IPI - Earnings call transcript Q4 2017

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Operator

Welcome to the Intrepid Potash Fourth Quarter and Year End 2017 Earnings Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]. I would now like to turn the conference over to Matt Preston, Investor Relations. ahead. go Please

Matt Preston

a are morning parts Good statements everyone. based them. remind based These believe assume I are of assumptions, the defined future no Thanks and we information our and discussion that statements laws. securities of available the forward-looking obligation performance are on guarantees which today These you of by Kyle. U.S. update reasonable. welcome and number are not today to will statements as on we to include us

find more future can the reports information You uncertainties about to performance filed risks our SEC. periodic and in our with

included today's measures. this release. refer Reconciliations During to morning's to operational non-GAAP these financial are financial measures and comparable will in we of directly the press certain call, most non-GAAP measures GAAP

are CEO; and our I'll Vice Bob Joseph are Marketing, available our filings now call on Sales for of and call to website Jornayvaz, President turn is Presenting our Bob. Chief SEC Officer. press also and President over questions. at and the available Chairman, on Mark intrepidpotash.com. Our McDonald, Accounting Vice today President and the Montoya, Co-Founder, Executive releases

Robert Jornayvaz

Matt and everyone. good morning you, Thank

our fourth two strategic an Our reflect trajectory as the improved the results benefit we years. from decisions for over quarter made we've business last

sales Our lower-cost selling selective in Potash margins production strong on segment a byproducts realized higher and more the realized another due profile, net focus to prices. quarter of with the an increased markets

and program solid spring mid-January, ton committed field in we announced January, price encouraged to per supported, quarter. the volumes extremely first volumes winter Our $XX commit early have well for was customers a which our in before to increase

as entering we market during clearly the quarter inventory $XX is is with in levels increase and paying effect. fourth fundamentals off season see as now Our spring demand price solid decision price higher to build good the the

succeeding increasingly a continue been International year-over-year larger our international to our be volume. for We've marketplaces percentage footprint to into to our reintroduce many key repeat the readily efforts and expanding and international numerous overall Trio to at now past specialty our capability sales make the higher strong markets sales orders become due had Trio Trio from the decreased customers. levels available. a years with unavailable production have basis is demand segment. produce in and Moving U.S. to in We in of international product

Given $XXX almost believe taking for have we that reason per nutrient and from our Trio, meaningful room is a Trio up Trio upside down current of two components the there's half to years account just pricing ton make and pricing the ago pricing into that product. for

Trio our during volume of due order field While to program, quarter end compared increase the healthy winter increased net a driving market in first is realized could lower adjustments, program quarter. before took February fourth and or increase order a year to last shipment mid-December in the early customers our tons of effect for January. price prices the an Under the cost average through lower segment of deficit $XX

inventory levels solid satisfy and $XX now the advantage higher to take have of price selling increase. levels order the We these are and at volumes price

million. our confidence of full continue year fourth million quarter $X.X million during demand, increase give place the We in million XXXX. the line to quarter XXXX. in to sales expectation $XX third commitments in Fourth of were great with combined income in significant on $X.X for a us million $XX of the over of $X sales diversification our million with sales increased during were XXXX, Increasing several our make strategy. and quarter Water to sales progress expectations in million our sales $X $X to

in over with of a fourth of sales of continue $XXX,XXX increase that this compared future Brine sold million alone of rate up of considerable run quarter with brine up to sales should are years. opportunities execute during on that $X quarter in growth $XXX,XXX, January well-positioned to the third on, June work We to amount We also sales negotiate, in XX% sales brine and the XXXX. record and month XXXX. we in meet are expectation $XX,XXX set to showing

which customer operators touch Our the base oil increasing in is points broadens with area. the our and gas

are past several arena the mentioned locations have our we our -- given the As reach our over oilfield of broadening the quarters, services we operations. advantaged into

services launched services under products formally of we we companies. and which and quarter, a fourth service the oilfield portfolio oil gas offer operators initiative, the During to Intrepid and

and on the geologists, fluid team, provide over educate fracs. tech to other KCl completion modern of research Our engineers quite includes additives necessary services services are in to that benefits third-party beginning are consultants, today's market which the completion

