Nico Piccini: Understood. Thank you for that. And just realizing that so for solar and carbon credits seem to be the more mature as just initiatives not just for Potlatch, but the industry. Is there any — can you give any update or maybe an estimate of when we might see those other initiatives come into play like bioenergy with carbon capture sequestration?
Eric Cremers: Yeah. I mean certainly, we’re in the early innings on biomass maybe brine lithium. We’re looking at carbon storage and sequestration. Yeah, those are — we’re developing all those opportunities. We continue to make progress. I think it’s difficult to put a exact timeframe on, when we would see monetizing some of these type of projects, but — and we’re very active in each one of those and pursuing each of those opportunities with outside parties. We’re under some NDAs as it relates to CCS, as we continue to look at that opportunity. I think we estimate at CCS, we may have around or up to about 150,000 acres that are suitable for CCS. And we’re active in looking at that geological formations that I think will support CCS. So we’re active in all those areas aggressively pursuing each of those opportunities.
Nico Piccini: Got it. Thank you, guys. I’ll turn it over.
Wayne Wasechek: Thanks.
Operator: Our next question comes from the line of George Staphos [ph] from Bank of America. Please ask your question.
Unidentified Analyst: Hi. Thanks everybody, and very good morning.
Wayne Wasechek: Good morning.
Unidentified Analyst: Just want to come — how are you doing? So the harvest levels in the first quarter were a touch better I think than your initial guidance. Was that just a weight issue? Are there other things that were driving the slightly better harvest profile. And then maybe staying on that same topic as we look to the south, and again, we all know that these are local markets. We can’t look monolithically. Nonetheless, pricing remains relatively flat in the South it’s been relatively flat and flat for a long time. When do you see the inflection coming in timber pricing in the south?
Wayne Wasechek: Yeah, George. So your first question on harvest volume yeah, we were I would say slightly ahead in the south as first quarter compared to what we had planned and we had just favorable harvest conditions. And we took advantage of those conditions and drove a slight uptick in our and our harvest volume. But we continue to maintain and our overall outlook for harvest volumes for the year somewhere around probably 1.6 million. Yeah. So no real change there. I think it’s just taking advantage of conditions when you can. And as far as pricing is concerned, yeah, I think you’re right. We’ve been in a pretty stable environment. I think that’s our near-term outlook both on the demand side and the pricing side even when we’ve looked across and kind of digging deeper into both of our markets whether that’s kind of on the Gulf South side or the Southeast I think we see pricing relatively stable across the board.
When that turn? Yeah, I think as markets continued attention, especially in the southeast side, where we see a premium because markets are more attention, I think when the lumber demand picks up, those tension markets you’ll see a bigger increase in pricing in that region probably compared to where we were a little bit less tension in the Gulf South region. So that will probably lag but there is additional capacity coming online. So timing is difficult to ultimately say, but we do think those markets will tension over time as well. But yeah, I think as soon as we see demand picking up you can see those especially those tension markets really turning around much quicker.
Unidentified Analyst: I mean the log and lumber markets have decoupled in the south for a long time. Is your view that we’re getting to a point maybe in within the next year that they will recover. And so, as we start to see lumber prices moving are we actually will see a higher propensity to pay for logs? Or is that still kind of too hard to call at this juncture with all the branches that was the answer.
Wayne Wasechek: Yes, I think that’s a bit of color. I mean look, we haven’t the prices have been fairly stable. When we saw the historic run-up in lumber prices, we didn’t see a huge increase in log prices in the South I mean, but we continue to add capacity in the South. And I think as those tension, you’ll see prices come up over time. But it’s difficult to pinpoint exactly when that will be. I mean there’s a lot of variables involved.
Eric Cremers: And I think George you got to step back and think about like what happened after the great financial crisis. All those mills closed in the south when you think about what happened to growth to drain. The forest was growing much faster than the harvest each year. And so a lot of standing inventory went on the stone each and every year for 15 years. And the latest industry data that I saw, it had drain actually equaling or maybe even slightly exceeding growth. So now the standing timber inventory in the south has now reached an equilibrium. And if you look out over the next five years in fact drain is going to be higher than growth. So you’ll start to see those standing inventories come back down again. Now to Wayne’s point every market is going to be a little bit different, right?
The already tension markets are going to show more tension assuming lumber demand continues to improve and you’ll see those tension market show better price appreciation on the non-pension markets. But the reality is even the non-pension markets are expected to get to get better over the over the coming years as drain exceeds growth.
Unidentified Analyst: Would you be maybe more willing now than in past years to consider selling in areas where you’re not going to see that tension in next several years given that inorganic 15 plus years since the crisis?
Eric Cremers: Well as portfolio managers, we’re always open to selling. I mean just take a look at our FIA transaction where we sold four year old trees for 1,700 bucks an acre. That’s good core timberland for sure, but it’s just we’ve got young trees that have no cash flows or virtually no cash flows for 20 some years. So, we’re always opening — open to the idea of selling. But I think that the thing you got to keep in mind is you don’t want to be just in the tension markets, look at the pullback that we’ve just had over the past year to what’s — which markets have taken it the hardest in the South. It’s been those most attention to markets, because those are the areas where capacity comes out first. So, I think you want to play in both pension and non-pension markets frankly.
