Greetings, and welcome to the Ring Energy Inc. 2019 First Quarter Financial and Operating Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Tim Rochford, Chairman of the Board of Directors. Thank you, Mr. Rochford you may begin.

Thank you, Doug and welcome all listeners to our first quarter 2019 financial and operations conference call. Once again my name is Tim Rochford, Chairman of the Board. Joining me on the call today is our CEO, Kelly Hoffman; David Fowler, our President; Danny Wilson, Executive VP and in charge of Operations; Randy Broaddrick, our Chief Financial Officer; Hollie Lamb, Vice President of Engineering; and also joining us today is Bill Parsons, Head of Investor Relations. So today, we will cover the financials and operations for the first quarter ending March 31, 2019. We will review our results and provide some insight as it relates to the current progress thus far in – or excuse me, in the second quarter of 2019. At the conclusion of our presentation and the overview, we will open it back up to the operator and we look forward to any questions that you all may have. So with that said, I'm going to turn it over to Randy and ask Randy to review the financials. Randy?

Thank you, Tim. Before we begin, I would like to make reference that any forward-looking statements, which may be made during this call, are within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. For a complete explanation, I would refer you to our – release issued Wednesday May, 7 2019 – sorry, that's Tuesday. If you do not have a copy of the release one will be posted on the company website at www.ringenergy.com. On April 9, 2019 we closed on the acquisition of the Northwest Shelf asset from Wishbone. The effective date per the purchase document was November 1, 2018. However, the effective date for accounting purposes was February 1, 2019. The effective date for accounting purposes was determined based on when we had control of or decision-making ability over the assets. The activity from November 2018 through January 2019 was accounted for as a purchase price adjustment while the revenues and related expenses for the acquisition are included in our operations beginning February 1, 2019. For the three months ended March 31, 2019 the company had oil and gas revenues of $41.8 million, and net income of $11.1 million, as compared to revenues of $29.9 million and net income of $5.7 million in the first quarter of 2018. For the three month period of 2019 the net income includes a pre-tax unrealized loss on hedges of $341,000; acquisition-related costs of approximately $3.5 million; and a deferred tax benefit of $3.9 million. Without these items, net income would have been approximately $10.3 million. The three month period of 2018 net income includes a pre-tax unrealized loss on hedges of $791,000; a pre-tax realized loss on hedges of $1.5 million; and an additional tax provision of $1.2 million. Without these items net…

All right, Randy. Thank you. I appreciate you doing that. I'd like to ask Kelly to give us a recap on the first quarter operations please.

Thank you, Tim and thank you everyone for joining us. In the three months ended March 31st, 2019 the company, using one drilling rig drilled seven new horizontal wells and four saltwater disposal wells. We also drilled six new horizontal San Andres wells on our Central Basin Platform asset and five wells which were one mile in length and one was 1.5 miles. In addition, the company drilled one new horizontal Brushy Canyon well on our Delaware Basin asset. And it was a one mile well as well. We also drilled seven wells, six of which -- of the seven -- I'm sorry completed seven wells. Six were drilled in the first quarter of 2019 one of which was drilled late in the fourth quarter of 2018. And of the seven wells, four were completed prior to the midway point and had a -- and those were the ones that had an impact -- significant impact on first quarter production. In the first quarter, we filed initial potentials on four of the seven completed wells. The average IP on the four wells was approximately 575 barrels of oil equivalent per day or 132 BOE per 1000-foot. Three of the four wells -- please take a note three of the four wells IP were on new leases -- the new leases that we acquired and announced in December along with the Carlyle acquisition. As a result, the net production in the first quarter 2019 is approximately 569,130 BOEs as compared to net production of 507 BOEs for the first quarter of 2018 and that's an approximate increase of 12.3%. Net production of 608 BOEs in the fourth quarter of 2018 an approximate 6.4% decrease. March 2019 average net production was approximately 6,381 BOEs as compared to net production of 6,005 for…