fourth selling burden customers quarter, to the blending began product lessen the well product provide are In services agricultural help on offer operators that to and also onsite in industries response, we KCl. feed reliable to logistical and simply bulk location basis the ourselves, to custom, of deliver addition speed, several received requests multiple by we fleet delivery. just-in-time a and During from trailers our ag and oil dependent and to deliver services, high truck operations a on gas built to have created types fast customers. with and We've

running we purchased generating All speak. and additional trucks and as are up newly of revenues our

to and have In addition, complete who we certifications equipment. CDL maintenance shops licenses employees our new three service and already have

in markets have our Sales actively our salt Feed/Safe another also Over a we a the Trio exclusively and We've in past renewed and Safe KCl to and To our expanding recruiting in salesman organic on year, our our to and we sales We've last of focus growing been our tons byproduct high byproduct sales. on oversee markets. Carlsbad. Market potash are our services brine team certified and oil to March gas oilfield and gas salesperson focus markets increased successful Manager hired first reviewed include profitable Food increased. markets, support oil margin with efforts our offerings.

lithium Wendover brine. economically to known, relatively method continue seek modest in our to We a but resource recover the

have in looking are and approaches again several solid seen forward lab truly our a testing. scale to have completing results potential growing we initial quite promising which at in We transition a pace. very and XXXX is identified year

continue pricing our in and our growth We water the be their year the in the brine growing with growing businesses, robust business, salt agricultural to excited about entering commodities demand. and

We immediate are our thrilled and the trucking successful very services demand the for oilfield by rollout services. Intrepid and of logistics

our well through cash flow. I'll in search products. improve sheet, to over financial the to grow free continue grow acquisitions our Our OMRI now bag and as the growth abilities for to It to turn Safe/Feed offerings year Joseph, continue additional you who as add to offerings Safe organically a the to now and update variety continue balance well [ph] of Food a our as is the as results outlook. on appropriate call will to

Joseph Montoya

Thank you, Bob and good morning everyone.

that loss we loss primarily carryforwards. our and results included million a sales. during Although tax during fourth monetization in benefit for Fourth $XX.X minimum the compares a a was the net of our to $X.X water of Segment results $X.X increase also driven quarter an the of decrease alternative million improved potash fourth quarter of by tax net related recorded million XXXX. The to

deferred become offset us significant tax available we liability. to tax still future hold to assets, NOL that Additionally, carryforwards including could

XXXX recorded lower results Strong the continued cost year benefits a of Potash as quarter transition to solar-only we margin increased potash fourth of in year quarter full $XX.X to $X.X to Our segment production. solar-only of gross compared see fourth million $XX.X million, million our due the gross decreased the our sales increase Potash margin results. production. a during to our to prior quarter when volume to XXXX compared the

sales percentage announced in netback were mentioned, rates was the $XX quarter. into last enabled from plant. to the prior industrial to to January, East as higher early that increased to ton improve year, until in sell year. end April run-time a the XXXX to We the year during ton beginning operations average quarter higher of tons quarter. Production increases the our price July of XXXX, us transitioned operate second slight and idled per and already that's effect midway which tons expect potash Although through we at generally down Bob to Wendover feed for from netbacks net of quarter realized a XXXX Trio-only volume we the of $XX our quarter, compared in third in to $XXX markets. price of are increase although had the per experienced fourth facility evaporation Average The primarily transition increased increase to those in expected from sell of of quarter and fourth facilities increase a due ton summer continued and the the second our inventory per overall the XXX,XXX through sales, for spot a our during West XXXX our

in deficit the million compared year the of Our year full quarter, with of the increased international fourth million in a prices generated $X.X Trio million million segment deficit our and of lower gross cost XXXX primarily bringing quarter net the $X.X fourth deficits lower full to related of result $X.X market The $X.X sales. in or and XXXX. and to were increased realized sales average adjustments, gross

reflects Trio the of we spot quarter January. higher XX,XXX realized in potash production the price sales, to matches the month. during price tons tons quarter schedule during increased Similar levels. are these sales full now benefit our and inventory stabilize reduced be $XX earlier, at fourth and manages production expect volumes and saw domestic to selling beginning As per better that we increase Bob our the ton mentioned our prices of then next

expect we rest our produce rates at While XXXX. increase of recovery Trio, to some we for to are implementing of continue improvements the overall reduced to

to liquidity. our and now on Moving investments capital

buyout XXXX, facility. for We million included lease. of million to ended capital a spending made be $XX to XXXX which $X and about capital offshore early $XX.X cash hand which in under our million credit We with $XX million, During $XX available $X.X a the investments, to million of sustaining estimate capital. million the year our we will majority borrow asset-backed of on be

