Tag Archives: green

Playing The Ratings Game

By Alan Gula Care to take a guess at Lehman Brothers’ credit rating right before its bankruptcy? I’ll give you some help. Investment-grade ratings range from AAA down to BBB- (on the Standard & Poor’s ratings scale). Anything below investment grade (BB+ and below) is considered high yield , which is also known as speculative grade, sub-investment grade, or “junk.” The higher the credit rating, the higher the perceived credit worthiness. In other words, high-rated companies can probably pay you back. Thus, you’d assume Lehman Brothers had a solidly junky rating – perhaps CC – reflecting the high risk of default during the credit crisis… right? Actually, Lehman had an “A” rating right before it went bust! The major ratings agencies – Standard & Poor’s, Moody’s Investors Services, and Fitch Ratings – took a lot of flak for this egregious misjudgment. To be sure, credit ratings still provide valuable information. In fact, looking up the credit rating and reading the commentary from the ratings agencies is a great place to begin when evaluating a stock. You can access Standard & Poor’s ratings for free by registering on their site. Just keep in mind that the ratings agencies may have missed some material risks. Therefore, we should really take notice when a company has a high-yield rating. Yet, most equity investors are unaware of the credit ratings of their holdings. For example, the following table shows three real estate investment trusts (REITs) that are in the S&P 500. Equinix Inc. (NASDAQ: EQIX ), Crown Castle International Corp. (NYSE: CCI ), and SL Green Realty Corp. (NYSE: SLG ) specialize in data centers, wireless communications towers, and commercial properties, respectively. I guarantee that the vast majority of retail investors in these stocks have no idea that the S&P’s long-term issuer rating of these REITs is sub-investment grade. It’s easy to see why these REITs have relatively low ratings, too. Their net debt (debt minus cash) to EBITDA (earnings before interest, taxes, depreciation, and amortization) ratios are all at least 4.0 times, which is high. The average net debt/EBITDA in the S&P 500, excluding financials, is 1.36 times. At a time when many high-yield bonds are coming under significant pressure, investors need to be vigilant . I’m not saying that these companies will default on their debt. However, I do think these REITs should have much higher yields to compensate investors for the additional risk, which is being ignored. The cost of debt capital will likely rise for most high-yield issuers during the next few years. This will be a painful process for unsuspecting equity investors in highly leveraged companies. Most stock watchers fail to appreciate the inextricable linkage between the credit and equity markets. Keep in mind, very few companies have rock solid balance sheets like Johnson & Johnson (NYSE: JNJ ), which is AAA rated. Sadly, many people’s idea of “research” involves pulling up a stock chart and (improperly) drawing some trend lines. If that’s the extent of your analysis, then you shouldn’t be investing in individual stocks. Stick with exchange-traded funds (ETFs). If you insist on individual stocks, at least do some credit analysis on your portfolio. You’ll thank me when defaults spike, sending shockwaves through the credit – and equity – markets. Link to the original post on Wall Street Daily

American Funds Lack Luster In Q3: Funds That Saved Face

American Funds, proclaimed as one of the largest active fund managers, perhaps wants to forget its third quarter performance – the sooner the better. The handful of flimsy gainers compared to the horde of mutual funds that ended in the red painted a dismal picture of the quarter. None of the American Funds mutual funds could even reach a 2% gain in the third quarter, whereas 371 funds ended with at least a 5% loss. As for the broader markets, the key benchmarks suffered their worst loss in four years. In the third quarter, the Dow, the S&P 500 and Nasdaq declined 7.6%, 7% and 7.4%, respectively. In fact, calling the third quarter a bloodbath will not be far from the truth. Just 17% of the mutual funds managed to finish in the green in the third quarter. This was a slump from 41% in the second quarter, which was also a sharp fall from 87% of the funds that ended in the positive territory in the first quarter. However to justify American Funds’ dismal performance in relation with the broader markets will only be partially right. American Funds even failed to beat the modest-to-poor performances from key peers like