor to Gordondale project, an expansion of the Peace Pipeline system to add capacity to the market delivery pipelines from Fox Creek to the Mayo, and further expansions to support volume growth in Northeast BC, including new pipelines and terminal upgrades. While reiterating their commitment to their Path to Zero project, Dow recently announced the delay in construction of the project to manage capital allocation in light of current market conditions and economic uncertainty.

At this time, other than changing the in-service date of Dow's project, the announcement delay has no impact on PEMBINA's ethane supply agreement and the development of potential infrastructure to meet its commitments. To date, PEMBINA has not spent material capital to support the ethane supply agreement and will continue to progress these projects, but may now have more time available to execute them. PEMBINA is evaluating the various options available to meet its Ethnian Supply Commitment under the agreement with Dow, including the addition of a deethanization tower at RFS III within the Redwater Complex.

Regarding Alliance Pipeline and ongoing Canadian Energy Regulator review process, Alliance is working collaboratively with its stakeholders and remains focused on delivering the highest standards of service that customers have come to expect. Based on discussions to date, PEMBINA expects lower future tolls on the Canadian portion of Alliance, reflecting a negotiated solution that continues to benefit both PEMBINA and the Alliance shippers through an equitable sharing of value and risk. We expect PEMBINA will continue to earn appropriate risk-adjusted returns, while shippers will continue to benefit from Alliance's firm capacity, high reliability, and cost-effective access to premium U. S. natural gas markets. I will now turn things over to Cam to discuss in more detail the financial highlights for the first quarter.

Thanks Scott. As Scott noted, PEMBINA reported first quarter adjusted EBITDA of $1.167 billion. This represents a 12% increase over the same period in the prior year. In pipelines, factors impacting the quarter primarily included a higher contribution from Alliance due to increased ownership following the Alliance's Sable acquisition, favorable U. S. foreign exchange rate, higher tolls mainly related to contractual inflation adjustments, Higher contracted volumes on the NIPC pipeline and the Peace Pipeline system. Higher contribution from Alliance due to higher demand on seasonal contracts. And lower firm tolls on the COSHABIL pipeline due to the contracting that occurred in July of 2024. In facilities, factors impacting the quarter included the inclusion of Oxable following the Alliance Oxable acquisition and higher contribution from PGI primarily related to the white cap and variant transactions, largely offset by lower interruptible volumes at Dawson due to third party sales gas restrictions.

In marketing and new ventures, first quarter results reflected the net impact of higher net revenue from contracts with customers due to increased ownership interest in AUXABLE, higher WCSB NGL margins and volumes, lower realized gains on commodity-related derivatives, lower AUXABLE NGL margins, and no similar gain to that recognized in the first quarter of 2024 from a change in the provision related to PEMBINA's financial assurance.

Finally, in the corporate segment, first quarter results were lower than the prior period due to higher incentive costs driven by the change in PEMBINA share price and relative performance to peers in the period compared to the first quarter of 2024. Earnings in the first quarter were $502 million. This represents a 15% increase over the same period in the prior year. In addition to the factors impacting adjusted EBITDA, the increase in earnings in the first quarter was primarily due to the net impact of higher depreciation and amortization expense, largely due to the Alliance Oxable acquisition. Unrealized losses recognized by PGI on interest rate derivative financial instruments compared to gains in the first quarter of 2024. Higher unrealized gains on commodity-based derivative financial instruments recognized by PGI.

Lower unrealized losses on renewable power purchase agreements and crude oil-based derivatives. Unrealized gains on NGL-based derivatives. Unrealized losses on interest rate derivative financial instruments recognized by CDER LNG. Higher income tax expense, higher net finance costs, and lower interest income. Total volumes in the pipelines and facilities divisions were 3.7 million barrels of oil equivalent per day in the first quarter. This represents an increase of 9% over the same period in the prior year, reflecting the net impact of the Alliance Oxable acquisition, higher contracted volumes on the Nipsey pipeline and the Peace pipeline system, higher volumes of PGI related to the Whitecap and variant transactions, and lower interruptible volumes at Dawson due to third-party restrictions. Thanks to strong results in the first quarter of 2025, PEMBINA generated meaningful free cash flow in the quarter, which was allocated to strengthening the balance sheet.

