Thank you for standing by. This is the conference operator. Welcome to the CES Energy Solutions Corp. Second Quarter 2021 Results Conference Call and Webcast. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Tony Aulicino, Chief Financial Officer. Please go ahead.

Thank you very much, Kathleen [ph]. And 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 12, 2021 and in our AIF dated March 11, 2021. 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 fourth quarter MD&A. At this time, I'd like to turn the call over to Tom Simons, our President and CEO.

Thanks, Tony. In the face of global supply chain pressure, Canadian breakup, certain customers resistance to pricing increases; CES is very pleased with our Q2 results. They are only possible because of our loyal customers, and even more dedicated employees. On today's call, we'll provide our customary operations update for Canada, U.S. when I'm going to start calling Oman Light. We'll speak plainly about capital allocation, we'll share our optimistic outlook for CES within this -- operate within cash flow energy patch. Tony will give a detailed financial update, we'll take Q&A and then we'll wrap up the call. I'm going to start with Canada. So Canadian mud turned into positive EBITDA for CES through Q2. From when I began as a mud engineer in '93 in Canada, that's a huge accomplishment in this competitive market. And how do Ken Zinger and his team keep doing it, by doing deeper pad work it saves days for the leading operators. Today we have 58 jobs. PureChem, our production chemical business in Canada, through Q2 did very well for the company financially and operationally. But today faces input costs pressure and supply chain pressure. Some CapEx is going to be spent in the second half of the year that will assist in really some of those problems and help them meet our customer's needs, particularly at oil sands. We're getting nice contributions through the summer from frac and stem, but that business is variable; low CapEx fits over our infrastructure, but it's variable. We remain completely committed strategically and scientifically to these product lines throughout CES in North America. Out in Vancouver, Sialco continues to both financially and strategically contribute to CES. Thanks, guys. Clear continuous scratching to keep it's nose above water, it's been a long time since Justin started stepping on this provinces' chest [ph]. These guys are keeping it up in a competitive market; we appreciate it. I'll move on to the U.S. AES delivered again strong financial and market share, 20% market share and making money. We're not chasing market share; while we are strategic, we remain committed to margin which translates to EBITDA. Today we have 83 jobs in the U.S. I'll move on to what I'm going to call Omar Light. With substantial one year plus planning from intercompany people, AES has a sauna project in Oman. It's a resource or title or play; it's deep, vast and our history with the customer is strong and built on mutual trust. But a note of caution, it's early days for this customer. For any of this to matter, or leads to flow; but we know how to do our part and possibly go from this. I've been a part of this myself, I've been there and I believe I see business upside for CES, business lines beyond drilling fluids as well. I'll now move on to Jacam Catalyst in the U.S. Birds always, the clip along but they are quiet and very solid contribution. Market strength is highest in the Permian, which includes Texas and New Mexico. This backstops the business, we have additional very strong contributions in the Rockies which obviously includes the Bakken. We do business in California, Oklahoma throughout Texas; we're working on other markets. Overall, Jacam Catalyst is a very key part of CES financially and strategically. I'm going to try and save some of the nitty-gritty for AES on these financial matters, Tony, which is capital allocation. But here are the headlines from me, CES will continue to set off equity-based comp grants with share buybacks. In plain English, we are not going to delete you to pay ourselves. I'll move on to the second bullet. We're very confident with the industry and our place within it, and thus we're proud to reinstate our dividend. As a free cash flow generator within this sector, like our glory days with double this multiple, we're now paying you cold hard cash on our equity. With this very modest percent of free cash flow generation, we believe the dividend is sustainable through cycles. I'll move on to the second bullet. We will reduce our bond when we refinance it. With cash and liquidity we expect to create within the context of this market and enjoy before we refinance it in an appropriate timeline. I'm now going to turn it over to the AES [ph], Tony. Tony, please let me share my outlook on the sector and our place in it before we go to Q&A.