All right. Thank you, Kelly. We appreciate that. From Kelly's recap of the Q1 operations, you can see that we had a reduced activity level during the quarter, especially compared to the activity levels we saw in 2018. As we reported at the end of 2018, we laid down both of our drilling rigs in mid-December and then resumed drilling in January with one rig drilling on the Central Basin Platform acreage and one rig drilling on our Delaware acreage. During the quarter, the CBP rig again drilled six horizontal San Andres wells and one saltwater disposal well. The Delaware rig drilled one horizontal Brushy Canyon well and three saltwater disposal wells and then was released. And the reason for drilling the saltwater disposal wells during that quarter was we had some permits expiring and rather than going back through the permitting process, we wanted to go ahead and get those taken care of. We continued operations with one rig until the closing of the Wishbone acquisition on April 11th. The following day, April 12th, we spudded our first well in the Northwest Shelf. As noted in the Q1 operations report, we did have a decline in production during the quarter as compared to Q4, but this was as a result of shutting the rigs during December and then effectively restarting with just one rig in January. It took us a little time to ramp the activity level back up but we are now running both the rigs at full capacity. As a point of clarification, we resumed drilling with just one rig as part of our goal in our plan to reach cash flow neutrality by the end of 2019. Obviously, the closing of the Wishbone acquisition gave us the ability to restart the second rig and still reach…

Thank you, Danny. Based on our press release that we released on April 29, 2019 in an effort to be fully transparent, we disclosed our internal tier work. And I'd like to walk you through it right now. It's pretty straightforward but I think it's worth basically addressing. So basically we took all of our acreage in our four core areas; Delaware, Central Basin Platform, North Gaines, and Northwest Shelf and classified them into a tiering system. Tier 1 would be our highest confidence wells. Those wells would represent our type curve production. And at $50 realized BOE price, they would reflect an IRR that's greater than 80% and net reserves higher than 325 MBOE. The PV-10 value would be approximately $4 million for each individual well. Our Tier 2 would be on par with Tier 1, but they are of more risk associated with these locations. They would be primary step outs to Tier 1 and would have similar rates of return that 80% and then reserves in that 325 area with a PV-10 of about $4 million. Tier 3 would be very commercial wells, but what we would consider to be under type curve. Their reserves would be in the high 200s low 300s. Their rate of returns would still be in that probably 50% to 70% range, but just not meeting the hurdles that we have set to classify Tier 1 and Tier 2. Tier 4 is I think the most exciting tier really to look at, because what it shows is the unexplored potential. When we made these acquisitions, we did our homework on subsurface, geology, core work, and we really cherry picked the acreage we felt had the most cost effective locations in these individual basins. The unexplored potential is we have yet to delineate if those Tier 4s are Tier 1s, Tier 2s or Tier 3s. So there is still a lot of upside in our acreage that we have yet to explore. About 55% of our Tier 1 locations were located on the Northwest Shelf. This was that accretive Wishbone acquisition we made earlier, but we have a strong Tier 1 locations in every basin. The Delaware has no Tier 4s simply because we've been working extensively on the geology in that area for as Danny mentioned a 1.5 years or two years and we have proven up a new producing horizon in that horizontal Brushy Canyon and the Hugin and Phoenix and Hippogriff wells. As it relates to the type curves in both areas, the Tier 1 criteria fits in both areas; the Northwest Shelf and the Central Basin Platform and the Delaware. We are seeing slightly higher IPs on the Northwest Shelf, a slightly lower decline and a slightly different B factor. But they are consistently hitting that Tier 1 criteria. At this point, I would like to turn it back to Kelly.

