그래니트 리지 리소시스(GRNT) 2026년 3분기 실적 콘퍼런스콜: EBITDAX 35% 증가, 2027년 변곡점 앞둬

핵심 요약

• 3분기 일평균 생산량은 전분기 대비 8% 증가한 34,641 BOE를 기록했으며, 원유 생산량은 16% 증가했다. 원유는 전체 생산량의 55%를 차지했다.
• 조정 EBITDAX는 1억 730만 달러로 2분기 대비 35%, 전년 동기 대비 36% 증가했다. 경영진은 이를 그라나이트 리지 리소스(Granite Ridge Resources)의 상장 이후 가장 강력한 분기 실적이라고 설명했다.
• 운전자본 변동 전 현금흐름은 9,660만 달러로, 해당 분기의 시추 및 완결 자본 지출 9,080만 달러를 웃돌았다.
• 이사회는 최대 3,500만 달러 규모의 자사주 매입 프로그램을 승인했다. 경영진은 자사주 매입이 기회주의적으로 진행될 것이라고 밝혔다.
• 경영진은 2027년에 원유 비중을 늘리고 자본 지출을 대체로 전년 수준으로 유지하면서 전년 대비 약 10%의 생산량 증가를 목표로 하고 있다.
• 그라나이트 리지는 2027년 조정 잉여현금흐름으로 배당금과 기타 자본 배분 우선과제를 충당할 수 있을 것으로 예상하며, 현금흐름 증가를 통해 레버리지를 낮출 수 있을 것으로 기대하고 있다.

핵심 재무 데이터

GAAP 기준 순손실에는 원자재 파생상품 손실 5,270만 달러가 포함되었으며, 이 중 3,180만 달러는 미실현 손실이었다.

사업 및 운영 성과

그라나이트 리지는 해당 분기 동안 주로 퍼미안 분지에서 9.2개(순 기준) 유정을 가동 개시했으며, 14.6개(순 기준) 유정이 진행 중인 상태로 분기를 마감했다. 와하 천연가스 가격의 회복 역시 전분기 대비 EBITDAX 성장에 크게 기여했다.

동사는 시추 및 완결 자본 지출의 대부분을 운영 파트너십에 지속적으로 투입하고 있다. 경영진은 이러한 파트너십을 통해 순 위치당 250만 달러 미만의 비용으로 퍼미안 인벤토리를 꾸준히 확보해 왔다고 밝혔다.

그라나이트 리지는 미들랜드 분지에 주력하는 또 다른 운영 파트너로 아레테 크릭 리소스(Arete Creek Resources)를 소개했다. 아레테는 약 6개의 시추 구획과 40개 이상의 총 위치를 확보했다. 10월에 첫 파트너십 유정 시추를 시작했으며, 2027년 중 시추기 1대를 가동할 예정이다.

유티카 셰일에서 그라나이트 리지는 약 6,300에이커(순 기준)의 부지를 보유하고 있으며, 100개 이상의 총 생산 유정 지분을 통해 일평균 약 3,000 BOE(순 기준)를 생산하고 있다. 해당 분기 동안 동사는 1,900만 달러 규모의 인수 거래 20건을 완료하여 위치당 평균 약 240만 달러의 진입 비용으로 8개의 순 위치를 추가했다.

그라나이트 리지는 또한 2,000만 달러가 넘는 DJ 분지 석유 및 가스 자산을 매각했다. 경영진은 이번 매각이 광범위한 자산 유동화 전략의 일환이라기보다는 기회주의적인 포트폴리오 정리 차원이라고 설명했다.

지배구조 측면에서는 그레이 록(Gray Rock) 계열사들이 지난 8월 유한책임사원들에게 그라나이트 리지 주식 1,400만 주를 배분했다. 이에 따라 그레이 록의 지분율은 약 39%로 하락했으며, 그라나이트 리지는 더 이상 지배회사(controlled company)에 해당하지 않는다. 회사는 해당 규정에서 정한 유예기간 내에 과반의 독립 이사로 구성된 이사회 및 전원 독립 이사로 구성된 위원회 체제로 전환하고 있다.