$XX the debt end long-term year. notes of million and $XX we on the debt at by During the reduced outstanding senior our total year, was million

$XX scheduled due million is December year. next of prepayment by Our of this

the interest to our notes remain rate during on senior X.X% expect We at XXXX.

to of before and Bob As have call on back approximately currently our facility $X.X million the asset-backed XXXX, turn questions. over XX, now closing million $XX on that we I'll for facility. credit remarks had take some December outstanding available we

Robert Jornayvaz

forward questions want forward really XXXX. prosperous that just to to remind your look very taking a and I we you look to We

Operator

Thank you.

question-and-answer from of go now Please comes session. Instructions] will question Markets. begin The BMO We Capital ahead. first [Operator Joel Jackson

Robin Fiedler

Robin ask I them at have Joel. time. one on for is questions. a This two I'll

be to with begin a year first with the the we sales think should how The consistent And a sales more quarterly the customer water contract? customer throughout sales did basis? of ramp? in Are five-year is, expected on about that January the from or

Robert Jornayvaz

outlined as Q in consistent we I be five next it's outlined years. over our in K. the to quarter described, and think think last we I it going very payments that every the We

So, the those payments yes, of that see yes, -- question project is to yes, the answer several the we has will started. benefits And quarterly your for next years.

Robin Fiedler

you QX sales provide water can total on guidance? any And color

Robert Jornayvaz

if to in addition think think customer at the I quarter talked easily we've rate, you fourth I run that, that you the can other about. look take

So, quarter its than significantly in totality. fourth at we look better first quarter being

Robin Fiedler

Right.

where provide on on Okay. for costs costs? And international any to And expected How a could my expect Trio? XXXX the in Thanks. on is, elaborate if you that to will able higher basis. be optimization is size to color freight international last Trio the freight shipment year-over-year offset much you question you

Robert Jornayvaz

couple a fill seeing optimization. we're to one, a orders, see for potential schedule which larger us there's in it the ship why a we reasons Well, quite of and easier Number a hold -- enable better.

that customers customers working with nutrient international partnering groups to of grocery together well. our down that with the on their -- shift transportation working that products help we they going are call bring those coordinate a joint other products. you can producers transportation to see would we're to of variety export what I are put we as We're with so purchase producing our Second, a as them costs

to strategies a that down volumes that as begin well variety required for the basis, of as transportation strategies So, costs. orders your putting which negotiate orders a repeat and to bulk larger into there's on bring we're repeat the place warehousing larger

Robin Fiedler

Okay.

you a year-over-year So, XXXX? expect or in lower be freight to would costs Trio little flat for

Robert Jornayvaz

Lower.

Robin Fiedler

all Thanks. Okay, right.

Operator

go Connelly comes ahead. Our next question Mark Please from Incorporated. Stephens of

Mark Connelly

Thanks Bob. and want you this how When about A Trio couple have a inventories of talk do less year, differently things. to producing bring target you much down? running for you

Robert Jornayvaz

great a fourth are talk of And to orders job it. we've just when international not and customers about are -- significantly. have their I'm going but third that orders and going It's up we placing Yes, growing done those our volumes. certain

to one has thousands of We of in customer the gone American that region zero have literally tens from South tons.

now And because, to proper that for it plant, what as are beginning as significant know, so run you on the has rates the we're run capacity. excess focus we plant

an much having contracts are is our year with and space higher volumes, we us ability allow larger at that more orders to and a to exciting XXXX larger So, warehouse our that negotiate notice. as manage placing on customers and transportation levels, now costs basis advanced look providing volume freight for at larger us

Mark Connelly

about international international Do swing the to in more the I pushing to You've of been the you international? talking sales So, mean, U.S. you're towards increase side. domestic also heavily expect to mix mostly

Robert Jornayvaz

I can demand. side, seeing there -- think to good, pricing. look we have room when is on And work Well, components upside and Trio, it's where that make nutrient continue the are our transportation growing we in at the solid where up if volumes we're

If the so if you to them, $XXX And you differential, for think pricing there's demand quality price to think basically were enjoyment we're the components. and we of magnesium the of the up XX% being the those products Trio about room and of SOP product product two combine additional go Trio just take sulfite, because internationally. there's and as current XX% of seeing nutrient and the

but-- question don't I I'm So, I or if -- Mark, answering don't know not, your

Mark Connelly

saw you quarter your the next the on the helpful. of expect you should in and very how seasonally characterize that are question. Can changes costs they potash normal side if in It's significant terms we operating more One any quarter? in

