Welcome to the CES Energy Solutions Second Quarter 2023 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 second quarter MD&A and press release dated August 10, 2023, and in our Annual Information Form dated March 9, 2023. In addition, certain financial measures that we will refer to today are not recognized under current general accepted accounting policies, and for a description and definition of these, please see our second quarter MD&A. At this time, I'd like to turn the call over to Ken Zinger, our President and CEO. Thank you, Tony. Welcome, everyone, and thank you for joining us for our Q2 2023 Earnings Call. On today's call, I will provide a brief summary of our strong financial results released yesterday, followed by our divisional updates for Canada and the U.S., as well as an update on our capital allocation strategy. I will then pass the call over to Tony to provide a detailed financial update. We will take questions, and then we'll wrap up the call. As highlighted in our press release from yesterday, some of the major financial accomplishments we were able to achieve through Q2 2023 included: Record Q2 revenue of CAD 515.8 million versus our prior record level set in Q2 last year of CAD 433.7 million, an improvement of 19%. Record Q2 EBITDA of CAD 73.9 million versus our prior record level set in Q2 last year of CAD 61 million, an improvement of 21%. EBITDA margin of 14.3% versus 14.1% in Q2 of 2022 and 13.8% in the prior quarter. This result was once again within our stated targeted range of 13.5%-14.5%. We once again reduced the total debt to TTM ratio, this time to 1.57x from 2.7x a year ago and from 2.17x at year-end. We realized free cash flow in the quarter of CAD 66.7 million. The draw on our credit facility, which peaked at CAD 221 million at the end of Q3 2022 and was reduced to CAD 167 million at the end of Q1 2023, declined again to CAD 120 million at the end of Q2. This represents a reduction in excess of CAD 100 million over the past three quarters, in spite of our NCIB activity and dividend payments. We utilized our NCIB to purchase 2.91 million shares through Q2. Subsequent to June 30th, we have purchased an additional 4.53 million shares, with 1.6 million of those being purchased under our new NCIB. For the first time, I will start this quarter summary by providing some general guidance on our capital allocation strategy for the upcoming year. We will continue to support the business with the necessary investments required to provide acceptable growth and returns. We intend to fully utilize our NCIB, expiring in July of 2024, to repurchase the full 10% of outstanding shares allowed under the approved program. We will continue to pay our dividend of CAD 0.10 per share per year or approximately CAD 25 million per year. We may choose to adjust this level from time to time as cash flows and forecasts allow. We will use this, the balance of the remaining free cash flow to continue paying down debt towards a target of 1x debt to TTM. Our outlook for industry activity in 2023 remains the same as discussed on the last couple of calls. We continue to experience a more stable environment and activity levels. At CES, we continue to anticipate that oil prices will likely be somewhat range-bound in the CAD 70-CAD 90 levels throughout most of 2023, with prices likely edging up to the higher side of this estimate in the second half of the year. We continue to observe that producers are aggressively pursuing improvements in drilling, completion, and production performance and efficiency through any means possible, including chemical additions and advancements. We continue to be well-positioned to contribute to this outcome. We believe the North American natural gas market will be a bumpy ride until the supply-demand balance improves and there is more takeaway capacity. At CES, we remain well positioned to take advantage of natural gas-related activity as it evolves over the next few years. However, our current focus is on the oil and liquids-producing basins throughout both countries. As natural gas continues to represent approximately 15% of our overall business. We continue to overcome challenges throughout the business and the industry. Although inflation in our current product lines has now largely abated, its costs have generally remained at the highs. However, now that international shipping costs and shipping efficiencies have corrected back to historical norms, it is allowing us to begin to evaluate diversifying our supply chain internationally with a few select product lines. However, we are cautious of overstepping here as we are well aware of the importance and reliability of our North American partners. We do not expect a big change here at the current time, more just educational, and if big opportunities appear with the appropriate risk profile, we may be opportunistic. I will now move on to summarize Q4 performance by division. I'll start by sharing that our current rig count in North America is at 196 rigs out of the 845 running, or a 23.2% market share. This number compares to 22.3% from the same time last year. The Canadian Drilling Fluids division continues to lead the WCSB in market share. Today, we are providing service to 64 of the 186 jobs listed as underway in Canada. The forest fires in Canada during Q2 caused delays on a few projects starting, as well as challenges due to evacuations