IPI - Earnings call transcript Q4 2018

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Intrepid Potash Fourth Quarter and Year-End 2018 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Matt Preston, Investor Relations. Please go ahead, sir.

Matt Preston

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

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

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

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

Robert Jornayvaz

everyone, you, us. we good and morning and Matt, to appreciate you Thank joining

flow, cash As full received year segment, strength Trio delivered operating you year compared cash fourth cash with XXXX ended year the of increased the year-over-year. solid highlighted in improvements in income full improved last million. and at margin Net and million periods year quarter water $XX.X know, while segment. in fourth to and income the our a by $XX.X potash for same $XX.X Total flow positive return and net our a quarter gross we continued for million $X.X million

in at incremental the permitted us. with road a permitted in and XXX royalty well great the partners our details to in the interest a diverse generating of add Dinwiddie recently $XX grow have on the multiple to as permitted the to and land with least lines, positive as business Ranch disposal our and and Dinwiddie The Northern related in water opportunities grow in acquisition portfolio develop surface significant Intrepid XX% Dinwiddie as There the improved to locations announced disposal position complement acres pending pursue more to Jal the in Ranch expand also dollars XXXX. property, market. tens of currently market to XX,XXX Ranch and further feet side our oilfield-related are productive to and and Our flow gas and world. which midstream basins operating saltwater perfect wells them. gas rights actively one XXX-acre ponds for ranch sales around in and diverse or X,XXX property other the well million from use assets includes to history of acquisition, surface as strong on water It will of a approximately This which of footprint. fully our a will interest significant pending revenue has over and saltwater operate oil and water additional Mexico. includes infrastructure us of oil and of an announcements additional referred rights, of existing us undivided water currently South will approximately Delaware we owned are revenues liquidity complete south our assets allowed water produce, the assets. we and on leased Southeast location our water continued The The of now have part of millions legacy supply expansion location to cash frac of we allow east of Basin, system New and from existing operators. strategic of permit, infrastructure allow the as will fit alone most pipelines the rights The our some set current rights of our rights, for acres rights

property in cash diversified flow line the in to bottom quickly our contribute will expect addition to this undivided our We streams. XX% interest existing

there pursuing our As growth the of puts permitting assets, property we midstream mentioned potential and location future. company sales, of earlier, And are rights water disposal we is HB and solution the us and transportation additional in our The believe the water will proximity while the addition our currently trained have water our near offerings. the our us we and unique allow hard. workforce, allowing and believe The the oilfield through opportunity to set property partners. to East to mines meaningful ground for given leverage to our saltwater multiple highly water utilize wells, of produced we close also we other hit existing further running us ways grow to

XXXX, revenue, on see this grow in will to later of there's expect second run acquisition has and and this property We right of of opportunities to the the as some this Further, the expect close room benefit quarter these Dinwiddie early refusal subsequent first the rate quarters. we believe month. as its EOG of waived revenue that

our are solutions oil needle with increase customers mines. to We offerings our heavy oilfield our our more gas points us for trucking margin and our touch brine, and and will serve high themselves in included These the while pay mixing significantly presence not than cash around with companies which the and segment. our on and and our in better allow on services revenue, gas new the finance oil also overall operations moving our existing of credit portion This complements KCL facility. existing property hand water,

quarter results to and oilfield increase largely the an while revenue. segment year-over-year full-year in KCL XXXX, fourth growth in solutions fourth was of in sales, attributable also the an sales from For water increase benefited mixing quarter

revenue During from sales. business. recurring We’ve continued long-term our set water in aimed put the fourth at a growth in diverse we water saw generating quarter, our arrangements of place

infrastructure investing significant partners water develop enhance to Our this our to mines end deliver the and gas water oil in and the customer are users to around capital industry.

large are created entire this potential Mexico. Basin New of that We and have the in part southeast the segment footprint Delaware we the the business covers that Northern about not excited of growing

