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PCYO Pure Cycle

Participants
Mark Harding President and CEO
Robert Howard Boiling Point Resources
Elliot Knight Knight Advisors
Geoff Scott Scott Asset Management
Call transcript
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Operator

Good morning, ladies and gentlemen and welcome to the Pure Cycle Corporation Quarter Ended November 30th, 2021 Earnings Call. At this time, all participants have been place on a listen-only mode and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mark Harding. Sir, the floor is yours.

Mark Harding

Thank you very much. New you Happy and morning Year all. to Good to quarter call. for like to fiscal first you welcome earnings I'd our our year XXXX

Just do presentation. some We deck housekeeping this for have a items.

at You it on landing is. to there can page you you it direct the on website the will find and where can purecyclewater.com our click and presentation

so that, with I'll And get started.

forward-looking our contained Moving to this statements historical Statements facts or that the Exchange by statement. that Securities presentation our first Commission. as are Safe slide, from meaning are Harbor which in incorporated is reference and not

with I then a about we think and most company the of like business at of of a Safe lawyers or kind the is talk statement. and you the then that the color are bit to roughly bit now operations the do what of here. our of a up I'd quarter familiar bit to water little But out little it room, the of Harbor about get Q&A really end open segments, overview then and

you segments -- these actually learning aren't operate segment. those drive kind we for the of complementary kind and that are of we So, company company, familiar with of three of each other in and those that each for business the just operations segments

that an opportunity in acquired we've water assets value the and longstanding it's So, development. our where we're leverage continuing of land to

recently areas we out grave In that own development development and water it, that national we an the is that and real water that for resource Our then for cradle developing the mostly and infrastructure master We also the are hottest planned horizontal we're Denver attractive area one lots some own that to of homebuilders. we're in estate those it actually wastewater that homes we metropolitan back infrastructure list opportunities have commercial production exciting segment, can treats the highly that a then for our improving, the we're them Denver we a holding are customers. that area, where and distributes Eastern we corridor lots some a in water metropolitan we're the single-family you ourselves, homebuilders, rights. portfolio areas. more diverts I-XX land taking here to of on where land all construct that building families own us. it, And individuals to develop and some sell And the in -- and water rentals, contracting production water to we where provides community segment own water, of and to in some rent waste model develop

some talk I'll some that So, of little that we've there and because as delivery successes well. about as well, a bit got great product

water the out me with let start So, segment. utility

wastewater we a provider. water, So, are wholesale

are current have we fee which treatment upfront we mentioned, to have process so have water tap two we One large I wells, generates fees we our we that and these water, capital for and facilities, distribute water tap that model As we customers a tall sewer. network, fee, a is both incomes. fees distribution that

fees about you margin because serve a the capacity around right two which if the XX we about -- Those by they're we are and are that the is homebuilder, that on water in the amortized the customer, about a that sewer That's take then number XX% And $XX,XXX and $XXX per that predominantly for little that. into $XX,XXX about month as or and paid use cost are So and And connection. we've by get how that's once year. utility translates cost-effective and source. the connections tap -- house then connection that so facilities almost XX,XXX typically water existing can about our over back a we that continue $X multiply typically capacity topline to those handle sources water per reuse $XX,XXX, our business, water you a $X,XXX of our new of of sustainability, residential that. is generate to the of typical construct billion all revenue water got necessary monthly per we'll get to connections -- home that for and fee, our side single-family most fees

that distribution treat that we have system that we back water facilities demand. So, that through very a to wastewater then able for be reclamation treat separate irrigation and water a outdoor redeliver to water. two we supply can where We high-quality put

So, water we've that. our little got on A segment. of to use for utility and bit reuse color model

we oil a And the which Southern community. capacity a build of in worth. the Sky We're the We certainly connections. and Wattenberg the continue system, seen last grow investment so do and for little customers through just to Field. typically a our serve top operations steadily the connections A Highway another the develop connections the tremendous working as over the water Really acquired utility growth water about very and we've five customers. assets and bit our sit years with, Sky that a base. years active this referred ourselves water or of Elbert oil is a mostly two serve gas of It would then, in about for that Ranch you've lucrative of and is but the talked number We Formation the are that this four years. which community couple out is play we Niobrara to been then something gas represent shows XX doesn't about side, just a our about recent wastewater which also on XX,XXX the to we and month, projected model developments adding for continues be water more Ranch to our and really customer XX, the absorption into over X,XXX that's of of ago, happened portfolio,