of towns and facilities. At the end of the day, no assets were lost and the situation has now normalized. Business is now largely moving back towards normal in spite of several fires still burning in the province. PureChem, our Canadian production chemical business, saw our third highest revenue quarter ever in Q2, in spite of Q2 being historically slow in Canada. We have continued to see growing contributions from our frac chemical, stimulation, and H2S Scavenger groups as we further penetrate each of these end markets and gain market share, while utilizing only our current infrastructure and supply chain to support them. Of course, our primary business, production treating, continues to grow as well. In the United States, AES, our U.S. Drilling Fluids group, is providing chemistries and service to 132 of the 659 rigs in the USA for a 20% market share today. The number of rigs is down slightly from 136 last year, but ahead on market share from the 17.8% reported at this time last year. This includes a basin leading 99 rigs out of the 329 listed working in the Permian, equating to a 30% market share in that basin. Our second barite grinding facility, which we are constructing in the Permian Basin, continues to be on budget and is anticipated to be grinding and supplying ore to our operations during the third quarter. Finally, Jacam Catalyst continues to grow market share and revenue in the Permian. Our manufacturing facility in Kansas continues to operate at a very comfortable output level of approximately 65% of what we believe to be the current maximum capacity. We have continued the recent trend of winning more business in the region, and we believe our market share is continuing to grow in the Permian and the Rockies as a result. This has led to an increase in CapEx requirements by CAD 5 million in 2023, specifically assigned to purchasing equipment to service the added revenue, which we expect to materialize as the year progresses. Lead times for the equipment, primarily delivery trucks, is approximately six months, so investments are being made now to support what we foresee as growth in the business on the come. As always, I want to extend my appreciation to each and every one of our employees for their commitment to the business and culture of CES. It is rewarding to note that due to the growth we are experiencing, we have increased our total number of employees at CES from 2,122 on January first of this year to 2,216 today. This is an increase of 94 employees so far this year, or approximately 4.4%. Unlike last year, where we increased headcount in the company by 17% over the course of the year, we expect headcount growth to be relatively muted going forward. In conclusion, I would like to note that the results in Q1 were once again not due to any one division or area excelling. It was a balanced effort across the company in which every business unit contributed. It speaks once again to the quality of people employed everywhere in every division here at CES. As always, I want to sincerely thank all of our customers for their trust and commitment to CES in good times and in bad. With that, I'll turn the call over to Tony Aulicino for the financial update. Thank you, Ken. CES's financial results were a second quarter record and demonstrated a continuation of strong revenue, Adjusted EBITDAC, and free cash flow levels. These impressive results were realized amid stable industry activity levels through a combination of growing market share and disciplined spending. Continue to illustrate CES's cash generation capabilities in the current environment. In Q2, CES generated revenue of CAD 516 million, and Adjusted EBITDAC of CAD 73.9 million, representing a 14.3% margin. Q2 revenue compared to CAD 558 million in Q1 on seasonally lower activity levels in Canada. Represented an increase of 19% from CAD 434 million in Q2 2022. Revenue generated in the U.S. was $375 million, or 73% of total revenue for the company. This revenue number compared to CAD 369 million in Q1 and CAD 300 million a year-over-year, reflective of stronger industry activity, higher production levels, and improved market share year-over-year. Revenue generated in Canada was CAD 140 million in the quarter, down from CAD 189 million in Q1, as is expected on seasonally lower activity levels in Canada, and up from CAD 133 million in 2022. Canadian revenues also benefited from increased drilling and completions activity year-over-year. Adjusted EBITDAC of CAD 73.9 million in Q2 represented a 21% increase from the CAD 61 million generated in Q2 2022, and a sequential decrease of CAD 3.2 million, or 4%, from the CAD 77.1 million generated in Q1. Adjusted EBITDAC margin in the quarter increased to 14.3%, compared to 13.8% in Q1 and 14.1% in Q2 2022, and is reflective of effective pricing and procurement practices and maintenance of prudent SG&A levels. I am proud to report that during Q2, our net cash provided by operating activities totaled CAD 89.3 million, representing an increase of CAD 16.1 million over Q1 and CAD 102.2 million over Q2, 2022. The improvement comes from lower required investments in working capital amid continued strong revenue levels, combined with an ongoing focus on working capital optimization. During the quarter, CES achieved strong free cash flow of CAD 66.7 million, compared to CAD 54.1 million in Q1. This measure demonstrates the cash