VAALCO Energy, Inc. (NYSE:EGY) Q1 2024 Earnings Call Transcript

VAALCO Energy, Inc. (NYSE:EGY) Q1 2024 Earnings Call Transcript May 8, 2024

VAALCO Energy, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, and welcome to the VAALCO Energy First Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Al Petrie, Investor Relations Coordinator. Please go ahead.

Al Petrie: Thank you, operator. Welcome to VAALCO Energy’s first quarter 2024 conference call. After I cover the forward-looking statements, George Maxwell, our CEO, will review key highlights of the first quarter. Ron Bain, our CFO, will then provide a more in-depth financial review. George will then return for some closing comments before we take your questions. During our question-and-answer session, we ask you to limit your questions to one and a follow-up. You can always reenter the queue with additional questions. I’d like to point out that we posted a supplemental investor deck on our website that has additional financial analysis, comparisons and guidance that should be helpful. With that, let me proceed with our forward-looking statement comments.

During the course of this conference call, the company will be making forward-looking statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. VAALCO disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, you should not place undue reliance on forward-looking statements. These and other risks are described in our earnings release, the presentation posted on our website and in the reports, we filed with the SEC, including our Form 10-K. Please note that this conference call is being recorded.

And let me now turn the call over to George.

George Maxwell: Thank you, Al. Good morning, everyone, and welcome to our first quarter 2024 earnings conference call. We began 2024 with positive operational and financial results, including strong earnings and adjusted EBITDAX generation. In addition, we closed the Svenska acquisition at the end of April, ahead of schedule, and we’re excited about incorporating those operational and financial results into our numbers for the rest of 2024 beginning in Q2. We returned over $12 million to shareholders in Q1 2024 through dividends and buyback. Let’s begin our overview of VAALCO’s assets with the new acquisition. We announced that we close the Svenska acquisition in an all cash deal for $40.2 million on April 30, 2024. This was done very quickly and efficiently and ahead of our internal expectations.

Our team traveled to Cote d’Ivoire to meet directly with the Ministry of Hydrocarbons to officially introduce VAALCO as a new partner on Block CI-40. We are adding an asset with strong current production and reserves at a very attractive price. This acquisition is highly accretive on key shareholder metrics and provides another strong asset to support our future growth. It provides us with additional diversification and strategically expands our West African focus area. The Cote d’Ivoire Baobab field in Block CI-40 has strong production and reserves. We are excited to be partnering with Petroci and CNR International, and believe that Beobab field, the next phase of drilling, and the discovered yet undeveloped Kossipo field in Cote d’Ivoire is an outstanding asset with significant upside potential.

In yesterday’s earnings release, we updated our full year and second quarter 2024 guidance. Both OpEx reflects the positive impact to production and production expense per barrel, which should lead to improved margins and greater adjusted EBITDAX. Later this year, we expect to provide additional information on the Baobab FPSO project planned in 2025 and future Baobab drilling plans after we’ve had time to further our relationship with CNR International and get a more detailed understanding of the operator’s development plans. Turning to Egypt, as we disclosed last quarter, the first half of 2024 is focused on high rate of return capital workover projects to help mitigate decline. In the first quarter, we had six workovers, including five recompletions and fracs.

This work added about 800 barrels of oil per day, helping to offset natural decline. In addition to the successful workovers, I am very proud of a major milestone that we accomplished in the first quarter of 2024 in Egypt. We have gone over 1 million-man hours without a lost time incident. This is a testament to our commitment to safety, training and dedication of all of our people in the field. As I mentioned on our last call, we have a 10 to 15 well drilling program that we are currently evaluating for the second half of this year. This program remains contingent on completion of the program evaluation and confirmation of a drilling rig for the period. We have not included this program in our 2024 CapEx guidance and won’t add it until confirmed.

However, if we proceed with the program, we anticipate additional 2024 CapEx of approximately $18 million which will also generate additional production. We have seen some positive announcements from the government in 2024, in particular payment of ACE receivables, which is very encouraging. In Canada, we successfully drilled four wells in the first quarter of 2024, all 2.75 mile lateral wells. In late March, we released a drilling rig and we began completing all four wells. We have now successfully completed all four wells and two of the wells have been unloading fluid and are coming on production with encouraging results. The other two wells are expected to be placed online within the next 14 days and all four wells contributing production by the end of the month.