Joseph Montoya

while been is for I would Joseph say, as -- you've Mark, you following a by know, speaking, the this way.

quarter. therefore, quarter it's solar-only, production, bit fourth Our and is in the more now cyclical first all potash, production of with a that costs the

abnormal think would additional excess any it spread say, or out. costs. will year-over-year, So, though, that I unusual I incurred haven't just we

the So, your I flat, to mind yes, throughout keeping is, just answer year. it's in pretty guess question the general cyclicality but the

Mark Connelly

is the what No, concerns yet? about Sure. fair you amount one We're that of your in that's you the this product Southwest. you where And last it for. affecting year, I exactly question. sell drought hearing going Is affect And mix a was do looking think? to

Robert Jornayvaz

we're look having hay you at moisture what's at When moisture. California the to North moisture. happening cotton are yet markets. our a if an that snowpack Texas significant some markets, at great at seeing and reservoirs We're some impact clearly seeing no. Northwest say California not got cotton run look -- the the is levels into levels, I'd but and so we just if needs normal look you levels, the and Pacific ability

seeing price one And not market, a I and that paying strong strength really impact thing like corn didn't all corn, to seeing add sub handle steady at If won't I'm just it. we at are a So, in good, of aware predictions wheat it's to we're to the but a of, something not not were We're stronger that market. the to look were $X cocoa a think back but an have people handle beans soybeans, market; for stronger what it would the we market, the attention we're wheat wheat. got seeing $X, and the solid, see to at future, analyst we're soybean an demand. seeing saying have be and $X on corn the stronger go yet. it that seeing We're be us. it in I

showing in so bottoms are of strength. and to lot agricultural appear put seeing a globally And we're commodities

Mark Connelly

so us your they're for though. broke, tell Thanks perfect. Well, like Sure. help farmers to

Joseph Montoya

want back delve increased to arena direction. volumes huge want to moving are listening variables the and international positive Trio and I your in if you all There the may. is they're I repeat and are from have several sales question, we call. The go Mark, I the that reiterate folks for to as involved, same customers. for in into just the

those increase first the as down, prices working So, mentioned The that as Bob and will on, volumes, we're thing. that's we freight the earlier. issues freight come

in this the and for the we K talked there more the produce that that and our we've to. XX-K to the have in increases referred we see customers documented morning demand capacity, capacity Our as it you'll later terms in previous ability Trio before of it, then and again price

for So, moving about Trio. I the but just down been kind leave to of quarters, lot dragging want of feeling positive several past momentum the there's us with a call forward. a positive you It's

Mark Connelly

you. Thank helpful. That's

Operator

question comes ahead. Our go Roberts UBS. of from Please next John

John Roberts

you. Thank

bromine does services, to cost primarily the relative alternatives KCl oilfield characteristics with the the And performance there? are compete additives? and On what

Robert Jornayvaz

It on with. and which clays basin which really depends dealing you're

would as think not it's you be. might as like So, generalized to it

if Basin, were the Delaware cretaceous look and clay they're of Basin, formations, if at look clay inhibition to very parts have that So, so-called the Basin, certain or that the geologies River different of react substitutes KCl Powder at specific in geographies Basin, we Permian Uintah we clay the to types deeper substitutes. differently parts of versus

the clay decline that on curves KCl we benefits before. We're operators swelling geologies their past, in oil differences has have done in relates very and problems pointing our with gas Intrepid basis been where very working do much out simply to side. not as their discussing fracs, long-term and aggressively fracs it operators, just specific can in a order to very more of So, the geographies show identify that a they designing have of taker now and services we proactive passive in

XX% equipment, XXXX, XXXX, mixing XXXX equipment own own so the of we've in, was of we one inject high it a the oilfield down able deliver -- can brine can frac we to that basis basis. just-in-time needed the downfalls brine it and in with and deliver high-speed a our on mixing and say, jobs built a X%, speed being and to service it these period X%, X% large then that dilute so And custom on as KCl to

-- out I what market where oilfield and our consultants help a clearly your There and there to their much complicated work just the don't it's than using are third-party -- once answer and trying need more doing our need they geologists, engineers stress, shouldn't to is plays much, just of to KCl. with fracs So, KCl, companies now we're directly question to them design can't be that's benefit to they where to them. we

that So, And competitive that's I we're cost we certain geologic higher doesn't the in than and ability EUR clearly in that hope answers question. have formations, going formations. a to clearly your certain certain a to KCl generate by using have areas, in one well

John Roberts

you. Thank Okay.