conversion quality of our earnings, as measured by some of our peers and respective analysts, by calculating CFO, less net CapEx and lease repayments, divided by Adjusted EBITDAC, resulting in an industry-leading 90% ratio for the quarter for CES. CES continued to maintain a prudent approach to capital spending through the quarter, with net CapEx spend of CAD 19 million, representing 4% of revenue. We will continue to adjust plans as required to support existing business and growth throughout our divisions, and for 2023, we now expect cash CapEx to be approximately CAD 60 million, split evenly between maintenance and expansion capital to support higher activity levels and business development opportunities. During Q2, we were very active in our NCIB, purchasing 2.9 million common shares at an average price of CAD 2.61 per share, for a total of CAD 7.6 million. Subsequent to the end of the quarter, we continued our aggressive buyback with an additional 4.6 million common shares at an average price of CAD 2.68 per share, for a total of CAD 12.2 million. We exited the quarter with a net draw on our senior facility of CAD 120.2 million, compared to CAD 166.7 million at March 31st, and CAD 208.5 million at December 31st, 2022. The decreased realized during the quarter were driven by strong cash flow generation, enhanced by the reduction in working capital investments, partly offset by CAD 7.6 million in share repurchases and CAD 5.1 million in dividend payments. We ended Q2 with CAD 478 million in total debt, net of cash, comprised primarily of CAD 288 million in Senior Notes, which mature in October 2024, and a net draw on the senior credit facility of CAD 120.2 million. Our total debt to Adjusted EBITDAC declined to 1.57x at the end of the quarter, down steadily from 1.78x at Q1 and 2.70x a year ago, demonstrating our continued deleveraging trend. I would also note that our working capital surplus of CAD 641 million exceeded total debt of CAD 478 million by CAD 163 million, and demonstrated continued improvement in respective year-over-year metrics, with cash conversion cycle improving and working capital as a percentage of annualized quarterly revenue at the low end of the historical norms at 31% for the quarter. From December 31, 2022 to August 10, 2023, our draw declined by a total of CAD 110.5 million, from CAD 209 million to CAD 98 million, driven by prioritization of surplus free cash flow generation and optimization of working capital. If you account for the CAD 24 million spent on share repurchases and the CAD 10.2 million on dividends, the surplus free cash flow was approximately CAD 145 million to date. This very strong surplus free cash flow trend will vary with lumpy outflows, but it is very indicative of the cash flow generating potential of CES in this environment. At this point, I, I believe it's important to step back and highlight the relative financial positioning of the company. CES's annualized revenue levels have now stabilized for three sequential quarters in the CAD 2.2 billion run rate range and are supported by generally steady macro industry trends. At these industry activity levels, we believe that CES's incremental working capital requirements will continue to decline and usher in a continued era of strong surplus free cash flow generation, fueled by these revenue and Adjusted EBITDAC levels. I believe it is important to highlight the developments that have contributed to CES's ability to get to this position. Number one, our revenue and Adjusted EBITDAC remain consistent at near record levels. Two, incremental working capital needs are muted in this stable revenue level environment. Three, cash flow generation and quality of earnings are steady at near record levels. Four, our recent financing effectively addresses our 2024 bond maturity, providing ample liquidity and financing flexibility for the next two to three years. This combination puts CES in an enviable position of strength and flexibility, and is key to informing our capital allocation considerations, as outlined by Ken, and supported by the following figures. We continue to prioritize capital allocation towards supporting existing and new business through investments in working capital as required, and CapEx projects that deliver IRRs above our internal hurdle rates, including a modest CAD 5 million increase to the expected 2023 cash CapEx spend. We intend to repurchase up to the maximum 18.7 million common shares under the renewed NCIB over the coming year. Year to date, we repurchased 9.1 million shares, or 3.6% of outstanding shares at an average price of CAD 2.65 per share. We remain very comfortable with our dividend, which represents a yield of approximately 3.5% at our current share price, and is supported by a prudent 13% payout ratio, well within our targeted range of 10%-20%. We will continue to use remaining surplus free cash flow to reduce leverage towards the 1x level to further strengthen our balance sheet over time. I'd like now to turn the call over to Ken for comments on our outlook. Thank you, Tony. As you and I both noted, the near record all-time Q2 results allowed us to return significant capital to shareholders. We are very confident in our ability to grow the company within a stable industry environment while continuing to provide growing returns. Thank you to everyone for contributing to these spectacular results