Thank you for standing by. This is the conference operator. Welcome to the CES Energy Solutions Corp. Q3 2021 results conference call and webcast. 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. To join the question queue, you may press Star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing Star and zero. I would now like to turn the conference over to Tony Aulicino, Chief Financial Officer. Please go ahead. Thank you, operator. Good morning, everyone, and thank you for attending today's call. I'd like to note that in our commentary today, there will be forward-looking financial information and that our actual results may differ materially from the expected results due to various risk factors and assumptions. These risk factors and assumptions are summarized in our Q3 MD&A and press release dated November 11, 2021, and in our annual information form dated March 11, 2021. In addition, certain financial measures that we will refer to today are not recognized under current generally accepted accounting principles. For a description and definition of these, please see our Q3 MD&A. At this time, I'd like to turn the call over to Tony Aulicino, our President and CEO. Thank you, Tony. On today's call, I will provide a brief summary on our financial results released yesterday, followed by our divisional updates for Canada and the U.S., along with a brief update on the international businesses we have entered into recently. I will then pass the call over to Tony to provide a detailed financial update and an update on capital allocation. We will take question and answers, and then we will wrap up the call. I'm gonna begin this call today by highlighting the fact that our leader at CES and my business partner of 22 years, Tom Simons, has decided to retire, as announced last month. I want to thank Tom sincerely on behalf of our employees, our board, our shareholders, and myself. It is with a heavy heart that I wish Tom all the best for his future. Tom and I began working together at a small private company 22 years ago. It has been a great ride with a great friend and a great man. Tom guided CES through 15 years of mostly great times, but also with a steady hand and outlook through some very challenging times. He has helped place our company in the current financially stable position we find ourselves in today. Tom leaves CES very well-positioned in perhaps the most optimistic time that the industry has seen in seven years. I will truly miss Tom in my business life, but we will forever be friends. On behalf of the CES team and our shareholders, I want to once again thank Tom and wish him all the best for the future. I'm honored to have the support of the board, the executive management team, and our employees to have the opportunity to lead our great company. I wanted to take this opportunity to clearly lay out my priorities with regard to corporate strategy. I will continue to run our decentralized business model by making major decisions with the executive management team. This is what Tom and I have always done since going public. Richard Baxter, Vern Disney, Tony Aulicino, and I will continue to meet regularly to come to consensus on major decisions before I recommend them to the board for approval. As always, our main priority will be to grow our main business lines faster than our competitors at all times, and we'll keep a keen eye on margin targets. We will continue to invest in ourselves through opportunities that meet our minimum IRR and provide strategic advantage. We will continue to look for opportunities to expand internationally. We will continue to evaluate M&A opportunities as they are identified, and we will continue to evaluate the potential diversification of our platform into other chemical markets. Next, I will commence with the results summary by noting that for the first time in years, I see optimism and excitement in the oil field space in North America and worldwide. At CES, we share that optimism in the macro outlook for our industry amid a very constructive oil and gas supply-demand balance. Q3 2021 was a great quarter for CES. Revenue of CAD 314 million, EBITDAC of CAD 42 million, and EBITDAC margin of 13.4% were all at their highest levels since pre-pandemic. All three of these key metrics were back in the fairway of our recent pre-pandemic levels. Since the low point of the pandemic in Q2 of 2020, we have been on a steady path of recovery, with revenue growing each quarter sequentially. I'm extremely proud of the executive management team and of our employees for cautiously guiding the company through the uncertainty of 2020 and for positioning us for success in the much stronger market we find ourselves in now. Our outlook for the rest of 2021 and 2022 is very optimistic as we anticipate a market which will allow us to yield significant free cash flow. In order to meet demand created by this enthusiasm, we have strategically invested in inventory and commitments across our business so we can supply our customers in a very dynamic supply chain period. Our best-in-class supply chain team recognized the signs of upcoming issues early in Q1 of this year. Together, we developed a strategy to minimize our exposure to the risks of key raw material shortages and higher product costs. This has been a monumental challenge, which we have met with a monumental effort. Security of supply for our customers on both sides of the border has been the focal point of the strategy. We continue to work with our customers to emphasize the importance of accurate forecasting in all parts of the business. Gone are the days of seven eleven shopping models, where you could simply call and place large orders and expect immediate delivery. Lead times and planning are critical to supply in the current environment. We moved quickly to opportunistically buy lower priced inventory through Q2 and Q3. In Canada, we did so aggressively to ensure we could get through the winter drilling season. I want to thank our customers and our marketing team for supporting CES by generally working with us to offset cost increases on both product and labor, largely in real time. We have done this by focusing specifically on affected products and rates, not through across-the-board price increases. Although these have been difficult conversations for all involved, and not all conversations have yielded the ideal outcome, it has allowed CES to largely offset overall margin erosion, supply issues, and adequately staff our business. With that said, I'll now move on to summarize Q3 performance in Canada. Canadian drilling fluids made another strong contribution for CES in Q3. Our customers in Canada are experiencing a strong market, and CES has been there to support them. As always, we are doing what it takes in a demanding market in order to support our customers and contribute to their successes. In