Turning to the full year, as Scott mentioned, we are confident in our outlook and currently trending towards the midpoint of our 2025 adjusted EBITDA guidance range of $4.2 billion to $4.5 billion. Notably, the guidance range reflects the following full year and quarterly or seasonal assumptions. PEMBINA continues to see rising utilization on its conventional pipeline systems and at PGI that aligns with volume growth across the Western Canadian sedimentary basin. However, in 2025, PEMBINA's revenue volume growth within the conventional pipelines and gas processing assets is expected to be slightly lower than physical volume growth as certain customers expand into their contractual take-or-pay commitments. We expect a higher contribution from Alliance in the first and fourth quarters due to the ability to transport higher volumes during colder periods.

Further, the current guidance assumes the existing Alliance toll is in effect for the full year. For the second quarter, our outlook assumes planned maintenance at Oxable and Lyons, certain PGI facilities, and the Redwater complex, as well as restrictions on third-party natural gas egress within the basin. We expect the third and fourth quarters will have higher integrity and geotechnical costs across the conventional pipeline assets, and we expect stronger first and fourth quarter results in the NGL marketing business due to typical seasonality. Additionally, while marketing results in the first quarter exceeded PEMBINA's original guidance expectations, this has been offset by the outlook for the remainder of the year, which reflects lower commodity prices due to global economic uncertainty.

As a result, PEMBINA's full-year adjusted EBITDA outlook for the marketing and new ventures division of $550 million remains unchanged. PEMBINA does not expect any material impacts to its guidance from tariffs on U. S. energy imports. At March 31, 2025, based on the trailing 12 months, the ratio of proportionally consolidated debt to adjusted EBITDA was 3.4 times, and we expect to exit 2025 at 3.4 to 3.7 times. Our leverage remains well below the low end of our targeted range, reflective of our strong balance sheet and supporting a strong BBB credit rating. I will now turn things back to Scott.

Thanks, Cam. In closing, I want to remind you that PEMBINA will hold its annual meeting of shareholders today at 2 p. m. Mountain Time, 4 p. m. Eastern Time. It will be a virtual-only meeting conducted via live audio webcast. Participants are recommended to register for the virtual webcast at least 10 minutes before the presentation start time. For further information on the annual meeting, please visit the Investors tab at www. pemina. com. Thank you for joining us this morning. Please go ahead and open up the line for questions.

Morning, Jeremy. Thanks for the color today. I just want to kind of start off with maybe a bit more color On your producer customer conversations at this point in how you see, I guess, drilling activity shaping up and you know should a WTI be going below 60 staying there for some period of time, how in corresponding moves in condi prices, how you think that impacts. Montany production and your your outlook here, you know, granted PEMBINA has material contractual protections, but just wondering any thoughts you could share there. Yeah, Jeremy, it's Scott. I'll start off and make some comments, and Jarrett might chime in as well. But I would say, to date, we haven't seen any material changes to drilling plans.

I would say we have seen, you know, in the last couple days, a couple producers start discussing about moving completions into Q3 and Q4. So I would say we are starting to see some timing of completions but overall reductions of CAPEX to date we really haven seen that Got it Thank you for that And then maybe shifting over to alliance if I could and recognize that you in a place where you can only say so much at this juncture but is it fair to kind of characterize I guess the range of outcomes at this point is relatively minor within the grand scheme of PEMBINA as far as what unfolds in the Canadian process here And do you see, I guess, on the US side, similar things materializing or any other color would be helpful?

Thanks.

Morning, Jeremy. Jared here. And yeah, I appreciate you mentioning that we are obviously limited in what we can say. But what I can reassure you, Jeremy, is that our customers continue to reiterate they enjoy the high reliability availability of the Alliance asset. They enjoy the high value end market delivering into the Chicago area. I will now turn the call over to the PEMBINA. And they really value the risk sharing aspect. You know, obviously PEMBINA takes a material amount of operating cost risk. We believe we're a good, safe, reliable operator. And they do appreciate that with respect to that asset. On the Canadian side, that's unlike any other of the major gas transmission pipelines in Canada.