Operator

comes of go question Morgan next Our from Vincent ahead. Please Stanley. Andrews

Neel Kumar

Hi, Potash as It seems second incremental the new through and calling is half How you should a expect there environment year-over-year for price in both first and XXXX in capacity K+S Vincent. of evolving this half down the demand also hubs? like be that should see you do potash of for Trio. be Neel from the positive XXXX

Robert Jornayvaz

with base recent whatever commodities. the just the and seeing that first the the across Well, pricing we're it, solid, for in saying, see conferences call a stick recovery half. of because to or And the want upward we bottoming, of let's in strong nation, I agricultural opportunity solid commodities, we're all demand. we the agricultural mean, we're good, attending

all. just we K+S in we markets haven't at really So, our -- seen

going they ask is you are a them. and That's a mystery. question appear when so to And how should

Neel Kumar

in and water the mechanisms contracts? are you that pricing your embedded your about volume on can And talk maybe Okay. sales,

Robert Jornayvaz

No.

Neel Kumar

take what to like Just to million sales? $XX I in terms maybe in $XX of, million guess, the color any could you

Robert Jornayvaz

We've given really I I and the our you guess share pricing how our it's think to And I understand. just appropriate. we're revenue don't structuring guidance. contracts, don't

Neel Kumar

Okay, all you. right. Thank

Operator

question comes of next from ahead. Our go Please Evans Jon SG Capital.

Jonathan Evans

you smartly. a was Can some you bit because or And SG&A quarterly run something? a SG&A? up Or comp about little rate guys talk there a that on basis? sequentially goals pretty is it in achieved was good for embedded there some And

Joseph Montoya

question. the run does rate. I that not is Jon. would represent would Thanks for new fourth quarter speaking, say say no a -- I no Joseph this the

doubtful at that If but $XX could if $XX.X technically, indicative forward. you more experienced million, some venturing million allowance let's international to probably accounts that's should the you of markets. we're call I we going just as look it down, SG&A In year-over-year, increase is you into see quarter, flat, the flat. what and to versus our fourth in argue it's for want get

some we We're bad all the well. Although seeing things slow some about talked good there are as customers. paying things,

haven't We to off, we an believe written allowance. thing create accounting but is to completely proper do the yet

deeply, potash payers. little are that. to good There specific the we're bit also terms and that are slower. ever not markets, we're seen seeing you've payers, industrial core different world the on SG&A, payment but So, into more while pretty delving industrial in are where necessarily -- also The quick topic, line while a they're our we're customers

up front a long some so just million little no that international I should the closely, you're specific unknown what fourth customers So, cash we're that $XX quarter still seeing bet short, new bit managing deposits in rate is really a But would in quarter to more the year-over-year. be say the to run the for Relative continuing allowance story one-off. our that differently. customers, of looking fourth issue, on

Jonathan Evans

Okay.

just So, which $XX.X down the you before. I finished was it a million, year we year-over-year million and anomaly kind an mean, $X.X $XX up million from should was of --

rate. for fair that million that run year it Is saying $XX no? you're that So, to basis, $XX.X million in a or should be

Joseph Montoya

that's Yes, fair.

Jonathan Evans

Okay.

of here million. now yet, what had water the to $X.X side. understand since revenue, I I'm you've don't have Q out et the we So, but -- income last I'm onto is, guess given know us you quarter I the cetera, trying

the of profitability something $X.X million? questions? you in the something $X.XXX in in you the you sales guess did sequentially? million the if $X.XXX quarter, water so different -- only other losses, from the other income there that showed water, I there and Is standpoint million this understand else is that the Or was So, Do was water why something?