that Tony and I have had the privilege of presenting here today. I'll now pass the call back over to the operator for questions. Thank you. We will now begin the question-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 Cowen. Please go ahead. Hey, morning. Thanks for taking my questions. I know you mentioned the 1x leverage target in the prepared remarks. Do you have, like, a, a timeline you're willing to speak to in terms of when you hope to hit that target? Once you get there, is this something you think we can take to the bank through the cycle, or how should we think about how that might change, in a, an upturn or a downturn? Yeah, I can start with that. We've had a lot of questions, you've heard, you've heard evolving dialogue over that leverage. We were talking about 1.5x-2x up until the last couple of quarters, and we're now at that 1.5x levels. I'd say we're gonna work towards that, that 1x level. That could change, Aaron, depending on what happens in our business in terms of surplus free cash flow generation, capital allocation. But right now, Ken highlighted it, and I got into some of the details. We're gonna continue to do what we said, which is maximize the NCIB, while we support our dividend, support the business. That 1x timing will depend on our activity levels on the NCIB, on our share price. We're gonna continue to work towards that 18.7, and I wouldn't anticipate that 1x to be accomplished within the next year, year and a half. It'll take longer than that, probably. When we do get to that point, we're gonna recalibrate. Things could change at that time. The NCIB could continue to be a very good option, and it likely will, especially if we're anywhere near these trading levels. We could see other growth opportunities in parts of the business that would require us to take a harder look at putting that surplus cash to work, especially if we start getting below that 1x level. Okay. I guess, what led you to focus on the NCIB rather than increasing the dividend? When we looked at the dividend, we look at it from from two specs. Number one is what do we think is a prudent level from an internal perspective to support everybody internally and externally, and that's when we look at our payout ratio. Our payout ratio, we like to have in that 10%-20% range, and it went up a little bit into the 13% level, very marginally. We're very comfortable with that level. The other thing that we do look at, we look at, but it doesn't drive the dividend number, is the yield. At 3.5%, it's not top tier, but it's competitive, especially with companies that have our level of cash flow stability and in our sector and industry. The bigger thing on the NCIB, Aaron, is as we listen to a bunch of shareholders over the, the years, they've been very supportive of our plan to get up to this very high cruising altitude level that you know very well. We had to take on debt to get there. We promised that as we started to see that surplus free cash flow happening, that we would take a hard look at what they were asking us to look at, which was the buybacks. Even before coming public with it, for people that were taking note, they saw that we were aggressively buying back shares. Not just now, but two months ago, we were maximizing repurchases. Over the last month, we maximized repurchases, and we still believe that our stock and valuation is inherently very low. We were going to wait until we put at least a couple of quarters together to demonstrate that surplus free cash flow. You're going to see us continue to do what we said, which is focus on the NCIB. We'll come up for air again, likely early next year, to take a harder look at the dividend, especially if we do have a high comfort level with the new implied payout ratio after we accomplish what we want to do with our NCIB. Great. Appreciate the color. Turn it back. The next question comes from Jonathan Goldman with Scotiabank. Please go ahead. Hi, good morning, guys, and thanks for taking my questions. The first one on the industry. Ken, it seems like service providers remain more disciplined on pricing this cycle. I guess, firstly, is that a fair assessment? If so, is there anything different in this operating environment than past operating environments or cycles that you can speak to? Yeah, I think we've talked-- good morning, Jonathan. First of all, I think we've talked about this a bit on calls in the past, kind of generally, and just in, in that the market has changed a little bit, with the international companies moving out. Yes, it's more disciplined this time. Recently, we've seen some of the private companies get a little bit desperate and start moving prices lower, so we've had to manage that. I think the biggest difference between now and five years ago is the lack of the majors chasing market share. You know, we continue to not chase market share as well. We, we talk about market share a lot because that's how everybody likes to judge us. You know, it's about prudent returns and, and responsible returns so that we can grow our company. Oh, perfect. That makes sense. One for you, Tony, on the working cap. It's another quarter where you're at the low end or near the low end of your annualized run rate. It also looks like the cash conversion cycle improved fourth quarter in a row. I just want to know if you can describe what's driving that, and how should we think about