You can see the impact in our production and sales guidance we put out yesterday in our press release and that Ron will review in more detail later. In addition, we are also targeting an exploration appraisal well in the third quarter of 2024 in our Southern Acreage. In our Southern Acreage, we have minimal subsurface information and this exploration well, if successful, to additional loan [indiscernible] wells in the future with the potential to approximately on developed locations. Our existing well portfolio has an increasing gasoil ratio and the new wells will rebalance this more in favor of liquids, which contributes to the strong production performance and to our overall profitability. Turning to Gabon, we completed our previous drilling campaign in the fourth quarter of 2022 and invested only minimal CapEx dollars in Gabon in 2023, primarily related to maintenance CapEx and long lead drilling equipment.

We have seen positive overall production results since then with strong production uptime and improved decline curves on the wells. The FSO and field reconfiguration projects in 2022 have allowed us to minimize downtime, capture efficiency and reduce overall OpEx. Looking ahead to 2025, we are actively working on the final technical and commercial aspects of our next drilling campaign at Etame. Activities are planned at the Etame, Ebouri, Southeast Datam, and North Tubbila fields. We have a planned drilling campaign of between five and seven wells that includes a mix of development and exploration wells, along with a gas well for infill power requirements, that will substantially reduce fuel costs in the field going forward. As discussed previously, in 2014 at the Ebouri field, we encountered increasing low levels of H2S in the three oil wells after they had been on production or tested.

We were able to keep the well with the lowest levels of H2S, the Ebouri 2H well, on production using a chemical treatment solution, but the 3H and 4H wells were shut in due to the high H2S levels that were trending to be too high for chemical treatment to be effective. As a result, we were left with between 8 million to 12 million barrels of oil as contingent resource due to H2S contamination. We are currently remeasuring the H2S concentrations in the 2H and 4H wells to validate the field’s current levels and expect to complete our H2S testing in the second quarter of 2024. The testing is being done to support our modeling efforts to assess and forecast future potential H2S levels in the 2H well and also other proposed wells. We continue to look for the most cost-effective path forward to increase production at Ebouri.

We are reviewing two methodologies to address and sweeten the oil at Ebouri, mechanical and chemical treatment going forward. Once we determine the optimal solution going forward, we plan to conduct workovers of the 2H and 4H wells and replace the 3H well with a more optimally located well. In addition, we will test an undrilled fault block in the field with a new well. Coupled with our plans to derisk the crude sweetening process, we’ll result in an opportunity not only to commercialize the currently stranded H2S oil at Ebouri, but also to potentially add resources with an exploration well. Our ability to use our engineering knowledge and new technologies to drive lower costs and access more oil has been paramount to extending the life of the Etame field.

In Etame field, we have just completed a revised evaluation of the field’s potential. Based on the results of this new evaluation, we identified a number of opportunities. We are planning two additional production wells at Etame and to test a nearby exploration prospect. The exploration prospect sits within reach of the Etame platform. Therefore, the well will be drilled from the platform. And if the well is successful, it will be immediately brought online as a production well. We have three slots open at the Etame platform, so we have the option, if both of the early pilot wells are attractive and the exploration well is successful, to drill a second production well from the Etame main fault block, resulting in a potential third well for the Etame platform.

We continue to spend a lot of time examining our assets, how to make them more efficient and profitable. We are expecting to spend between $30 million and $40 million on long lead items in 2024 preparing for and in anticipation of the drilling campaign. Progress on Box G&H is ongoing. PSA negotiations are continuing between the partnership and the governing government, and we have made some encouraging progress this quarter. On March 25, 2024, we announced the finalization of documents in Equatorial Guinea related to the Venus Block P Plan of Development. The finalization of these agreements included a carrier arrangement of the partners Atlas and GEPetrol. This arrangement is on commercial terms at SOFR+ 7%, a total of currently 12.5%. This improves our 1P economics on those previously announced, and we have included an illustration of this in our accompanying slide deck.

We will now proceed with our front-end engineering design or FEED study. We anticipate the completion of the FEED study will lead to an economic final investment decision, or FID, which will enable the development of Venus. We are very excited to proceed with our plans to develop, operate, and begin producing from the discovery in Block P offshore Equatorial Guinea in the next few years. And we look forward to discussing this new year of operations in more detail once the FEED study is complete. We have started 2024 by delivering on or exceeding our guidance operationally and with solid financial results that have outpaced analyst expectations. We remain focused on growing production, reserves and value for our shareholders. I would like to thank our hardworking team who continue to operate and execute our plant.