XXXX, received of million sales the expect from total Dinwiddie byproducts revenue of ranch full-year of $XX and the $XX and water but cash the excluding $XX For and we including our million acquisition company between between $XX million. million

as in expanded Delaware have the currently us pending Dinwiddie frac afforded We partner by update that expect insight the to under into more other these infrastructure of throughout relationships, our numbers opportunities investments water year are Basin. our we partners and to schedules, construction footprint acquisition and more

the with price potash results drove our and pleased we're Looking margin of from rest business, and increases at our improvements. sales the sales segment year-over-year where

price potash net to fourth continued X% quarter to increase quarter, the During up last year. of compared the fourth realized

in We the increases the above this which demand fieldwork some capitalize continued byproducts. expect a fourth potash healthy weather delaying evaporation market is average And both quarter for quarter. strong second accepted domestic to demand wet season the through push sales well-positioned into will spring and country us price on season across with and has the

price many of positive any push of to buoyed For for Trio, increases have savings the business first first markets the where in sales in meaningful to to parts freight could worked the year. XXXX. grow helped our in maximize our the for the don't overall expect second quarter. impact and wet those we areas. Internationally, seen we half for Similar certain increases weather segment year-over-year us since gross we to country early But a into margin some sales, volumes time potash price the

we've to efforts our Oilfield evidenced Over the we flows further resilience pending maximize of taken acquisition by discuss steps overall the value to adding cash assets financial and strategic flow towards allow cash in growth have season outlook. in to additional prices have now step the combined with a of call to above overall our consent business We in turn our and into in us flows the already an last of average us Ranch. strong several the our to through diversification our We these years, growth byproducts big our to well-positioned platform enhancing strengthen more XXXX opportunities. and value. potash over cash overall results the our moves I’ll model stability operations Trio who'll of the Joseph believe and byproducts Solutions generate believe Heading continue diversified growth segment. shareholder as XXXX and pursue creation Dinwiddie these with to

Joseph Montoya

you, Thank and Bob good morning everyone.

improved release to to previous the of quarter bottom $XX.X Trio periods. generated net net diluted $X.XX improve press few for million part our Oilfield year in This million filed and full During success notice as pricing EPS segment to you'll That Solutions our business. share and potash morning continue quarters. and of to or prior brings our compared growing we our income line changes is income to per $X.X fourth in presentation Accordingly our $X.XX share. due this compared to consolidated per a also

We’re of disposal, sales with production. speed and and a associated Oilfield water, segment gas mixing, high in new includes certain addition segments to trucking, activities Solutions potash now Trio the third Solutions presenting Oilfield as oil segment KCL saltwater the other and

will the not the While pending results, included results in going the of also forward, XXXX segment. acquisition this in included be

the current been instead now consistent cost past years two to credit quarterly on recast sold. Prior will sell of available are the figures to a we recording goods and as presentation later be the our for have revenue week. amounts this Additionally, with as byproducts of be period website to

to in the during quarter sales volumes the segment Potash increases Our We less and average a $XX.X still the another more propelled previous slightly the evaporation year margin above year potash gross but million than Potash quarter to produce tons our great facilities quarter. generated across due we production increased during during price segment in as solar decrease XXXX/XXXX XXXX. producing in our due runtime anticipate to fourth

In increases this first the season, to lower benefit net when carry compared which our truck enter spring and $XX sales we average in generally to expect of XXXX. price the recent XXXX, freight will expect to increased drive realized we increase of quarter costs. price As spring quarter the from $XX fourth sales a we

XX,XXX down sales we of offset reduced saw in revenue margin shipments production Our the in price Trio fourth Changes to conjunction that during XXXX, to Improved the by combined with last production segment because the standard, of and million increased sale And XXXX. due increase recognized Heading sales. of we quarter, timing into compared adoption and the sales with international we in year were of of the higher quarter fourth sales which with year. expect to the decreased an our primarily standard. ton old the XXXX prior a improvement pricing, prior in ore new the Trio began international to of segment third of per in in to fewer than a shipment. instead lower quarter Reduced back for we continues the recent net sales, increase tons quarter XXXX, grades quarter due of new second to of volumes Trio the quarter in rec prices. to first close with in to XXXX. increased international led to the due average year, fourth somewhat increases recast average the the shipment slightly fourth price recording increase realized an the to $XXX,XXX of the year-ago domestic revenue the net for compared significant this half drove Full-year compared This XXXX. domestic the had generated quarter. it profitability realized in fourth price schedule sales production timing a XX% adoption international compared the in a improvement as the the period large fuel the XX% byproduct overall altered of of the gross standard end $X.X under was associated

results and demand oilfield led Fourth million, Our in of $X.X of to lower an million $X.X quarter water to by also segment our fourth of has an fourth a carry of that margins decreased Gross sales XXXX. in in margin quarter, mixing which quarter increase XXXX, mixing than our trend strong sales. on delivered solution average, trucking, compared in increase in XXXX. the continued a due sales as saw high-speed water the services, into percentage

