Neal Lux: Yes. And I think another interesting driver that I’m not sure if you heard John Daniel’s comment on longer laterals, that’s another great driver in this business as they continue to drill newer wells and fill in the development, they’re extending their laterals, which for Variperm and the combined company will be more product per well. So as the meter [indiscernible] we have more revenue per well.
Daniel Pickering: Got you. And this product – it is a new well product. So it’s not a – there aren’t a lot of maintenance revenues associated here. It goes in the well when the well is drilled and then you’re waiting on the next well drilled to generate your next set of revenue.
Neal Lux: Correct. I think there’s some occasionally remediation work where they’ll go in an existing well. But I think that the typical is that it’s a new well – and a new set of well, excuse me, an injector and a producer that’s in the ground to fill in the maintenance capital and utilize the steam generation of the central processing plant.
Daniel Pickering: Got you. And as you think about your opportunities set internationally, so this is a heavy oil application. Where do you see the top two, three, four countries that you might focus an expanded sales effort?
Neal Lux: I think we’ll want to focus on areas where we have a good footprint, where we can utilize our fixed cost and do this in a good and profitable way. I think the Middle East and the areas around there and the countries around the Middle East are really going to be our key focus. Again, that’s where we at FET have seen the most activity. And I think if we step outside of Canada, I think that’s the next big area.
Daniel Pickering: Okay. And the kind of historical information that you showed in the acquisition press release highlighted, they had a couple of million bucks of CapEx on a trailing 12-month basis. That’d be your expectation. So, low capital intensity here for the business?
Neal Lux: Absolutely. It’s a strong conversion of EBITDA to free cash flow, which I think is something that really drew us to this business along with what the team has been able to accomplish and the technology, the customer relationships, and then the outcomes they have, I think just really are all fantastic.
Daniel Pickering: Okay. Cost opportunities. They’re an existing business. You’re an existing business. Is there any overlap here? Should we expect you to save some money out of the combination?
Lyle Williams: Dan, as we look at Variperm very well run private company. Don’t expect a lot in the way of cost synergies or cost additions for that matter, as we integrate them into FET. The business is really well run. They’ve done a great job. And so expectation is that they will continue on their current path.
Daniel Pickering: Okay, perfect. Again, thanks for letting me press on all these things. So SCF was mentioned earlier they’re locked up for 180 days. I saw that in your commentary. Is there any restriction in allowing them after that 180 days to distribute out to their shareholders? Do they have to control this stock or could it wind up out with their LPs?
Lyle Williams: There’d be no shareholders. I’m sorry. No restrictions after that 180-day on the shareholders. So again, our expectation is getting those extra shares and float out on the market could actually be beneficial to the story. And so we look forward to that.
Daniel Pickering: Yes. And Lyle any – so we didn’t see any announcements, so no SCF person comes on the Board post the close of the deal.
Lyle Williams: No, that’s right. That’s right. So we’ve got – as you know, and others know, we’ve got a great independent Board, a lot of experience in the industry and they do a super job of representing all of our shareholders.