Over the past two years, we have greatly diversified our portfolio, which has expanded our ability to generate operational cash flow, while growing our cash position and remaining bank debt free. We are well positioned to execute the projects within our enhanced portfolio and our proven track record of success in these past few years, so you can still confidence for the future. With that, I’d like to turn the call over to Ron to share our financial results.

Ron Bain: Thank you, George, and good morning, everyone. I will provide some insight into the drivers for our financial results with a focus on the key points. Let me begin by echoing George’s comments about our continued success into 2024, driven by strong operational performance, quickly closing on our highly accretive acquisition and solid financial results. In the first quarter, we generated $7.7 million in net income or $0.07 per share and $61.7 million in adjusted EBITDAX. Both were ahead of consensus estimates. Let’s turn to production and sales, which along with the realized pricing drives our revenue. Production for the first quarter remains solid and sales were almost 16,400 barrels of oil equivalent per day at the high-end of our guidance with our sales for the quarter also at the higher end of the guidance.

We completed a lifting in Gabon in March, as you can see by the strong sales results. I’d like to reiterate that with a diversified portfolio of assets, we will have changes from quarter to quarter in the mix of sales from each of our producing areas. This change in mix impacts our realized pricing and ultimately our revenue and earnings. But if you look at the bigger picture and over a full year, you will see impressive growth across our expanding portfolio of producing assets. We closed the Svenska acquisition on April 30th, and this means that all production, sales and financial results for the assets will be incorporated into our results from May 1st forward. So, the second quarter will have two months of Svenska impact and the full year numbers, eight months of impact.

Pricing remains strong, and our hedging program has always looked to help mitigate risk and protect our commitment to shareholder return. We have costless collars in place for 2024, and our current hedge positions were disclosed in the earnings release. Realized hedge costs in the quarter were $24,000. Turning to costs. Our production costs for the first quarter of 2024 were below the low end of guidance on an absolute basis and at the bottom end of guidance on a per-barrel basis. While we remain focused on capturing synergies and keeping our costs low to enable us to maximize margins and increase our cash flow, some of the lower costs were driven by timing of projects across our assets. G&A costs were also in line with guidance. When compared to the combined G&A costs seen in 2022 by both VAALCO and TransGlobe, we’ve seen meaningful reductions in costs well ahead of our target synergies.

The final integration and reorganization of the business is behind us, and we have commenced a back-office process improvement project with the implementation of a single cloud-based ERP across the whole company. Noncash DD&A costs increased quarter-over-quarter, primarily due to year-end depletion adjustments, mostly in Egypt, that were made in the fourth quarter once we completed our reserves evaluation and 2023 CPR. Compared to the prior year, in 2023, we’re seeing an increase in absolute DD&A costs because of the additional investment in new wells brought online for both Egypt and in Canada in 2023. Year on year DD&A costs on a per barrel basis are down 13%. In November 2023, we agreed on a protocol with the governing state for a long-standing debt on TVA, together with an outstanding debt from the government owned Sagara refinery.

This was by way of transfer of state profit oil barrels to the Etame contractors in settlement of its debts. This reduced the quantity of barrels we are holding as foreign taxes payable and this will be settled with the state lifting of the remaining barrels in May 2024. We had no Gabon state lifting in 2023, primarily due to the protocol agreement, but had a state lifting in 2022 of approximately 600,000 barrels. Tax costs in the first quarter of about $22.2 million resulted in effective tax rate of about 74% in the quarter. This was higher than prior quarters and driven by both revaluation of tax oil barrels held for Gabon as well as some discrete permanent differences at corporate for deal costs for Svenska and an increase in our overall credit loss reserve.

As I stated before, in Gabon, our foreign income taxes are settled by the government through in-kind oil payments. At the end of each quarter, we have to mark-to-market the in-kind oil. So, in general, when prices rise, it has a negative impact to our accrued taxes and if prices fall, we see a benefit, thus reducing our tax liability. We cannot control the movement of the underlying commodity price to which this in-kind oil is marked to. We continue to guide that 60% to 65% effective tax rate is the correct effective tax rate over the long-term, excluding discrete items. Turning now to the balance sheet and cash flow statement. Unrestricted cash was down slightly to $113 million as of March 31, 2024. Also, in April, we used about $40 million of this cash to fund the Svenska acquisition.