Franklin Templeton, Fidelity, Vanguard or T. Rowe Price mutual funds. American Funds in Q3: Comparative Study As mentioned, American Funds failed to beat its major peers. The best gain from this fund family was a meager 1.7% scored by the American Funds U.S. Government Securities Fund® Retirement (MUTF: RGVFX ) . This 1.7% gain was not only far short of the best gains achieved by key peers, but was also somewhere around the average gains that mutual funds from fund families like Franklin Templeton, Fidelity, Vanguard, BlackRock or T. Rowe Price scored. In a quarter ravaged by headwinds, mutual funds from the Vanguard Group gave a decent performance. Its best gain hit 8.4%, achieved by the Vanguard Extended Duration Treasury Index Fund Inst (MUTF: VEDTX ) . Separately, Fidelity’s top-gainer, the Fidelity Spartan® Long Term Trust Bond Index Fund (MUTF: FLBAX ) , could post only 5.5% return. In fact, the only other fund that managed a 5% plus gain from this lineup is Investor class fund, the Fidelity Spartan® Long Term Trust Bond Index Fund Inv (MUTF: FLBIX ) . For T. Rowe Price, the T. Rowe Price U.S. Treasury Long Term Fund No Load (MUTF: PRULX ) gained 5.1% and was the best performer. However, it was the only fund in the 180 T. Rowe Price assortment we studied, that posted a 5% plus return. Franklin Templeton could put up a modest show in the tough third quarter. The Franklin Real Estate Securities Fund Retirement (MUTF: FSERX ) was the best gainer among the Franklin Templeton mutual funds, which gained only 3.4%. BlackRock’s best performer was the BlackRock Real Estate Securities Fund Inst (MUTF: BIREX ) , which gained 2.4%. The average gain from mutual funds that finished in the green for Franklin Templeton, Fidelity, Vanguard and T. Rowe Price were 1.2%, 1.2%, 1.9% and 1.3%, respectively. Of the 629 American Funds mutual funds we studied, only 135 funds finished in the green with paltry gains. The average gain for these 135 funds was just over 1%. None of the funds could post above 2% return and 68 out of these 135 funds finished with sub 1% gain. Meanwhile, 493 American Funds mutual funds finished in the red. The average loss for these 493 funds was 6.6%. While 371 funds lost over 5%, 60 funds lost at least 10%. The biggest loser in the third quarter was the American Funds New World Fund® C (MUTF: CNWCX ) , which slumped 12.4%. In comparison, of the 626 funds we studied in the second quarter, 232 funds had finished in the green while 2 funds had break-even returns. The average gain for these 232 funds was 1.41%. This compared favorably to the average loss of -0.84% for the 392 funds in negative territory. (Note: The numbers include same funds of different classes) Top 15 American Funds Mutual Funds in Q3 Below we present the top 15 American Funds mutual fund performers of Q3 2015: Fund Name Objective Description Q3 Total Return Q3 % Rank vs Obj YTD Total Return % Yield Beta vs S&P 500 Load American Funds US Govt Sec R5 Government 1.72 5 2.43 1.39 -0.03 N American Funds High Inc Muni Bnd F2 Muni Natl 1.67 14 2.34 4.07 0.05 N American Funds Tax Exempt of CA A Muni CA 1.66 41 1.84 3.23 -0.01 Y American Funds US Govt Sec A Government 1.64 7 2.19 1.1 -0.03 Y American Funds High Inc Muni Bnd A Muni Natl 1.63 16 2.22 3.91 0.05 Y American Funds Mortgage A Govt-Mtg 1.56 3 2.08 1.04 -0.01 Y American Funds T/E Bd of America A Muni Natl 1.44 31 1.58 3.13 Y American Funds Tax Exempt of VA A Muni State 1.4 42 1.13 2.94 0.01 Y American Funds Tax Exempt Of NY A Muni NY 1.34 49 1.26 2.72 0.02 Y American Funds Tax Exempt of MD A Muni State 1.24 61 1.02 3.03 0.08 Y American Funds Tax-Exempt Prsrv A Muni Natl 0.99 67 0.98 2.29 Y American Funds Bnd Fd of Amer A Corp-Inv 0.96 9 0.85 1.85 -0.01 Y American Funds Bnd Fd of Amer 529A Corp-Inv 0.93 10 0.78 1.76 -0.01 Y American Funds Ltd Term T/E Bond A Muni Natl 0.91 70 0.95 2.3 -0.01 Y American Funds Intm Bd Fd Amer R5 Corp-Inv 0.9 12 1.79 1.45 -0.03 N Note: The list excludes the same funds with different classes, and institutional funds have been excluded. Funds having minimum initial investment above $5000 have been excluded. Q3 % Rank vs. Objective* equals the percentage the fund falls among its peers. Here, 1 being the best and 99 being the worst. Morningstar data showed many sub Municipal fund categories, such as Muni California Long, Muni Pennsylvania and Muni New York Long, featured in the top performers’ list for the third quarter. However, the gains were modest, with Muni California Long giving the best performance with a 1.7% gain in the quarter. Long Government funds category was the second-best gainer in