investment rates for the balance of the year, maybe into next year? Sorry, can you repeat the second part of the question? How do you think about what rates? Just what should we think about in terms of investment rates and working capital, in terms of your range, or maybe there's some other structural factors that are going on that would? Sure. change that typical range of 30-35? Yeah. Yeah. To start off with, the improvements that you've seen quarter-over-quarter is really the result of hard work by our team here in Calgary and the divisions. I give the controllers and the ops people together a lot of comfort. They've worked gangbusters. They've gone gangbusters over the last year to get us up to these revenue and EBITDA levels. Over the last six months, as they came up for air, they started focusing on those things that were that were second to winning that high profit business, and that was working capital. It's been a whole variety of bringing on the right people, of educating everybody, of using some technology to, A, measure and improve and try to optimize working capital. that's-- it's almost a cultural thing now, where it's being talked about and acted on by a whole bunch of people, and it is part of, part of our comp structure as well, when, when we look at the levers that we're trying to improve on. A lot of attention on the working capital. I'm pleasantly surprised that we, we are now still in the low end of that 30%-35% range. We'd love to pierce through it, but, we don't have visibility to whether we're going to be able to get below 30% and how long that's going to take. In terms of, of investment and investment rates, it applies to working capital, where we have to invest in the working capital to win the profitable business. In terms of investment rates in total, some of the one question that we get a lot when we talk about capital allocation before dividends and, and, and buybacks for sure, is what our internal rate of return is. The hurdle that we use is, is 15%-20%, and it's closer to 15% for production chemicals related opportunities and closer to 20% for the more cyclical, drilling fluid, capital opportunities. Oh, perfect. That makes sense. Just one more housekeeping one, Tony. What should we expect for a cash interest for the balance of the year? It seems to have bounced around over the first two quarters. For the, the total year, you should expect around CAD 30 million, and I'd have to go back to see what the number to date is, but that would be a good number to be using, and it's consistent with what we've said before. Perfect. Thanks a lot, guys. Thanks, Jonathan. The next question comes from Cole Pereira with Stifel. Please go ahead. Hi, good morning, everyone. You talked about capital allocation, quite a bit, but I'm just curious, how are you thinking about M&A in the current market, or is there just not really any attractive targets available? I think M&A is something that we're always, thinking of and aware of, and, you know, we're on the radar of a lot of the banks so that when opportunities come up, we generally are getting a look at them. To date, we haven't found one that sort of, meets our criteria, so we haven't had anything to move forward on. There are some interesting things out there. Our bigger problem has been share price and multiple as we look at an accretive acquisition. We've decided to focus on share buybacks and things we can do to correct how low our multiple is, so that we can get into a better position if we do find something to do on the M&A side. I guess from a financial perspective, the other thing that a lot of, a lot of the dialogue and narrative that we just went through has helped us do, is inform those key attributes that would be required to be met from an M&A perspective. We look at everything. We're able to do that. Again, we're very keyed in with our partners and our board on what the attributes would have to look like from an accretion perspective, even for very small tuck-in deals. Okay, got it. That makes sense. Thanks. Obviously, U.S. activity has moderated a bit, but, you know, your, your business lines across North America are looking pretty strong. Are you seeing much in, in terms of pricing competition, or is it largely stable, maybe moving higher? I'd describe it as stable, I think. It's been pretty stable. You know, maybe a little more pressure on Drilling Fluids in Canada, but overall, I would say stable. Okay, got it. Thanks. That's all for me. I'll turn it back. The next question comes from Keith Mackey with RBC. Please go ahead. Hi, good morning. Maybe if we could just follow on, on the, the last question. The U.S. rig count is, industry-wide, is down about 100 year to date, yet your revenue has really been flat from Q4 levels. I'm sure some of that certainly owes to the, your presence in the Permian, which has been more stable. Can you just speak to the factors behind what has enabled your revenue in the US to remain at these, you know, stable levels, despite a pretty big downtick in overall industry activity? Sure. I think, you know, on the, on the production chemical side, you know, we spoke a little bit about Jacam Catalyst and the success they're having in the Permian and in the Rockies. They continue to be winning new work and providing great service to customers and finding new solutions for customers, which has led to them having a bit of