We rights. fees to also permitting legal water process increased protests our third-party the related incurred of and

is inclusive segments. water bonuses operations expenses is which savings to SG&A as sale portion Total targets future cost Trio in reflected and As meet is a a respective from of received year-end. we was received contract segments across in legal $XX.X similar Total a the $XX.X was three our of byproduct water pay sell million prior water did water were bonus sales to potash quarter as not as and our at increased the to that recorded under related $XX.X the of million were XXXX. to for sales offset company million Fourth we water year for cash those deliveries, cash pre-established XXXX. by a liability required program the expense reminder,

We due due our expense between stock will the expect compensation. quarter made XXXX. and bonus payment be prepayment increased XXXX senior during to on make-whole SG&A and the comp million of the legal million associated write-off in deferred of $XX Interest expense increased fees million the fourth quarter notes to $XX and with financing scheduled $XX expenses

$XX cash in for the no the of in financing credit XXXX. remain all the We balance to expect We outstanding favorable with senior our on million in million notes ended year facility. most and $XX tier

take and to in earlier, we a expect ready under and strength facility. acquisition our we Bob prepared spring business, to we remarks, remain expect the some our to are questions. and Operator, good on with water in short-term favorable As With our borrowing position That all XXXX. credit byproduct of concludes season for cash liquidity continued Dinwiddie and finance mentioned ahead a hand

Operator

[Operator go first Stephens. question Instructions] Connelly Please from is Mark Our with ahead.

Mark Connelly

meaningful Can it you that be X, versus investment referenced business for mean development? you at ongoing I sense to is is of the it in the and give a cost, incremental going that higher acquisition the us XXXX XXXX a looking number? cost

Robert Jornayvaz

didn't are asking. what the - on you’re the clarify you question. Are East. talking about talking built I what about don't you the your pipelines you are - being understand remotely Well, Mark,

Mark Connelly

up Sure. activity I picked about acquisitions. mean ongoing talk now new in in the release you this development you've XXXX and

just out, come figure is to trying along lot I'm this? So with of that's there a going spending to additional

Robert Jornayvaz

No.

amounts terms in significantly mean minimal it's In returns or small than achieved. million. $X really quite the less we're $X I and fact of talking million

Mark Connelly

- the That's fine. happened from tell or It was whether to the release not. already say has hard to spending

of and Okay, Can the about of right? thing. how relatively so how geographies clearly are you longevity first coming and activity over relevant talk couple about your you? way This gas years oil last new business? think development do to the the is It's about that's business Bob generally, you in of the this that think now, you

Robert Jornayvaz

you got are decades Southeast in read, our thousands decades us depending upon backyard. Basin Northern of And totally reserves, in which Well, it’s article just that the surround that permitted New and Delaware we've being of wells in Mexico.

sure that overall. of And can out so we have service turns really because pay focused on become Southeast it northern portion the of prolific we multiplicity has the and the zones that Mexico of area most the making Delaware and New

and water expand pretty concentrated to side sales putting dollars we're in So then handle with on frac tens of Caprock property the east of will, it water footprint west, we've able cetera our the fits ponds, all we you north service connects on are much the our really millions our on of some to groups as rights. access south, et Pecos now surrounded the certain to off of comes as and River if having our as as infrastructure the of east. greatly this that together pipelines, everything that Dinwiddie water well being with our in The

service can one world. what well-thought the the So, that oil out of fields largest in so has very footprint we we a now strategic have become

Mark Connelly

one And if in. I more could just squeeze question

You've and of about to shifting How for is markets better you're that last that to on focus quarters. process better freight. the mix talked with couple about of that where You the going going? talked business export the returns try

Robert Jornayvaz

said highly that some freight well. We've feel selective. mean, been price and sales. volumes down got bring with certain sales to booked seen very, going costs. we no good We've about. We've It's that just we've second the been quarter stick, are to the America I we've in good into really going larger able South increases very

arena, job that in really maximizing our focusing on - a think that done we've margin. and on So, netbacks I of good