light of a tight labor market, we have managed to hire sufficient staff to support the increased activity, although this has been a significant challenge as well. Today, we have 67 jobs underway in Canada. At PureChem, our Canadian production chemical business, we had another solid quarter in Q3, both financially and operationally. Each month in the quarter was at or very near all-time record revenue levels. Similar to the drilling fluids group, margin erosion and security of supply have been the main focus area. We are working with our customers to ensure we have accurate forecasts of anticipated volumes so that we can guarantee them delivery of the products and services which are critical to their businesses. We continue to see nice contributions from our frac chemical and stimulation groups. Although there has been significant cost escalation in both of these business lines, and now more than ever, it is critical to have inventory on the ground to support them. We view these business lines as low CapEx, low manpower, and sustainable, although obviously variable depending on commodity pricing. These lines both fit nicely over our existing infrastructure and supply chain and are flexible to scale up or down as required. The other three Canadian business lines, including Sialco, Clear, and Equal, all continue to contribute to the financial and strategic success of the two primary business lines in Canada. Now I'll move on to the U.S. AES, our U.S. drilling fluids group, once again delivered a very, very strong quarter as well as a solid market share. It has been a long road back from the depths of the April 2020 oil storage crisis. Richard Baxter, who manages our U.S. drilling fluids group, and his committed team have proven through another crisis that they have the ability to guide the business through the toughest of times. We're not chasing market share on either side of the border and continue to have a focus on working with the right customers in the right basins for the right returns. As in Canada, our customers in the U.S. generally have worked with us to ensure we keep up with the current cost of goods increases so that we can manage margins in real time. Today, we have a market share of approximately 17.5% in the U.S.A., with 96 jobs underway, including an industry-leading 27% market share in the Permian. Next up is Jacam Catalyst, our U.S. production chemical business. This division also had another great quarter as it continues to profitably gain market share despite a very competitive environment. The Permian region continues to backstop the business. However, we have additional strong key contributions from the rest of Texas as well as the Rockies, which obviously includes the Bakken. Although we have faced significant supply chain challenges in this division as well, we are proud to have the advantage of being the basic manufacturer of a lot of our products, so we were able to avoid disruptions that less capable companies could not avoid. Overall, we are very confident in our Jacam Catalyst business and look forward to more of the same consistent growth in revenue and earnings. I will finish with a quick update on our recent forays into international markets. The drilling rig in Oman has completed its first of two wells. The drill was successful, and the learnings by CES were significant. Once the customer evaluates the success of the current well, a further tender for more drills may be initiated. This is a long fairway, and we are in very early stages. In Nigeria, our partner company, PEARL, has now taken delivery of the first three containers of production chemical concentrate that we have shipped to them. As we speak, they are preparing another order for three more containers, likely to be shipped in Q1. As with the Oman business, this is a growth opportunity in the very early stages of a long runway to making a meaningful contribution. In conclusion, I want to personally thank each and every one of our 1,700 employees for their commitment to the business, culture, and success of CES. As well, I want to, of course, thank all of our customers for their commitment to CES in good times and bad. With that, I will turn the call over to Tony for the financial update. Thanks, Ken. CES' Q3 demonstrated continuation of strong financial momentum through 2021 and reaching distance of pre-COVID levels. Key financial metrics improved across divisions, including revenues, margins, and surplus free cash flow generation, underpinned by a focus on strategic investments in working capital and preservation of strong balance sheet and liquidity metrics. CES realized improvements throughout its business lines amid strengthening industry conditions as it was able to leverage its established infrastructure, strong industry positioning, committed employees, and strategic investments in key raw materials. The continued positive momentum demonstrated in the quarter has been supported by improvements in rig activity, higher production volumes, pricing increases, and strategic procurement initiatives that are expected to continue through the balance of the year and into 2022. As industry activity levels continue to improve, CES remained disciplined on capital expenditures during the quarter, retaining substantial liquidity while also making strategic use of its balance sheet to finance key surplus raw material purchases in order to meet the increasing needs of existing and new customers, manage product cost inflation, and mitigate the effects of global supply chain constraints. We exited the quarter with a net draw on our senior facility of CAD 51 million versus a net cash position of CAD 12 million on June thirtieth. The increase was primarily driven by a working capital build associated with strong increase in sequential quarterly revenue, combined with strategic surplus raw material purchases driven by unique global supply chain environment. In addition, CES repurchased approximately 863,000 common shares for $1.4 million or $1.66 per share under our NCIB program. CES has continued to realize strong demand and also invest in our surplus inventory since the end of the quarter, and our current net draw on our senior facility is approximately $81 million. CES's Q3 revenue of $314 million represents an increase of 89% from Q3 2020 and a sequential increase of 24% from Q2. Revenue generated in the U.S. was $197 million or 63% of total revenue for the company. I would note that AES continues to effectively operate on the right jobs and with the right customers as we continue to approach pre-COVID levels and continue to realize operational and financial torque in that business. Similarly, Jacam Catalyst, our U.S. production chemicals business, which helped carry the business through the lows of 2020, has continued its trajectory and is getting very close to pre-pandemic levels through increased