Beautiful. All right, well, thanks, everyone. Appreciate you sticking around for day two. I'm still Vincent Anderson, still the lead analyst covering materials. I've been here all day, same room. But next up, we have LSB Industries, more specifically, we have President and CEO, Mark Behrman. And we're just gonna get right into it, because nitrogen is nothing if not exciting all the time. Well, I got a change of room, so I'm really happy. Yeah, yeah, exactly. You've been staring at the same wall for. So all right, I wanna talk about UAN first, because it's been kind of a weird start to the year. Maybe let's focus first on the spring planting season- Yeah ... 'cause weather's been all over the place, and a lot of what happens now kind of sets up your expectations for side dressing demands. Like, maybe let's start there, and specifically what you're seeing with, with UAN. So the season, I'll go back to the season, started early this year. Mm-hmm. We had a warm winter, and I would say spring ammonia application, so pre-plant ammonia application, started in some parts even early February, mid-February. So, 4-6 weeks earlier than it would be in a normal year, which led to early planting and the expectation we were gonna have a huge bumper crop. And people then translating that to high stock-to-use ratios, too much corn, too much supply, and corn's going below $4 a bushel, and, you know, kind of the whole spiraling effect. In fact, that's not what happened. We had wet weather during the spring. It slowed planting. Last week, I think you came out with this, right? That we're just about, but slightly behind the five-year average. Mm-hmm. It looks like. Yeah. And so we were way ahead, and now we're slightly behind. And now, if you start to look at the weather patterns, it's supposed to be really hot and dry over the summer, and so that's not really good for corn crops. So the expectation now is, where corn was gonna trend below $4 a bushel, it's actually trended more towards $5 a bushel. Certainly anywhere between $4 and $5, the farmer's making good profit, willing to pay for fertilizer to increase yields and can afford to pay for fertilizer. UAN. So ammonia goes down pre-plant, corn goes in the ground, and then UAN or urea gets applied, you know, right after planting. UAN's season actually was really strong. Mm-hmm. So a lot of demand for that. Patterns changed a little bit, and probably started two years ago, where, you know, retailers, wholesalers, even some large farmers, used to carry inventory. But two years ago, price went against them, lots of inventory losses, and starting last year, really more just-in-time inventory, and that's carried over to this year. Mm-hmm. So we're still seeing that. So overall, I think UAN demand was really strong. And most of us in the industry probably ending the season with pretty low inventory levels. Gotcha. And so, too early to say, but, you know, that late spring wet weather, are we... You know, did we waste a whole bunch of ammonia that we have to make up now? Is there any indication of that? Not to my knowledge. Okay, but we are, at the very least, probably in a better spot for summer fill than we have been in the last two years? Yes. Excellent. Now, that's the, that's the easy part. Let's talk about Russia and Trinidad. Yeah. So I mean, you know, we can see the data. It's a bit wild. We had the trade case, right? Imports fell in anticipation, you know, of that going against them. Unfortunately, it didn't go against them. Imports spike, now they're coming back off the top, despite a strong spring demand season. Walk me through what you're seeing on that front. Where was Russia ending up in the market? And as they kind of normalize, you know, have you seen more opportunities? Oh, I guess a lot of people think that Russia is not importing fertilizer into the U.S.- Oh, no, they still are. Yeah, that's a mis- Exactly ... misnomer, right? Yeah. So despite many farmers and farmer lobbyists talking about, you know, made in the U.S. and supporting that, it's ultimately about lower fertilizer prices, and they're happy to buy Russian imports, not all, but certainly enough. So we did see imports coming into the U.S., less than what had been traditionally coming into the U.S., but still some imports. You know, it sort of backed off a little bit now. I don't think we're seeing a tremendous amount of imports coming into the U.S. The interesting part is that, you know, everyone's real focused on... Or the government, our government's certainly real focused on, you know, not supporting exports of natural gas out of, out of Russia, but fertilizer—you know, nitrogen fertilizer, ammonia, urea, UAN, are all derivatives of natural gas- Yeah ... and so they bring it in that way. Yeah, yeah. So in terms of specific channels, you know, your, you know, your plants aren't, they're certainly not on the East Coast. I believe a lot of the Russian imports arrived, you know, kind of East Coast, and of course, some of the Gulf. Yeah. Have you been able to push a little bit further east, in terms of where you normally sell, as they've backed off or, you know, have you, have you had any opportunities to optimize around that? Yeah, sure. So, starting three years ago, out of our Cherokee, Alabama plant- Mm-hmm ...which is east of the Mississippi, we've been able to push up into the East Coast on selling UAN primarily. Where Russia had been bringing in, and you're right, to the East Coast, there's a lot of terminalling operations that they set up, and a lot of storage, and a lot of rail coming from the East Coast inland, where it wasn't coming in, we were able to sort of fill some of that gap. Not so much that we're selling more product, but we're selling product to customers that we've