경영진 가이던스

경영진은 그라나이트 리지가 2027년에 전년 대비 약 10%의 생산량 증가를 목표로 하고 있으며, 증가분 중 원유가 차지하는 비중이 더 클 것으로 예상된다고 밝혔다. 또한 전년 대비 자본 지출이 대체로 전년 수준을 유지할 것이라는 가정도 합리적이라는 데 동의했다.

경영진은 생산량 증가와 헤지 만기도래에 힘입어 2027년 조정 EBITDAX가 2026년 3분기 연환산 수준을 크게 웃돌 것으로 예상하고 있다. 동사는 또한 2027년 조정 잉여현금흐름으로 배당금과 기타 자본 배분 우선과제를 충당할 수 있을 것으로 내다봤다.

아레테 크릭은 2027년 중 시추기를 가동할 것으로 예상된다. 그라나이트 리지는 기존 운영 파트너십을 통해 2027년과 2028년 개발 계획에 대한 가시성을 확보했으며, 이를 바탕으로 그 이후 연도의 인벤토리와 활동을 검토하기 시작할 수 있게 됐다고 밝혔다.

리스크 및 주목할 점

광구 운영 비용은 BOE 기준으로 전분기 대비 감소했음에도 불구하고 여전히 높은 수준을 유지하고 있다. 경영진은 이러한 비용 압박의 주된 원인으로 수분 함수율 상승 및 플로우백과 관련된 염수 처리 비용, 지상 장비 임차료 및 도급 노무비를 꼽았다. 생산량이 증가함에 따라 총 운영 비용은 증가할 것으로 예상되나, 경영진은 단위당 비용이 가이던스 범위에 근접할 것으로 예상하고 있다.

원자재 가격 변동성은 여전히 중요한 요인이다. 그라나이트 리지는 선물 곡선 가격 기준 25%를 상회하는 풀사이클 수익률을 토대로 인수 및 파트너십 유정을 평가하며, 주로 근월물 원자재 가격에 기반하여 자산을 추구할 의도는 없다고 밝혔다.

향후 그레이 록의 주식 배분은 시기와 규모를 포함해 그레이 록의 재량에 달려 있다. 회사 측은 또한 자사주 매입의 속도와 규모가 기회주의적으로 결정될 것이며, 이사회가 승인 한도를 확대하거나 취소할 수 있다고 덧붙였다.

경영진은 EBITDAX 증가에 따라 부채 대 EBITDA 레버리지가 하락할 것으로 예상하고 있으나, 잉여현금흐름은 배당금, 자사주 매입, 부채 감축 및 기타 자본 배분 우선과제 간에 배분되어야 하는 상황이다.

애널리스트 Q&A 하이라이트

• 2027년 프레임워크: 경영진은 약 10%의 생산량 증가, 원유 기여도 확대, 대체로 전년 수준을 유지하는 자본 지출이 2027년에 대한 합리적인 가정임을 확인했다.
• 운영 파트너십 역량: 아레테 크릭은 2027년에 시추기 1대를 지원할 수 있는 충분한 인벤토리와 40개 이상의 총 위치를 확보했다. 그라나이트 리지는 또한 2027년 말 이후부터 기여하기 시작할 수 있는 기회를 모색 중인 비공개 파트너들을 추가로 보유하고 있다.
• 자사주 매입: 경영진은 초기 3,500만 달러 규모의 승인이 기회주의적 매입을 위한 유연성을 제공하도록 마련되었다고 밝혔다. 이사회는 현금흐름과 시장 상황에 따라 프로그램을 재검토할 수 있다.
• 위치당 인수 비용 증가: 경영진은 전분기 대비 비용 증가의 주된 원인으로 유티카 거래 비중 확대를 꼽았다. 유티카의 수평 시추 길이(15,000~20,000피트)가 퍼미안의 표준화 기준인 10,000피트를 초과하기 때문이다. 피트당 기준 인수 비용은 일관된 수준을 유지했다고 경영진은 설명했다.
• 자산 매각: 경영진은 6개 분지에 걸친 비운영 포트폴리오를 지속적으로 검토하고 있으나, 체계적인 매각 프로그램을 추진하고 있지는 않다고 밝혔다.
• 레버리지: 동사는 대차대조표의 안전성에 중점을 두는 동시에 EBITDAX 증가에 따라 레버리지가 자연스럽게 하락할 것으로 기대하고 있다.