volumes, market share, and improved pricing. Revenue generated in Canada was CAD 117 million in the quarter versus CAD 52 million a year ago and CAD 78 million in Q2, thanks in part to the seasonal increase in activity in the Canadian drilling fluids business. Canadian revenues benefited from increased drilling and completions activity, coupled with higher production volumes and frac-related chemical sales as revenue levels in production chemicals surpassed pre-COVID levels and drilling fluids continued its steady march upward. CES achieved adjusted EBITDAC of CAD 42 million in Q3, which is more than double the CAD 18 million generated in Q3 2020 and represents a substantial sequential increase of CAD 10 million or 31% from the CAD 32 million generated in Q2. Adjusted EBITDAC margin in the quarter was thirteen point four percent, representing a significant improvement from the 11% recorded a year ago and a sequential improvement from 12.6% in Q2 as the company benefited from stronger competitive positioning, pricing increases, and increased drilling and production levels. I would also note that we are closely watching product costs and their potential impacts on gross margins. Our procurement team has been industry-leading in terms of strategic inventory purchases during the last year, and our sales and marketing teams have been working very closely and respectfully, as Ken mentioned, with customers on pricing increases. However, we do anticipate a potential lag period as pricing catches up to increased product costs. At CES, our main financial priority continues to be surplus-free cash flow generation. I am very proud to report that during Q3, our funds from operations was $35 million, representing a substantial increase over $23 million in Q2 and actually above the $32 million generated in Q1 of 2020, which was prior to the COVID-related downturn. CES has continued to maintain a prudent approach to capital spending through the quarter. Net CapEx spend for the quarter was $9.8 million, representing approximately 3% of revenue. We will continue to adjust plans as required to support existing business and growth throughout our divisions. For 2021, we expect cash CapEx to be approximately $30 million, of which $20 million is estimated as maintenance and $10 million as growth. Our balance sheet continues to benefit from the attractive structuring and maturity schedules of our credit facility and senior notes. We ended Q3 with CAD 372 million in total debt net of cash, comprised primarily of CAD 288 million in senior notes, which mature in October of 2024, and a net draw of CAD 51 million on our senior facility. During the quarter, we successfully completed an amendment and a two-year extension of the senior facility, which addressed the needs of the company's expanding U.S. business by shifting $20 million of availability to the U.S. while preserving total facility size at a Canadian dollar equivalent of CAD 235 million, providing ample liquidity versus current draw levels. As Ken mentioned, we are increasingly optimistic about the industry outlook and CES's ability to continue its strong financial performance. This combination is key to informing our capital allocation decisions, which we revisit as a team on a quarterly basis. In terms of capital allocation considerations, we continue to prioritize capital allocation towards supporting existing and new business through investments in working capital and modest CapEx projects that deliver IRRs above our internal hurdle rates. We remain very comfortable with our current dividend, which represents a yield of approximately 3% at our current share price and is supported by a very prudent payout ratio in the mid-teens. We will continue to buy back at least enough shares to offset equity compensation-related dilution. Year to date, we have repurchased 7.7 million shares, representing 3% of outstanding shares, which is approximately double our stock-based compensation related dilution for the year. As we are becoming more optimistic and comfortable with our outlook and free cash flow generation, we will revisit becoming more active in our NCIB program, especially at current valuation levels implied by our stock price. We will also continue to use remaining surplus free cash flow to reduce leverage to further strengthen our balance sheet, opportunistically purchase our bonds, and prepare to refinance our 2024 bond at an appropriate size over the next couple of years. Throughout the 2020 downturn and into the recovery period of the last several quarters, CES has consistently demonstrated its CapEx light and asset light decentralized business model, enabling generation of significant surplus free cash flow. As our customers increasingly regulate their business models to maintain spending within cash flows, we believe that CES will be able to leverage its established infrastructure, business model, and nimble customer-oriented culture to continue its track record of strong financial performance. At this time, I'd like to turn the call back to Ken for comments on our outlook. Thank you, Tony. Our outlook for the remainder of 2021 and into 2022 remains optimistic, as Tony pointed out. As economic activity has resumed from the lows of the pandemic, we are benefiting from a strong and significant increase in activity by our customers throughout North America amid a constructive supply-demand balance. Our customers are back to pre-COVID production levels in some of our most attractive basins, and rig activity continues to trend upward. The market remains competitive, but our business and employees remain hardworking, nimble and well-positioned in the market. We are very bullish on forecasted activity in our industry for the midterm, and I love our chances to grow revenues, cash flow, earnings within each of the divisions. The future at CES is bright, and I'm humbled to have this opportunity to lead our great team for many years to come. Thank you for your time. I will now pass the call over to the operator for questions. Thank you. We will now begin the question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question comes from Aaron MacNeil with TD Securities. Please go ahead. Thanks for taking my questions. I'm hoping you can give us a bit more of a detailed look at the U.S. production chemicals business. I know you're not gonna get into specifics on revenues and stuff, but you mentioned the vertical integration or as you say, being a basic manufacturer, at least relative to my numbers, it seemed like that's where some of the revenue strength occurred this quarter. I guess I'm just wondering, you know, has there been market share gains in the segment? Are you seeing other positive tailwinds that you could maybe address a bit more specifically? Yeah. Yeah, fair question, Aaron. As you saw, we did demonstrate solid growth in the U.S., and