the third quarter. According to Morningstar, Bear Market funds category gained 13.1% and Long Government was next in line with gains of 4.3%. So we see that among the American Funds’ best 15 gainers, the Government category is the top gainer. However, Municipal Bond funds dominate the top 15 gainers’ list. Among the Municipal funds, the American High-Income Municipal Bond Fund® (MUTF: AHMFX ) , the American Funds Tax-Exempt Fund California® A (MUTF: TAFTX ) and the American High-Income Municipal Bond Fund® A (MUTF: AMHIX ) sports a Zacks Mutual Fund Rank #1 (Strong Buy). Meanwhile, the American Funds Tax Exempt Bond Fund® A (MUTF: AFTEX ) holds a Zacks Mutual Fund Rank #2 (Buy). Municipal funds the American Funds Tax Exempt Virginia Fund A (MUTF: TFVAX ) and the American Funds Tax-Exempt Fund of New York® A (MUTF: NYAAX ) carry a Zacks Mutual Fund Rank #3 (Hold). However, while the American Funds Tax Exempt Maryland Fund A (MUTF: TMMDX ) and the American Funds Tax-Exempt Preservation Portfolio A (MUTF: TEPAX ) carries a Zacks Mutual Fund Rank #4 (Sell), The American Funds Limited Term Tax-Exempt Bond Fund® A (MUTF: LTEBX ) has a Zacks Mutual Fund Rank #5 (Strong Sell). Coming to the Government funds, top gainer the American Funds US Govt Sec R5 and fifth-placed the American Funds U.S. Government Securities Fund® A (MUTF: AMUSX ) carry a Zacks Mutual Fund Rank #2. However, Government-Mortgage fund the American Funds Mortgage Fund® A (MUTF: MFAAX ) holds a Sell rating. Original Post

GreenHunter Resources’ (GRH) management on Q3 2015 Results – Earnings Call Transcript

GreenHunter Resources, Inc. (NYSEMKT: GRH ) Q3 2015 Results Earnings Conference Call November 16, 2015, 10 AM ET Executives Serene Prat – Head of IR Kirk Trosclair – Executive Vice President and Chief Operating Officer Ronald McClung – Chief Financial Officer Operator Good morning, ladies and gentlemen. My name is Latisha and I will be your conference operator today. At this time, I would like to welcome everyone to the GreenHunter Resources Third Quarter 2015 Financial and Operating Results Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] Thank you. I would now like to turn the call over to Mr. Kirk Trosclair. You may begin sir. Kirk Trosclair Thank you, operator. Good morning everyone and thanks for joining our third quarter call today, Monday, November 16. And before we get started with the operational results and the financial results, I’d like to have Serene Prat read the Safe Harbor statement. Serene Prat Good morning. Thank you, Kirk. Before we begin with the content of today’s call, I’d like to advice you that today’s call may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The following discussion provides information which management believes is relevant to an assessment and understanding of our financial condition and results of operations. The discussion contains forward-looking statements that involve risks and uncertainties that may include statements regarding our expectation, beliefs and intentions, or strategies regarding the future. Actual events or results may differ materially from those indicated in such forward-looking statements. This discussion should be understood in conjunction with the financial statements accompanying notes and risk factors included in our SEC filings. The discussion should not be construed to imply that results contained herein will necessarily continue into the future or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment by our management. Actual events or results may differ materially from those indicated in such forward-looking statements. This disclaimer is an effect for the duration of this conference call. Thank you. Kirk Trosclair Thank you, Serene. We’ll go ahead and get started this morning and basically just give you some highlights of the third quarter, look at the three months and the nine months ended September 30. But before we go into that, let’s just grab the overall picture. From last year at this time, WTI prices are now over 52% or so down year-on-year and the rig count itself is down over 50% as well. So you basically understand what that translates to as far as production and drilling and completion flow is in the work space, on the environmental services side and the shale water outlook side. We’ve had some continuous growth over the last few quarters, continuing from the first quarter when we were averaging somewhere around 250,000 barrels a month or so of injection and in the second quarter that went up to 275,000 on average and in the third quarter we’ve averaged around 360,000 barrels per