of actively the in a here, interest that which formation, We time several of there of the operators is consolidated, wells here. number is number lease a drilling have and producing have formations interest over largest really

you take what servicing for wells in so a water for the XX,XXX be the It's well And excess at needs of capacity. the where about in capacity would we that. is look

it's at in very we rate. sell large to if water, So, how at couple maybe we a a play area. for hundred very a us miles of And water high that we're sell them a footprint square looking of this

very, time. their water that large need compressed in very and demands So, of are they period very a

a operations. seeing And week and in $XXX,XXX here. oil the renewed a strength for gas we oil over three of well and So, maybe period. much averaging about that are they two or want space Currently, per activity gas we're

I There Colorado lot of politics renewed and the of in their going is to think state and So, move of as has oil regulate are how have and sense the to certainty operators a terms oil to firmed operations. the settled the operations how are up forward. as going gas

where service a glad for that you of to activity This lot we're proximity our give areas. of back to operations of So, come to kind continue is a see well. our slide development as will

what's and the kind metropolitan of to land happened picture ago. area. relationship we grown And where assets positioned, gives a there we where So, years this are. our we water number how are out of these acquired of, And is kind metropolitan is to areas you in legacy the service Denver of a

We have a large service area.

of education XX,XXX public proximity We Sky Range, they to of It's you which Ranch. fiduciaries for not also the by our Colorado of the area, that's have terms school exclusive system, a Lowry the that revenue the of has owned property and a Colorado. just a in our where by service responsibility area, acres board, really State only -- of number but have of generate service owned the gives which state fiduciary one is

of well the that can little us as see Corridor acquisitions operations surrounding about area, area serve then our you pink key utility service I-XX properties that the Lowry corridor. north in are a land along of at that opportunities both the is take our -- look some as four As airport. to And miles which in a south also for bit

we of so itself positioning positions company, as like only this the region for And We like in the really terms not the our at. a whole. we're activity, like really how where investment but in We marketplace.

develop decade little development when for company buy area. more a utilities of an Talk -- contract came a we acquisition metropolitan context exciting with height the just the for commercial space, couple to we up about that in right it of little an the of were about gives to acquired It a to looking residential because us. have recent bit an it at the of XXX our lot to So, We how ago land of the some on zoning of was under years. interchange Denver to It only the The with together about Interstate. development the but recession. we lots acre a were housing assets than excellent it. our in positioned property X,XXX has not bit allows been more provide are This feet land million operations. along us square a

at more lots uses. when look over and we how roughly for many connections, about converts it the light square we commercial we at and monetize X,XXX how And retail, look is take can industrial commercial ideally positioned look a many property, So, at connections that this property you as just as footage. to

X,XXX that's So, feet. square about

phase I it's years our of really first a about most As ideally We XXX development referenced, embarked couple started corridor. development lots. this ago really which and the property located active was of on that of and

those all completed have We lots.

out about to little there right of of XXX have me, customers. the We've end, the a bit We residents there. is lots sold we Excuse transferred taps. but quarter XXX now, those more XXX all homebuilder as almost our have

fee a in about phase we adding we're those So XX the tap at connections and building this. revenues typically get really permit month

all of or model So, in pretty delivery. at least quickly builders their are had absorbed this sold complete Two see on three are our awaiting the the of build-out portfolio of with that. homes remaining and their we builders of with are first that homes you'll

or a lots there. left. bit the has that selling They may left pricing have Richmond and out through a a market maybe dozen think they're more little few I or lots still

our I nearly fee Phase optimizing from on they're price so of that tap X. all revenue revenue think recognized the lot our we've and all that. building specs, But them their they're for

So, back and year, started exactly, a on spring our phase second of few about for that's and launch with lots a XXX a us phase for be and -- XXX will ourselves. those development our total this for homebuilder customers XXX contracted our that. lots held In of second of about we been lots very successful of we last of

our for single-family back other held markets. areas the we XX really with those about So, rental some lots for expand and lots to reserve ability

bit District in what I'll that little presentation. a we're So, both school excited good so in and phase us for district, we also Colorado about here working very a school, working was partnership But a the the that the talk particular the to a School later more pleased School Bennett with been were has and relationship local charter really very included this about charter we're very get school District. Bennett that