Additionally, we heard from our customers that they do not want us as part of the negotiated settlement to move to a cost of service model like a true traditional cost of service model. So with all that said, you know, we continue to work with them expeditiously to, you know, get to a negotiated settlement that we can get into the Canadian energy regulator as quickly as possible. You know, that ultimately will provide PEMBINA with that risk-based return. And that's unfortunately, that's all we can really say right now due to the active aspect of those negotiations.

You bet. And then on the U. S. side, Jeremy, so I believe it's December 1st of this year, we'll be submitting It's roughly every five years we have to submit our information to the FERC, and that's coming up, I believe, December 1 of 2025.

Yeah, Jeremy, I would say that a couple things. One is that you've certainly seen us do that over the course of time on a targeted basis. Obviously, we very successfully leveraged the PGI relationship to add some really exciting opportunities there over the past year or so. I would say that in terms of capital allocation, obviously, it's a pretty dynamic environment right now, and we're obviously monitoring things in real time. But at the same time, we always stand ready to make our business better as opportunities present. I would say that the prospect for big game hunting is not something we're focused on, But certainly, you know, the smaller value add opportunities, if they come about, you know, we're certainly going to be in a position to act on.

Good morning, Jared here. Maybe I'll just take a step back. So we announced, it was probably May of 2024, actually, we announced the supply agreement with Dow.

And I think we've been saying quarter over quarter, we've been evaluating. PEMBINA has the luxury of having multiple supply sources across its entire portfolio. And we've just been taking a prudent approach to evaluating what's the most cost effective approach to that supply. And we have been signaling that RFS3, which was a clone of RFS2, does make a lot of logical sense to build the DF side of that asset as part of our overall portfolio. And we continue to believe that that still makes a lot of sense. There was minimal capital being spent on the portfolio of assets in the calendar year of 2025. So even with the most recent reprofiling or delay that Dow has mentioned, there isn't a material change to our overall capital in 2025.

And we still believe, you know, not knowing exactly when the new on stream date might be announced. We believe that it's kind of that it's just normal routine execution doing the DF tower. Now my team is probably cringing that I'm saying that, but it's not like a three or four year build for what we're doing. So we absolutely believe that when we do get a little bit more line of sight, we'll be able to act quickly and have that asset on to meet our supply portfolio commitments.

I won't get into the specifics of the negotiation, but I can say that obviously demand for incremental gas egress is extremely strong. And we have a couple of opportunities. We obviously alliance was built for a full path expansion all the way down into the into the Chicago market. And there's also opportunities to do shorter haul expansions with, you know, less compressor stations here on the Canadian side into the Alberta heartland. So we're just continue to evaluate those and kind of in the pre feed engineering stages of that. But lots of demand for incremental liquids rich gas egress.

I don't think I can get into too many of the details, but maybe I'll just provide some colour that, unlike some of the other pipelines in Canada, we do take operating cost risk. And the reason PEMBINA at the time and the joint venture previously was open to that is that we do believe that we're extremely good at providing safe, reliable and cost effective operations. But with that said, as we're the back and forth goes with the customers, there could be changes to that overall risk sharing profile as different inputs into the economic model change. So it's pretty live and dynamic right now, but that's all I can say about that.

But you can see that we have to have a lot of feedback from each other. And the reason being is that, as we have seen from us, and continues to be the case, we continue to sign up new contracts on a regular basis. So as we continue to sign up new contracts, and obviously the contracts are the leading indicator against the fiscal volumes. They typically come first, the volumes come second. We've continued to see that lag over time. I'm not sure that we will expect those to true up. I think we continue to sign contracts as evidenced by this quarter, and so we will continue to see a gap between those revenue and physical volumes as a result of that.