Before we turn that back to Kelly, let me just -- I'd like to point out one thing. Kelly had talked about during our-- during his section of the presentation was the CapEx. I wanted to visit here just briefly tell you the reason why we're looking at a midyear CapEx revision. Essentially I was on the Wishbone properties. We were essentially in control of the operations beginning in February. However, we did not physically get our hands on the wells until mid-April. And since that time, we've been working with the field people. We've been -- we actually hired the production manager who was over there at the time. We've been going over it with him, looking at different projects, different ideas that they have about some things we can do to optimize production as well as infrastructure and facility needs that we have moving forward. We are formulating a plan on that. I told Kelly and David I look at this like buying a new house. It's passed the inspection. You've gotten your closing done, but until you live in that house for a few months, you really don't know the intricacies or the little quirks about it that you need to -- that you always learn as you buy a new property. And that's kind of the way I look at this. We've got our hands on it now we've started to really dig in, look at the infrastructure needs, look at the work over opportunities. And so that's the reason why we are looking at a midyear CapEx update. And so moving forward with that, again I anticipate that will come out midyear and we'll be very transparent about what those costs are or what we -- the projects that we see needs for. And with that I'm going to turn it over to David to go over our acquisition opportunities.

Good deal. Thank you, Danny. So since the Wishbone announcement, we've seen a significant increase in the number of acquisition opportunities that have been brought to us since many of the operators in the area now see us as a platform and shelf consolidator. The majority of the projects we're seeing aren't in the public domain and range in size from smaller bolt-ons to several larger acquisition or acreage projects. Additionally, we continue to internally source acreage to net up our existing leaseholds and are focused on extending or bolting on acreage in our Tier 1 and Tier 2 core areas. As is our standard procedure, we take the time to review and evaluate each and every opportunity that crosses our desk to determine if there's a fit. But now that we have approximately 120,000 combined net acres on the CBP and the Shelf equating to a potential of over 20-year drilling inventory, our appetite's a lot more selective with a focus on add-ons that are meaningful and can be bought right. Regarding Investor Relations. To enhance our presence with new and existing investors, last year we started a more proactive role in attending and presenting at various energy and investor conferences. To date, we've have -- we've presented at many conferences across the country and have participated in numerous non-deal roadshows and plan to continue this pace going forward. And with that, Tim, I'll turn it back over to you for closing comments.

All right, David, thank you and hey, thanks everyone because I think you all did a really great job in bringing forward so much that we've accomplished and how meaningful and how impactful this is going to be going forward. It's going to be exciting. We've accomplished a lot in the last six, seven months and sometimes an adversity, but still we got it done. So congratulations to our team for doing a wonderful bang up job. So at this point, what I'm going to do as it concludes really our portion of the presentation of the review. So I'll turn it back over to Doug, our operator and we're going to open it up for questions that you may have. Doug?

Thank you. [Operator Instructions] Our first question comes from the line of Neal Dingmann from SunTrust Robinson Humphrey. Please proceed with your question.

Good morning guys, and great details today on the call. My first question, could you talk a little bit about -- I know Tim for you and Kelly you don't explicitly give quarterly guidance, but I just want to make sure to sort of help us analysts for the rest of the year and into next year, how do you think about as far as quarterly activity. I know Danny mentioned possible gas takeaway issues and I know talked to Danny in the past to off a deal for realization of prices and et cetera you ended up grouping some wells. So I'm just wondering could you talk about are there some lumpiness that we should be expecting? And how should we sort of think about that the lumpiness or the cadence for the remainder of the year?

Yes. Kelly, go ahead and then I'll comment as well.

Sure. Neal. We're combining these two assets together. We feel like we're going to be in that sort of plus or minus 20% range. It's like we had originally forecast when we were only looking at just the legacy assets. We still feel strong about that. We think we're going to be able to do that on a year-over-year basis. Obviously, as we're incorporating this transitional period here first quarter, second quarter we might see a little bit of lumpiness there, but it's continuing to smooth out and you can expect the second half of the year to look a lot better and to look a lot smoother and a lot more predictable. And I think everybody's going to be excited about it.

Yes. Neal, Kelly makes a great point and that is this. Look the activity that's taking place now in terms of adding that second rig I think Danny did a great job of articulating the movements behind that, but the reality of it is, is that second rig isn't really going to contribute at the earliest maybe the latter part of the second quarter. But I believe as we go into the third and fourth quarter kind of grab a seat, because I think it's really going to be impactful. So I think we're going to see some meaningful upswing at that point in time. We're certainly postured to continue that for some time to come.