Joseph Montoya

a our of we're of into into you income a is six, disclose see part sale therefore, that to footnote the the all chosen in and callers transparent our Does XXXX, I in we water happy more comes of see an part bigger business, help? are an the six. by differently. when as asset question water that the a statements. that XXXX, the when is financial that come bit footnote And and becoming obsolescence make just income out we'll water gets the bit specifically, recorded our be we've items it talked out, financial do. But which our opaque statements. of moving We've it's that see the disclosing little tell little XX-Q bit. are other for you a a to to face you'll you'll disclosing way I'm in things the can be inventory in expense. reserve on The in as in a other And while, in a the XX-K presented going differently. about. out And see had difficulty the few netting other broken we And and being got sales details we'll to various it but answer there other the operating sales there that in We increase out all

Jonathan Evans

the is water I profitability change So, just make in there sequentially business, sure right? the understand, in no to

Joseph Montoya

no. No, absolutely

Jonathan Evans

right? Because being the of incrementals about on talked XX% XX% you've to revenue, kind margins

Joseph Montoya

statements these We're that the with And very, margin on to. profitability costs still nothing fair. has from incurring sales. other very you're seeing that's say the absolutely accounting would face perspective. profitable of It's that water but do to referring items a I'm some the I Yes, financial

Jonathan Evans

is understand to which understand about so your have be filing, a reading five the answer the in give about that be QX should contract at and is that's sales you by but guess that it's then million to water, water least correct? I do for so I to for QX, don't going and and $X.X that have guidance to on me And have you question quarters add years take I what that opaque it, your to why divided all to

Robert Jornayvaz

look to way fair a yes. It's it, at

Jonathan Evans

get that the that customer Have Do to really you then -- they're comments thing, about in with frac over I'm Permian. to that us tax there. customer a positive time they're they And going discussions going can at give more with here if customer? even lot the more update So, than any announcement? you aggressive talked going least kind curious because Okay. wells more after some bigger is sure of made think to had they've that you be that

Robert Jornayvaz

saying are customer more I'm All are water is selling -- that one more to. we're that than there certainly there

terms a of variety And variety people selling a to variety so we're on of prices. a at of

someone And so because literally you where water they Friday can on all a and have Saturday needs different phone they on demands all have morning different needs a a and get call afternoon.

frac to. or longer that given And so a committed they've term that's can someone a that get that's priced schedule someone on you differently than contract

the long-term go we to someone a at that party signed how the that's up contract. a So, very we're details that's why last minute don't want servicing versus into of calls

in all servicing the the those are at companies we're of oil companies so some well -- all majority much and surrounding or names And so if you operators look biggest us, as those of all the business as they're several of of smaller the that companies.

it's company, not well, you will. So, if just, that one

Joseph Montoya

would that, to Jon. I I guess add

cash we have we're The complete clear, revenue control the that opaque, not don't certain just staggered. Just one that from of will to over that quite is relative we'll demand. And more thing we're water. a generate to being bit little the it's be the be operations

other the customers at don't the the thing same of that have we that's other in this One our ourselves the things on pride so we over have of to over schedules on the some operating we control But is our moment's notice ability and competitors market. calls, call to that is, time, on deliver and as referred Bob of basically still either. the

So, certainly we're not be not -- most just to providing opaque, sharing. intent with an information that comfortable

Jonathan Evans

takes then next the that And question. to me

a be or March. usage talked on of issues, and kind If of weak QX frac about seen about talked you Halliburton expect exiting the strong them rate. cetera. have issues out less sequentially? They about weather, They've in sand February which really guys lot frackers has calls, at in better got sand weather for water you've talked issues January. a the in started caused They other Have to et schedules those been you

Robert Jornayvaz

very No, out. we about turn QX feel good how should

of would balance we expected from grow schedules but -- had we're that from frac the really that what companies; in so the variety as And XXXX off. we exciting And say at I taking them part that's a is looking we're of get XXXX. seeing

think I fracking exactly the know that you're and of shaping XXXX to about don't companies to refer Delaware the in the year and to is world are going frackers, about, that's up oil or very the When those the for the of I terms about be a Halliburtons reporting. as EOGs XTOs you're you're who occur So, talking Occidentals, talking Basin but-- robust if if talking you

Jonathan Evans

talking providing water. they pumping are pressure about provide pumping, the I'm the guys when the that the they because need pressure

Robert Jornayvaz

Right.

with that talking as we're so -- dealing both are operators frackers, selling the the as well guys we're the So, horsepower, themselves.

stuff lot not months XX having us quarterly, to very from just ago in companies these position meetings where a a So, this of monthly, big we different from oil with schedule were terms if of that's out.