실적 발표 콘퍼런스콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Granite Ridge Resources' Third Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. At this time, I would like to turn the conference over to Mr. James Master, Vice President of Investor Relations. Sir, please begin.

James Masters

Thank you, operator, and good morning, everyone. We appreciate your interest in Granite Ridge Resources. We will begin our call with comments from Tyler Farkison, our President and Chief Executive Officer, who will review the quarter's results and company strategy. He will then turn the call over to Kyle Kettler, our Chief Financial Officer, to review our financial results in greater detail. Tyler will then return to provide closing comments before we open the call for questions.

Today's conference call contains certain projections and other forward-looking statements within the meaning of federal securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ from those expressed or implied. We ask that you review the cautionary statement in our earnings release. Granite Ridge disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Accordingly, you should not place undue reliance on these statements. These and other risks are described in our press release and our filings with the Securities and Exchange Commission. This call also includes references to certain non-GAAP financial measures, including adjusted free cash flow. information reconciling these measures to the most directly comparable GAAP measures is available in our earnings release on our website. Finally, this call is being recorded, and a replay and transcript will be available on our website following today's call.

With that, I'll turn the call over to Tyler.

Tyler Farquharson

Thank you, James, and good morning, everyone. Let me start with the most important takeaway -- for the last year, we have told you that 2026 is the final year we invest ahead of our cash flow and that 2027 is the turn. This quarter, you can start to see the turn in our numbers. Average daily production grew 8% from the second quarter. Oil volumes grew 16%. Adjusted EBITDA taxrose 35% sequentially to $107.3 million. and our cash flow before working capital changes covered our drilling and completion capital for the quarter.

We are also taking 3 steps today that reflect where the business is going. First, our board has authorized a share repurchase program of up to $35 million. Second, we are putting a clearer definition of adjusted free cash flow in front of you, along with the order in which we intend to use it. Third, we continue to evaluate our operating partnerships, and we are excited to name our third operating partner in the Permian and retake free resources.

Kyle will take you through the first 2. Let me start with the quarter in the platform. Third quarter production averaged 34,641 barrels of oil equivalent per day, 55% of it was oil. We placed 9.2 net wells online, most of them in the Permian, and we ended the quarter with 14.6 net wells in process. The other major driver to our quarter-over-quarter EBITDAX growth was natural gas price realization.

Our realized gas price was from $1.12 per Mcf in the second quarter to $3.46 in the third quarter as Waha basis recovered. Kyle will walk you through that in detail because it's a real change in our cash flow. Our operator partnership platform remains the core of our strategy and it directs the majority of our 2026 drilling and completion capital. The advantage starts from sourcing, our partners find and assemble acreage to their own leasing, ground game and operator relationships, so we see opportunities that never reach a marketed process.

We provide the capital -- we underwrite every opportunity to our return threshold, and we control the pace. That is how we've consistently added inventory for under $2.5 million per net Permian location well below where marketed deals command. Admiral Permian Resources has been the flagship of that platform. Today, we are introducing another partner. retic Creek Resources is a Midland-based operator our partnership with them is focused on the Midland Basin.

The core of the group worked at Henry Resources where they drilled, completed and produced more than 200 horizontal wells between 2014 and 2024. We retails management has helped build 5 Permian Basin ventures, including Bold Energy, 1, 2 and 3 and OxboPetroleum, and its business development team has executed more than $8 billion of upstream transactions. retaking Freeport's the same way Admiral does.

This land team builds positions through grassroots leasing and joint ventures with large overlapping asset managers. We provide the capital that we control what is drilled and win. Arete spud its first well under our partnership in October, and we expect them to run a rig during 2027. Outside the Permian, we have built a nonoperated position in the Utica Shale that we're increasingly proud of.

We hold about 6,300 net acres and produce about 3,000 net BOE per day from our interest in over 100 gross producing wells. We built this position from scratch over the past 2 years through a high volume of small deals and count these opportunities among the most economic in our portfolio. During the quarter, we closed 20 acquisitions for $19 million adding 8 net locations at an average entry cost of about $2.4 million per net location.

Also, we divested over $20 million of oil and gas properties in the DJ Basin at a 3.8x forward next 12-month EBITDA multiple. While there's been a lot of volatility at the front end of the , we continue to plan our business around the back of the curve. Every acquisition and every operator partnership well has to clear a full cycle return above 25% at the strip. And in today's backward market, those long-dated barrels are priced at $70 or below. We're not going to chase near-term prices or pay up for assets based on where the front month is trading.