And most of that activity at least for the remainder of this year on an either rig will focus on most of the Tier 1 activity that Hollie spoke of? Or will you venture and do some of the Tier 2 and 3 and potentially 4?

I think that everybody will tell you that we're going to focus on -- look Kelly mentioned it earlier, Danny mentioned it earlier, we've mentioned it numerous times. You know that we have a high priority of getting into cash flow neutral, a transition into cash flow positive and to do that we've got to cherry pick. We've got plenty. We could have 440 Tier 1 and 2 locations. Now it makes sense obviously that we'll step out occasionally to a Tier 3 or a Tier 4 maybe even more so on the Tier 4 side, but the bulk of what we're going to be doing between now and year-end is going to be Tier 1 and 2.

Okay. Then lastly by my math you all have interesting potential value built in some of your infrastructure let's call it your noncore upstream acreage. Just Tim have you and Kelly and the team talked about potentially monetization? Or I mean any thing you can mention towards potentially monetizing or the type of value you all see in the water and all of these other sort of EBIT noncore upstream assets you might have?

Certainly that's a great question Neal. And yes we've absolutely considered it and we've gone beyond considering it. We're really evaluating that now particularly -- if you look at the Delaware Basin for example that's a great asset and what we've done here to evolve with the Brushy Canyon, there's no question that that's a great asset that we could be developing for some time. However, as we've been mostly talking about here today between Wishbone and Northwest Shelf as well as the platform itself we're going to have plenty to say grace over. That's not to say that something's for sale, but we are evaluating that possibility and what that could be -- how that could be meaningful for us.

Very good guys. Look forward for all the activity. Thanks.

Our next question comes from the line of John White with Roth Capital. Please proceed with your question.

Good morning everybody. In your initial Wishbone presentation in early February you had it fried with a lot of details on the Wishbone infrastructure. And using Danny's analogy of moving into a new house, now that you've moved in, how are you feeling about the Wishbone infrastructure?

Danny call it?

You bet. John, look we're very happy with it. After sitting down with the manager out there, he had some very, very good points on some things we can do to increase reliability and redundancy in the system. And that's kind of what we're going through right now is what's it going to take for these -- for the existing facilities to be able to handle the drilling activity that we have moving forward. So that -- I think that's really kind of what we're talking about. We really kind of planning for the future drilling. But as far as the asset itself, we are very pleased with it. Everything is just what we thought we were buying, there's been no surprises. And the water heater hasn't gone out yet, but you never know. But no, it's everything is progressing just like we had hoped.

Well good. And you talked about your frac crew. That's the same frac crew that you've been using for about the last 18 months is that right?

That's right. It is Schlumberger and it's the same crew we've had now for about 1.5 years. And they know the process intimately now so it's -- everything runs very smoothly when they're on location.

All right, glad you got that nailed down. Congratulations on the deal. And I will turn it back to you.

Our next question comes from the line of John Aschenbeck with Seaport Global Securities. Please proceed with your question.

Good morning everyone and thanks for taking my questions. So a lot of helpful information, a lot of things have been addressed. I apologize, if I missed this. But I was wondering what the current capacity is on your borrowing base and kind of a two-part outlook with that. How do you just think about your future liquidity outlook? I mean is there -- I think it was Neal who maybe hinted that some asset sales. I mean is that an avenue you could take? I know you mentioned free cash flow on the horizon. How soon is that coming? Just any color on future liquidity would be helpful.