Jonathan Evans

so the $XX. of was Should you of And your March make that or part March in when So, strong And just said sales, realize then? you you pricing, month second to in you realize and that the pricing relative should moved quarter? will up. realize it then Okay. you on then that that it you'll comment that in your realize said you

Robert Jornayvaz

it, so-- sales, we of some realizing we're as speak, on spot Well, and

Jonathan Evans

percentage-wise? much your roughly spot are sales how And

Robert Jornayvaz

you can right don't answer Mark, have -- really -- is I don't I you now. a a for it good know,

Jonathan Evans

Okay.

Robert Jornayvaz

I should-- apologize, I

Jonathan Evans

then right. from And all That's question production Okay. standpoint. just a the

You going the your assume in and assume into was be production to it Does QX? ramped or quarter. to more to way in simplistically going I because fourth Is QX. I you're about ramped benefit that a stupid? think as you that go COGS demand am I And hurt production strong COGS. that you sell

Joseph Montoya

ramp inventory necessarily would referred we the would question, articulate production decisions price as to as us into increases. in thought, with I when much that you're going say our for making didn't manage not year benefit new sure. terms we we Certainly, an did of on Bob levels we believe, the inventory our stupid,

inventory guess. the production. discussions, its versus The-- management One I So, of is different the two

Robert Jornayvaz

not sale. choosing a XXXX make It's to

much understanding think but that's you -- I looks solar like. standpoint, production if production education at around a our you how profile what don't and our discussion I a potash know followed whole from us, look

the served we not when a So, to say make end it sales of us couple XXXX we large and some into looked well we that appears at of managed inventory, chose XXXX. it it -- -- going

Jonathan Evans

up you And prices a so because going are thought Is why would because cost? better you you Or it that you and do both? in got or it it solar is produced that? is because of

Robert Jornayvaz

a tightening market Well, We're strengthen. in and first were soybeans corn, looking United at agricultural commodities the and of of overall States. strengthen we pricing all, market seeing seeing other the in the we were wheat the granular -- and agricultural

So, tight tight. was look December, in into market the market at fourth the November when you really was quarter and how the going

agricultural saw you pricing so up. going And

You idea saw and consolidation had out. industry no occurring turn that the might in how

hold positive lot benefit could to know working what said, that of of now And had let's headwinds off in happens got variety result see on your so in these factors better XXXX, that when and a you've a sales making outcome. you you a

Jonathan Evans

for you answers. appreciate Thank Okay. your I it.

Joseph Montoya

we're footprints. I different of thing in final XXXX, wanted to production talking one to production speak terms the on compared Yes, two XXXX

when world, than But idling facility. the look that Trio-only to to way went though our as changed and this in this opposed production, we looks to it's XXXX look QX The through to we is for converting facility, make did. the you is production XXXX. the we mind the But less changes I completely relative of better important XXXX So, East XXXX look at in have full last compared the XXXX West quarter; XXXX keep we to in like to XXXX, need the our it year-over-year this at full in produced year production more QX comment, year to potash to at versus XXXX. how

Jonathan Evans

Thank you.

Operator

Bumbershoot question ahead. next from Jason Please comes from Ursaner go Holdings. Our

Jason Ursaner

Good morning.

walked MOP of weather. average seems a comment XXX,XXX fairly production. the you The back quarter to on following-up in Just tons had the like especially last last sort that amount, after be significant due to more on expectation quarter

the see production of almost you tons kind and year fairly as at just of quarter guess the XXX,XXX that looking average So, forward? do in I full of that solar-only, in being range sustainable going

Joseph Montoya

just the would cyclicality of Yes, say, again absolutely. mind Jason. I our in keep business,

and mean, and during back dial evap we'll lot a QX the and QX As you season more QX. produce down that in QX are in I aware,

harvest year-to-year I year-to-year. vary from a and going yes, So, from probably our it's good it's year changes our Again, as year to indicator. think evap changes to time from

I little because increase. comments, than generally little had longer There's average. a that that mentioned bit But to nothing XX% earlier we're increase a speaking, bit doing anticipated. about As production probably Wendover we that's better ran in specifically my

Jason Ursaner

of run-time one have. understanding And Okay. from that when of staying that is operating Wendover, that, costs mine, you with is of my optimally, just increased kind production the it's lower the

question this from beneficially So, And half do that of you maybe sold up? built this going XXXX? first a following-up earlier. on cost in into tons inventory on margins of the was just Would impacting impacted goods how the see have