month. So the biggest thing there was, if you guys remember, right at the end of the second quarter and going into the third quarter, we added two additional wells down at our Mills Hunter facility and those results of those wells were really good for us. And that helped translate that to a good third quarter on volumes, even though we turned the wells on the first week of August, we didn’t get the ramp up until we finally got most of the injection volumes two or three weeks later. So we finally saw that going into August and September. So that’s the disposal volume side, on how it’s going so far this year. The trucking side has basically done a little bit less exciting than the disposal side. We started seeing price pressure on transportation middle of second quarter and that’s continued into the third quarter. We had, from the first quarter, we had 8,000 hours or so of trucking; second quarter, we averaged 6,500 hours or so per month; and in the third quarter now, we’re around 5,000 hours or so per month. We’re staying diligent in adding new customers out there in the Marcellus and the Utica area that should help to increase some of our volumes. But it’s – like you guys can imagine, it’s mostly production volumes at this point. Every once in a while we’ll have a flow back coming in from someone that maybe fracing a well, but there’s not that many completions going on. So our report, I think, the completions [indiscernible] are up over 5,000 wells and that’s just unheard of today. So I’ll jump into the press release portion and hit some of the operational highlights before I turn it over to Ron McClung on the financial side. Obviously, first of all, we did have positive adjusted EBITDA of $482,000 for the third quarter. The injection volumes, as I just mentioned to you, basically only about a 10% decrease respectively year-on-year and being the majority of that is production volumes that’s pretty steady and it’s – what we can look forward to, I think, as the new norm right now until things turn around. We’ve already talked about the wells, but the two wells that we turned on at the Mills Hunter facility basically were 6,000 to 8,000 barrels per day each well. And that effectively raised our total disposal capacity by 50%, which now takes us to about 21,000 barrels per day of injection capacity currently at this time. We have a couple of other wells getting ready to go. We’ve got one in Ritchie County, West Virginia that we should add and turn on here in the next week or so, couple of weeks. So you’ll see that one come on in the fourth quarter of 2015. And then we’ll add one of the additional wells at Mills will come on as well in the fourth quarter. The last well at Mills, we’re looking at now probably in the first quarter of next year before we turn that on. In the last Q, we just ordered those trucks. We have received the eight new Peterbilt trucks, 407s. And out of the trucking transportation side, the pricing pressure has not hit the 407 trucks compared to the [straight] water trucks. So that’s a good sign and we continue to put those on the road every day. Also, we looked at our revenues and based on our injection volumes, we looked at our current portfolio and how it lays out between our number of customers that we have in the Appalachian Basin and no one customer is more than 21% of our total revenue up there. So one other thing we’ve done is pulled back on the G&A; we went from $2.1 million in the third quarter last year to $1.5 million third quarter this year. So that’s another decrease of 29%. And we’ve pulled on the belt just about as tight as we could possible pull and cutting cost everywhere we can, but still trying to keep our customers happy and work in a safe and prudent manner. So with that, those are most of the highlights from the third quarter, I’ll let Ron take over and go through the financial results and we’ll follow that up. Ronald McClung Thank you, Kirk. I’m not going to rehash the bullet points that are in the press release related to EPS, [I guess drive into] some of the financial results. Revenues for the third quarter in total were $4.5 million for the 2015 third quarter compared to $6.3 million for the third quarter of 2014, or an overall decline of 28%. However, our operating loss has declined to $649,000 for 2015 for this quarter versus $1.2 million in the same quarter in 2014. As we expected and had disclosed previously, we did not move some of our debt covenants for the third quarter of 2015. These covenants had previously been waived by our lender for this quarter. Notably, as we previously also announced, we