Academy have -- Heritage August on we're XXXX. August a National We the in charter school terrific of school this to an Michigan looking for build charter the opening operator, year of that

to local It's continue community a school. in So add that itself. to will the neighborhood

the fees We're about very improvements the space, back. of our our we doing $XX gutters, those the not homebuilder estimates will the totaled partners which were fees we open from development. million doing, In then just little we're in development lot a all some from phase $XX the having million local a at that Phase $XX in of are our those campus that phase, K-XX weighted, our and and parks, -- -- right those about public in about only but as some revenues horizontal roads, a here. do more And tap little roadways improvements So, of a about generate another had of we project. to And part the million those we $XX X bit contract we do public that investment get first about have was public we're then second This entire improvement our bit looking common That roadways total, with collect start what to also of about because reimbursables. homebuilders, fees. million. excited of curbs

at of not combination the also million costs $XX the we have in about a revenues, revenues So, million. and million phase the the but in $XX $XX second the then estimated only reimbursement for lot are our developing

the for us. land bit opportunity gives for extremely level a lots of segment, feel So, the our you high in economics a attractive on delivering development

little a go out homebuilders on this deliver so by me to our -- lots. able for just Let we doing We're these that our bit in incrementally XXX of, real-time about four kind just revenues that metrics builder. parsing are sub-phases and lot more how also lots basis a the is

more the in So, total it reimbursables about costs bit revenues the and color are, gives those you to distribution a the revenues that. tap fee the lot and how

of sub-phase. So, a gives you for sub-phase. and as reimbursables take then aspect individual at a but This is gross And that the each kind for it the the proceeds how those well. feel we're of add breakdown you look gross of you not cumulative to how us the the need of only each work to proceeds, delivering if

here look to contractual which to in three allows on to basis. deliver of able homebuilders be one sub-phase, four incremental we do basis an and of structure, a first that that the the us lots incremental on the be are things Our paid structure

happens what a a we finished not so Agreement lot, lot finished where lot. format us them platted And is is, able pay deliver each or to call we a Lot when builder Development a that

pay utilities, a platted gives the finished second, what when lot, a the them homebuilder third for finished we bit then the we and price third that lot then cost get of little roughly end pay wet agreement deliver to to us they'll third, phases deliver that and the we they that's we carry finished lot as that title finished more And lot the that property, get So where we and have of payment. through the to that we a then finished call in one finally, us lot lot. deliver the

the So, components first first two lots. the of we've completed XXX

to roads all and that lots on right XXX So, deliver the this year. we're and the able end now of we'll by expect working curbs be fiscal

sort August individual XXXX a builder. each there dates of delivery of the you no, and got October breaking that's -- kind how by for we've So, give timeframe of feel down

at the an So, that one was space, business as single-family curb rental talk bit buy we lots. value, community, what of value some for what the for at we're the doing amenities, the we're things customers and the we're that a doing value and want looked Not for homebuilders also metrics on for increases little value what that appeal, and about for the for only out it doing what of that we're schools, increases creating doing time, to commercial all of attractive our well. they come the parks Also open us these. but these and the homeowners here

at participate to one on that And looked we that. being so the things was of to continue able

fundamental do the way single-family was So, seemed model that. attractive a rental to that very us of for that kind the like theme and on investment

and look tight extremely took really is dissecting a you the market, If an housing market. market that

it's as think market as what is both and well here home significantly you're for seeing rental but prices true in nationwide, that. that's market I increase think exaggerated Denver the I the

these are in price, some rental we see in listings how are the three foot. terms so market last years, the what over available, the And lease about price median the square per both of statistics many

And lots three this really investment with four theme our from and first really process was out our -- phase. so started we that

to of three out and and homebuilder construct XX budget homes fact, Those listing. local the were lots. delivered in each lots on with contract a within days into rented time, entered those we So, the of we first in

rental forma bit on little a on but that. of $X,XXX that month is around the on a income this is that, pro So,

this which be activities, to to of cover maintain the we team that system our you and do we're of have development give that able do basis value vertical of be we a allow these the and a bit of as construct a that at us forma sufficient gives and pro professionals able you to we very us not generate operate then to on the only as was, roll our then the in helping well and kind an for utilities were as to equity So, finance have able homes a ourselves of portion what terrific some to lot where we of rate, wanted as improved are that. attractive financing water annualized forward cost component so money look we a it land and land that the to vertical well and attractive to line that very the going up

but were shareholders, the first to be forward, units. benefit flow we to incremental having to able on finance So, cost it three able that, each only carrying our free also on vertical cash us our homes from not for be

if take So, the activity third-party we capitalized that on most look handle we to that We that, financed you some out-of-pocket of builder. landscaping. roughly on costs, at of the able the self-perform our a were did where cost to