Will do, Tom. Thank you very much and thank you for the new indelible nickname. So CES's second quarter results demonstrated strong revenues, margins, market share and surplus free cash flow generation underpinned by a focus on strategic investments and working capital and preservation of strong balance sheet and liquidity metrics. In the second quarter CES generated revenue of $254 million and adjusted EBITDAC of $32 million, representing a 12.6% margin. Q2 represented another consecutive quarter of strong financial performance with revenue EBITDAC and margins steadily improving from the depths of 2020 while market share in the U.S. drilling fluids business has continued to march up nicely towards the 20% level from 13% a year ago. Over this past year, CES has continued to consistently generate positive funds from operations, reaching levels of $23 million in Q2, and $27 million in Q1; while revenue in some divisions is actually approaching reaching distance of pre-COVID levels. CES remains confident in it's ability to continue to generate material surplus free cash flow amid an improving outlook. And on August 12, the Company's Board of Directors approved the reinstatement of it's dividend on a quarterly basis. Accordingly, CES will pay a cash dividend of $0.016 per share on October 15 to shareholders of record at the close of business on September 30, representing a dividend yield of over 4% on an annualized basis at yesterday's closing share price. CES's reinstated dividend returns additional value to shareholders, represents a conservative payout ratio and preserves the strength of the company's balance sheet while maintaining ample liquidity to fund capital allocation options, including potential growth initiatives. As industry activity levels continue to improve in the quarter, CES remained disciplined on capital expenditures while retaining substantial liquidity and balance sheet strength. We exited the quarter with a net cash balance of $12 million compared to $18 million at the end of 2020. The decrease in cash was driven primarily by investment in strategic inventory, and by the repurchase of 6.8 million shares for $10.3 million or $1.50 per share under NCIB program. Our current net draw on our senior facility is approximately $3 million as a result of investments in working capital, and the repurchase of approximately 700,000 shares since June 30. CES's Q2 revenue of $254 million represents an increase of $94 million or 59% from Q2 2020, and in line with $261 million in Q1. Revenue generated in the U.S. was $175 million, or just under 70% of total revenue for the company. CES continues to participate in the improved drilling environment in the U.S. as demonstrated by our market share of 20% for the quarter. Revenue generated in Canada was $78 million in the quarter versus $38 million a year ago, and $93 million in Q1. This stronger than expected sequential revenue level in the seasonally softer second quarter was the result as Tom mentioned of high activity levels in both, our Canadian drilling fluids and production chemicals divisions. And CES in the same quarter achieved adjusted EBITDAC of $32 million, which represents a significant increase from the $8 million a year ago and in line with $34 million generated in Q1, again despite Q2 being a seasonally weaker quarter. Included in these results is a $3.1 million benefit recognized by CES from the Canadian federal government's Q's [ph] program. Adjusted EBITDAC as a percentage of revenue in the quarter was 12.6%, representing a significant improvement from the 5.1% reported in Q2 2020 as the company benefited from stronger competitive positioning, increased drilling and production levels, higher market share and the realization of efforts in 2022 to right-size the business. CES has continued to maintain a prudent approach to capital spending through the quarter with net spending of $4.5 million representing approximately 1.8% of revenue. We will continue to adjust plans as Tom mentioned, as required to support growth throughout divisions, as industry conditions continue to unfold during the year. Right now for 2021, we expect cash CapEx to be up to $30 million, of which $20 million is estimated as maintenance and $10 million is growth. Our balance sheet continues to benefit from the attractive structuring and maturity schedules of our credit facility and senior notes. We ended Q2 with $305 million in total debt net of cash, comprised primarily of $288 million in senior notes, which mature in October of 2024. At June 30, we had a net cash balance of $12 million on our senior facility, with a maximum available drive of approximately $235 million CAD equivalent, providing us with significant availability. We remain cautiously optimistic on our outlook for the remainder of 2021 and beyond. Throughout 2020 -- the 2020 downturn and into the recovery period of the last few quarters, CES has consistently demonstrated its CapEx-light and Asset-light decentralized business model enabling generation of significant surplus free cash flow. As our customers increasingly regulate their business models to maintain spending within cash flows, we believe that CES will be able to leverage it's established infrastructure, business model and nimble customer-oriented culture to deliver superior products and services to the industry. In it's core business, CES will focus on profitable growth, optimizing working capital, developing or acquiring new technologies and making strategic investments as required to position the business to capitalize on current and future opportunities. Operator, at this time I'd like to pass it back to Tom for a summary of his views on our outlook.

I'm going to say what Ace Bailey [ph] said a lot less elegantly. We like the new financial sustainable energy packs. The sector does not need to rely on outside money anymore, I personally believe it insulates industry from the political hatred that is building. And over here at CES, we don't kid ourselves; that's how it is now. And I believe we can make it because this place is built and run by a group of ex-private owners who don't kid themselves. We built this company from 15 years ago that started with a chicken poop, that staged mud chemicals to now having $300 million of infrastructure, assets, rolling stocks approx., inventory that we turn fast enough to turn into free cash flow, most importantly, real customers that pay, and maybe the most important, great, trained, motivated employees that we know to treat properly and keep through crashes; and I think a fabulous future. So with that, we're going to turn it over to Q&A. And then after that, we'll wrap it up.