did not pay dividends for any of the months in the third quarter of 2015. Our amended agreement with our lender does not allow us to pay dividends until we’ve been in compliance with our settlements for three consecutive quarters. With the current state of the oil and gas economy, we do not anticipate paying dividends in the foreseeable future barring a significant change in the business environment. And we’re not able to predict when such a change will occur. For the first nine months of 2015, our revenues were $14.3 million versus $21.6 million for the same period in 2014. A key factor in managing our business relates to direct margins, which we define as revenue less direct cost of goods and services provided and then what percent that direct margin is when compared to our revenue. Even with this 34% drop in revenue, our direct margin actually increased to 40% in the first nine months of 2015 compared to 33% in the first nine months of 2014. This improved margins while the current business environment is a positive reflection on our management’s ability to cut costs. Looking a little closer at the current quarter results, our disposal revenue was about $3 million this quarter compared to about $3.4 million in the same quarter in 2014, or a decline of about 13%. This decline was partially the result of a 5% decline in this quarter last year in the number of barrels we disposed. And as Kirk said, this was mainly due to a dramatic drop in flow back order from last year and also due to some wells in our service area that are being shut in due to low commodity prices. We’ve offset [indiscernible] as Kirk also mentioned, what could have even been a greater decline in revenue by adding some new customers in the third quarter of 2015. With revenue being down 13%, volumes are only being down 5%, the remaining 8% of the decline was due to a decline in our average revenue per barrel of about $0.29 when compared to last year due to the downward pressure in processing we’ve experienced while trying to maintain and even grow our market share in this difficult environment. Internal trucking revenue was about $1 million this quarter compared to $1.2 million in the previous year due to market conditions that have led to a decline in trucking hours and again a downward pressure on processing. Skim oil revenue was down to $87,000 this quarter compared to $198,000 last year, mainly due to lower commodity prices. Now, some comments on the cost side of our business for this quarter. Our disposal cost in the current quarter, in spite of only seeing a 5% drop in volumes, we were able to decrease costs by about 16% from last year due to operational cost cutting measures. Our trucking costs declined about 20% from the same period last year and we were able to maintain our direct margins at about 43% for both this quarter and the third quarter of 2014, in spite of an overall 28% decline in revenue from last year due to these cost cutting efforts. As one might expect and as Kirk has already noted, we’re leaving no stone unturned in looking for ways to lower our costs in this environment. We were able to cut general and administrative costs by about 46% when comparing the current quarter to the same quarter in 2014, while a little more than half of this savings was due to a decline in non-cash stock compensation. The company also had substantial declines in payroll related costs and smaller costs in G&A, again, mainly due to our austerity efforts. The company continued to cut costs in the third quarter of 2015 and some of these more recent costs particularly in operating payroll were late in the quarter and thus not much of a benefit to the current quarter. We should see more favorable results from these latest cuts in the fourth quarter of 2015. And finally, as I’ve already noted, we did not see current market conditions allowing us to meet our debt covenants in the near future. This outlook has caused us place on applicable accounting rules to classify all of our new $13 million debt as a current liability at September 30, 2015. That in turn has resulted in adding language to our 10-Q [indiscernible] as to our ability to continue as a growing concern. Kirk? Kirk Trosclair Thank you, Ron. Before we go to questions, let’s just – I guess, I want to go through the third quarter one more time and highlight the additional wells that we turned on at the beginning of the quarter and that took us from 15,000 or so a day over 21,000 barrels of day of injection capacity. And if you look back a year ago, prior, if we’d had the wells owned at that specific time, we would have