when you look at the available metrics, rig counts have been improving, but we're still marching up towards pre-COVID levels. We did see significant strength in U.S. production chemicals. As Ken mentioned, we were able to, under Vern Disney's leadership, gain market share in production chemicals in the U.S. As Ken also mentioned, when you look at production levels versus pre-COVID, although U.S. production in general is down from the 12.7 or so pre-COVID to about 11.5 currently, if you look at our most important market and our most significant market in the U.S., the Permian, volumes, production volumes are actually back to pre-COVID levels. That gives you an indicator of increase in activity. On top of that, Vern and his team have been able to source the required chemistry that our customers were looking for. We're also able to pass along pricing increases. You'll also see, and some people mentioned it over the last while in our disclosure, we talked about some bulk chemical sales that that business unit was able to put on at very reasonable margins as well. It's really a confluence of the industry coming back in some of the most important basins that we operate in and the team being able to outperform its competitors to win and gain market share and pass on pricing, and they're still in the process of that. Understood. Maybe, Tony, a quick one for you on the balance sheet. You know, obviously, the working capital grew quite a bit this quarter. Do you expect CES to sort of grow into the current working capital or do you actually see like maybe an unwind of the inventory over the next couple of quarters as this, you know, supply chain challenges ease? Yeah. Look, everybody's been able to observe our business model. What happens when revenue goes down is we harvest. As Ken mentioned, we're carrying surplus inventory, especially in the Canadian drilling fluids business. To answer specifically, we expect to grow into that working capital. Given the expectations that you heard in the outlook summary, we expect revenue to grow next year. As we do that, we expect to grow into that working capital level that's elevated at this point. As that happens, you'll see very significant free cash flow generation. Understood. Ken, maybe one for you're new to us, but not all that new to the company or the industry. I guess, you know, aside from the obvious stuff around E&P capital discipline, can you maybe just give us your sense or perspective on what you're seeing in terms of the outlook, how, you know, this cycle is shaping up from prior cycles? I mean, you sort of addressed it in your prepared remarks, but if we can expect anything different from you versus your predecessor as you kind of take the helm of the company. Yeah, Aaron. It's setting up to be an aggressive build. The biggest challenge is we keep hammering on, and I think everybody's hammering on is supply chain. We've had to get really aggressive with putting inventory on the ground more so than we have in the past. That's led to the balance sheet taking some flak and picking up some dollars. We do see it balancing. The main reason for it was Q1 in Canada, really. I mean, Canada buys about half our inventory from China and India. India is basically shut down. Shipping from China has been massively affected. Industry is being regulated there to only work a few days a week. The Beijing Olympics are coming, so they're trying to control air quality. Chinese New Year's is coming. There's just been a lot of headwinds that way, combined with manpower in Canada and the U.S., but I would say more so in Canada. We've really struggled to find people. We're competing with not only our competitors, but even the rig companies. It's made things tough. People have left the industry, and it's hard to get them to commit to coming back. Having said that, we're in pretty good shape and we're excited about what's in front of us. I think it's gonna be a busy first half of the year for sure, and probably a busy couple of years. Just anything you bring to the table that's different from your predecessor? I know you talked about the business units running independently, but anything you wanna highlight there? I mean, Tom and I worked together for about 25 years, Aaron, and I believe we see the world largely the same. You know, to be totally honest, when over the last bunch of years as we've been working together, we visited all the time and came to a lot of the same decisions at the same time. I'm not sure that there will be any massive changes. My hope is to emulate him on the leadership side and, you know, maybe be a little more open to looking at M&A if something good comes along, but that's really it. Other than that, I think steady is the course for now, and we'll see how that evolves over the next six months. Understood. Thanks, for your time. I'll turn it over. Thanks, Aaron. The next question comes from Tim Monachello with ATB Capital Markets. Please go ahead. Hey, good morning, guys, and welcome, Ken. Congrats on getting that first prepared remarks section out of the way. Thank you. I just wanted to talk a little bit about what you're seeing on the supply chain front. Like, I don't know if you can get into specifics, but are there, you know, specific or, you know, certain regions or business lines that are most impacted? It sounds like the Canadian drilling fluid space perhaps is the most. Do you think you're ahead of that? Are you seeing anything change on the margin? Is the supply chain getting tighter or looser? Well, I mean, I think it's on the Canadian side. It's definitely the drilling fluid space that we've had to be. It's because it's more seasonal. We have this big ramp up into Q1 every year. Usually, we can buy going into it. This year, we had to pre-plan for it because we're so concerned about not being able to get stuff in the coming months. As far as pricing goes, I mean, we're working on that all the time. I'm visiting with the customers I have. Our sales people are visiting with their customers. We're advertising on LinkedIn about supply chain crisis. We're doing everything we can. I mean, we don't really have to blast it from the rooftops because, I mean, everybody in their everyday life is dealing with the same problem. The inflation is through the roof, and selection is way down because it's hard to get stuff. It's a unique year in that regard. I don't remember ever going through anything like this in the last, whatever it's been, 35 years in this industry. We're trying to make that case. I, you know, I'd say by and large, we're getting buy-in from more customers than we're not, but definitely not getting buy-in from everybody. It's a challenge, and it's kind of the business I've been living and breathing for the last 35 years. It's every day it's a new fight and a new opportunity to work with clients to come to something that