$XXX,XXX And on were so units the those higher that. then significantly each value appraisal in of came of those and about

our So, house that. tremendously lot delivery really the on benefiting us is just of on

really $X So, the first value financed value these about of we've three -- market worth be million. $X.X homes, of about million their is estimated fair these to

these some So, to X% of and equity excess units a each we're single-family up seeing continue built of appreciate We've a in year-over-year in those increase units. got units -- we've on in these each value. of got

us. So, what quarter about bit terrific for talk the to another with of that, like do I'd kind The was quarter-end end. little is a quarter

our really you is And for the the a of in basis. assets, and of income how a is of in a so at showing about share segments. land to each little bit on million per contribution three a net this earnings fully the and the diluted million $X.XX kind Taking continue about terms of look about monetize $X.X water We assets, revenue. both income, our net in $X.XX

a And that the revenue, yet that materially the so on we if the will representative at is is you land rentals blue the The because don't grow. that portion segment. green it portion water and contributed take continue and look hasn't single-family of of that wastewater while segment of the see really much, to development

On to utilities. what starting quarter, It's this Phase a and so weighted that guys bit more X. more and the land increment feel because if as land basis that and QX in because recurring bit segment. each XXXX, as And little rental activities than finishing in you want the we're segment we our for land our evenly we're water weighted as from particular operational deliver utility an give is land a we're the a for a segment was revenues X so water then we do get Phase out side both distributed. lot development those development of are But revenue, on going to the will single-family that, the those into you saw drive well those that reimbursables from

our are most you our for roughly delivered and land looking X,XXX So, there's five take is at mean three if to little still and about second, for properties been more kind and last the lots to commercial lots us holdings do the trajectory even driving of XX% things water here, land to optimistic our years in a particularly And over transformative shareholders. the about plenty monetizing be talk XXX a last early look really and our to value innings the most effort. of and have while how from encouraging I other which company. for yet really we're gone the I thing, over valuable come. have we've a assets this lots, the bit of our our the years, is what's significant wanted of been We've

from the which grow smaller with XXX We're only that year. We've delivered even even between single-family quarters continue we're in excited rental potential and our another So, percentage then past our in asset an assets to of that. to on somewhere will flow We've at and systems, about capacities in smaller single-family segment. XX drive this this excess our extremely the in yet, in water and both water coming continuing into capacity wastewater still years, units. delivering cash our that delivered then focusing units and year XXX coming three and

land what reimbursables year-over-year, and activity in value to development driving looking us would showed This was now really see last we reimbursables a year, increases have improvement record so significant we $XX public I We approximately million was on of income where call year, earnings recognized cash So, in able that. that significant expect were in and our what we earnings. that to flow.

delivering prioritize many that success to later those of of business portion at year, forward? with and as here kind we So, of both lots about do areas Board appropriately add all fully level How and describe to kind I know we're this and reimbursables of XXX we'll that, of what's well this next? to how offering the you liquidity, then second able we bottom would our here, I have segment be our our next from this anticipating year. think also each our our plan the monetize bond a slide. moving office asked we so, And as how the at three of

deliveries, able operations, expansion water our those First blocking investing returns for timing tackling, water the market. -- incremental we customers of on that. refinance our expand Our do be capacities our then increase right? day-to-day single-family, issues we typically, continuing in and sales control, cost we're optimizing look of water our and to of oil lot foremost, investing the and into infrastructure opportunities we're costs to And gas we to to rental that and we single-family and at vertical our industrial but have our the in our

they're drive returns these of but value. capital cash delivering have a a return quarter-over-quarter portion liquidity these them it of quick within have demands all you our a control thing exciting and take is our very of high each year-over-year. basis, are of are on Each to really of that position they to the and about And are so very of each these what doing margin continue

ball, you're doing the in increasing our with well do day, what a maintain and by as build to a this companies we day-in sheet returns you're what see And and position acquire. we assets cash see that growth I that is company the classify going going and optimizing the how on continuing of our eye profitable and to balance would day-out so the management have every we the keeping

Second category of what M&A we growth. is look at

the you we During outstanding a financial long-term Denver only it's in delivering here. revenue peel only three engines if market, our results, results, outstanding years, respected player back but past not but become outstanding the not what you see are assets,

Our and only built recognized land Sky leading development one communities market. XX% as segment, the Ranch is out the is in master-planned of

continue And area. opportunities we in that look other to so for

capacities, the be it both Our sufficient an which add will for add water able for use to M&A utilities will significant and for that also opportunity us have wastewater cash water to flows us and in growth.