Instead, we will continue to seek longer-dated development opportunities further out on the curve. keep our hedge program discipline and direct any excess cash to the priorities Kyle will lay out. Stepping back, the plan is working. Our traditional non-op business generates steady cash flow across 6 basins and our operator partnerships are compounding inventory and growth. Through the first 9 months of the year, our cash flow before capital changes, has funded our development capital.

Dividends and acquisitions have been funded from the balance sheet, but in 2027, that changes. We expect adjusted free cash flow to fund the dividend and the rest of our capital allocation priorities, leverage falling as our cash flow grows. With that, I'll turn it over to Kyle.

R. Kettler

Thank you, Tyler, and good morning, everyone. This is our strongest quarter of adjusted EBITDAX since we've been a public company, and I'll spend most of my time on what that means for 2027. But first, the results. Oil and natural gas sales were $177.2 million. On a GAAP basis, we reported a net loss of $10.1 million or $0.08 per share driven by a $52.7 million loss on commodities derivatives, of which $31.8 million was unrealized.

Adjusted net income was $22.6 million or $0.17 per diluted share. Adjusted EBITDAX was $107.3 million, up 36% and from $78.6 million a year ago and 35% from $79.6 million last quarter. Cash flow from operations was $87 million or $96.6 million before working capital changes. Our unhedged realized price was $55.60 per BOE and $49.4 per BOE, excluding settled derivatives. LOE was $30.1 million or $9.43 per BOE down from $10.27 per BOE in the second quarter. Last quarter, we said we expected per unit cost to improve sequentially as new volumes came on and they did. But LOE is still high, mainly from saltwater disposal costs tied to higher water cuts and flowback, along with related surface equipment rentals and contract labor. Production and ad valorem taxes were $10.3 million or 6% of sales. Cash G&A was $8.7 million or $2.73 per BOE. We invested $90.8 million of drilling and completion capital weight and hedges rolling off -- we see 2027 EBITDAX well in excess of the third quarter annualized EBITDAX. With that, I'll turn it back over to you, Tyler.

Tyler Farquharson

Thanks, Kyle. Let me close with 3 points. First, the inflection is underway. Volumes are growing, oil mix is rising, gas realizations have covered and our cash flow is caught up with our development spending. We defined adjusted free cash flow plainly and told you how we will use it. Second, our operator partnership platform is broadening.

With that roll now Retake Creek, have 2 Permian partners sourcing attractively priced locations that extend our controlled development runway. Third, Gray Roth. In August, affiliates of Gray Rock distributed 14 million Brant Ridge shares with the limited partners of Gray Rock Energy Fund III. IROC ownership is now approximately 39% and and Granite Ridge is no longer a controlled company. We are completing the transition to a majority independent Board and fully independent committees within the periods that ICC standards provide.

Gray Rock has indicated that it expects additional distributions. The size and timing of any future distributions are at Gray Rock's discretion, we would refer you to BraRock's Section 13D filings. We view the first distribution as a healthy step. It expanded our float and has meaningfully increased trading liquidity and which makes Brandon reach more investable for a broader set of institutions.

We are excited about where this company is headed and we look forward to delivering on it. With that, operator, we'll open the line for questions.

Operator

[Operator Instructions]

Our first question or comment comes from the line of Michael Scialla from Stephens.

질의응답

Michael Scialla

I wanted to get some high-level thoughts, Kyle, you mentioned the slide showing where you think EBITDA will land. Just some of the assumptions built into that production, I guess, should we be thinking kind of high single-digit growth and CapEx kind of flattish year-over-year? Is that fair? Any more you could offer on that?

R. Kettler

That's a completely fair assessment of it. we're targeting just about 10% production growth year-on-year. I think we have a little bit extra weighting on the oil side and that production growth. And then if you take into consideration our hedge book rolling off, those are the really 3 kind of simple key things to look at to pencil out where 2026, Q3 '26 annualized EBITDA goes into '27 estimated on that page.

Michael Scialla

Great. Appreciate that. And Tyler, you mentioned the changes with great rock and changes on the board. Anything we should expect in terms of changes with direction of the company with those.