You bet John. Let me respond and if Kelly would like to jump in he can as well. But let me start off by saying that, yes to Neal's earlier question as it's related to, specifically I think maybe midstream side of things and then possibly the upstream as well as we focus on the Delaware. That's certainly an asset that it's been suggested between ourselves. It's something that we've considered and it's certainly something that we're now evaluating and that is an opportunity to do something with that asset or assets and use that to further do some housekeeping as it relates to the balance sheet. As it relates to our current facility as you know and as we've reported, we now have a facility that's moved up to $1 billion, $425 million on the base. And with this acquisition, we're right now at approximately $350 million. As far as cash flow neutrality or ultimately transitioning into the cash flow positive side, we feel very comfortable is -- at a $50 realized price that we're going to get there by year-end.

Tim, what I would add to that is just a remainder in case there are some people on the call that don't realize this or may not know it -- we not only have a saltwater disposal system that is expensive out in the Reeves and Culberson County areas, we also have our own gas pipeline system out there. And then if you look up on the platform we own an oil pipeline system that is meaningful and substantial in value along with a substantial gas pipeline system and a saltwater disposal system that is larger than what we have out on the Delaware. And now we've bought the Wishbone assets we have two smaller saltwater disposal systems that once tied together would be a substantial system in that area. All of those items have significant value that we don't get credit for today of course and understandably why. But at the same time they do have substantial value. It's a very hot time for midstream companies right now looking for those types of assets. Again we're not saying that's something we're stepping up to, but it is something for us to keep in the back of our mind as we move forward.

Okay. Great, Tim, Kelly. It's really helpful. Just maybe to dig in a little bit more on the infrastructure because I definitely hear you there. I mean just -- I don't know if you could frame it for us maybe I don't know give us something to work with. Approximately how much EBITDA is running through those? Or how much volumes do you have either on gas, water, oil? Or just anything you could help us with just maybe to help us find some assumptions to come to some type of value ourselves. Thanks.

Kelly and Danny you want to start? Maybe Hollie you want to start with just kind of -- maybe a flat buy on the Delaware side?

Yes. Go ahead, Hollie.

Sure. So on the Delaware side -- on the saltwater disposal system, we're in the range of disposing between 40,000 and 45,000 barrels a day into an extensive infrastructure in multiple commercial SWDs that we all own and we own the surface so there's no royalties. So it's essentially royalty-free, which drives our price per BOE for disposal down into that $0.06-$0.07 range which is very economic. On the Central Basin Platform, we're in the neighborhood of disposing in the high 50,000 barrels a day into our own SWDs. It is a complex system which allows us to route water to different wells. In the Central Basin Platform there's a mixture of our surface owned -- and then some areas where we're basically paying a small royalty to the surface owner. Still very economic in that low $0.10 to $0.15 range for disposal and it's very extensive. On the Northwest shelf once again, it's very much like the Central Basin Platform. It's in the neighborhood of the low $0.50s to high $0.60s as far as disposal. It is also a combination of surface-owned facilities where we own the surface where the disposals are and then obviously there are some leases that we are disposing and paying a royalty on those waters. On the Central Basin Platform, we have an extensive oil system that goes into two separate black systems so we limit our trucking and we get -- we have a lot of advantages as far as the trucking cost because there is none and the marketing fees associated with that. That system ranges in the neighborhood of 10 miles north and south and about four miles east and west. So it ties a lot of our significant leases together into those two last points. We have an extensive gas system that ties on the Central Basin Platform to a DCP mainline basically removing constraints due to aged facilities. It is -- it's about 30 miles of gas pipeline that we have infrastructure that we own.

Okay. Great. Fantastic color. And just a point of clarification just circling back. I'm not sure if I missed it here or not but when -- is the expectation to get to free cash flow neutrality is that still by year-end 2019? Is that still the plan?

That's still the plan.

Okay. Great. All right. Well, thank you everyone. I appreciate the time.

You bet. Thank you.

Our next question comes from the line of Ron Mills with Johnson Rice & Company. Please proceed with your question.

Good morning. Now that you've had the properties at least in your hands now for almost a month I know it's still early. But maybe either for Danny or Hollie, can you talk about any kind of major differences you're seeing on the Northwest shelf versus your legacy CVP? I know there's different flow back methods and it's my understanding that the dewatering process up in the Northwest shelf actually can provide production benefits especially as you move through full development of a section. But any initial color on Northwest shelf versus legacy acreage?