And maybe I'll just add to that that you do have to delaminate the difference between what we call our high-vapor pressure products. So that's your C3 pluses and your C2 pluses versus your LVP, your low-vapor pressure, so your crude and your condensate. It is customer-dependent, and it is commodity-dependent. Obviously, PEMBINA has a suite of pipelines in our conventional system, C2 plus, C3 plus, condensate and crude. So there is different dynamics happening. Some customers are over on certain aspects of their contracts, but overall you will see that true up. But it's not a blanket statement that all of our customers are below their firm or their taker pay and they're all drilling into it. It is dynamic between asset, commodity, and customer and region.

Yeah, you bet. Appreciate the question. So it is one of our, I can't say it is one of our largest customers. It is a Northeast BC customer. And I think what I'd like to leave the group with is that this announcement, I think it just provides confidence that we recognize our customers do have a choice to flow on other service providers, and they continually to choose us for a safe, reliable, and cost-effective option, specifically around the conventional pipeline. And it's not only the safe, reliable operations and cost effective. It is that suite of different assets that I just referred to, the different pipelines connected to all of the fractionators in the Fort Saskatchewan area, connected to all the egress outlets, etc. So, you know, we do recognize they have choices and we do appreciate them choosing us to be their service provider.

I will say that this is a, like I'll use the word material volume. You know, it's existing volumes across the enterprise, so the pipelines, the fraction in our marketing business, but it is also new. And it's, there's kind of twofold here is one is that it shows the resiliency and the requirement for high utilization across the base assets, but also reinforces the need and necessity for new expansions, albeit the Taylor to Gordondale area, you know, new pump stations within Alberta, etc. We've referenced pump station expansions between Fox and Nemeo. These are all incrementally required as customers reaffirm their base volumes and sign up with new revenue barrels throughout our system.

Aaron I just maybe add a couple of data points You know the renewal piece is obviously we talked about it it a very meaningful piece of our piece contract structure It not quite 10 but it pretty close Obviously, the commitments beyond that flow through both the frack as well as other pieces. When we talk about it being a fairly material contract, that's the renewal piece. Obviously, the new piece of it is obviously quite material, not quite to that magnitude, obviously, but very meaningful on its own.

I'll just touch quickly on that. That's one of the biggest challenges through this negotiation is exactly what you just touched on. And we are different than any other asset and we're just working through that. What does that risk premium look like for PEMBINA?

Aaron, the only thing I'd say is, I mean, obviously, you know, the filings are public. You can look at all the other pipelines, which are, you know, effectively no risk utility type structure and see that the ROEs there have climbed, you know, into the mid-teens in some cases. And so that's a no risk scenario. So if you sort of look at Alliance obviously taking on the kind of risks that it does today, we believe that it's appropriate to earn a premium to that and perhaps that's what we're getting at with an appropriate risk adjusted premium. Probably as far as I can go there, but I just make those data points clear.

So on the timing piece, I'd say that's still part of the negotiation, so no update. And with that in mind, you know, we really can't comment on 2025 guidance and giving that clarity will just is another angle to try to figure out kind of where we're at in our negotiations. And it's just too confidential and sensitive. So we're just not going to answer that question. I apologize. As soon as we can say more, we will.

Sure, it's Chris Sherman. Thanks for the question. The project's progressing nicely. We're really focused on our interconnection applications at the moment, and we haven't made any turbine long lead purchases, but we are actively engaged with equipment suppliers. We're very alive to the cost and timing dynamics that are unfolding out there, and we're going to be prudent with our order placement, and frankly, the timing still aligns with our expectations. So everything's going well and on track, both commercially and on the project side.

I think from a timing perspective, Rob, you know, nothing really changes on our end in terms of that project. That was always a late 2028-2029 project. So, you know, without knowing the specifics around the extent of Dow's delay, I really can't comment on that. But as of right now, we're continuing to progress that pipeline just due to when the in-service date was. So no change from that on our end.

And Rob, I would just add that obviously the announcement from Dow and the assessment on our part and everything that comes with that is kind of happening in real time here. We were not spending material dollars on that in 2025, obviously. It was obviously early works. We're obviously going to get more information as the weeks and the next two, three months tick by here. We'll obviously make judgments at that point, but I just want to make clear that we weren't spending material dollars on that in 2025. Obviously, just some early works and engineering work.