Operator

question UBS. ahead. Roberts next Please is Our from with John go

John Roberts

this and report water minority do or the your the expect after deal now new - Dinwiddie, same? to interest margins you be segment are current close you a here acquisition you it be to similar next line Will the on you

Joseph Montoya

believe answer similar part will the to current. question We’ll I revenue answer of to but to interest. questions. be your assets, or consolidating both let as on Dinwiddie the returns the of of but is we XX%, the minority property only Yes we second be relative take will be a the transactions And our I'll own Alex the that showing Bob

Alex Wagner

in we our have near say no rights mine. virtually the because I water basis would Yes, up

Our margins what the offset. of significant, is north, the the we're property, are the three price to so getting times to in because for going it's some location water but two Dinwiddie of those than cases the on of price more

So of one all location, the directly like not when have supply with turn just the logistics more oil oil highest system major to areas estate, you system is, companies key will, it those ability world, in to water look surrounded production by themselves. into but want and the quality companies at location. gas and as can of we're water footprint strategically, the if dealing or only in massive now that And you the in the recognize real a we location,

it So, a another whole level. to takes us

John Roberts

have financial to And rights then partner? is them Sherbrooke over any buy minority out just do And a you time? passive

Joseph Montoya

right that And first brought us a Sherbrooke refusal. of company the a do deal. We is have

the our of of take in we XX build the starting of for to that road, in terms lay our equipment of permits beauty of to millions part in the have on the pads, for that the just service number is advantage we And world we build we're I the just they the from roads, a to force, have ranch property. interest, the for because mean of caliche infrastructure, just machinery down minutes and operate have that paying sales, all ability XX labor paying it's XX%, they're the anything as were we’ll to so place, And so itself. ability to and – XX% water dollars looking the out approached water of us, the infrastructure, everyone's and are the the this XX%

Operator

is ahead. from Our next Stanley. question Andrews Morgan go with Please Vincent

Unidentified Analyst

Vincent. is This Jeremy for on

was I think And items in First wondering, that gross question Thanks. you not, do if the any positive one-time remain were there drove margin in Trio, can on the quarter? that positive XXXX?

Joseph Montoya

your the to the kind So quarter if is you Very first answer standard, - first of question no. will. stable

As to are we Bob the our volume that will second then continue. If all part – as on volume it really that relative if depends successful been your continues we've to of how over price successful, our question, strategy. said,

bring mentioned But that my I we that QX the sales As a in of some my run period long it little down in international have should in stabilize. will to remarks, period, over start prepared will in bit. kind year-over-year,

Unidentified Analyst

from the… And then just

Joseph Montoya

fluctuations point. my be is some from quarter-to-quarter There’ll

Unidentified Analyst

In water of and the percentage oilfield terms if versus business oil that you quantify lines mentioned gas. is to could the just what like understand trying trucking, of like services, you some other of

Robert Jornayvaz

new it The That's water is. due and majority way reported it is you're why accounting vast the saying rules. to

appears as and you And complicated. if change move rules. the so we bar accounting know the apologize continues profession to But the it

accordingly. to have act So, we

we're to as forced it So make so to we'll while the segments and do that simplify the understandable try new by accounting to best it breaking do it into rule. our

Joseph Montoya

that in helpful we the recognition lot generating XX-K see as year we're additional our see you'll to is Jeremy standard before. ever than from out before you help this and new exactly information we modeling you'll a relative and What put for note would will break we've working more what which the water put haven't disclosures you're that till in done revenue on be

well. So, that be as will you I for helpful other think and folks

Operator

question BMO Markets. go next Our Joel ahead. Jackson with comes Please Capital from

Joel Jackson

higher in similar in kind but year. those QX Potash of were of the costs were costs the lot half first a

a can what XXXX, rate look help it of potash is or run at will looking for more So, QX right like us. number. QX you or number Thanks. Maybe sort the costs

Robert Jornayvaz

happening not but put word, be modeling be helpful sense to by will Again, all okay taking the as detail be trying the of that teams cost a I'm just reported the you’re website this byproducts of the probably on that we reported is later any what's earnings we sold. because are XX-Q of will you're and your for the looking reduction or goods Joel, if were week, you QX or

And look lower. as sold goods so, now, it's goods so cost therefore, And higher. making cost reporting we're of of revenue, our our sold look it therefore,

here, we've little If because of at line change gross recognition reported, there's the like it gross look of bottom becoming the but net-net, they the revenue you get all Bob bit hits to no changes margin, both because confusing. margin, it's same that but a