Having each important other side. really muscle think But opportunities well sustainably. opportunities value control in better day-to-day Each is look that sure in we're there shareholders on components going create our create as focused But where to, our we we blocking continued liquidity share the we're both with a leading We're two be number focus can really on at sustainably I we in how company of M&A water. of water it the would to high that we're would that integrated then to margins single-family to it's value I them and driving these basis, what and through efforts operations our in just first are the important grow us the value and pursuing this, the is continue this Water side land ways to but to through and the we Board. for are driving finally, acquisitions. to probably rental. day-to-day is single-family our the say payments. balance land. repurchases and and what drive shareholders. to each acknowledge making really only can led doing for opportunities for has this what And that not for supposed to tackling margin I that to growing of pipeline is the increasing vertically would we The want of the rental then are for And in are land want business value that with our asset classify we're as the we revenues looking M&A described to is at front dividend opportunities as continue land and as segment classify discussions. we And those the led value and at would our additional both acquisitions segments, with as, our shareholders. to the have about on a interrelated what on very continue our and doing really look existing sheet we're assets doing drive additional on segments add So, additional and acquisitions. and to development acquisitions, drivers company acquisition, land producing some

to acquisitions through that. two, number to one, to highest we we capital then would capital those priority the of adequate have priority which adequate of capital priority is is continue next which execute for have grow going that where and in we some shareholders generate business Company, our value if be activities, on we to So, and return have be the

our we continue income on which from single-family revenues to are not little potential see only really but balance leverage really a is I'll kind on how the to long, continuing in lot sheet, over We do Again, grow also continue about from balance Board. space. a look in we've coming rental, strength to that that. last, really strong sales view that. debt-to-asset as let particular dissect have say, that's that. low our water we years how very sheet the of units over from, and This very, So, our and the where at statement and more add three recent segment, sheet that grown A time a guys you'll of our you balance bit

of for business back and company segment. you turn the the We outstanding all see than to to deserve. you provide rolling over down to specific some like to to are to the to be any and A women able a invest this And an for group I'd on questions balances I drill continuing I what to got that, have the want far quarter with do to guess, if that or that continue forward. color I see Board looking checks is and advice can terrific better company men you it either in growing that

with it questions back any and I'll Holly there's that, out over turn if there. So, to see

Operator

Ladies open gentlemen, your questions. today the affiliation, for coming Your is now Please for from question. your Miller. pose is Bill then question Instructions] first announce and [Operator floor

Unidentified Analyst

Mark. Hi

Mark Harding

morning, Bill. Good

Unidentified Analyst

morning you. to Good

You're I on early another you looking rental morning the and far the-- have just great and market is I'm the quite by opportunities that would at quarter. this congratulations think maybe

Mark Harding

Bill, are your you hearing feedback on side?

Unidentified Analyst

I Yes, am.

Sorry.

Mark Harding

if that not can am that side a Holly, Yes. there's your I sure mute if a improve on quality. there's we sound way or

Bill. try that, Okay,

Unidentified Analyst

try let's Got it? it. Okay,

Mark Harding

better. much that's Yes,

Unidentified Analyst

surprised that the recurring three revenue, it's Okay. supplying But returns. you highest your am far the best and of looking utilities, priority, in development, because cetera, just various is market, to by water rental elements at land I your then the business, et have

of get which is bigger this trying of what XX there, you isn't You with business? increase to get inflation Why to you you'll financing, And your good or can eventually? XXX You price it that accelerate and the why part terrific going be year, now? you maybe XXX the a right homes. get say think aren't protection in the

Mark Harding

That's a question. great

the relationships long the the planning getting a builder in of land a with setup. of on So, what lot all we're terms of doing it's lead and side,

we probably two, market went our builder partners we X, the lots, the and of January in when ago to and that looking at first maybe really, years February the the with -- Phase So February were middle pandemic, of at literally XXX or I January, -- with two was it call half on it our XXXX.

we value roll community, and just -- It that you seeing can the the on of in it that terms starting market And rental has really so the way, of marketplace. have go increase the new were in brand we these homes, a a where a was depends where either concept how in which well positioning delivered community out to lot thought single-family we're right?

