Tommy Moll : Rob, to pivot for a follow-up on PTI. The rig count here in North America obviously dropped pretty quickly over the last quarter. We’re also now getting close to budgeting season for your customers for next year. Do you have any visibility at this point to that rig count having bottomed? Or any visibility to customers potentially picking up rigs anytime soon?
Rob Saltiel: Yes. I mean we read all the typical industry outlooks as everybody else, and we talk to our customers as well. And we certainly have the view that the rig count has bottomed in the third quarter. We’ve seen a pick up three out of the last four weeks. We think it’s going to pick up as we move into 2024. Obviously, we need to see the budgets actually crystallize from the individual producers. And obviously, we’re much more heavily levered to the publicly traded larger companies, and again, with a big focus on the Permian Basin. But previously, people have talked about CapEx spending being up kind of mid-single digit for North America. We don’t have any reason to believe that, that’s changed. And again, the trend should be in our friendly direction, believing that it’s bottomed in the third quarter, picking up in the fourth quarter.
And keep in mind, our business, which is really removed from drilling. It’s really on the production post completion side. There’s typically a one to two-quarter delay between seeing that rig count pick up and seeing the PTI business grow from there. So that’s really our outlook, Tommy, and we’ll just have to watch as the budgets get set among these major operators.
Operator: Our next question comes from the line of Nathan Jones with Stifel.
Nathan Jones : Good morning, everyone. I’m going to follow up on some of the gas utility stuff here. Obviously, you’ve called out destocking is having a big impact on the business here with a few other things. Is there any way that you can quantify what you think your customers have deep in terms of inventory this year and will continue to destock maybe for the next couple of quarters?
Rob Saltiel: Well, it’s a great question, Nathan. I think as a practical matter, it’s difficult to break down each of these individual components. We think the destocking is the major component. But as we mentioned before, the challenge of getting any projects across the line with higher interest rates and the fact that the cost of construction eats into a fixed CapEx budget all these things are coming together. And keep in mind that each individual utility has its own set of circumstances that drive one or more of these factors to have a bigger or smaller role depending on the situation. One of the things that’s worth mentioning is that if you look at our top 25 customers, through three quarters of this year. 14 of those have actually increased their spending with us and 11 have reduced.
So each utility is kind of doing its own thing. It turns out that some of our bigger utilities have really pulled back on the spending. And again, that’s because they overloaded on inventory relative to the rest of the group as we were coming out of the pandemic, and they were concerned about the availability of products. So it really is a bit of a mosaic and it’s individual utility by utility. But again, what we’re talking about here on the call are general trends that we think will persist as we move into 2024.
Nathan Jones : Maybe I picture asking it this way. If there was not a customer destocking, do you think that the gas utility business would have grown in ’23 rather than shrunk?