been at 100% utilization on all of these wells, the new wells that we’ve turned on. But as you noticed in the past, what we’ve reported, we’ve always stayed pretty true to it that we had about 75% of our volumes were production volumes, the other 25% or so was completions volumes. And completions market has just dried up, so basically seeing all the injection volumes that we have and then what we reported in the quarter, the majority of that is production volumes. So a good part is if you can find any silver lining in the commodity price market is out there that production volume is pretty stable and we’ve seen it week over week and continuing through the fourth quarter, I don’t see much change outside from the volumes and trucking hours, things have stayed pretty flat. Outside of that, operator, I think we’re ready to go take a couple of questions. Question-and-Answer Session Operator [Operator Instructions] Your first question comes from the line of [Tony]. Unverified Analyst Can you tell me how – you mentioned your debt covenants not been in compliance, can you talk about what you’re going to try to do to amend those or get in compliance? And in conjunction with that, your $2 million requirement to fund additional equity and [indiscernible] with him, is that still available? Kirk Trosclair Yes, the line is still available and we have to – the current amended waiver allows us to raise that capital that equity by December 31, 2015. We are already in talks and negotiations with our current senior lender to modify those agreements at this time. So we’re working on those as we speak. Unverified Analyst Can you go as far as to characterize you believe you will be successful in modifying those? Kirk Trosclair We’re working with the lender, that’s pretty much all I can say at this point. Operator Your next question comes from the line of [Bryan Butler]. Unverified Analyst On the disposal volumes, so assuming that 75% is from production, 75% was in the past from production, does that mean that 21,000 barrels a day capacity that you exited third quarter at, is that basically at 75% utilization, is that the way to think about that? Kirk Trosclair No, that’s our available injection capacity currently today. We’re not operating at 100% utilization on that 21,000 per day. In the third quarter, we had a couple of really good weeks where we averaged over 15,500 or so a day for several weeks, but it’s fluctuating up and down anywhere from the 12,000 to 15,000 per day on average right now. Unverified Analyst And that’s all produce volume? Kirk Trosclair Pretty much all produced water, that’s correct. We have maybe – a couple of the companies out there had a couple of flow backs, I can only remember one or two in the third quarter. We do have some anticipated flow backs coming in the fourth quarter that we’ve identified, our customers have reached out to us and told us to expect some heavy volumes towards the middle to late December where they have a couple of wells they are trying to get online before year end. Unverified Analyst So produced volumes [indiscernible] 12,000 to 15,000 per day and then the new capacity that you’re adding in the fourth quarter and the first quarter 2016, I mean, it’s just capacity that’s going to be… Kirk Trosclair This capacity is waiting for the uptick. Unverified Analyst On the new trucks that you added, did they contribute at all in the third quarter or is that all talking about fourth quarter and 2016? Kirk Trosclair Only two of the trucks contributed to the third quarter numbers. The rest of them will be contributed in the fourth quarter. Unverified Analyst What contribution can we expect in the fourth quarter in the current environment? Kirk Trosclair On the 407 side, I think we’ll see steady runs with the 407s. That market has not really declined. But the older straight trucks and water trucks, the pricing pressure that we’ve seen, it will definitely be down again in the fourth quarter. Unverified Analyst So even though you have new trucks coming on, the pricing pressure you’re seeing is going to be offsetting any benefit that you’re getting from the new 407s? Kirk Trosclair That’s correct. That’s a safe way to look at it. Unverified Analyst Can you talk about the competitive environment? I know you talked a lot about the market being very difficult and pricing there, but are we seeing any competitors exiting the market here? I mean, is there some silver lining of – as competitors exit, there is additional volumes to be picked up? Kirk Trosclair We have not seen that, Bryan, at this point additional competitors closing the