growth. Then on the drilling fluid side, I think just the, the more complicated wells that, you know, operators are going, going further. Some of them are doing the U-turn wells. They're, you know, as these, as drilling performance improves in the United States and in Canada, they're drilling faster. As they drill faster, there's two things that are required with that. One is you need lubricity to be able to get weight to bit to do that, so that's more additives on the chemical side. The second thing is you're generating more cuttings, so you have to get those out of the hole in a much more efficient manner. That also leads to more rheological properties. Both of those things bode well for us and contribute to sort of a higher day cost for Drilling Fluids on wells as they increase performance on wells. Got it. Thank you. If we think about the, the firms, and the, the E&P customers that will be more active in the US relative to maybe the last 12 months, it seems like you're, you're gonna have more larger E&Ps and super majors picking up rigs. Maybe some privates will come back with the, with strength in oil prices. In general, the, the, the larger cap companies and public companies are the ones that are becoming a little bit more active. What is your general position with those, with those customers? Are you at a comparable market share with that group of companies versus your overall market share, or is there opportunity to improve there? I think, I think the, the evidence is in the, the market share trend. Like, mathematically, the majority of... By all accounts, the majority of the, of the, the rigs that were put down over the last six to eight months, most, most accounts are that about 90% of those were owned by the privates. You saw our market share steadily improving over that same time period. Yeah, mathematically, unless we were picking up a bunch of privates that we didn't have, we were doing more work than our peers because we do more work for the guys that were more active, and those are the public guys. If you look at our updated investor presentation that we posted last night, you'll see that approximately 75% of our revenue comes from public companies versus the privates, and that's been trending upwards. Our relative positioning with the publics is higher than with the privates, especially when you talk about the smaller privates. We do have some very large private clients, specifically in the US, but those guys are capitalized almost as well and are almost as active as some of the big publics. Our leverage to the publics is way higher than to the privates, to summarize, Keith. Okay. Thanks very much. That's it for me. The next question comes from Andrew Leno with National Bank. Please go ahead. Good morning, Andrew. Andrew, your line is now open. Once again, if you have a question, please press star, then one. The next question comes from Tim Monachello with ATB Capital Markets. Please go ahead. Hey, good morning. Good morning, Tim. As you close in on commissioning the barite facility in the Permian, I'm just curious what your expectations are for that in terms of, like, your cost structure, in the Permian Drilling Fluids market and the ability for that facility to open up market share for you? Yeah, I mean, I, I think it's more of the latter than the prior. It, it'll defend the cost structure we have. We're kind of at 100% capacity on the current facility, which is why we moved forward with building the second one. The second one will enable us to continue to grow with that same financial results. But what it does do is give us capacity, not necessarily to grow in the Permian, but, you know, as we start to look towards other basins, it gives us some capacity to potentially feed the Northeast, potentially feed the Haynesville. You know, recently we've done taking a little step into the Haynesville, and we've got a rig in there, and, you know, we're looking at that to the future as we talk about. We wanna be positioned there so that when there is takeaway and gas prices are solid, we do have a footprint there. You know, the, the Pecos plant will stabilize what we already have and potentially provide us an opening for growth. We, we built the Pecos plant with the ability to have two grinding mills in it. Currently, we're only building it with one of those mills, but if we open up an opportunity somewhere else or capacity becomes an issue again, the next time we won't be building a new plant, we'll just be adding a second mill. When that facility comes online, will the production out of it, be replacing third-party volumes that you're using? Will you just be slow, like, slowly ramping up the capacity as your job count increases, or how should we think about that? What we've done, like, to, to get these plants to run efficiently and get maximum value out of them, they pretty much have to run at 100% capacity. When we built the facility in Corpus for the last bunch of years, we've been supplying the wholesale market with a percentage of that plant and using the rest for ourselves, like, basically establishing how much we were gonna use and then selling the rest into the market. Over the last six, eight months, we've now gone to taking 100% of the capacity of that plant, plus, yes, we've been buying a little bit on the open market, and the Pecos plant will enable us to stop doing that and potentially go, go back to selling