So…

Joseph Montoya

very very, of your rule you're so the accounting given changes Joel, position. aware

change the why quarter. fourth that's in so, – it it we And to changed had

And so, differently. instead of having byproduct sales, it's reported

it's net-net, the numbers. still So, same

Joel Jackson

your still And, are now mean, what in for couple you years. you have next hole you do at I do you the some are when water, happy fill strategy And you what you more to want? have? Bob, want look or of what with there

Robert Jornayvaz

lot, A really, working well. really it's

service that that's position we we're its marketing have. in a you water when rights north, look the entirety. infrastructure And our New what a fraction not around to us the are to Mexico what service only of couldn't in being to And at be we so southeast better far

that in very millions New are providing water companies that tens on we spending excited by infrastructure on southeast water The that infrastructure. we're So, Mexico. about various dollars what's delivery participating going of in into of are

XXXX and this with So, we out, it's how forward out. and growth as that very look the see to in playing going pleased significant we're to plays we're XXXX

Joel Jackson

think And the partially you were fund at hoping plant. pilot maybe looking I to finally,

commercial be brine that, it have an Could on update you in could went you lithium potential give whether think lithium. I investigate please? over a to

Robert Jornayvaz

We've actually - groups. we're talking several to

least. lithium brines producing know, difficult, to well complex you say complex the from the As is

of companies, you're to as that both are trying well America rather in down that familiar lot are a with, complex so, very Canadian produce - than from And folks South brines. lithium us as Juniors there

knowledge in is technology So, participating the from valuable. there's the interest because what's most

Operator

with Our Please Bloomberg next go Intelligence. from Perrella is ahead. Christopher question

Christopher Perrella

On preclude payments rework forward? is when you repurchasing that you the shares going issuing there sizable XXXX, from a anything ones? dividend is debt there the outstanding debt, for scheduled any And in that or

Robert Jornayvaz

your the requirements is to XXXX. to payments relative answer for debt question no So, in

The we're the first do rates you that the debt, in tranche and enjoying at of until present, our we very as don't due of have the plans. we be any million $XX immediate given and reporting, plans we But have That'll nothing to have opportunities do XXXX. any favorable successful XXXX. but restructuring of don't the debt. know, tranche then we're that Because again any comes XXXX results

Christopher Perrella

belt with a because sales? your year here. cash on big – cadence generation, is smooth what's the XQ of the water how of coming about and good And under should slug more now XXXX water XQ, we of handle over seasonality Is a down, there it then or a think sales you when into

Robert Jornayvaz

converted water to an you as brief and you're actual any we like up just was say in smoother that But met. Southeast their is schedules. a oil infrastructure in think that pipeline. gets more was have the up was hiatus to condensate see pipeline New as situation companies with with there - while smoother People Mexico, pipelines XXXX had legislature frac the guess there budgets. came My see going a smoother and the get I working both as it I additional companies are would the directly their oil transmission out setting and built

of the are better in the So takeaway and parts getting capacity better. certain Delaware

into you quarters. pace perfect several see, grow being we this infrastructure out, takeaway like onto, added move the very position capacity as to at as So in a feel the next a rapid built we the we're

Christopher Perrella

quick – between deals books? generation, the get one. the are between Is recognition that one the and the there's with when a and or acquisition, you earnings then revenue on it has where disconnect lag similar recognition the contract the cash this big the revenue you And and only the cash

Robert Jornayvaz

revenue which say take-or-pay like we contract receipt contracts whenever delta that folks you, organize tell take-or-pay there I’ll between and create can cash them, that are recognition.

only it's But that So that take-or-pays about right now, with. contract. talking are folks we're there other primary one

slight that's the the create if you out the water. comes of all So it wash does because more of just but right paying you the end will take-or-pays, we if in offset to they're what at that have the for enter a will. take-or-pay day, into availability It

Operator

& next DeForest with question go Walthausen comes Please The ahead. Co. Hinman from

DeForest Hinman

more the Dinwiddie Just ranch. some color on

$XX mentioned revenue help understand… give prepared the You in million of you the us remarks. Can

Joseph Montoya

think $XX million. that’s I

DeForest Hinman

these ponds? million, help $XX you for Can it is? just water? it of some you that revenue Is me. excuse rental received is right a understanding of that some primarily understand now. what Is sort us of what frac I want better