Thank you. We'll now begin the question-and-answer session. [Operator Instructions] Our first question is from Michael Robertson with National Bank Financial. Please go ahead.

Hey, good morning, Tom and Tony. Congrats on the strong quarter and thanks for taking my questions.

Good morning.

It looks like another strong quarter for U.S. drilling fluids market share, I assume some of those recent gains have been driven by customer mix and who is more active out there right now. Just wondering what you're seeing and hopeful for from a market share standpoint over the coming quarters, assuming activity levels continually to graduate that up.

I'm pretty -- you know, it's interesting, one of the couple of nuances I want to share with people. We do not want $100 oil because the customer will not pay for the input cost increases to any of the chemical companies, no matter what any of the people with my job put out for public letters telling your sales people to get, that's not how the oil field works; they'll eat those letters, sales people will have to quit because they look like monkeys [ph]. So we don't want $100 oil because it'll screw the services. But the nuances natural gas is making money for all the customers, so we don't think the breakout in the U.S. is going to $800 because their customers are running businesses now, not trying to flood the market and sell their companies because there's no one to sell them to. So we're going to try and generate -- I think as an observer, cash flow; do what we just did, give the money back to people and hope they catch it [ph]. And so we're going to benefit from the privates running rigs, we're going to benefit from the slow creep of the public's -- maybe entering the rig count. But based on the results we just printed, I don't think we need anything to change. We're not looking to crank the dividend every quarter, we want to be a reliable payer of cash, a reliable supplier to the customer, a reliable employer to people, we want to slowly expand this business in a reliable way. I like not owing the bank money, because if there's another crash of the commodity in the world, we're going to collect $100 million and be thoughtful with it because we don't owe anybody any money. And so that's how we're looking at our business. We're trying to go to 30% market share in the U.S. and not make money off the 10%, and it's not the 10% that you won't make money on, it's the 20% you have that you'll destroy. And we know that from being private owners, that's the wisdom we get from building this company. I'll just say instead of the centralized businesses that hire people in suits to take over from things they bought, that they chased off the owner; so that's our competitive advantage, that's our business, it's why we're no longer telling our competitors why we have the work that they don't and our operations call and they are never going to resume; that's why the call was short. We have the work, we need to keep it so we can make money and give it to the people on this call.

I got it, that's helpful color. Do you think you'll be able to keep most of the gains that you've -- you know, sort of picked up in recent quarters?

It's upto the customer. If they won't let us make money, then we might call it 18%. But I don't think they can add base to their rigs. I don't think the competitors can keep losing money. I don't think the integrators will enable them. But we're not taking the work and losing money, we went down from 22 to 20 because there's some customers that won't pay. And we're not paying our people, they won't work if they don't get paid, there is differences in the U.S. and Canada; for six years it was risky to work in the oil patch in Canada, and there was just no work. So there is a nuance there that's different, people with my job are calling out some of the customers in the DOB. I don't know, Michael, we're going to do the best we can, we're going to try and make money, we're going to try and meet the customer's needs; there is a reason we push the norm on [ph], because Biden is trying to push their oil field out of the U.S. While he's demanding more oil, he's obviously talking out of both sides of his mouth, we can all see that, but we can't change it. They want it both ways. So -- but natural gas is kind of a nice hedge for everyone on this call, we have South Texas revenue now that we didn't have a year ago because of that, and that's built into our results, we're not going to tell everyone where it is because our competitors are going to go chase it, they try and offer our product for $0.10 a line item less because they're terrible on the rig, and that's how they get the work. So we're going to keep our cards close to the desk, try and give everyone better results, keep the work, and we're not changing.

Fair enough. That's helpful color, thanks. Just switching gears to the international opportunities; I was wondering if you could provide a bit more color there, particularly in Oman. I appreciate it's early days, but I was interested in sort of -- what that operation will look like to better understand how it may serve as a platform for future opportunities in the Middle East?