never sold before at better pricing than we would've normally had received. Perfect. Yeah. Maybe just a quick update, because it's been pretty volatile in the Southern Plains premium, just to go back to ammonia real quick. We're past the pipeline turnaround, right? So that's fully in the rear- No, NuStar pipeline turnaround starts in July, so next month. Oh, then we must be on another one, 'cause it just, it all blurs together. So how are, how are we thinking about the setup for planning around July? Are customers taking inventory ahead of that? You know, how, how is that playing out? Not really. I mean, we've had now. This is the fourth year in a row that NuStar has done some type of reliability maintenance onto the pipeline. They'll do it in sections. Ah. Sometimes it's below our El Dorado, Arkansas plant, and sometimes it's above. So depending on how that works, if it's below, that's advantageous for us, 'cause so then we can take it up north. If it's above us, then we've got to inventory a lot of ammonia, so that we can fill customer needs. Okay. Is this above? Uh- This year. Actually, it's, it's below. Oh, excellent. Yeah. Okay. Okay. So that's what I had flipped. I think the last one was above. Yes. Great. So this is all kind of gearing up. Let's actually just take, like, a huge step back. You've invested a lot in your commercial assets on the human resource side. Can you just level set where we are in terms of investing in things like storage and logistics to support your commercial team? Yeah. So we've got a few projects that we're doing, this year, as we speak. One of them is to add another two large tanks of nitric acid storage. And why is that important? Well, at our El Dorado, Arkansas facility, we actually produce a lot of nitric acid and sell it to consumers like Dow, Covestro, BASF. The issue is, while we have contracts with them, they're generally... Some of them are take-or-pay contracts, but some of them are requirements contracts. And even in the take-or-pay, within the take-or-pay for the year, there may be some switching off or volatility month to month, right? And so if they've got a plant that's down, and therefore, they can't take our product that month, unless we can sell it to another customer spot, or we can upgrade it to another product, there is the potential for us to have to turn down or shut down one of our plants, which we never want to do, because once you lose the opportunity to make the product, it's gone. So by having additional storage, that gives us the opportunity to continue to produce through a customer outage or some, you know, anomaly in the marketplace and continue to, you know, produce that product for sale in the future. So that's really important for us. We've also started out of our Pryor, Oklahoma facility, where we had another competitor, CVR Partners, that distributed UAN for us. January 1st, we went direct to customer and did a wonderful job. The team did a wonderful job this year doing that. Not only do we distribute out of the plant, but we also took four terminaling locations, which allows us to position product in season and then have additional storage out of season to sell at a more advantageous time. So those are kind of two different projects on the commercial side that are helpful to them to optimize where the product goes, but also optimize price. Another project that we're doing is to add additional loading of ammonium nitrate solution, primarily to support a contract that we announced two weeks ago, which is a contract with Freeport-McMoRan and to support that contract. Well, let's get into that then. Yeah. This is interesting, 'cause it raised a couple of questions on my end related also to just your clean ammonia strategy. But let's first go through the contract. So this is, what? 400,000 tons- 150,000 tons of ammonium nitrate solution for five years. For five years, sorry. This is low carbon. What do we, what do we mean by that in this case? Well, I mean, we have a carbon capture and sequestration project at our El Dorado facility. The project is to capture 450,000-500,000 tons a year of CO2 that we're emitting in the air today, and to sequester it in the ground. We got lucky. We own 1,400 acres. We use about 250 acres for the actual plant footprint, but underneath our 1,400 acres are two large saline formations, which is what you need to sequester CO2 once you liquefy it. So we've partnered with a company called Lapis Energy, and they're private equity-backed, ex-CMP guys that have started a company to create a sequestration company. And we filed a Class VI permit with the EPA a year ago February, and we've been having ongoing conversations with the EPA. So very simple project. The EPA acknowledges very simple project. Actually, very akin to a project that had a Class VI permit approved in Indiana, where one emitter, and then... Actually, I think they have three wells about five miles from their plant, so pretty short pipeline. Ours is on our site, so the EPA really likes our project, because it's one emitter on our site. Don't have to worry about rights of way, and building pipe, and things like that. And it's known geology, so we actually sit on a formation called a Smackover. So there's old oil-producing wells underneath where we are, so really good geology and known geology. When the EPA is looking at a lot of these projects, what they're really looking for and, and they're really worried about is the risk. We have a lower risk project than some of the other projects that have multiple emitters coming into one gigantic, you know, 5-well, 6-well, 10-well site. All different pressures, probably have to stabilize pressure before it goes down into the well so you don't crack the well case. We're hoping that, you