Joseph Montoya

a decades some it from combination run some Well, caliche, it bought decades cattle of We as was was that’s decades some and - in XXXX, and water, it damages. and ranch. a this a family owned for it

around as them, opportunity we to so, was saw for expand significantly. it that increased the activity there tremendous And

And the improve having equipment, robust use, various has road the that We all it's of pad revenue delivery, just rancher, your the income significantly building, that's is question. up whether you disposal, everything a saltwater opportunities I own set cattle XX now we it, so, all to caliche of for plus that opportunities. employees hope what miles fresh And sort sales, own of a answers about that's water road. a very instead excited rancher diverse we're intrepid managing have XXX

DeForest Hinman

get So to off million, clearly going about forward. when $XX kind going that's built base that's the we the of hear

Joseph Montoya

it. see I how That's

DeForest Hinman

related or about business that, gross that subtraction from that's is we're just then to that $XX as the thinking the $XX then And part number? would that of million, that And the… a the when million it be a royalty grows, there's is

Joseph Montoya

in As the the only saltwater it's proportionate disposal event we reduced interest. the applies and royalty to drilled

specifically it's that significantly. a to very to So, a very of amount expand not any water, caliche, generate it's - disposal which we’ve opportunity another a of small - pretty plans related royalty fresh that But straight saltwater revenue. got

to reserving want is that So, that that saltwater it that, royalty clear they're saltwater make just that want future just pieces. future make they're I it only on royalty only I disposal is clear that reserving to disposal

DeForest Hinman

explore that I in did I property some put if wells, How wells a can on little what on saltwater well to you could plural, to ranch? that. saltwater a is understand that want there And that What there saltwater guess drill sounds saltwater area? the bit, does cost like comparative opportunity us it - wells be? a to well, many is it help well that already. from or

Joseph Montoya

saltwater on It discussing I the that significant really the exists mean just quarters news very piece. which a on zone if there's and looking going other is we're that the you're well, that adjacent as potential more That's in will think better depends that and really as we very got which it's a much we're that opportunity matures with way going as opportunity. right We've Devonian. give not a handle and very good opportunity significant into looking the - geologic but go to disposal owners you now, companies, gas we're at. that joint ventures color future you're oil ranch that thoughts develops. about talking not I a broad some you're asking It whether into question, Devonian a mean, you're to at

Robert Jornayvaz

in point, would we royalty Bob start do, don't Yes. at And information introduce the those in those no and have more lines any building and you numbers. royalty. guess, as saltwater consider to basically we that out of it disposals says, should be I modeling to that going any currently The forest, you appropriate the any giving along you're as since

DeForest Hinman

it think first the handle to from there's was relates I I'm perspective. exercising just them clearly get EOG on me sort positive stated with read a contract answer questioner deal obviously when deal close is made their do we with a a And then, it strategy. relationship have closed. supply some supply from or from not get contract when But guess trying EOG that to of this the I as right but not? of refusal better to previous a we It last the

Robert Jornayvaz

no impact impact presentations their impact. to ancillary on on rather than the their reading answer would businesses yes. themselves. it oil and go press on XXXX their has then terms of and minimal get have But primarily and if EOG website focus out had revenues you water to access would virtually releases specifically supplying and In is - building out EOG’s them, have And is drilling it buying them their to trying gas very of or services you’re IR and no

new So with it great the a fit. excited a was relationship - It's about. that great EOG we're it's

plans it so announced and their simply into are available just which in - throughout readily their didn't publicly And their presentations IR it website. announced easily fit

Operator

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

Jason Ursaner

Just first to potash. question. Joel's follow-up wanted the on on I

came but You're is it with some all that of like that have that million the the $X news now segment. seeing revenue but through byproducts’ in looks segment still you the potash

of kind of So, those of a which gave of think kind think segment? brines high if about chloride, is way full salt, way you I of Is breakdown is water, there any about kind into look at which those of mag other. going and each to to level high-level

Robert Jornayvaz

the follow-on to and in the primarily say way would probably and potash evenly guess different in relate do it, that to going of continue really it's salt to to water we've take number be at the segment to the that and see brines. between then mag byproducts compare that to specifically, other question split What less probably years, to amount. look with with Trio the do kind you're the for would then Joel's years and Jason, is chloride potash. we'll had I have relatively total and and the with really to water more number, to minimal and I best