I think you should track down the customer, and ask them. But if they can make oil, we hope to stick around and build off of it. There is a big backstory to it, it's premature to say it because it might not happen. We don't give guidance. If anyone's known me for last 16 years in the market, we try not to sell too much hope. But I've been over there, I've been over there before, other people have been over there, we've been poking at things, we have sponsor as we call it in the oil field that will let us go over there and not start $20 million in the hole and build the Field of Dreams and hope they come because they don't, because they know you're sunk and they have you where they want you and this isn't that beginning. But at the end of the day, if the oil company can't make the oil flow, we can't change that and there won't be a platform. So it's too early to say and I'm not speaking on behalf of the customer, let them speak themselves.

Okay, fair enough. Well, listen, I appreciate the color. And thanks for taking my questions. I'll turn it back.

Thanks, Michael.

The next question is from Joseph Schachter [ph] with Schachter Energy Research. Please go ahead.

Good morning, Tom and Tony. And congratulations on the quarter, and also reinstating the dividend. Two questions for me. When you're talking to customers in Canada and the States for business and heading into Q4 and then Q1, are you getting much increased volumes that you see coming -- more jobs? And how is the pricing discussions going in terms of starting to see some recovery of the cost increases and maybe expanding margins?

It's different in each country, Joseph. The customers, I've seen -- I mean, you know as much as we do about this because you cover both sides, GMP and service. It's 60%, 70% of their money will go back in the ground, the rest -- this is a generalization; pay down debt, pay dividend, pay variable. But they've got cash flow from gas, not just oil; hedges are falling off, so cash flow is going up, these places are swimming in money. Some of the big guys are pretending they're not energy producers now, they're using it from Europe; so they're talking about -- you know, let's say they're playing it both ways, I want to be respectful and we work for them. We need to work for them, we're solving their problems, we're better than the big big guys that are centralized that can't figure it out on the rig, and their ops people have figured that out finally. So visibility, let's say 60% of cash flow goes in the ground; I -- Canada is not in a position to go to 250 drilling rigs, until some of the operators allow supply chain to let us pay people to take the risk to come back into this -- this is not the case in the States. In Canada, the rig crews are so green, that we need 24-hour mud engineers on rigs that used to be able to go there for four hours to keep the rig out of trouble, mix the product and not get them three days later stuck in the hole; it's changed. We have to babysit the mixing, the inventory, keep them out of trouble; we're literally carrying sacks that we didn't use to but we have to pay the people more to take the risk to come back into the sector. And we have certain operators that expect us to show up with a sharp pencil despite knowing shipping companies are turning the screw on the whole globe, we can't change that. That's why we don't want $100 oil because they won't even let us pay people $300 a day more to come back into a sector that has burned them and burn them; not through the sectors fault, but through the noise [ph] fault. So we're trying to bridge that divide. A lot of customers are working with the vendors, that's why we had a good quarter; I want to be clear, we're very grateful to those customers. I know people with my job feel the same way and other services. Going to some of the bigger places to let the supply chain guys help them win, so we can put a better person on that rig to keep the rig throughout trouble or the sector is not going to 250 rigs despite the cash to put them to work. There's no -- I don't want to get stuck in the hole. And they won't even improve the rig. So there is some nuances here, Joseph. We're going to -- if we just keep putting this quarter up, I'll be really happy.

Okay. Going to the international side, are you sending people to Nigeria and Oman, but not building the base because you don't want to put -- as you mentioned $20 million in capital that the customers got to over the barrel? Do you -- are you just sending people over with the product or how much of an help are there? Where would the people be staged? And then, would you at some point then need a base?

Specifically, Nigeria is production chemicals. It's half of motion breakers and then half the other stuff, so it protects production; no people, it's sea pans are the Houston. It's through a company that does the work on the ground, they're competing against big integrated service, they're competing against manufacturers, they need a manufacturer to give them technical advice, shout-out to our Chief Technology Officer. He went from Scientist to BD, it took -- in his words, it looks fast to you guys; this took forever in the background. So way to go today [indiscernible]. We would have more product in the ground except because of the shipping issues, there is a couple see cans [ph] tied up in Houston. Zero people at risk, zero capital at risk, Joseph, zero product at risk; it's elbow grease. And we're all about working 24/7, so we're cool with that. As far as Oman, I personally was there, AES people were there, Canadian supply chain and U.S. supply chain are actively doing this; and just so people understand their business, we bring product from all over the world, we finish it in North America and sell it to North American operators. A North American operator is in Oman, we're working for them, we have an Oman family that as infrastructure there that we can work off of, we can buy certain commodities at market. It's kind of a protected market, if market pricing is 1, they've kept everyone else by pricing them at 1.2. That took forever to get us to market; we're at market, we're on the work. I'm not talking about the play, that's the customers play, not our play; I can only talk about our part and warn everyone if there's no -- if they can't make the play work, it's nothing. But we are actively selling work, we have one single person there who is already Omani; I spent a bunch of time there earlier this year, sold it to other AES people. We believe in the play because we believe in the ability of the customer to find oil before it's out of the ground based on their incredible success. So we're just going where they go because that's sort of CES forever. And that we bet on the horses that win; so that's the story.