know, we continue to have good conversations with the EPA, and we can actually move the timetable that they've publicly announced up from May of next year to something sooner than that. Gotcha. Perfect. So the way that we've, you know, discussed that specific investment is, you know, your economics were kind of fixed based on the carbon credit, right? Yeah. So our partner will put up all the capital. Right. So they're gonna own the carbon capture and liquefaction facility. They'll obviously own the pipeline to the well, and then the well's all theirs. Mm-hmm. We don't operate wells, don't wanna operate wells. And they'll get the 45Q credit of $85, but they'll buy the CO2 from us- Okay ... in order to do that, and they'll pay us about $30-$35 a ton per ton of CO2. So it's about $15 million a year in additional EBITDA. So now when we talk about the Freeport-McMoRan contract- Yeah ... how is—what is the profit sharing? What is the... Right, so how do those economics translate to what Freeport is getting from you and how that comes back to you? Yeah. So, our partner gets the $85 and then has expenses against that, right? And they'll net something. But we're left with not only the dollars per ton that they're gonna pay us for CO2, but we're left with 375,000 tons of low-carbon ammonia that is ours, 100%, and we get all the financial attributes of-- I mean, the- Yeah ... the environmental attributes of it, right? So we can either sell it as straight low-carbon ammonia, but actually, I think the better play at El Dorado is to sell it to existing customers who we're already selling product to and all want to reduce their own CO2 footprints and meet their 2030 or 2035 goals. So while Freeport was not an existing customer because they actually were producing ammonium nitrate themselves, they made the decision to shut down their nitric acid plants and to buy low-carbon ammonium nitrate solution from us, that they can use, for their blasting of their copper mines, or copper mine that they're at in Benson, Arizona. So there are other opportunities, I think, with other mining services companies and possibly some mines direct- Mm-hmm ... to do the same there. But on the nitric acid side, you know, where Dow's a big customer, BASF, BAE, Ascend, and of course, Covestro, we've got a long-term relationship with them. Sure. They're all now asking about, "Well, what would it cost us to get low-carbon nitric acid?" And so we haven't finalized any agreements yet, but the commercial team, our commercial team, is in discussions with our customers about what that would look like. Yeah. Well, that, I mean, when I think about MDI, what I'm really worried about is the carbon footprint of the nitric acid, but if they wanna pay for it, don't ask any questions about Boschi. No, that's excellent 'cause that is... I can tell you, that is not how we have looked at it because you have positioned yourself in the low-carbon ammonia to take minimum market risk in terms of downside, right? Yeah. And in particular, you know, the green ammonia front. So is there anything that you can share on that project? Obviously, it's a much longer time horizon, but you've said very adamantly and publicly that, you know, we have a, a set amount of take-or-pay fixed economics that we need to meet to move forward with it. How has that conversation evolved with the, your partners on the project, the potential customers? How's that going? So we have announced a world-scale, brand-new blue ammonia plant in Deer Park, Texas. Mm-hmm ... outside of Houston, so on the Houston Ship Channel. It's actually on the site, and the reason that we like the site is it's on, the site of the only ammonia import terminal today. So the old, Houston Ammonia Terminal was shut down. So it's Vopak and what was, called Moda. Now, it's, they sold their interest to a company called Exolum. But they developed a new ammonia import terminal, and so all the, terminaling, the jetty, all the infrastructure is there, where a number of other sites have to build all that infrastructure and get permitting for all of that. So we partnered with Air Liquide, the largest Japanese E&P company called INPEX, and then, global terminaling and storage company called Vopak, to create this. Air Liquide will build and operate an autothermal reactor, an ATR- Okay ... to provide us hydrogen. They'll also have an air separation unit, or an ASU, to pull nitrogen from the air, and we'll have a long-term supply agreement for hydrogen and nitrogen from Air Liquide. And they'll do the carbon capture and deliver us blue or low-carbon hydrogen. We'll then build an ammonia loop to actually take in the hydrogen and nitrogen and synthesize it into ammonia, and then we'll ultimately sell that to customers. So the way we envision structuring it, and I think the way it's going to be able to shake out based on conversations, are our hydrogen purchase agreement from Air Liquide will be natural gas indexed based, so call it Henry Hub plus something. Mm-hmm. Our sales price to our customer will be Henry Hub plus something. So we'll be able to de-risk the volatility in natural gas, and that plus to our customer will be Henry Hub plus the, you know, the remaining cost of manufacturing, plus a profit. Net profit should give us an appropriate return on capital. And so when I think about it, if we're successful in doing that, we'll basically create an annuity, where their only risk is operating the plant, and it's a brand-new plant. So I think more the risk is possibly in commissioning the plant. Sure. But once it's up and running, it should actually run really well. It's all known technology. It's KBR technology. Mm-hmm. There are KBR plants around the world, so we're not taking any technology risk. As far as moving