John Royall: Hi. Good afternoon. Thanks for taking my question. So I was hoping for some additional color on refining M&A in light of the 8-K. Could that impact some of the things you would otherwise do on the organic side, particularly thinking about the bigger projects you’re considering with RD? Is it sort of an either/or with M&A or could both be done at the same time?
David Lamp: Well, John, remember that our larger RD project, our SAF project, however you want to call it, is really banked on our contribution being our Wynnewood operation of renewable diesel or SAF. What we are doing is, what equity we’re providing, the location, the land, the permits, the design, all the rest will operate it for or whatever. But we will not do the project without a partner that is strategic in nature and is interested in the space, with the idea that we would IPO that company out as an eventual exit strategy. As far as other M&A, there’s some very intriguing deals out there that are transformative for our company as well as others. And I think as we’ve always said, we look at everything, and we continue to look at everything. And like I said, some unique opportunities in the refining space that really made us pick up our pencil again and look at it again. So more to come on that.
John Royall: Great. And then a follow-up, sticking with the 8-K. On the potential strategic options for UAN, I know this is something you looked at about maybe about a year ago. Now it looks like the idea of potentially separating UAN is back on the docket. Can you talk about the type of transaction that could potentially take place there? And what’s changed between then and now in terms of being back and looking at the some of the parts for fertilizer? Is it just the equity coming back a little bit? Or are there other drivers?
David Lamp: Well, I think you probably heard about the recent transaction that’s occurred with – or it hasn’t closed yet, but it’s been proposed for the Wever plant with OCI that kind of mark-to-market a pretty big value, pretty much twice the value of what UAN is today. So that’s what kind of sparked the interest in it and we’re just exploring opportunities that, that might incur going forward.
John Royall: Great. Thank you.
David Lamp: You’re welcome.
Operator: Our next question comes from the line of Neil Mehta with Goldman Sachs. Please proceed with your question.
Neil Mehta: Thanks. Dave, just building on the M&A comments that you have made and in the 8-K. Are there characteristics that you say define what would be a successful M&A transaction for you on the refining side, whether it’s specific regions? And as you think about potential M&A, do you have a preference for packages versus single assets? Just trying to get a context of the framework by which you evaluate success as you consider different options.
David Lamp: Yes. Sure, Neil. I think one of our biggest impediments to our stock price, I think, is our lack of diversification. So we’ve in the past, have pointed to the West is our desired area. But I don’t – I think what we need is size and scale and diversity of our refining fleet, and any of these actions and the available transactions would scratch that itch. So I think that’s mainly what we’re looking for. When you sit here in the Mid-Con and that’s all you got, particularly Group 3, you’re subject to the realms of the market with nothing to offset it other than fertilizer. So – if you look at the size of our fertilizer business compared to the rest of it, it’s relatively small. So any diversification we can do there is a benefit to the stock and the shareholders is my point of view.
Neil Mehta: Yes. Thanks Dave. And the follow-up is just distillate. You have a distillate heavy mix here, which has been a huge tailwind over the last couple of years. It has softened a little bit here more recently and part of that does seem to be seasonal. But has anything changed in your structurally bullish distillate and diesel view? And are you seeing anything real time that would say that things should turn more positive as we work our way through the summer?
David Lamp: Well, we had – we came off of two very mild winters, frankly. Some people say it was the mildest winter ever in the States. I don’t know because we had some severe weather in our markets that makes me wonder if – how much the climate is really changing. But that said, I think the bigger impact is – really is the industrial activity and just the movement of goods around the country has just been kind of anemic. That said, if you just look at – the other thing I’d add to it, we’re up to almost 5% now of renewable diesel in the pool. That was less than 1%, 1.5 years ago. So it’s really come on and it certainly is changing the California market, but it’s probably affecting everywhere to some degree. Now that’s – all that said, if you look at the practicality of EVs in the heavy trucking industry, it’s poor at best and renewable diesel is by far a better solution.
So I don’t think that the market can’t handle that. It’s just – if we have a little bit of any kind of manufacturing and industrial activity, diesel demand will pick right back up. And that’s kind of our view.
Neil Mehta: Okay. Very helpful. Thanks, Dave.
David Lamp: You’re welcome.
Operator: Our next question comes from the line of Paul Cheng with Scotiabank. Please proceed with your question.
Paul Cheng: Hi, good morning, guys. Good afternoon, guys. Dave or Dane, that in the event if there’s a good transaction in refining, how much of the debt now you will be willing to put on in terms of the balance sheet that – I mean, how should we look at it?
David Lamp: Can you repeat it again, Paul?
Paul Cheng: If that’s a good transaction that an acquisition target that you think is really good for you. How far you will be willing to stretch your balance sheet?
Dane Neumann: Yes, Paul, it would obviously depend on the target and what the earnings power of that target would be. We’ve always kind of said we’re comfortable between the 1x and 2x levered ratio. So depending on the target, I don’t think our – we want to change our debt profile materially long term. So I’d still use that as a benchmark over the long haul.
David Lamp: And we want to use our equity to some degree, Paul. So…
Paul Cheng: Right. But I mean that, Dane, I understand your long-term leverage target you haven’t changed. But in terms of the short-term, how far are you willing to go? What is within an acceptable level of that, say, within the 12 months after you close the deal?