In the last call, we discussed likely working capital movements, some of which occurred in the fourth quarter of 2023 related to the reduction in accounts payable associated with the 2023 capital program. In the first quarter of 2024, we experienced a small decrease in Egyptian accounts receivable. We sold all production as domestic sales in the first quarter, but we also had multiple offsets, including our annual modernization payment. The $10 million annual modernization payment was negotiated as an offset against EGPC accounts receivable. We also had cash collections and other available EGPC sister company offsets, more than recovering a full quarter of domestic sales. Additionally, in Q1, we had certain annual cash payments that tend to be paid early in the New Year, including our domestic market obligation in Gabon and our annual energy package insurance renewal and annual staff costs.

Finally, as part of being a responsible operator and a community partner in Gabon, we are executing on community engagement projects sanctioned by the PSC that were previously accrued. These items also reduced cash in the first quarter of 2024. With that said, we’re pleased that the Egyptian government has made a concerted effort to reduce its backdated bill payables. In the first quarter, it reduced its backdated bill payables with VAALCO by about 25% of its agreed outstanding Egypt receivables as of the 31 December 2023. As has been the case since the third quarter 2018, we are carrying no bank debt and have credit facilities available to utilize for additional accretive acquisition opportunities continue to build value. In Q1 2024, VAALCO paid a quarterly cash dividend of $0.0625 per common share or $6.5 million and our share buyback was about $5.5 million.

Over $12 million in shareholder returns in the quarter. We also announced the second dividend payment of the year, which will be paid in June. Let me now turn to guidance where I will give you some key highlights and updates. I want to remind you that guidance now includes a recently closed Svenska acquisition for the second quarter and for the full year 2024. Also, our full guidance breakout is in the earnings release and in our supplemental slide deck on our website with production breakout of both working interest and net revenue interest. For the total company, we are forecasting Q2 2024 production to be between 23,800 and 27,000 working interest barrels of oil equivalent per day, and between 19,000 and 21,800 net revenue interest barrels of oil equivalent per day.

This is up significantly from the first quarter due to the Svenska acquisition, expected new wells in Canada and slightly offset by natural decline. For the full year 2024, we’re now forecasting our total company production to be between 23,600 and 26,500 working interest barrels of oil equivalent per day and between 18,900 and 21,400 net revenue interest, barrels of oil equivalent per day. Looking at production by asset, we’d expect a natural decline in Gabon and Egypt, although we do have a capital workover program in Egypt in the first half of 2024 that should help mitigate decline. In Canada, as I mentioned, we expect year-over-year growth from our drilling campaign and a Cote d’Ivoire would reflect in operations from May through to December and our full-year numbers.

For the second quarter and for full-year 2024, we’re assuming our sales will be more or less in line with our production. In Gabon, we’re expecting two liftings in the quarter, with one of them being a government lifting. The government lifting flows through our sales and is offset by settling the accrued tax liability that we’re holding on the balance sheet. It’s net cash neutral for VAALCO in the quarter. Our absolute operating costs are expected to go up with the Svenska addition, but we are projecting our per barrel of oil equivalent range to decrease due to the Svenska volume. We’re also expecting small increases in absolute G&A as we noted previously. Finally, looking at our CapEx, our 2024 capital spend has increased to be between $115 million and $140 million as we prepare for the 2025 Svenska FPSO change out, the anticipated next drilling campaigns in both Gabon, Ivory Coast and the Canadian 2024 drilling program.

For the second quarter, we’re expecting a range of between $30 million and $50 million for our CapEx. In closing, despite our recent strong stock price performance, we believe that we continue to trade at a low multiple of EBITDAX, despite having a dividend yield and being bank debt free. With the Svenska acquisition, we’re forecasting a meaningful increase in production and sales, which should also increase our ability to generate adjusted EBITDAX and operational cash flow in 2024. We are very well positioned to execute and fund the CapEx program across multiple producing assets over next several years. With that I will now turn the call back over to George.