works for both of us. I guess to summarize, we're working on it every day, and we're trying to get margins up as much as we can in line with what we're paying or what we're seeing in increased costs. Okay. As you go into a sort of tightening market, I guess, especially in Canada, and you've got this sort of edge of inventory where, you know, perhaps some of your competitors don't, are you being able to translate that into, you know, better market share or new customer relationships? Well, it's definitely a topic of conversation every time we go into a customer's office. I mean, supply chain, you know, if we're doing 100% of the work for them, then we're not pitching this. But if it's a company we're not working with or we're doing a small percentage for, supply chain diversification is probably key for everybody through this. And on our side, we're hoping that, yeah, in Q1, this is gonna be a big advantage. We see shortages. I'm not gonna telegraph where we see them, but we believe there's going to be shortages of key products through Q1 in Canada, and we believe we've positioned ourselves to not experience that. As you go forward, and I know it's a very dynamic situation, but can you provide some insight into how the company's, I guess, monitoring the supply chain issues and as things perhaps loosen through 2022, how do you make sure that you're not long, higher cost inventory? We're doing that just by working with customers and getting accurate forecasts with them. We subscribe to some publications on supply chain, and then we have a supply chain that's living it and breathing it in real time. You know, I'm constantly getting forwarded emails of communications between our supply chain team and our suppliers, where the suppliers are giving us intel on what's happening in the space and what our competitors are doing. I think we're pretty in tune with it. We don't foresee a massive shift in any direction until mid-2022 at the earliest, and we'll be prepared for that, where right now we're just trying to buy about six months out and stay on that. If in Q1, you know, as we get into a seasonally softer season, we'll have inventory levels coming down anyways, and we'll make decisions at that time about what to do with the second half of 2022. Okay. Last one from me. You know, Ken, you've done a good job at least of being credited for a lot of the good work that's been done in Canada in turning around the margin profile, especially in the PureChem business. Overseeing the whole company, is there any lessons there that you learned that you think, you know, could be applied elsewhere in the business? If so, how do you see that progressing? I think we're doing. I mean, we're honestly very satisfied with the margins that we're getting in the U.S. I think they're fair to the operator and fair to us as a service company. Once again, to be honest and to share credit, you know, some of the things I learned in working with the Canadian divisions, I picked up from the U.S. division. You know, I'm not sure there's a lot of work to do there. As the market gets strong, if there's shortages in people or if our customer base gets super busy and we can drive more efficiency, then we'll start to see some margin improvement there. We're already heading in the right direction and I think everybody's doing a great job in the business now. Okay, great. Really nice print, guys. I'll turn it back. Thank you. The next question comes from Keith Mackey with RBC. Please go ahead. Hi, good morning, and thanks for taking my questions. Just maybe to start out on the international initiatives. You mentioned that you know, things have progressed well there. Do you foresee you know, the current projects you're working on, you know, being the beginning of a snowball in the international you know, based on how they've gone and the results and lessons that you've learned? Or is this still an entry point that will take you know, additional time to really flesh out? I think it's the second part with a mix of the first part. This is gonna take time to play out, but we do have a lot of optimism around our chances for success in that market and growth into that market. I've personally been spending quite a bit of time on this over the past three, four years. We've looked at a bunch of stuff, including the Q'Max breakup when they were trying to sell off their Kuwait business. I mean, we've been quietly monitoring that market for the last, call it, five years. It will be something that I will put emphasis on going forward and trying to grow it. It is contingent on, you know, first of all, how this project goes that we're on now, and second of all, what we can directly pick up off that project. 'Cause we have to get not only a foothold in the Middle East, but also kind of a reputation there so that other companies will trust us. We are working on some other stuff in real time right now that could turn into something, but just nothing to announce at this time. Got it. Thanks for that. Maybe just as a follow-on then, you mentioned you might be a little bit more open to M&A than in the past. Are there any obvious gaps that you think the business has, whether it be more of the international type stuff or anything within North America to really drive the next leg of the business? No, I think we have no holes at all. I'm just talking in an opportunistic sort of way. I mean, we did something a year or a year and a half ago, once again during that QMax breakup, where we were able to buy some, not some business off them, but just some product line off them, because we took the time and threw kind of a stink bid at it and won. I would say that if there's opportunities that look so good we couldn't pass up on them. We'll take a look at them, but as of today, no, there's absolutely nothing on the table. Got it. Thanks very much. That's it for me. The next question comes from Andrew Bradford with Raymond James. Please go ahead. Good morning, guys, and welcome, Ken. Thank you, Andrew. In your comments, you mentioned, you know, you talked about some market share gain. I'm speaking about U.S. production chem sales. I'm just curious. Would you characterize this gain as sort of being through your involvement on, you know, newly constructed wells that are coming on first production? Or is this, like you're grabbing share or restarting a previously shut-in legacy producing wells? I think it's a combination with a big emphasis on the former, on the first category. As we've said over the calls over the past few years, the volumes of production chemicals sold during that initial production phase is obviously high. Really it's been the Jacam Catalyst team doing more with existing customers and winning some new customers and gaining market share that way. If you look at the trends, as I mentioned earlier, with the high production volumes getting back