So, how performed perform does and submarket found we terrific. it our that

us lots with was more to had lots of a back we with, those of said, of okay, distribution the as was on call We working were here were hold it we XX in our some was single-family builders builder the discussions just okay, back, we it plus they some they XXX where kind just had and would that of our pullback analytic single-family lots. lots in lots And so all builders. the able say, I each delivered them having we each and pulled And more those back market, and the were of it and buy actually those went then not more getting about market blocks we'll and to holding of said, the yet. it late-stage actually contract, that our of

be been stronger got in for to So, deliver while have still another lots area. to company in on could was early frankly able it that we've that Phase the area, X,XXX and X

be So, that I weighted think, portions maybe higher and next of we phase back growth. the we'll see to accelerate continue that XXX in hold able will to where

XX ago And that, that weighted portion more a so, we're that contracting of when still I of reason on why early and so, higher couple it see for were we that, don't the very as process years you're to expanding in was is have than in going that. a

Unidentified Analyst

Okay.

the only rental units? do So, XX to XX acceleration this do if see XX or you're to we when going year,

Mark Harding

-- pulled XX in those So, I each we've where sub phases. of four back each core each got lots phases, phases the sub the sub of of

going filing percentage that to between those of the of and and filing see consistently. you're But filing So, and two overlap a weighted three lots. four, have we'll three filing more

first the at XX, building next So, lots. us two XXX then the this same in time see be filing might out going XXX. while out to XX the phase of being three is another portion filing of a building And those XXX we're as you're

going each rolled subsequent how to terms be of they're we in phase. So, cumulatively out

Unidentified Analyst

So, rental counting to revenue -- Mark, flow cash percentage going be? acquisitions, of the market what free and in is particularly your are three years, about

Mark Harding

XX we'd XX to in we're units, and If of three maybe years question. another units like in having a executing, be position under Great units construction. occupied XX

the in be timeframe, X. as XXX Phase take individual that's maybe out three roll going at short you of a that function units to a overlapping period. that three-year units these of would phase, if from kind a look going And next a well So, phases how to in as be each of

Unidentified Analyst

And recurring the revenue? Okay.

Mark Harding

that, on point good $XX,XXX per cash revenue, are each flow. generating recurring in is the year these per of So, unit about free

is right So, decimal cash -- in that'd my flow a $X.X $XX,XXX. be $XXX million there, free

are that's think that's And we that balance add then if I of sheet. typically there value would $XX asset to million $X.X right. million about worth the each,

Unidentified Analyst

All right.

question. second just Mark, Now,

You've back of can't hope of price. years been a Well, your talked both, shares, cake do a I've versus acquisitions. what having you bargain and it I'd being to hearing is too? the about buy have for consistently several you immediacy Why why pipeline can't eat able and

Mark Harding

see very Yes, existing we from -- diligent dealing day-to-day. our our cash executing position you and you when we're that business are as with quarter-over-quarter about fluctuates

a So, at end. end, had maybe million $XX year $XX at balance we million quarter a balance

the the the front, things time of really where a there for some on so our be able liquidity that, reimbursables being, opportunities think to into to is monetize we're positioned that its position best consider of of and balance purpose. our acquisition liquidity quarter-over-quarter the that that lot that and so that, using out bond of pursuing invested sheet but with operations help fluctuation. we're like I gets next the we're we to activity stronger a get keep will some us Once and round And

a quite can't position my do So, eat just that's why too and where both. yet. in we cake can it I not have we're

Unidentified Analyst

you the do get when Well, reimbursables back?

Mark Harding

That's a good sometime We're this question. forecasting year. that

within million $XX think a look we the think I about portion taking what of is fiscal is that at we're the of million. the $XX current next which year,

believe bond next how we the see and we'll much back at we'll that get So, least positions itself out.