George Maxwell: Thanks, Ron. We will continue to execute our strategy focused on operating efficiently, investing prudently, maximizing our asset base and looking for accretive opportunities. As you have heard this morning, we are off to a very strong start in 2024, both operationally and financially. With the closing of the Svenska acquisition at the end of April, we will see a positive impact to production, sales, OpEx per BOE, operational cash flow and adjusted EBITDAX. Additionally, we have the Canadian development wells coming online in the second quarter. We are planning a drilling campaign at Etame and we are progressing the FEED study in Equatorial Guinea and optimizing production while executing workovers in Egypt. Our entire organization is actively working to deliver sustainable growth and strong results.

I believe we have gained credibility over the past two years and we delivered on our commitments to the market and to our shareholders, and we will continue to deliver with the exciting slate of projects we have over the next few years. We are in an enviable financial position with no bank debt and an even stronger portfolio of producing assets with future potential upside. In addition to funding our capital program, we have remained focused on returning value to our shareholders. In Q1 2024, we returned $12 million to our shareholders through dividends and buybacks. We are on pace to deliver another $0.25 per share annual dividend for 2024, matching what we paid out in 2023, which at our current share price has a dividend yield of about 4.5%.

As Ron discussed, our 2024 guidance now has the Svenska Acquisition, Inc, but I want to reiterate that the second quarter only has two months of Svenska Inc, and the full year only eight months due to the April 30th closing date. Regardless, this highly accretive acquisition will materially increase our operational and financial results. Before I open up the call to questions, I would like to point out that as part of our commitment to environmental stewardship, social awareness and good corporate governance, we have made a concerted effort in addressing and improving our ESG transparency and reporting, which can be seen in the sustainability report that we published in April 2024. During 2023, we greatly enhanced our leadership team, appointing new group level heads of functions to centralize accountability and set global standards, processes, and plans for the business that align with industry best practices.

Furthermore, the appointment of a Director of Sustainability and Regulatory Reporting has enabled a holistic approach to ESG management, performance and disclosure. This sustainability report represents our most detailed report in accordance with the Task Force on Climate-Related Financial Disclosures, TCFD, to date. Including assessment of the business resilience and impact of physical climate risk. As we continue to drive our decarbonization program, we are pleased to report a 19% reduction in Scope 1 emissions from the previous year. The 2023 Sustainability Report is available on our website under the Sustainability tab. We are truly excited about the future and VAALCO now has multiple producing areas and future prospects that have completely diversified our risk profile and our sources of income.

Even though we have been highly successful over the past two years developing and growing our assets, we remain disciplined in our approach to maximizing value for our shareholders by delivering growth in production, reserves and cash flow. Thank you. And with that operator, we’re ready to take questions.

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Q&A Session

Operator: [Operator Instructions] The first question is from Chris Wheaton with Stifel. Please go ahead.

Chris Wheaton: I know Al said only one question. I’ll do one question in two parts maybe. Firstly, could you perhaps outline a bit more the $40 million or so delta to CapEx in the year. How much that breaks down between additional spending on Canada, additional spending on Cote d’Ivoire? And also, maybe if you could identify what’s in that additional Cote d’Ivoire CapEx, that would be really helpful because that’s quite a bit of CapEx to be spending ahead of the FPSO shutdown next year. There was also a question I had on Egyptian oil price realizations, which seemed a bit low in the quarter. I wonder if that was related to the receivable’s payment that, Ron, you referred to in your discussion earlier. It’s about $10 lower quarter-on-quarter and I just wondered why that was. That would be my question. Thank you.

George Maxwell: Thanks, Chris. It’s George. On the CapEx side, obviously, we’ve given a little bit of detail as to what has caused the increase in the CapEx guidance position initially. Obviously, we’re now doing a fifth well in Canada on the southern part of the Hamatan area to prove out the opportunity to increase reserves and resources there. So that’s part of it. We’ve also added in the FEED study for Equatorial Guinea to get to the FID position for first quarter of 2025. And also, with regard to the investment inside Baobab, we’re looking at a number of forecasts coming out right now relating to LLIs that aren’t purely for LLIs on the FPSO refurbishment, but also relate to the potential drilling campaign in Phase 5 at Baobab. So primarily, it’s a mixture of the FPSO requirements and also for the potential drilling program that are increasing the main part of the $40 million on LLIs.