Joseph Montoya

Jason, makes it out to that physically so some of more understand on up you built And in to fashion it much makes and so it coming road in just infrastructure so significant IR easy into you'll situation trying deck current from that's just be and Mexico can fits want you the clear, clean sense. whole that and make very southeast see our And, a to when pretty infrastructure the it see been New how that the a maps. see I we'll it,

confusion, road makes for then that apologize puzzle be going and we the temporary quite simpler the a deck people to on bit we'll it jigsaw to that we to we're there any do IR out get was understand, So, together. feel best a but new showing our really put

Jason Ursaner

million it kind the from now still perspective, so helping you're the though byproducts the cost byproduct. old or of that potash growing If cost But a the well is looking the is as your if way revenue of a took $X cost be perspective of reporting side, below margin? guess, looks actually as of you'd like even at I'm you’re now from credit, a ton. gross just, success I fair hurting it's that having kind it mean, on a I reported as a it it But cash and kind I $XXX

Joseph Montoya

it I cost and more than the I although now - would we’re of now transparent was because disclosing exactly sales say it's exactly. past it that say number in been has before in would That's buried

And so…

Robert Jornayvaz

why increasing percentage. byproduct and a answer is question is success. that's revenues are the they And totally totally of way they're the your – your and they're online better But being are larger because becoming they're the that reported doing

Joseph Montoya

I you as that call. and and recall, in doing that - we the discussed that would Yes. quarter be we mentioned we third agree

now with And accounting further this that is of strategy strategy execution so and our execution. just aligned

Jason Ursaner

guys weather. the And into then the any saw? on sale the of rate impact given terms that into that about weather year, issues the weather I you in would evaporation that just you issue of side forward you looking on delaying had rains next the talked kind some Is with there wetter QX sales production guess the side

Joseph Montoya

No.

the had In kind ideal fact, of situation. we

Moab Carlsbad the had of you in in right we evaporation we had Wendover in which amount winter the Utah and time wanted. that want. We precipitation is what in So

So I ever that one ranks evaporation of had. seasons we've better the would XXXX say as

Jason Ursaner

So the production mentioned Joseph, not being of just a when plants issue? down the timing the reopen weather was think issue I year-to-year, that more you

Joseph Montoya

timing weather-related. production. of Not timing of More harvesting

Jason Ursaner

just talked doing back, you to of going acquisition. had, footprint water, Bob, Dinwiddie I begin I guess you the you've you I very and a based on rights around were water that with. what the of guess most third think a on existing is water water, your very, had the first then broad on And the a lot how about

guess guess, I you – out little plant. Maybe just to parts now talked the a the you talk in acquisition – footprint a east what should you builds bit the terms of So, could the gives there. about lot the of handle more the I east acquisition about where

Robert Jornayvaz

at oil yes, take our Caprock wells, service southeast. side gas you activity side on If are north of which but the on side property, our our and north on - the the us half water farther look east didn't the and

under us then to Dinwiddie and own Northern our the And goes XX approximately and of third which service us the side River border the we had So, New next Delaware projects pond construction, production. southwest. even gas that And water – of we that go the there've first west, to in up Caprock been little over west to participating comes we is really that pond million Mexico Caprock on and be that entire property east entire off our the market off second on which will of say barrel water part at have Pecos XX,XXX-acre bit you the we allows of complements side or due million farther service least the and two the the we done, with feet and take into one civil work which if south, and side. and north which is major as the announcements a days, would then south infrastructure mine, east pipeline is of rights with actually major operational side some barrel then east the I west then the should frac the help everything water oil the has today public side, where be filling speak our Southeast has more that and system within up the

now wells of of where square Not you we rectangle, the we there's in - docks. giant now of So deliver think water to permitted. number been have the literally a ability terms of thousands can now to if or mention

Jason Ursaner

a building talked discussion when that's fair And finding I is you you with the about that? not And specifically it's mean, say that that guess part fresh pipeline is finding by the they know, be infrastructure the participating they kind said I talk I Energy, would about customer to million Select program it's availability. you're and that of part area take-or-pay in that it projects, these, right, water of challenge, of in $XX active development a know, supported an the contract.

Robert Jornayvaz

That's very fair to say.