the project along, so there's a lot of announcements in the marketplace about, you know, LOIs or MOUs with companies for offtake. And I'll just say that, you know, the offtakers are smart. They don't know how to handicap which plant's gonna be successful or not, and so they're signing LOIs and MOUs with everyone that's out there, right? Why not? So really, those mean nothing. What really means something is, can you get a true long-term take-or-pay agreement, and can you get it for, you know, a vast majority of the offtake, prior to greenlighting or FID-ing the project, right? Mm-hmm. Because what you really wanna do is, you know, we can make anything look good on a spreadsheet, and you can always talk about, "Well, we think we can get this price," but, you know, at the end of the day, can you or can't you, right? And so I think when people think about all these announced projects and all these plans, for the most part, whoever gets the offtake is gonna be able to build the plant. And if you can't get the offtake, not many people are gonna spend $2 billion-$3 billion and build it and hope that people come, right? And most companies can't afford to do that. So I think we've had great conversations with both Asian and European offtakers. I think Asia was first out of the box, talking about, you know, we're gonna use ammonia as a replacement for coal and power generation, whether it's 20% or 100% or some number in between, and they're still going down that path. Well, Europe was very focused on green, right? So we're gonna go from a carbon economy, or a hydrocarbon economy, to a green economy. I think of that as a revolution, right? And now they've sort of backed off of that, and now they're really thinking transition or evolution, right? And so we've had a lot of really good conversations with European utilities and big European, you know, energy distributors about offtake out of the plant and what that might look like. And CBAM obviously is really pushing a lot of that, right? By 2026, CBAM tech starts small- Mm-hmm. By 2030, it becomes really impactful. Mm-hmm. So I think people are really getting ready for that. are your partners on this project kind of in, you know, have the same thought process around LOIs and MOUs, are worth exactly the paper they're written on or... Yeah. Oh, I think for the most part, yeah, we're all there. So I think it's a really good group effort. While ourselves and INPEX will own the ammonia loop- Yep ... and are responsible for selling the end product, Air Liquide is right in there, and so, for that matter, so is Vopak, in helping us with their relationships globally. So yeah, it's been great. Just a little point of clarification, 'cause I think I actually missed this, yeah, when this was first announced, but the carbon capture's on the front end? Yes. This really is just a turnkey ammonia loop. You're not even worried about the complications of the capture being on the back end, like it would be in El Dorado? No. Yeah. I am worried that, you know, they pick a partner, and we can sequester it, right? Of course. Yeah, yeah. Well, yes. Yeah, I'm not saying it- But we have nothing to do with it. They- Yeah ... We'll contract with them to deliver low-carbon hydrogen that meets certain specifications, so that we can meet the specifications of our customers. Perfect. Yeah. All right. Well, with five minutes, I figured I would open it up if there were any questions. If not, I always have a couple more in the chamber, but... So maybe talk about the anticipated premium for carbon-reduced. You've got to, you know, buy early to determine the magnitude of that, but any kind of what you see out there? Well, I would tell you that, the best way to, for me to think about it today, right, is I take today's ammonia price, and translate that into the ammonium nitrate solution that we would sell to Freeport-McMoRan without the low carbon aspect, and then what we contracted for. And so I would say that that probably translates into a $40-$60 premium for ammonia. But that, remember, that's a cost-plus contract that's kind of fixed, and ammonia prices could move around. But if I just compare it to where ammonia is today and what we would sell for on a spot market basis, it would probably be that. The interesting part is, people talk about that all the time, "What's the blue premium," right? And I keep hearing that. But I think most of the projects that are building brand-new world scale plants are gonna think just like I outlined. It's not gonna be premium to ammonia, 'cause what you're doing then is you're not reducing the volatility. So you're having to deal with all that volatile movement of ammonia. And if you want to project finance it, if that's really what the goal is, and most of the projects are really talking about project financing, I don't think you're gonna get financing. They're not gonna take that volatility risk, right? They're gonna want some kind of fixed price or fixed minimum EBITDA level of the project to finance that. So, you know, we've had a couple of potential customers come to us who are already buying ammonia, and they're used to the volatility of ammonia, saying, "Well, we'll give you—Let's talk about the premium to ammonia." And it's like: "No, let's talk about cost plus." And over the life of a 10-year contract or a 15-year contract, some years it's gonna, you know, look better than current ammonia prices, some years it'll look worse, but over the life of the contract, it kind of evens out, and you take the volatility out of it. Anything else? All right, well, we can end it there. I, for one, have a plane to catch, so, I'll take the extra two minutes. Great. Thank you. Thank you so much, Mark. All right. Wonderful. Good to see you. Yeah. Thank you.