One more for me. M&A activity with some of the weaker competitors having financial difficulties and you're having a strong balance sheet. Do you see potential of any smaller or medium-sized tuck-unders across your platform?

Well, they want to ascribe a bunch of value to making no money. And we're not giving our value away, so not really.

Okay. Okay, that's it. That's it for me. Thanks very much. And again, congratulations, and nice to see the dividend again.

Thanks for sticking with the sector and the thoughtful questions.

Thank you.

The next question is from Matthew Weekes from iA Capital Markets. Please go ahead.

Good morning. Thank you for taking my questions. I was just wondering, first of all, and if you could provide a little bit of color on the strength in Canada during the quarter. You know, rig counts were solid; it was quite a good quarter there. Was there -- was it a material impact from the exports to Nigeria or on the revenue side where there is kind of input costs pass-through to customers that ended up being really margin neutral in the end or what was sort of the cause there?

International was immaterial financial, it's more directional that we want to share. It didn't move the needle in one little bit. In fact, my airfare, and hotel probably made us lose money. Not that I stayed in the Taj Mahal, but we didn't make any money. Just so everyone knows, we haven't made any money yet. We haven't lost a bunch, but it didn't change anything.

Okay, thank you. And were there any inflation pass-throughs at all?

Well, we're trying to get them but as walkable. I mean, the whole -- whatever the government's saying, there was massive inflation everywhere. And you can read the news, there are ships tied up outside of Los Angeles, the ocean freight this seven or eight times to tie up a sea container than it was 15-18 months ago. And every single supplier to every single sector is not exempt from this. Because we're a manufacturer in North America, we are working hard to get around that, but the storm in Houston affected the oilfield. It affected the ability to make certain products to treat certain chemistries, I'm not telling anyone what they are here. We're keeping up, we're winning new business because we're -- our supply chain people and ops people are doing an incredible job of balancing that and winning new work where our competitors are falling down, and that's all I'm saying. But it's not you, it's tight; it's very tough. It's part of how we add a good quarter, there is no outliers; I don't think that are one offs. But in some businesses, there's always outliers, we're big enough to have them all the time. And probably have one in Q3 that's up, one is down and they'll kind of wash out. I've done this a long time, that's how it's always going to go. We're going to have one drilling job that takes loss circulation or a kick in the quarter, we don't know which one it'll be; that's why we carry inventory. It will get mixed sooner or later, don't break it before it gets mixed.

Okay, understood. Thank you for the commentary on that. And just one more for me, it's just a confirmation. I just wanted to confirm the drilling numbers that were mentioned earlier in the prepared remarks. Was it 58 jobs today in Canada and 83 in the U.S.; is that correct?

Correct. Correct.

Okay, thank you very much. That's it for me. I'll turn the call back.

The next question is from Tim Monachello from ATB Capital Markets. Please go ahead.

Hey, good morning, guys. Some of the -- I mean, most of the commentary on the call so far is sort of spoken to the resistance from customers who accept pricing increase and understanding that I guess the inflationary aspects of this upcycle are unprecedented. You also have a tightening market from a supply demand perspective for services and I would assume that most of your competitors given their outward stance around maintaining margin profiles would have a sort of similar view to pricing increases as yourself. So, do you think or is there any reason that you think that through the cycle as activity improves, that your leverage over customers won't also improve?

Well, I've done this since '93. And if you ever hear me say, I have leverage over the customer, put a bullet in me or my customer will; it does not work like that ever. If we ever have that arrogance in here, management should be fired by the board in one second. We do not have leverage, we work at their pleasure. We scratch and claw to make this money, that is our culture, it will never change.

Okay. And in past calls, you said, you know, you don't really need pricing increases, you need to…

No, no, no.