a little bit into the market. Ideally, we would grow somewhere and sell it to ourselves in the market and avoid having to, to feed the market with it. Okay, got it. There, there might be a little bit of a cost synergy there just as you displace third-party volumes and, and maybe a revenue synergy if you can sell some in the open market, until you can grow organically for yourself. Yeah, I mean- Um- ... barite is, the, the barite, it's not, it's not a huge margin at all, but it is... You know, having a lower cost base allows us to be cheaper on a high-use product to, to customers. We view barite, I mean, it's, it does affect financial results, but it also creates opportunities. It's a, it's a differentiator, so it's a way to, to open doors that might not otherwise be open. Got it. I think, you know, my next question is just sort of around what you, you know, the opportunities to structurally lower your cost base over time. I think, you know, you, you maybe alluded to that in your opening remarks with regards to evaluating global supply chain options. Can you talk a little bit about the, that in, in detail and, and maybe other things within your portfolio that you might be missing or opportunities to, to be, to bring things in-house or, or be a little bit more vertically integrated? Yeah, I mean, I, I think we, we do a very good job on the vertical integration side. Other than, you know, we used to, for 20 years there, the international markets were wide open, and you could reliably get what you wanted. Then, of course, as everybody knows, that changed. We've reestablished relationships here in North America, and there's still noise in the system, like the BC port strike, as an example, like, can come out of nowhere, and if you reverted wholeheartedly back overseas, things like that can bite you. It causes you to having to create or carry more inventory as well because of turnaround times and potential risk. We'll be cautious with going back until things stabilize more, but just wanted to point out that, you know, shipping and availability from Asia, from India, has somewhat rectified now. Costs have come back down, and we are looking at those things, and in a couple of them, we are actually acting on them. You know, we, we talk about barite all the time. We're, we're looking internationally for barite again in Canada. In Canada, we largely buy the barite from a mine locally over the last two years, but prior to that, we had been doing it internationally, and now we're starting to investigate that again. As far as where there's opportunities to, to further vertically integrate, you know, there's nothing, there's no gaping holes to chase after at this point. We choose to focus more on conversion cycle, and that's where we can find our money. Okay. That's really helpful. I appreciate it. Turn it back. The next question comes from Andrew Leno with National Bank. Please go ahead. Yeah, good morning. Hopefully, you guys can hear me now. Yeah, all good. Good morning. Morning, Andrew. Okay, great. Hey, thank you. Most of my questions have been answered actually, but, but just, just a couple. The first one, perhaps for Ken a bit, and, and you alluded, Ken, on market share and how it, players are not, are not chasing it as much or if at all in the market right now. I was wondering if you can talk a little bit how you see your market share evolving over, let's say, the next few quarters. That is in the context of some of your peers talking, focusing more on offshore or on international markets and perhaps a bit less on North American ones. Yeah, I don't-- I think that those comments from our peers about focusing internationally have been in the market. That's in offshore. Those, those things have been out there for quite a while, Andrew. Those-- That's sort of the evolution that's happened over the last few years. The opport... We've already kind of moved into that opportunity, and I would say the same kind of steady growth. You know, we're 20% of the U.S. market, we're 23% of North America. I don't see those going down. You can-- Everyone can model their rig counts and use those as baselines, and our intent is to grow those. That's what we're always striving for, and that's kind of what we've accomplished over the last couple of years. We'll continue to do that. It won't be earth-shattering or overnight, but we'll keep chipping away. Okay. No, that's great. Thank you. The other question, I had, it was a bit more on the marginal outlook. With inflation, yes, costs are high, but inflation is stabilizing and you're, you're moving to improve efficiencies with the second barite facility. I mean, could we see the margin be a bit closer to your, to the upper range, that you've given, or how, how are you thinking about that? I think it's still challenging out there, I mean, I don't want to go out on a limb and say that. I think 13.5-14.5 is the range, like, you know, Q1, we were 13.8, in Q2, we were 14.3. I think we'll just kind of see that noise in the system throughout. Okay. That's great. Thank you. 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, we'll wrap up the call by saying thank you to everyone who called in today. We continue to be very optimistic about the future here at CES, and we look forward to speaking with you all again during our Q3 update in November. Thank you. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.