to pre-COVID levels, especially in the Permian, where Jacam and Catalyst, which we acquired back in 2016, had a very strong presence in that business has continued to invest. We added a new lab last year because we were committed to it. We have added some more real estate to support new business, and it's paying dividends by winning more work from existing customers and winning new customers on the new types of productions, not the smaller, lower volume producing wells that you're referring to. Great. Thank you for that. As well, when it comes to the drilling fluids, the U.S. drilling fluids business as well, you know, as we think about market share outlook here, I you know, I appreciate you're really focused on customers that work maybe in more of a partnership with you. But do you expect this sort of formula that you form with these customers, do you expect this formula could facilitate market share gains in the near term? Or do you think if you were sitting on our side here, that we should just look at 17.5% as sort of your baseline for the next few quarters? Well, I think, you know, the model we have doesn't eliminate the opportunity for market share gains. Although, you know, generally speaking, half the rigs that are working in the U.S. are working in the Permian Basin. We've got a strong market share there. Then the other half are working everywhere else where we don't have that great of a market share. Every time you pick up rigs and they're spread evenly through those two sort of regions, call them, it dilutes our market share, even though we're still doing equally as strong in the Permian where we wanna be. When I talk about where we wanna be, it's because it's more technical work, and it's because we have infrastructure there. We've made an investment in that space, and it's put us right in the middle of the play with the best equipment and the best people, which gives us a big advantage, not only to our good customers, but also to pick up other customers. The problem is, you know, to invest that kind of CapEx into a play, there has to be returns there. There has to be significant activity. There has to be technical enough work that we can make a difference and beat out our competitors. So far, you know, there's a few places where we're doing that in the U.S., you know, the Northeast being another one where we have it and the Eagle Ford. You know, as far as places like the Bakken, the wells are pretty simple. The margins have been beat down there. We've tried to play in that space before. We don't currently have infrastructure there, so when we go in there, we're working out of a third-party warehouse, and we're not competitive on price. You know, I guess the answer is that as long as this market share growth continues in the Permian, we'll continue to capture around 1/3 of that, 1/4 to 1/3, call it. When rigs get picked up in some other places, like what happens in Canada, it may dilute the market share. We'll just have to see how it comes back. No, no, that's a great and complete answer. Thank you very much. My next two are fairly disjointed here and fairly quick. You know, labor constraints, you described this as well, and this usually works pretty well for oilfield services companies when it comes to pricing, at least in other areas of the oil patch. You know, you're more of a product-oriented combined with a service provider, so it's not clear to me how that works. Do you think labor constraints can work? They're certainly hard to deal with, but do you think they could ultimately work in your favor margin-wise? Yeah. I mean. Yeah. For sure. We'll see how Q1 goes. You know, I think the problem with the labor constraints isn't just directly as it affects us, it's with how it affects all the other services like the major ones, the drilling rigs. You know, we've had rigs shut down for weeks at a time, even when they were staffed, because of COVID outbreaks. You know, between the COVID risk on labor and just the lack of being able to find people. It's if that causes us a bigger problem than anything because I think there's demand. You know, listening to my friends on the drilling side, there's demand probably to run 250 rigs this year, but I don't think they're gonna be able to find the people for it in Q1. You know, down the road, once everything gets adequately staffed and we can get enough rigs going that it starts to affect service company ability to get hands, then maybe we have room to move on margin. The problem with the personnel piece is we charge the men out on a day rate basis combined with the chemical, so it's easily comparable. As long as our competitors are willing to not move that number, it's a flat easy number that companies like to spreadsheet. It's really hard to move that number up until everyone does. Okay. That's great. Thank you. The second question was, there's just a small item here of, you know, growth capital in the quarter. You know, it's a small number, but it still is larger than any of the numbers we've seen for a while, you know, CAD 5 million. I think this was for a site just outside of Edmonton, but I wonder if you could just throw out some color on that. Yeah, for sure. It's something that we discussed midway through the year, and it was spearheaded by the Canadian group. We made a decision to spend. During this year will be somewhere between CAD 3 million and CAD 4 million and a little bit more in the new year to expand our facility in Nisku. That gives us increased capabilities from a logistics, storage, and manufacturing perspective to supply some of the very specific key raw materials and chemistry that is in high demand. It was a very targeted investment. The IRR as presented and discussed is well above our 15%-20% internal hurdle rate. That's what it was for, Andrew. What we hope to gain with that, Andrew, to put a little bit more color on it even is days of safety stock. Our throughput, as productions come back on in Canada, has gone up significantly, and our days of safety stock had dropped significantly. It's to expand the amount of days that we have on the ground ready to go. That's great, guys. Thank you very much for taking my questions. Thanks, Andrew. The next question comes from Cole Pereira with Stifel. Please go ahead. Hey, good morning, guys. I'm back. Congrats on the quarter. Obviously, the business continues to improve, but there's some cost pressures. Can you just add some additional colors on how we should be thinking about gross margins on a percentage basis over the next couple of quarters? I mean, it sounds like they might compress near term, but, I mean, obviously, there should be an inflection point as well. I'll start with that, Cole. Fair question. Really, obviously, we're not gonna provide specific numbers, but I would say directionally, we're talking the same trends as some of our competitors, specifically