Eric Scheller: Yes, I think what we’re going to see is somewhere that we’re going to be around $115 million $125 million in expansion capital and probably somewhere between call it $25 million and $35 million in maintenance CapEx.
Brian DiRubbio: Got it. And just we think about you deploying some of the existing fleet back into the field as opposed to buying new equipment. Is that included in the expansion or is that included in the maintenance CapEx?
Eric Long: No that’s included in the expansion capital.
Brian DiRubbio: Okay. And I know you’re not looking to add more new equipment right now, but any thoughts on how long it would take if you order new piece of equipment. How long that would it take to get delivered particularly with the Cap 36 series hunchered [ph] engines.
Eric Long: It has brought in their construction period was running as much as over a year, a quarter or two ago, it’s been reign back into I’d say roughly nine months or so ago, and it’s not just CAD engines on the 3600 series, you’ve got fabrication capacity limitations. You’ve got other components that go into manufacturing, a compressor package from compressor frames and compressor cylinders. One of the things, I think people haven’t quite picked up on yet is that Caterpillar also uses these types of engines to supply backup generation equipment for data centers. So you can envision that if you’re Microsoft or Google or Facebook or Amazon, let alone before you move into the AI expansions that some of these folks are getting into.
All of those data centers end up with backup electric generation equipment, because they can ill-report to have any form of downtime. So as the number of data facilities are increased and spending billions and billions and billions of dollars to increase new capacity these places all have CAD driven, some diesel, some natural gas type backup generation equipment. So I look at it as these facilities continue to be brought online there’s going to be continued tension and pressure on not just USA and our peers to access this equipment but we’ll be competing with sourcing this equipment from Caterpillar with the likes of the Amazon’s ,Google’s, Facebook’s and Microsoft to back up their expansions into AI and continued forays with data centers.
Brian DiRubbio: Understood. That’s helpful there. And just as you think about the distribution policy post the simplification of the capital structure, how are you thinking about the distribution policy in context of the cycle?
Eric Long: So again that’s something that our Board makes that decision. The management team will sit down and look at it and say, gents, here we are early stage of cycle, mid-stage of cycle, late stage of cycle. What’s the outlook for interest rates? What’s the outlook for demand for our equipment going forward, what’s the regulatory environment? All of these things go into GANN calculator. So I think it’s fair to say that once we do get these 2027s refinanced maturity extended with our ABL facility, we’re able — on both of these we have several years of runway left. But at the point in time that we have some good clarity on just what our cost of capital is going to be, our cost of interest is going to be with the regulatory environment is looking like what’s going on geopolitically worldwide, what’s going on with OPEC.
Then we’ll have a little bit better sense of what we need to recommend to the Board as far as distribution policy. So I’m not prepared today to commit to next quarter or two quarters or a year from now, because there’s a lot of stuff coming into an election year with basically two wars going on throughout the world. There’s a lot of instability right now and I’m not prepared today to comment further on what the policies might look like in the future because today sitting here it’s pretty uncertain.
Brian DiRubbio: Understood. And then final question for me, unless, I missed this, are you still in the active CFO search at this point in time? And where does that stand?
Eric Long: So as we’ve indicated to multiple people, multiple times, the CFO has come in two categories those who raised capital, i.e. you’re actively in the equity markets, growing your balance sheet, or the CFOs come in the form of more on the technical, accounting, compliance and support and optimization of running your day-to-day business. Tracy Owens, our Chief Accounting Officer comes from a long and stable background in the latter category. So we have made the conscious decision to not add a CFO at this stance. As you are aware, our Board is controlled by Energy Transfer. We do have — our financials are consolidated underneath ET, and we do have adult supervision in the room, Tom Long, my boss who’s the Co-CEO of Energy Transfer is the former CFO of ET.
Dylan Bramhall who is the current CFO of Energy Transfer sits on our Board. And through the extent, Tracy and his team need any further support or “adult supervision”. They’re more than willing and able to roll up their sleeves, if it’s needed at any point in the future. So no we do not intend to add a CFO currently. We’re not actively entertaining M&A. We’re not actively growing our balance sheet with the form of equity capital. We haven’t raised any equity capital in over a decade, and we don’t contemplate any meaning to at any time in the foreseeable future.
Brian DiRubbio: Understood. Appreciate all the color. Thank you.
Eric Long: Thank you, sir.
Operator: As there are no further questions at this time that concludes today’s call. Thank you everyone for joining. You may now disconnect.