door or leaving the market, not at all. We haven’t seen it at all. Unverified Analyst Because there is an expectation across all the providers that there is going to be some kind of a recovery or is everyone just have a balance sheet that can support this? Kirk Trosclair There’s only two other public companies out there and they just published their results last week. I mean, everybody – the other shops out there are basically private shops, so we don’t really know what’s going on in there. But they’re experiencing the same pressures that we are, I’m pretty sure of that. Unverified Analyst Last one just on the covenants, can you just outline what the covenants are that – current, I know you renegotiate, but potentially what they are now, where you stood on those covenants at the end of the third quarter? Ronald McClung The biggest challenge in our covenants is there is a covenant that we have to have enough EBITDA to cover our debt. And that’s about – we now are paying principal payments to our new amortizing loan of $13 million. So that’s roughly $1.5 million a quarter and we did not obviously have that much EBITDA. And so until we’re able to cover that, we’re not going to pass that covenant. Unverified Analyst So that’s principal and interest on that $1.5 million, that’s what we’re talking about, it’s not just the interest? Ronald McClung Yes. Operator Your next question comes from the line of [Jim Collins]. Unverified Analyst Question on one of your customers, you probably guess [indiscernible] they had some language in their 10-Q that they are having some difficulties with [indiscernible] infrastructure and I just want to know if there’s been – as of this point, any construction in your business with Magnum, obviously that would be production water at this point, not flow back. And how you look at that going forward for the rest of the fourth quarter? Kirk Trosclair Jim, we have not experienced any delays or anything different on the Triad side, we’re still taking in their production volumes currently today. But overall, the percentage of revenue and percentage of volumes that have come in from Triad versus the rest of our customers has dropped significantly over the last couple of years. But outside of that, it’s still status quo. Unverified Analyst You mentioned that one of your customers is 21% of your volumes, I mean based on what you just said, can we assume that that’s not Triad, that’s a different customer that’s 21%? Kirk Trosclair We’ve got several that are floating right around the 18%, 19%, 21%, but it’s not Triad’s percentage. Unverified Analyst And on pricing, we’ve used $3 a barrel as a benchmark. Given the slowdown and the low rig count in Appalachia, is that still – are you guys able to hold $3 basically? Kirk Trosclair On a blended average, it’s still right around $3, actually in some cases it’s a little over $3, Jim. But yes, you’re correct, since the market has come down, commodity prices have dropped – we’ve seen a turn on pricing pressure getting closer to that $3 range. Operator [Operator Instructions] Your next question comes from the line of [David Rothschild]. Unverified Analyst Most of my questions have been answered. I guess the one I did have, I assume in the condition you’re in right now, any further capital expenditures at this point are pretty much put on hold, is that correct? Ronald McClung For the foreseeable future, that’s correct. I mean, and that’s why we’ve delayed some of the wells over at Mills Hunter, we just really – we have one of them ready to go, but we just have slowed that down because our capacities are – the injection volumes are not meeting our current capacity at today’s levels. So no need to rush into another well. Unverified Analyst Have you had to lower your prices quite a bit to keep the business that’s been coming in? Ronald McClung We’ve had to remain competitive and get aggressive with some of the newer pricings and some of the newer contracts. But for the most part, as we just mentioned, the blended rate is still north of $3. Operator And there are no more questions at this time. Kirk Trosclair Thank you, operator. This will conclude our third quarter conference call. Everyone have a good day. Thank you. Operator Thank you. This concludes today’s broadcast. We ask that you now disconnect. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited. THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY’S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY’S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY’S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com . Thank you!