in the U.S., have talked about. We have been seeing significant increases in the costs of our inputs. We've been very smart and aggressive by trying to get in front of as much of that as possible. We are getting into the times now where the COGS costs that we're realizing when we generate that revenue are creeping up versus a quarter or two ago. However, we are increasing pricing as well. As I mentioned, there's a lag period. Directionally, I think we're not getting back to the higher levels that you saw the last couple of quarters. I think what you're seeing right now is indicative of similar to what our peers are seeing for at least the next couple of quarters. I'd like to be pleasantly surprised, but that's what we're preparing for. Having said that's our objective is to make Tony very, very surprised. Okay, perfect. Yeah, that's very helpful. Just wanted to come back to your comments, Tony, on the U.S. production chemicals market share gains. I mean, sounds like you're getting some new customers and, you know, winning some more work with existing ones. I mean, what are really the drivers of that? Is it really come down to performance, or can you just be a bit more agile than some of your larger peers? It's both that business. That business, first with Jacam and then with Catalyst was the catalyst, no pun intended, to the vertical diversification that we did not have before Tom and Ken and the team made the expansion into the U.S. by acquiring Jacam. Then, when we acquired Catalyst and Vern and the team came on board and Vern took on leadership of that overall business, they continued to do what they did, which is beat out some of the bigger competitors with customers that maybe at first were a little bit smaller but grew. They were results-oriented. They were looking for the products, chemistry, vertical integration that Jacam Catalyst could deliver. Then, our teams just Continue to service the heck out of those customers, better than our competitors. We have the infrastructure. We've made the investments. We continue to support that business with capital for CapEx, like the lab, like some of the additional real estate, as well as working capital requirements. We talked a lot about procurement, but just step back and appreciate the fact that we have this North American footprint allowing the U.S. and Canada to help each other out with new supply supply chain sources and to be able to manufacture molecules from the raw chemistry level. It's really all of those things and a continuation of focus on the customer supported by the infrastructure that we have. Okay, great. That's helpful. Thanks. Maybe coming back to supply chains quickly. I mean, obviously this remains an evolving issue, but fair to say, based on your comments, that you're fairly comfortable that in Canada, in Q1, you don't think there'll really be any business interruptions as a result of supply chains. Can you clarify as well, is this both business segments? Yeah, it's both business segments, and that's correct. We have enough inventory on the ground now to get us through Q1. What we don't have on the ground, we have take or pay deals on. We have guaranteed supply as we need it, because some of the stuff is just too cumbersome to store. You know, having said that, you never know what's coming next. Right now, unless I don't know, some other catastrophe hits us, I think we're in good shape on both sides of the business. I mean, we're a little closer to the sun on the production chemical side on one particular product line, like everybody in the industry is right now. We have not dropped the ball yet, and I think we are one of the only ones who have not. We think we're gonna get through that one as well. Okay, great. That's all for me. Thanks. I'll turn it back. The next question comes from Josef Schachter with Schachter Energy Research. Please go ahead. Thank you very much. Good morning. Ken Zinger, congratulations on becoming CEO and your first analyst and institutional conference call. Please wish Tom Simons much success in his retirement, and it was a pleasure working with him in the past, and looking forward to working with you and Tony Aulicino in the future. I have three areas that I'd like to cover. One of them would be the supply chain issues. You mentioned earlier about procurement and issues for key raw materials. You also mentioned India and China and because of the smog and things slowing down there. Are there any specific areas where you have like, you know, like rare earths and other things which you need to maybe have longer lead times than six months of inventory? Do you see when China gets back after the Olympics that process of getting the materials you may need or India not gonna be impacted? How do you discuss all of the timeline issues related to items you're bringing in from Asia? A great question. We don't have any rare earth mineral type stuff that is hard to get a hold of. We do believe that as China unclogs and gets going and U.S. ports unclog and get going, we'll be able to get product. I also wanna clarify that, you know, we've been buying a lot of product from China because the quality has been excellent and the shipping times have been consistent and the pricing has been better than what we could do in the U.S. in some cases. In some cases, we can only get it there, but in a lot of cases it's strictly a decision to buy from there because we can get things cheaper. As this has unwound, it's put us in a situation of having to, you know, work with our U.S. counterparts and delve into their supply chain from Canada, because Canada was buying more internationally, and try and get local supply. The problem is we had to move really quickly and start sending some orders to those guys because as it got busier, nobody was taking on new clients. We think we've done a good enough job with that. We've reverted to, you know, on the barite front in Canada, we would mine that out of India for the last bunch of years. We're no longer doing that. We've switched to a mine in Canada, and we're getting some from our own, Superior Weighting Products down in Texas, in Corpus Christi, because those two options used to be uneconomic. Currently, with the supply and demand metrics in place, combined with the difficulty in getting shipping on time, they are now our best choices. Okay, good. Thank you on that. Second one, we saw from PSAC that the rig count, they're looking for next year 5,400 up from 4,650, a 16% increase. Do you see those kinds of numbers being logical given your customer conversations about how much increased activity they see and how much more business that's gonna generate for you? Yeah. I think in Canada over the last 10, 15 years, we've had a pretty consistent market share. If the rig days goes up, we'll participate in that to the same level we always participate. As far as whether