You did nail it, Rob. There is a creative C3 plus that can be extracted from the gas. If this did go into service and the FEMBIN component on the sales side was a little bit delayed, there is NOI associated with this that would be accretive to the project.

I appreciate the question, Rob. I think out of respect for our partner, we're going to refrain from getting into the nitty-gritty of the agreement. I guess what I would say is that we feel very comfortable that we have capital protection for capital, which we would spend. And outside of that, I don't think we want to go much deeper than that.

It's Chris Sherman. Thanks, everyone. I think we've been fairly clear about our aspirations around propane and some of the optimism and bulk case we have for the west coast of Canada. I think the positions we have today, both to our own facilities and others, are serving us well. We like that ratio as far as how it fits into our portfolio, but we've also talked about a desire to optimize Prince Ruber to increase some of the margins there. And honestly, if the price is right, we'll look at more off the West Coast for propane. As well, we're keenly watching butane. We're looking at a number of different projects to try to figure out where butane is going to fit best into North American market, other product markets, as well as potentially off the coast in the future.

I can't get too much into that, but we're putting a lot of effort and time into all of those.

Yeah, it's Scott here. You know, I think it's more than just the geopolitical changes. I think it's also the fact that we continue to see growing gas out of northeast BC that needs an egress solution. And, you know, we're continuing to see strong ARBs between Canadian gas and Asian gas prices. And so, you know, that's driving pretty significant interest in the CEDAR capacity. So we're pleased with where that's going. Also, the fact that, you know, obviously we're FID'd and we're a year into construction and a year closer in service days. So I think all of those factors are leading to, you know, decent interest in this project. And we're pretty pleased with where we're going.

So I would say the patience has paid off. I mean, at this stage, we are, you know, working very hard to turn the definitives into a final executable agreement. But they're big, complicated agreements. And as we've said for the last several months that, you know, we'll do the right deal for PEMBINA, not the fastest deal for PEMBINA. And we continue to progress that. But I would say as it relates to a potential CEDAR II, certainly the gas demand is there. We saw that from our recontracting efforts. Based on early stages negotiations on CEDAR capacity, we believe there is demand for a CEDAR II. But until we have line of sight to that gas on Coastal GasLink or other solutions, that's kind of the gating item, and that's something that we continue to work on.

GARY GOLDBERG- Morning, Maurice. Jared here. So yeah, we recognize that there's currently two projects moving forward, and we're actually, you may be surprised to hear this, but I think I mentioned it before. We're very supportive of both projects moving forward. Removing egress constraints for our Western Canadian sedimentary basin customers, upstream customers, is critical. That what midstreamers do We remove constraints so they can get to higher value markets and overall between LNG Canada Phase 1 PEMBINA is highly confident LNG Canada Phase 2 happens for all the reasons Scott just mentioned World scale resource and low commodities. You got your CDER, you got other projects in the works and or in construction. We believe that the overall NGL and condensate demand in Canada, we still import 250,000 plus barrels a day as a nation.

And the NGLs that are going to come with that incremental gas egress need to get to a market, need to get to a fractionator, need to get to a PET-CAM facility. So we're very bullish that both projects are required and we'll continue to work with our customers and work with the regulator and the communities to satisfy the requirements to get ours across the finish line.

A little bit of timing of spend, Maurice, and also just assumptions on timing of cash flow. It really sort of speaks to timing of cash flow in the calendar year versus subsequent year that has to do with changes in non-cash working capital as well as the timing of our cash tax payments. So it's really more so timing than any sort of structural change.

Correct.

Rob, it's Scott here. That's a better question for Dow. Out of respect for our partner, I can't comment on that.

It's Chris. Well, first of all, tariffs have driven lots of volatility, which we've all seen, and undoubtedly some shifting trade patterns. I think in the short term, we've seen strong volumes off the West Coast, which is really in line with increased demand for, frankly, Canadian propane as a result of some of the dynamics going on in the Gulf Coast and some of the curtailed supply from China. But I think in the long term, you know, it really positions Watson and really positions the West Coast of Canada really, really well. We've got, you know, tremendous resource in Western Canada. We've got a really proven pathway to get product to the West Coast. And we've got supply security concerns for a good part of the world that's going to be looking for alternate sources.