Unidentified Analyst

anticipating So, and world? when whatever is the in the $XX stock getting there's seemingly starting no no investing coming attention million or now appetite from back for the

Mark Harding

well. kitchen get muscle we're to And what table sure that keeping of Yes. as make some looking I and for these sitting we're really frustrating think it No, acquisitions, for with Bill. I is of us for down the that at some it's

Unidentified Analyst

at out On hand, the they now? to looking the dynamics you other same they are sell are, cheaper, so sell are why going out

Mark Harding

They a much today. and -- than more landowners. discussion. private going for and long in the decision tomorrow at, legacy more is well, are is is holders area worth these it's of And to That it land very how many if generational it be looking the are

the And it are and so typically estate for if don't them they don't planning and planning activity. have they want opportunities intergenerational it, mostly

them give planning, some a do activities. way some planning, does planning tax this some So, estate to

And working farm the that case rights each so that together with with individual dynamic we're supply, owner or in each of water, have. water landowner water

So, little everybody has certainly got But that say in their has I last our they're and bit market own the would visibility a circumstance. three Denver unique significantly. and the increased years

Unidentified Analyst

the great for thanks quarter. Well, Okay.

Mark Harding

you as always. Yes. Thank

Operator

announce from your coming affiliation, is Please Robert Howard. pose question your question. next Your then

Robert Howard

from Point Howard Boiling Rob it's Hi, Resources.

check wanted Just to in--

Mark Harding

Good morning, Rob.

Robert Howard

Denver looking have market in or what's -- just been I up the is that right now creeping look has areas. rights in on what Hi wanted wholesale There price the like? check Mark. like been to water

Mark Harding

It's It bought of XXX positioned by so, each farm, it, that competitive. us water reference a about Of that's farm, rights $XX XX little feet an that million small I'll acre acre, our difficult bought of we're $X,XXX that $XX,XXX. one we looking strategically it's more talking for about point. at and you just so got existing is. have for translates We call really bought in acre some into I or -- trending which that, of some around more that we Lowry. a at right It's where miles the the with XXX that neighbors and We costly, water goes and tributaries an at north transactions really on of anecdotal about about about, for acre-foot. year of feet give increasingly at one about had XXX about particular

years about seen a XX% we've increase on three So, in that.

acre waters per has because where on one wholesale we market our And our that skyrocket also for a reach the for developing that, the is of and company our out farther and on water So, continues basis. have rights originated. advantages cost the is of to foot water point-of-use farther that delivering and it the just to right

and to reach and statements that that's we Project number a as regional of -- continue years, that basis. really to out So, costs we farther portfolio, balance working with use in regional some looking for in WISE that entities keep with we from water capital our project of really of that on keep the of growing disclosure that and to sure our have can water, making And so infrastructure. we farther don't infrastructure a lot for costly to continue of the a we you we we're providers cost MD&A other a bear partnering that see because able such the in as sections close defer financial of be at

Robert Howard

don't of for year rights some great. using before water the you're water sounds are short entity if know all near that you to is to this up your opportunities and own for, in are able you other a your and I And Okay, or there is is be Do something -- stuff how year somewhat going for internal that? -- that profitable for like what margin uses. term many sell the

Mark Harding

-- that do do, to we So, on our customers. industrial a

they and would customers selling have of for use water demands. that's one-time that And need that be a that's and gas tremendous have I one-time continuing somebody one-off our going doesn't say and uses on So, water that. when water you're really basis, to oil a then

use water And we gas and then all does continue revenue, our per permanent that, tailing that much to that. is of we so leverages continue oil $X,XXX higher that the finance the connections. commercial, system that generate opportunities tap the our per expand our or to and system, that are when year customer and one-time water for and oil it grow because get have to our and we permanent pumping to capacity, And system. what connection The the of our those we I plumbing able margins the grow When connections to wells, we our fee gas. the our are storage for get reservoirs, revenues us to pipelines be customers continue margins incrementally connections they use residential retail

are those and great capitalizing those. on we are opportunities so, And

Robert Howard

Okay, your for the work. up Keep great. Thanks time.

Mark Harding

Thanks.

Operator

coming Elliot question. next pose from announce is then question Your affiliation, your your Knight. Please

Elliot Knight

Elliot Advisors. Knight, Knight

Mark Harding

to you. nice Elliot, hear

Elliot Knight

Hi, there.