Tyler Farquharson

The short answer is no, not at all. The Board is completely committed to the strategy that we have laid out. You've seen us transform the business over the past couple of years to be more focused on controllable development via the operator partners. We now have 4 partners. We'll continue to add partners in the future. That's been very successful for us. We've been able to capture inventory at less than $2.5 million per net location in the Permian, which we think is a pretty good value.

So we're moving into a little more maturity with Admiral, obviously, running 2 rigs, but we're excited now that Retake Creek is picking up a rig with us. We've actually drilled a handful of wells with them. already this quarter, and then we expect to run a rig full time with them starting in 2027. So the Board is fully committed to the strategy.

Operator

Our next question or comment comes from the line of Derek Whitfield from Texas Capital.

Derrick Whitfield

I wanted to start with your rate partnership disclosure. How would you characterize the depth of their gross locations, their ability to continue to source inventory and how the quality of the inventory compares versus your average -- the average of your partnerships?

Tyler Farquharson

Yes, you bet. So first, the Renta Creek team is very accomplished on both the commercial side as well as the development side. a large portion of the team came out of Henry Resources. They had a very successful exit a few years ago. chunks of the team have also been involved with various entities that they've built and flipped over the years. They've drilled over 200 horizontal wells over 10 years.

So the development front execution side very accomplished. On the commercial side, equally as accomplished. their business development team and commercial sourcing team is closed over $8 billion of transactions. That is incredible. This is a Midland-based team. They have very deep networks based in Midland. So we're highly confident in their ability to source opportunity that's more proprietary in nature, and we'll continue to build on what we've done with the Admiral team sourcing opportunity from those types of markets as well.

So we're about a year into it with a retake Creek. We like to let teams have some time to build up some inventory in front of them. We're proud to report that Arete's already secured at least half a dozen or so DSUs, 40-something gross locations and has enough for us to commit to picking up a rig with them in 2027. I fully expect them to be able to continue to add a lot more inventory to what they currently have just like our admiral team.

So this is a development strategy first. I'd like to talk about Admiral and Rete is hitting singles over and over again, but driving in a lot of runs. So this is -- they will be focused on the Midland Basin. That's not to say that they won't do deals in other parts of the Permian Basin, but where we expect them to find opportunities in the Midland Basin, and they've done a heck of a job so far.

Derrick Whitfield

Great color. And as my follow-up, I wanted to shift over to your buyback authorization it would seem on our math, which is clearly share price dependent that you guys could buy back a substantial amount of Gray Rock's future distributions. Is that a fair read based on where those lie today?

Tyler Farquharson

Yes, absolutely. We set the authorization of $35 million to start with. Obviously, where the stock is trading, we're trading at less than 2.5x consensus. I think if you look at where we think cash flow potential is for next year, we're trading at even less than that. So we'd love to own more of this company. We set the authorization at $35 million initially. We'll see how that goes. It's completely opportunistic. as Kyle mentioned, and the Board can come back in the future and raise that or cancel it at any time.

So -- we wanted to kind of dip our toe in the water here to start with. We set it pretty low. It's about 5%-ish of current market cap. But we'd love to own more of this business, certainly with where -- the current consensus numbers are at less than 2.5x '27, and we think '27 should even north of where consensus currently is. So Yes. But you're right, we could buy a lot more.

Operator

Our next question or comment comes from the line of Jeff Grant from Northland Capital Markets.

Jeffrey Grampp

Was CareTyler, on the operator partnership front, given kind of the focus and shift here to free cash flow positive and the progress you've made with the partners you have what's the appetite to add more partnerships?

Tyler Farquharson

Yes. We're always -- that's a good question. We're always looking at -- when is the right time to add more. We could. It's something we discuss all the time. I think we'd like to see how '27 goes. We'd like to get a retake Creek and their rigs to. We have a couple of other partners that we haven't discussed with you all yet. that are working on some things in the background that we think could start to layer in, in maybe late '27 and in '28 and beyond.

So we're interested in seeing how those develop over the next, call it, 6, 9 months. So there is some more in the background that we haven't talked with you all about -- we talk a lot about the operator partnership platform. Most of our capital goes into that line of business, but we do have a lot going on in the Utica via our traditional non-op business. We really like the returns there. We've built a position over the past 1.5 years, 2 years of over 6,000 net acres. We've done it at a very attractive entry cost.