That's a great question. Ron, there is a difference. What we see up on the Northwest shelf as you mentioned is that's an area that needs to be dewatered before you see the wells make their peak and come in with their maximum production. Now a lot of that obviously there's been a lot of drilling up in that area over the last four years or five years or so and so some of that has already taken place. In our presentation that we'll be uploading in the next few weeks, we'll talk about everything we've been talking about type curves. We will also be uploading some information that shows unlike some of the areas you're seeing with the Wolfcamp where you see this parent-child degradation issue going on we're actually seeing the opposite effect up in the Northwest shelf where the parent well is actually dewatering the area and the child wells are coming on stronger than the parent wells. We're seeing oil cuts faster. We're seeing higher peaks. And we're seeing, it looks like to us at least better EURs moving forward. We're going to present several slides within the presentation that will be looking at that going forward. But that's the main thing, we see up there. There are areas on the Central Basin Platform that need to be – have the pressures drawn down, before we see good oil cuts coming in. But it's not quite the same as we see up on the Northwest shelf. There's quite a bit of difference in the geology between the two. There's a lot more variability in the CBP. Just it was a much more active environment when the San Andres was laid down in there. We had this outlet sea going in and out and in and out…

Great. And then as a follow-up, Hollie you did a good job walking through Tier 1 through Tier 4 and I think you're also referencing you're focused on Tier 1 and Tier 2. But when we think – as you start drilling some more of the Tier 3 and Tier 4, or as you sprinkle those in what are some of your bogeys that you're looking for to be able to transition some of those Tier 3 and Tier 4s? Is it based on production history? How much do you think you need? I guess, I'm trying to get a sense as to as we look out 12, 18, 24 months kind of how much of the Tier 3 and Tier 4s can kind of work their way up the ladder so to speak?

So that's a great question. No, I would like to see a six month production history really to start high grading some of those Tier 4s to Tier 1 and 2. In addition obviously when we're going out into these more unexplored potentials we will be doing some additional testing, logging to see if we can find that signature that helps us predict more consistently in these unexplored potential areas what's the signature that makes it that Tier 1 versus that Tier 2.

Great. Thank you very much.

Our next question comes from the line of Jeff Grampp with Northland Capital Markets. Please proceed with your question.

Hey, guys. Sticking on the tiered inventory topic was curious if very – message received that your near-term focus is on Tier 1 and Tier 2. Do you have a sense if we look back on 2018 maybe how that I guess split may have been between the various tiers if we were to do kind of a look back on your 2018 development program?

Do you want to take that Danny?

Yeah. I would say one of the – obviously, one of the areas that we started out last year with is a Tier 4 area. It was our North Gaines area and there's still -- obviously there's still quite a bit of Tier 4 in that and that is the biggest area that we have Tier 4 in. However, the work that we did over the last year going in and working with the completion techniques and refining that and then now we're obviously getting the disposal well which is going to help the economics. That's just an example of one that we took from a Tier 4 to a Tier 1 or a Tier 2. That was one in particular. We did look at some areas, some outlying areas in – on the CBP that some of that turned from Tier 4 into Tier 2 probably and then a lot of it turned into Tier 1. But we did have a particular area in there in the north that we expected to do a little better. But I would say that's one that moved from a Tier 4 into a Tier 2 or so. So we have been sprinkling these in. We obviously to keep the growth growing you spend the most of your time drilling those good wells but then -- Brushy Canyon, let's look at that. There's a zone that was completely undeveloped in that area. I mean, we had some analogies that were miles away, but there wasn't a handful of those horizontal Brushy Canyon wells even up in New Mexico. And we took that from a tier -- I would say a Tier 4 and moved that to a positive Tier 1. So we are working on those and moving them in and we'll do that selectively during this year. There's quite a bit of area on the Wishbone acreage that needs to be looked at and the geology looks very promising. All the work we're seeing looks very promising, but you really need to get a well in there to move it up to Tier 1 or Tier 2. And you'll see us do that sporadically through the year.

