Philip Choyce: On the ABL, we could, yes. Certainly, we are always going to be looking for opportunities to reduce our costs.
David Marsh: Great. And I mean
Philip Choyce: I wouldn’t predict it using that, and we wouldn’t use that. We were not €“ we probably wouldn’t be using our ABL much in a debt reduction that we will probably be paying that to zero here this year. And so that’s not going to be a significant cost to us going forward.
David Marsh: And I have been a little out of touch with the market, but are there any restrictions on your ability to potentially repurchase any of these converts in the open market, should the market present that opportunity to you?
Philip Choyce: Yes. So, the converts are closely held by two holders. The indenture wouldn’t allow. We would have to negotiate that with the two holders.
David Marsh: Got it.
Philip Choyce: We do have the mandatory redemption provisions where we make an offer to them beginning in June. And we would buy those, it’s $5 million a quarter, and we would buy those notes back at par. I don’t know whether they are going to accept those or not. It’s at their option, but we do make those offers to them beginning in June of this year.
Anthony Gallegos: We are certainly hopeful, they are going to accept the redemption offer, that you guys know, we are very focused on doing the things necessary to bring the leverage down on the company. I think we are on a glide path to do that. So, the sooner we can make progress. Certainly on a net-net basis, we are going to do it anyway. But the sooner we can make progress and actually taken out notes, the better in my mind.
David Marsh: Absolutely. Well, congrats again on the quarter and good luck going forward. It sounds like you guys are on a great path.
Anthony Gallegos: Great. Thank you, Dave.
Operator: The next question comes from Jeff Robertson with Water Tower Research. Please go ahead.
Jeff Robertson: Thank you. Good morning. Anthony, on Slide 22 of the deck you posted this morning, you have your backlog and spot market exposure. Can you talk about the impact of rig transitions to the Permian? And how that will impact re-pricing as you look into €˜23 and €˜24, I am sorry, third quarter and fourth quarter, when you are pretty much exposed to the spot market?
Anthony Gallegos: Yes. We made the decision in the second quarter of last year to put some backlog on the books. As you might remember, Jeff, we did that. Fourth quarter was about positioning our contracts to take advantage of what we thought was going to be increasing commodity prices this year, and the activity that that would spur along. That’s why you have seen the backlog level come down that combined with the fact that there is not a lot of 1 year contract opportunities out there. Right now, it’s more six months, or pad-to-pad, which is fine with where the market is and what we are doing. So, we think it’s going to take a couple of quarters for this to shake out. I think where you see the next inflection point is going to be in the fourth quarter around 2024, CapEx programs as our customers begin to execute on those.