Jason Ursaner

is in I remain think growth, kind of terms be you've going guidance in the When organic organic to on conservative. of you year-to-year tried an to it obviously, mostly And the it water, all about flat growth or growth Is basis. acquisition is mean growth?

Robert Jornayvaz

be organic. all should It

and If the organic you as Dinwiddie, producing. and to really should take have of its to to projection. But get if begin growth we're a these up close variety hooked assume online growth the going include projects - you off that's own going

with the it's So buried different of It's when million just XX-inch to service frac you a move ponds. you style areas to pipeline massive quantities of that to go from to on allows surface using flat infrastructure greater lay lay certain much X flat a - – barrel water. whole

Jason Ursaner

moving seems been in freshwater things. guess, freshwater. It more lot's level, been question And water high doing a a water? take what's me. at about the using on lot versus lot these what's of But freshwater. just, a A guess like just at made – recycled direction last of has of doing recycling has a of point you're some I for versus this your you're I just in operators what

Robert Jornayvaz

dealing but And oil New vast companies of – we're - attempt, with got going Southeast a We're Midland in not we've seeing the make every talking orders. the we number to attempt significant just seeing we're literally the Mexico. literally – are still people that week group

give want on And companies use and used to experience color some produced literally so, basis. water not been if talked there's recycled this given we're a water. a technologies trying about and other at is you your there Halliburton commercial But Alex, for looking that. decade at to and you've a to - just lot yet the being

Alex Wagner

Certainly.

produced is concern. logistics a So primarily the issue with water

technologies And to use order volumes it water, able the in so in that companies have out be the a biggest remains around while aggregating it. and how reuse there's sufficient to to in few quite challenge different there proprietary developed

And compete. water for difficult produced so place, to with the supply and infrastructure current it's in freshwater delivery

Operator

Our with Evans next is question from go SG ahead. Capital. Please Jon

Jon Evans

just think you little a you it from sequentially talk Can realization what a potash - bit again will be the roughly, clarification range? up XXX, just do a in the again, on about

Joseph Montoya

the prepared $XX to $XX remarks. We said in

So, more…

Jon Evans

If X% - strong then you And down. just side, potash, enough the to talked the about can gentleman in year? other on it seems in grew the in market, volumes for which guys is X% being the like you grow X% demand volume production about again this

Joseph Montoya

rates. That's had a fluctuates the tough question We've year-to-year. a and evaporation to answer. depends on good year, it lot A

increase production, I We much be to too give but ability to reluctant have some upside that. would on

Jon Evans

And then just the last question…

Joseph Montoya

timeframe. that We we I right-sized just shortened range right-sized - us the our we set that But increased and if to and bit executing on. in pricing, strategy production the available we were little we're and color, selling and facilities - circumference could the in of out the kind was we a we our which of the XXXX so of to add gave opportunity were decrease

Jon Evans

come you to And out, the the year into have received you on where I’m that last and come as then next us deferred left large what the the just question, filing hasn’t the you customer update - since just you could then is the - sorry.

Joseph Montoya

the was $XX million. in the - It’s prepared that was prepared in That remarks.

Jon Evans

Is understand with get And to time help accountants? that? know a I realize so can you when your just that. do period me you there

Joseph Montoya

be. would There

still we into a pay the request is going water. which on that much from is to kick We take would our I’ll a a robust. else think didn’t need the it. The there detail in. But so rules the we’re bore recognizing don’t’ everyone deliver and for get don’t in in or let start even water So, and forecast that before at too we because area to point going and But get water, I if the the in customer before deliver there. accounting kicks think there want accounting time in be us we’re call. the take contract just while to revenue We little would

Jon Evans

Will relative that, all or contract? the million it you be quarters get XXXX get is you will to take it or upfront then last is in or for then? payment that how And pay still $XX again over flow question to the the going cash

Robert Jornayvaz

it’s quarterly. been from announcement. its always Well, It’s been

Jon Evans

Okay.

Robert Jornayvaz

Well, thank you for the question.

Joseph Montoya

would cash receive that of range expecting the I are we’ve we disclosed. say to

Operator

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

Robert Jornayvaz

to for you everybody taking Thank and We your look dial-in really speaking future. time Intrepid forward to the today. the with everyone appreciate interest in near in

Operator

today's call. conference concludes This

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

Intrepid Potash (IPI) 12 Mar 192018 Q4 Earnings call transcript