And Canada is a great piece of that. So we'll be looking to leverage that as much as possible.

Yeah, good morning, it's Cam. You know, as I mentioned earlier, I think it's something we've clearly been watching in real time as the markets evolved through the, you know, the greater macro volatility in the last couple of months here. So, you know, clearly in our guidance, we indicated a preference or, you know, sort of a base case disposition towards debt reduction in 2025 as we had free cash flow, which we expected to have and continue to expect that. I think as we've seen things ebb and flow throughout the course of the year, we've obviously taken that information in. We obviously haven't changed that leading up to the Q1 print year. We were in blackout through April, so we wouldn't have been in a position to execute any share value backs, even if that would have made sense at the time.

And so, you know, we are sort of looking at all the signals here and are looking at things on the back of the first quarter release. And as we come out of blackout and obviously are reconsidering whether we shift some of that free cash flow towards share buybacks, you know, wouldn't put a pin in it at the moment, but certainly something with lots of active debate. And we'll ultimately be market condition dependent.

You know, I would say that the biggest one would obviously be just in the near term is frankly probably going to be where we see the commodity business. I mean, I think it's no secret that that is the biggest driver of variability in our business. Obviously, we do have some interruptible volume exposure in our business, and certainly where there are dislocations on competing pipelines or alternatively egress constraints elsewhere, and we stand to benefit from that. That's another driver of variability. You know, obviously, we do see, you know, we do see seasonality in our business as we highlighted in the release and certainly Q2 and Q3. You know, we do expect to be sequentially, you know, sequentially lower compared to Q1, which is normal.

And that's a function of all the elements we saw. You know, the cost picture on that side is largely well understood.

This is a great question. I would say that the market price variability will be the biggest single driver. Lastly, the interruptible volume situation as egress on our own or on third party pipelines becomes available or constrained.

Chris Wendt, It's Chris. So on the hedging side, our frack spread businesses go in and around We have about 50% hedged here across the full year of 25. And so we've got a degree of protection from the volatility that Cam was mentioning on the frack spread side. And then as to how we're thinking about the market long term, you know, we've been, I think, fairly consistent for a while that we think, you know, the long term resilient markets for the Canadian, you know, wave of growth that's come and will continue to come is global. So, you know, U. S. demand has been strong, and there's lots of different, you know, narratives out there about how that might unfold over the next while.

But I think in the long term, the most resilient markets are going to be going to be global. And so, you know, we'll be striving to get as much growth as possible, access to those markets. You know, we remain constructive on, you know, our portfolio and think we've got a nice balance at the moment between, you know, some North American markets and global markets. But as we look forward, we truly think the most resilient markets are going to be global.

And I would just add to that, Ben, that in terms of the hedging, Chris mentioned that we're both 50% hedged. We are hedged at levels which are in excess of the current outlook for the balance of the year to the tune of 10% to 15% above current levels.

Yeah, hey Ben, good call out. First thing I would say is that, you know, if you remember back to our announcement there, I would say that the lion's share of the synergies, the material amount of them were actually coming from the Oxable business. You know, there's a significant amount of commercial opportunities in the Oxable business. You know, some small opportunities on the cost side across both assets, but more so on the commercial side, and those are largely on the Oxable side. I would say that, you know, so far our perspective is, you know, we're tracking very well to our plans timing. I think we communicated at the time, you know, a range of 40 to 65 million and that obviously had a ramp to it.

You know, some of those come very quickly. Some of those take a little bit of time. And certainly for 2025, you know, we're tracking towards our intention there, which is probably at the lower end of the range as we expected. And continue to see the integration opportunities and we'll continue to look for more, but so far tracking according to time.

Those are the two assets. Obviously, the two assets here that are federally regulated would have been Kochen and Alliance, and obviously, we've dealt with both of those. So nothing else.

Scott Cudderon, Thank you everybody for joining us today and we look forward to speaking this afternoon at our AGM. Thank you.