Ron Bain: Chris, it’s Ron. I’ll take the question on Egyptian oil price realization between Q1 and Q4. The first part, I would say, it’s got nothing to do with the related payments. The related payments, we recommend you may have heard from a number of companies that EGPC started to pay down some of its outstanding receivables as of the 31st December 2023, and we were also party to that. We got about 25% of our raised receivables as of the 31st December on their books paid. So that was the first thing. The second thing in relation to the average realized price, it did come down about $11. In Q4, effectively, we sold domestically. But domestically, in Egypt, there was cargoes that EGBC had. So that was obviously within the price that everyone was provided.

In Q1, we basically are in a situation where they’re utilizing the blend now for the refineries locally, so they’ve been trialing that out, and that was the market price domestically to those refineries. So, that’s really the difference in pricing as Baobab $11 in quarter.

Chris Wheaton: Just kind of one follow-up, if possible. Does that mean if a new blend is being trialed with the domestic refineries, does that mean this $10 delta is more likely to be where the realization is going to be in forthcoming quarters or is it still going to be dependent on that mix of domestic versus international sales?

Ron Bain: I think it will be very much dependent, Chris. At the end of the day, it was a trial line that they went through in Q1. So, we cannot say that, that’s locked in. And we’re continuing to talk locally with EGPC’s pre-marketing department in relation to obtaining our own cargoes too. So, no, I wouldn’t take that as being a locked in price.

Operator: The next question is from Stephane Foucaud with Auctus Advisors. Please go ahead.

Stephane Foucaud: Good morning, guys. Thanks for taking my questions. Question is on Cote d’Ivoire, and I appreciate that it’s early stage. But I was trying to understand the order of magnitude of production when things come back in 2026. Are we talking of 50% increase? Are we talking of something similar than we have today, double? So that’s sort of magnitude. And likewise, also in order of magnitude of the CapEx in between, again, it’s $200 [ph]. That’s my first question. My second question is also on Cote d’Ivoire. Now that the transaction is closed, I was wondering whether you could provide further detail on the on the fiscal term you’re exposed to. So, I think looking at C&I, it looks like the royalty is 9%. But I was wondering whether you paid the corporate tax or whether the government pays the corporate tax sometimes in the case in Cote d’Ivoire? And lastly, if there is any cost pool that you could benefit from? Thank you.

George Maxwell: Thanks, Stephane. So, with regard to the FPSO schedule going offline, obviously, we’re looking at that right now and with the information received from the operator, we’re reviewing that. It’s absolutely impossible for us to say what the position would be coming on post the refurbishment of the FPSO. One would expect that the existing production would have some flush production coming back into it. But that’s there’s quite a lot of work to do on the subsurface side to understand exactly how that would take place and the timing of that. But that would be our expectation. But at this point in time, we’ve yet to sit down with the operator and get an understanding of both the time lines and the projections around that.

Obviously, there’s also the potential of that drilling program happening concurrently, which would also increase the volumes. But we obviously have a model that works with that, and that’s still subject to discussions and validations with the operator.

Ron Bain: Stefan, it’s Ron. I’ll take the second part of your question if I heard you correctly, on the physical terms in Cote d’Ivoire. In our supplemental deck, you’ll see in Slide 9, we’ve given elements of the PSC’s physical terms there. I’m happy to go through that with you outside of the call to make sure that your model is up to date.

Stephane Foucaud: Okay. Thank you.

Operator: [Operator Instructions]. The next question is from Bill Dezellem with Tieton Capital. Please go ahead.

Bill Dezellem: Thank you. That’s Tieton Capital. May I start with Svenska also? And given that that is non-operated, I guess the question is, when are you ready for the next transaction, the next acquisition? And with that in mind, what does the pipeline look like?

George Maxwell: Thanks, Bill. Difficult one to answer. I mean, obviously, the opportunity set for growth is something we’ve been focused on, and I think our track record in the last three years demonstrates to market that we’re serious about the growth opportunities for this company and where we’re taking it. Of course, there are many, many transactions around that can fit into our portfolios. Yes, we have to actually consider post the Cote d’Ivoire acquisition how the cash flow profiles fit into the growth opportunities because it’s absolutely paramount that we maximize the opportunity from our existing portfolio before we start looking over the fence at something else. But in this business, in this industry, there’s always a very steady pipeline of opportunities that are always under evaluation.