Joseph Montoya

and detail, the pretty much you're Without into is significantly. that our cost But getting that not footprint in say across of not Wendover, only I Yes, in beneficial in Moab as in is Wendover. comment production the think Carlsbad right but Board, believe and solar-only of cost your to like too at things the one well. we terms

trend cost like I'd to of of And so just to indicative again, per have not just more; But caution lower a surely, produce any doing we're you anything think math, or that. kind that's ton. we going the

Jason Ursaner

way appreciate the Trio, kind Okay. what you do achieving from closer Is of gross separate there tonnage sales you when How profitability? the the at domestic is versus domestic up And I it I but building netbacks look international? guess, deficit, profitability? to on any to footprint, is the achieving is do to trying two? you're separate the

Joseph Montoya

be little detail. into a just I'd guess too Jason, to bit reluctant, much get I

in in our breakout. few to Trio much and As you international general this really and space relative know, information want specific divulge to versus there domestic don't to we are very too competitors

I the best Sorry, do with can that. that's probably

Robert Jornayvaz

upward Yes, about is trajectory Trio for I believe we potential and a XXXX beyond. very its solid that excited and really would we're just stress that on very

Jason Ursaner

And on shaping then is just XXXX that's range Okay, the given Basin. water, lastly, Delaware how in out fair. obviously, you reaffirmed the

that drilled that And started seriously that originally In talking with sustainability, but start able was to the think about I growing a in was confidence X,XXX the closer up to had had around about from been it at terms one I you wells. And business almost it. think think you it's uncompleted being which though, time you that of that aspects, of Bob, when gave talked build running first DUCs X,XXX. I now

you range visibility So, beyond future? look XXXX, the type out that of just what for do you when being sustainable have into

Robert Jornayvaz

we Well, with direct continue very that creating work operators just to on relationship.

remember, You a were ago. lot months XX got acquisitions to just of those made

now on for services, they're negotiating they're now a And that they so now for acquisitions and were procurement multibillion-dollar negotiating their basis. teams, in what their want those long-term put

water. require you of transference the plans, information, the look at their multibillion-dollar so And when capital

in were than assets, incredibly wells And they've a so the bigger drilled before the in as we now just some companies oil different right way New talking of because state prolific us. the Mexico to own you they know we're around

look of so and to water discussion need -- get so deliver we a you to this measured the it vast out, a to geography. that's we When X,XXX measure our with fracked mature at square continues that that footprint just mile it different And ability cover wells you mature a in incredible it's and out volume when territory.

Jason Ursaner

Not to of million for covered in only or hoping run you of range, specific rate anything water see mentioned of contracts the you increased an $XX the think rights but state. terms share terms previously about in $XX volume, years. to commit price your And million Okay. the or the in to I -- total looking in a had future range third

in an mean, range to the work implication still is So, about two-thirds it with per peaked you'd terms is there doesn't overall, monetization. implied that out. left I your seem of like also obviously, And barrel of rights there water price have

in I So, you or volume given the terms of waiting potential be for to price just do guess, range either to of or work how see that amount maybe both completed? grow

Joseph Montoya

now within. just on can and work opportunities would Bob we are range reiterate we the that several run What sharing I that feel There shared working rate. the increase Jason, we're you is projects that earlier. comments that with continue comfortable to

all we rights. water out, utilized point haven't of you As our

further aren't And comfortable we that additional out any just so any work continue limb. certainly, opportunities on than but that going more on to

Jason Ursaner

it. appreciate Okay, Thanks a lot.

Robert Jornayvaz

at will grow. right But we looking it way. I you're I have Jason, is the Bob. this say mean room to in

Jason Ursaner

Okay, Appreciate all Thanks great. the comments. guys.

Robert Jornayvaz

Thanks Jason.

Operator

question-and-answer to closing the like time turn over concludes remarks. This for Jornayvaz I allotted to would conference for session. the Bob any back

Robert Jornayvaz

be want Thank we for your look us. XXXX today and looks a just their I to in continue confidence Intrepid and to thank in as your Potash. you time interest their forward everyone for And very interest to year. promising

time. thank So, your much and for you thanks very

Operator

today's conference call. This concludes

a lines. you have day. And pleasant participating. You Thank your may disconnect for

Intrepid Potash (IPI) 27 Feb 182017 Q4 Earnings call transcript