That business itself right now is generating about 3,000 BOE a day net to us. We have over 100 gross wells online that we're participating in, and we're continuing to find a ton of opportunity there. So we have the 3 or 4 partners that we've disclosed publicly, there's a few others that are working in the background, plus we have the Utica program up and running. So there's a lot on the plate and we're really excited about where it's headed.

And I think we're happy with where we're at now, and we'll see how '27 goes.

R. Kettler

Yes. I'd add, Tyler, to that. the way this operated partnership business model works is we've got '27 and '28 laid out, and we can start thinking about '29, '30 and '31 in so to your point, Jeff, we can always look into doing more work with existing operator partners as they grow and flourish, and we can look at bringing others into the fold. But we're thinking years down the road now because we've got the near-term set up for us.

Jeffrey Grampp

Great. Super helpful details. My other question is on the acquisition you guys did in the quarter. It looks like the cost per location went up a bit sequentially -- is that just a function of higher commodity prices driving some increased cost while still making sense from a hurdle rate perspective or any other factors driving those specific locations to be a bit more expensive than the recent averages.

Tyler Farquharson

Yes. Yes. No, that's a good question. And $2.5 million per net location is still extremely incredible in our view, and it just continues to build on our track record of what we've been doing in the past couple of years in that space. But Specifically, to answer your question, we did 20 deals during the quarter, we closed 20 deals during the quarter. There was a higher -- I just mentioned how proud we are of the Utica program. There was a higher percentage this quarter of transactions that closed in the Utica.

So those wells in the Utica are of 15,000, 20,000 foot average lateral versus what we're buying in the Permian is normalized to a 10,000-foot lateral. So that's the difference. We're just getting more lateral feet. But on a per foot basis, it's all been consistent and in line with where we've been.

Operator

[Operator Instructions]

We have a question -- a follow-up from Mr. Michael Scialla from Stephens.

Michael Scialla

Yes. You mentioned, Tyler, that you sold some DJ assets. Just wondering anything else that you could be potentially looking to divest.

Tyler Farquharson

All of that is opportunistic, right? We're not looking to systematically dispose of any assets -- but we do have a large nonoperated footprint across 6 different basins, thousands of wells. So from time to time, there's opportunities that come across our desk that make a lot of sense. I think Kyle will walk you through some of the multiples on why that made sense to us. But from my standpoint, we're always evaluating things in the non-op portfolio.

Again, it's a huge footprint. So from time to time, there are things that are interesting, but it's not a larger strategy of monetizing assets.

R. Kettler

Yes. I'd add that this was largely, I'd say, kind of a cleanup exercise. It was about 800 gross wells, so a good proportion of producing wells with very small working interest. highly gas concentrated asset, too. And so it made sense just when we were taking the portfolio to shed those assets. And it worked out that we got a really good multiple of forward EBITDA at 3.8x.

Michael Scialla

Makes sense. I wanted to ask on your LOE came down a bit in the third quarter from second quarter on per BOE basis, how are you thinking about op costs for 2027. Should we anticipate with the growth that continues to come down? Or just any color you can add there?

Tyler Farquharson

Yes. there we still consider the dollar per BOE high. We're going to see aggregate costs going up just because we have production going up. We've increased guidance on LOE as a result. I think as we have -- I guess, you can think about like we had about 18 wells come online in the first 3 quarters of this year, and we've got a number of them coming on in the fourth quarter and then growth '27 -- so I think as we drill more, that number is going to hopefully come off and be close to where we are in guidance.

Michael Scialla

Got it. And on your leverage looks like it's going to come down naturally, I guess, with the EBITDA growth next year? Do you have any plans to try and reduce debt? Or you just kind of let that leverage come down naturally?

Tyler Farquharson

We are fortunate. It looks like with the trajectory of EBITDA leverage on a debt-to-EBITDA basis is going to come down pretty materially. I'd say we got free cash flow going into 2027. that's going to compete with everything else, but we do want to watch it closely and keep a pretty safe balance sheet.

Operator

[Operator Instructions]

I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to management for any closing remarks.

Tyler Farquharson

Thank you, operator. Thank you, everybody.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.