No? Okay.

I'll stop slowing up in cost. We're scratching and clawing to get it paid for; that's why -- I don't mean to sound edgy, we do not want $100 oil because it will eat everyone's lunch, because people will barely let us pay someone that hasn't worked in six years in Canada. How do they convince their family to come back into this racket knowing Trudeau wants people to drive electric cars, places they can't even get to on a tank of gas to get elected? How do they convince their family to go work on a drilling rig as a mud engineer at a rate that they got six years ago or less? They take out risk for their family, so that asked here that the DOB apprentice [ph], please let us pay the person what it takes to take the risk, we're not ripping you off; it's real. We need the price increase, we're not immune. Just because we make the molecule doesn't mean we can make the input; if oil is $100, somehow on paper [ph] be $70.

Okay, understood. I guess my point around price increases against on the net basis. But what I was really trying to get at was like, when you look at that, let's say, you know, pricing doesn't increase and you're able to get similar pricing than what you're getting today on a net basis. Do you think margins improved based on operating leverage? Do you still see -- sell at operating leverage in the business?

Well, I hope I was very respectfully careful that we're not chasing market share. So we hope we have customers that pay for results, not line item, that they care about their case for costs [ph]. We think we do because we held 20% which is pretty close to 22% [ph]. We just turned the dividend back on so we believe it; so we're just we're voting with our feet.

Okay, guys, I appreciate it.

That's the answer. That means operating leverage, like we're not chasing that Haynesville cannot make money in that 30 range and figure out somehow that's going to help. Like go look at the people that have the work and look at their results to keep printing a huge loss. How are they flipping that with more work that loses money? Like the group of us running this place ran private businesses; your tax return sucks when that happens?

Okay, understood. Thanks, guys.

[Operator Instructions] Our next question is from Keith Mackey with RBC. Please go ahead.

Hey, good morning, and thanks for taking my question. I'm just curious; you mentioned Tom that you may spend a bit more capital in the back of the year on some things that will strategically or just improve the business. Just curious if you can give us a bit more color on what that might be and how you're thinking about the decision to proceed or not or not.

This has been contemplated all year, Keith. It's inside the brackets we've guided and we're not going to disclose the products for competitive reasons, but you won't get sticker shock later on the number.

Got it. Makes sense. And just on maintenance capital; so, kind of around that $20 million number. Just curious if you see that changing throughout this year or next given -- given them, you know, lower demand or lower requirement for treater trucks and things like that, just given the mix of wells that you're treating these days?

No, I'm not a production expert on a drilling expert. It's kind of out of the game. I think overtime it gradually shifts, but you know, we've got a lot of stuff now, so we're going to keep it up-to-date. We've got a lot of pickups, so maybe the number slides. I don't know, Tony, what do you think?

Yes.

But we're growing business, Keith. So this is kind of on the spot, but maybe 10 of growth slides to 15 because we can make more money spending 5 in the business than trying to buy stock overtime. And I'll let you answer, Tony.

Yeah, no. Just the way and actually that's a thoughtful question. And I think the underpinning consideration is the fact that revenues at about $1 billion run rate, we did $1.3 billion. The guys did a really good job of maintaining all of our stuff, plants, equipment, etcetera and you're right, because of those secular trends, like the transition to a higher percentage of wells being represented by multi-wellpad drilling and sites, and improve logistics, things like treater, track, demand, as a percentage of overall work will come down. Right, we don't want to hang our hats on it but I think you're onto something that we're frankly watching very closely. Because we would like for it to stay at 20 and maybe come down a bit. The other thing just like other cost inflation areas that we're not immune to, is the very tight trucking market that North America and the world has experienced over the last year. So it'll be interesting, and we're all watching and the guys are making all the right decisions, real-time in their divisions, doing the best and using partners on the vehicle spends. But until some of that inflation is off, I think we're not going to know for sure if I had to guess I guess we stay at 20 or maybe come down a bit.

Got it. Okay, that's it for me. Thanks very much.

This concludes the question-and-answer session. I'll hand the call back over to Tom Simon's for any closing remarks.

Well, I'm going to wrap up the call by saying thanks to our customers and employees for helping us produce a great quarter. We're really pleased to be returning tasks to shareholders coming out of COVID. Like everyone in the sector, we're really happy oil stores didn't fill and receivables converted to cash for all the vendors. We look forward to the next call to give an update, and we'll wrap up the call with that.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.