Okay. Great. Really helpful context there Danny. For my follow-up. On the CapEx spending side, it looks like in the first quarter at least on a run rate basis you guys were kind of tracking I guess in line with the full year number that you've provided here recently, but obviously you have the second rig going for the remainder of the quarter. So could you guys just maybe help us kind of understand some of the gives and takes on the spending side, help us kind of I guess better setup our models in regards to spending profile for the remainder of the year?

Yeah. Danny, I think go ahead, address that. But keep in mind Jeff that again there's a lot of evaluation taking place between now and the next time that we bring that back to the Street for an update. But go ahead Danny and add some color, if you would please.

Sure. No, obviously, that's the thing. The update or the CapEx that we put out, we knew that was kind of -- what we knew about Wishbone plus our existing efforts on the Central Basin Platform and the Brushy Canyon. Knowing that we were going to need to do an update and there -- and obviously too with the additional the progress and the efforts we're seeing on the Brushy Canyon, there may need to be some infrastructure done there as we continue to watch those wells and if they hold up. There are some excellent opportunities in that, but we are going to need to do some work to be able to handle more water. Because the Northeast area that we're drilling, there was no infrastructure up in that part of our acreage. So, those are the things we're weighing back and forth. Our main goal though is to get to that cash flow neutrality. And so we've got to weigh those projects and see which ones have the most bang for the buck and get us to that point without overspending. So, it -- look, we'll be walking through that and particularly over the next couple of weeks and we'll have more clarity with that as we get to that mid-year point and start looking at the remainder of the CapEx.

All right. Understood. Look forward to that. Thank you. It sounds good.

Thank you.

Our next question comes from the line of Richard Tullis with Capital One Securities. Please proceed with your question.

Hey, thanks. Good morning, everyone. A question for Tim and Kelly. As you move toward the free cash flow situation late this year and then going into 2020, what's your preference for use of that free cash flow at that point? Tim, what's your comfort level with the current level of debt on the balance sheet? And would it -- would the excess cash going toward maybe relieving some of that debt? Or would you be open to share buybacks at that point, or what might be some other consideration?

Well, Richard, those are all fine points. There's no question that as we transition into the surplus side, the cash flow positive side, we'll be working on our balance sheet. There's no doubt about that. We're going to deleverage wherever we can, knowing that there's no capital market that exists for us or anyone else for that matter for right now probably for some time to come. So, we are focused on what we can do with assets that may not be as larger contributor as they've been in the past, particularly now when you compare it to what we've done with these recent acquisitions. So we'll be looking again at that side which we've touched on a bit earlier. But as we transition into that surplus cash, there'll be one or two things. It will be cleaning up that balance sheet and considering acceleration which at these multiples will continue to just benefit the value of the company. So will we consider share buyback? Look, there's no question in our opinion. Everyone on this team realizes that -- and I think a whole lot of you folks realize that right now these shares are grossly undervalued. No question about that. I don't care what model you want to use -- you take a look and you can argue whether it's the EBITDA side or NAV side or maybe a couple of others. There is no question that it's undervalued. So why doesn't the company stop and start buying shares back? The dry powder that we have, the liquidity that we have, we are best at our job and managing that to continue to add growth and bring that cash flow neutrality and eventually that positive surplus build to the bottom line. And then, on the way, with some of these other ideas and then with the surplus cash, start deleveraging and then look to accelerate.

Thanks, Tim. That’s the only the question I had. I appreciate it.

You bet.

There are no further questions in the queue. I'd like to hand the call back to management for closing comments.

Okay. Thank you, Doug. We appreciate it. And thank you everybody for taking the time today. We know there are a lot of companies that are reporting and we appreciate your support. If you have follow-up questions, feel free to reach out to, of course, Bill Parsons, Investor Relations and we'll always have that open door policy. We want to be able to have communication as often as you'd like. Thanks. Have a good day.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.