it's possible or not, I think where you can get the win on the contractor and operator side will be in Q2, and that'll be the decider. There has been times when we've run 100 rigs through Q2 back in the good old days. That's CES, not the industry. The last bunch of years here, it's pretty slow in Q2, not because it has to be, just 'cause it's a little bit more expensive to drill during that time. If operators really decide they wanna get busy, you know, I think they can average 220 rigs probably through Q1, and, you know, they can probably average at least half of that through Q2 if they want to, which is not what I think most analysts are predicting right now. Yeah. Is your business pickup happening more on the private companies which don't really have the market pressures for shareholder returns? Are you seeing more of a pickup on the private company activity in both sides of the border versus the public companies? You know, on the Canadian side, I think it's the bigger companies. I think just with capital where it is and WTI where it is, you know, 65% or 75% of free cash flow for these big oil companies is growing. It's becoming a bigger number. We're seeing the growth. In Canada, I would say it's more on the public company, bigger guys, and in the U.S., it's probably more on the independents and the little guys. It's happening in both, on both sides of the border. Last one for me. Treatment points, you show the U.S. down 7%, Canada up 16%. Were you giving away low-margin business in the States where you didn't see the sufficient margins and weren't willing to go down to levels that were unprofitable? Do you see those treatment points going up as activity picks up? Yeah. I'll start with that one, Josef. As we mentioned in the narrative before those graphs, treatment points used to provide a higher correlation to actual revenues generated by those production chemicals businesses in both countries, Canada and U.S. What's happened that's actually benefited us from a profitability perspective is as we've evolved to treating higher volume producing wells and delivering chemistry to more and more multi-well pads, number one, the economics are better, but number two, especially if we have continuous treatment, the actual volume that we're providing for every touch point or treatment point is higher. That graph unfortunately masks the true volume trends that we're realizing, and that has to be the case because we've seen increased volumes and frankly, revenue. That's the biggest part, and we're thinking about other information that's publicly available to provide more of a better picture of the driving factors of the production chemicals business. The other thing, as we mentioned, I think in both the press release and the MD&A, we did benefit from some significant bulk chemical sales, especially in the U.S. Unlike previous cycles, that obviously that margin is a little bit lower, maybe at the gross margin level, but the team has been very smart about that business because it doesn't require significant increases in SG&A or more importantly, CapEx. That's why you continue to see strong EBITDA margins and strong free cash flow generation, regardless. Long-winded way of saying, the treatment point metric isn't perfect. It's the best we have right now. Over the last couple of years, we have seen a bit of a bifurcation between the true drivers and that metric. Super. Thanks very much for taking my questions. Ken, welcome aboard, and I look forward to the next quarter. Congratulations on a great quarter. Thank you, Josef. Once again, if you have a question, please press star then 1. The next question comes from Michael Robertson with National Bank Financial. Please go ahead. Hey, good morning, Ken and Tony. Congrats on the quarter, and thanks for taking my questions. Just a couple quick follow-ups here. Maybe start with one for Tony. I believe you mentioned that the draw of the credit facility is currently around CAD 80 million. You touched on this a bit earlier, but based on your current inventory levels and expectations to, you know, move product and convert that to cash flow, how do you see that trending into 2022 while, you know, also anticipating incremental improvements in activity levels? You know, maybe asking another way, where would you expect the sorta peaks and valleys to sorta shake out? Yeah. So number one, we're very comfortable with at or around this level. Again, our available line is CAD 235 million Canadian equivalent, so tons of room. As I said earlier, I do expect that to go up through the quarter as we catch up on collections for the increased revenue that we've seen sequentially, and we're gonna continue to see that in Q4 and Q1, especially in the Canadian business that's a bit more seasonal. Then if it is true that we are getting comfortable with our inventory levels in particular and we grow into that working capital, you'll see that starting to come down next year. Probably not significantly at the beginning of the year, but mid probably, and towards second, third quarter for sure you'll see a deleveraging. Again, it's a good problem to have because it does afford us options that we're taking very, very seriously in terms of capital allocation, as I mentioned. Got it. That's really helpful color, Tony. Appreciate that. Then just a quick one related to the international. From what you're seeing, does it look like the shipping issues have they all eased in terms of getting sea cans from Houston to Nigeria? Was just wondering how much of that was, you know, hurricane related versus how congested the supply chain is in general right now. Well, I think that we've only done 1 shipment of 3 containers to Nigeria, and it went pretty quickly. I mean, hauling away from the U.S. is better than hauling to the U.S. As far as in, you know, international shipping, the stuff coming out of China, you know, the prices are starting to come off a little bit on getting containers, but getting containers onto ships is still a huge problem. You're competing to get on, and so the price is coming down a bit, but even when you agree on a ridiculous price, it doesn't necessarily mean you're getting on a boat anytime soon. Got it. Okay. Well, it's helpful. I appreciate you taking my questions. Congrats on the quarter. I'll turn it back. Thanks, Michael. This concludes the question and answer session. I would like to turn the conference back over to Ken Zinger for any closing remarks. Thank you. With that, I'm gonna wrap up the call by saying thank you to our customers and our employees for helping us produce another great quarter. We're pleased to be in a strong financial position and returning cash to shareholders coming out of COVID. We look forward to speaking with you during our Q4 and year-end update in March. Thank you, everybody. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.