Mark, is we was presentation, XX Speaking flew you and next of want listening become. to Pure I Denver has for to and to Cycle say out it on met and hearing really note, a month what extraordinary the it this just years personal to listening me time that ago today first I

-- do end industry that's the started re-fracked question speech. my is were Now told would be by the wells out years. well My to my with question the drilled is of business. having and that there, When be after oil to these gas about we five

which you is what number said operators' be short number two know going of you is is the labor is? what's they about the you of begun for number are that to drilling question planned in can Question about one are What re-fracking? plans, tell Have So, number on? do overall And you. us wells frac three availability Thank supply. and next thinking that? their crews, what XX months, know

Mark Harding

so work support years and your remember do question shareholders And in very lend oil in for continued call the and opportunity Weld as northern deposit whole quicker and and a whole you flow an you're through though on they these Colorado think and are in creates bet. to where for the that the and area. what seen their stimulation they lot has itself they to the re-stimulation. much it well shale well do of and our that do was, market when those You ago fated we this I and well company thing time Northern Thanks. A and XX the the this Niobrara for that, much, typically here. fracking that flies in first many I this deposit And or go and again, and years shale wellhead In gas makes right. wells probably others the that space County that day are of

field. Southern core area, really the we particular area operator that in attractive County I and attractive, in really suffered what Weld from than as more yet that think seen of the you've seen not Niobrara not have We issues. is And sort if our

defining became And major never and putting together, big in we ton so who infrastructure just of -- that money very was for field, we had a had this in it the a all putting came field a spent but them. in, really something it enough

just was like seem because the And meet their terrible field, but big, not process a didn't didn't -- the so it too proving and it job you Because too a starting didn't on they they on was they the really -- the out and operator while job did threshold, was defining it big operator it. just did they could and -- compete, it great big. de-risking developing it, too

And what so was ultimately up to enterprise. they selling private a ended

then oil a So, but called still company pension weak where and Crestone did that was a coming a Canadian that in creation is about were of production, to period that. they going fund that to Conoco job Crestone predominantly pretty from And went starting much better monetize time. during which

that and transfer now it Extraction, recently, So then we they much weren't more all it, again different a is economics a is what because of barrel Crestone. Bison, And $XX than that company at combination is at $XX about and aggressive the called a have a barrel. Crestone interest

So, was in a group consolidation called a Civitas. it

company. And entity. new They so this is are publicly-traded a a brand

up doing. then Crestone and and management take they're predominantly I Extraction that portfolio some as expertise well. They them and at positions and and Bison development think a You their have can what land look look of

they They've got setback. entities. to I dedicated that's combination drilling with prioritizing been revised you've They're of Colorado know can close So, rig of as the have one we those field. kind a wells. three as wells this drilling

So, X,XXX-foot setback. they have a

can of so and the then they're that. move can to in prioritizing they on place west those start drilling as that far they laterals And side as get so the with play wells east

areas. A in Aurora Aurora or may on lot of year those water provide city those the It's a urban And them are depending and wells. wells to may to development are of not concentrated. the close water lot so of the

And so water some of Aurora limitation wells. I the think supplied water it. those that as those see labor wells shortage, some on we've and The of don't some being to supplied to I some

company one really price did -- can of a more I over but Crestone think entity this with wells consolidation that. maybe primary to position was one an continuously, with wells what's a about various you're rig happening of think mean or years having it's XX much a than and to core operators. see the also-ran year. that that last hold Conoco Conoco a or a strengthened on Crestone not going they and are then And If really drivers per recent activity as got never mostly I by drilling going been three rather we've just new the their I repositioning being what the four And to interest oil had the Crestone drill lot HBP, continued of be production. this

more program seeing It on of and interested $XXX,XXX pad. delivering on to moving losing well that XX a million That's in where defining that efficient to XXX,XXX drill lease that's lock XX, they more much those in well to they XX and $X.X interest drilling a as water wanted water way that those also is for they pad $X million, and potential interest So, per wells well they're is were that done eight, didn't each make that. square drilling then lease more all each well, doing maybe acre of another sure us mile, pad, in doing have opposed really efficient per deliveries they of what that them. and we're XXX much

that's terms delivery period how why terms capacity. what wanting much a water over our so significant water incrementally of they're which expand of and operations, And time, to then storage in continue we is increase in of transfer both

repositioning as those The -- oil play was had analyst, the you each yourself So, play oil de-risked. could to some of play. an gas would recovered from of the oil analyst I what such characterize and

that per focused. pricing of operators that centrally to so investment then price consolidation at sufficient that that the of by really on the sure increase patients some had make a and barrel activity play to and level You've for asset was it's them their

things some all over years. how us play are of long of five good So, giving think I would gas those forward-looking now next a view the

Elliot Knight

Thank you questions. have I no very great answer. further much. That's

Mark Harding

you. Thanks Elliot. Best to

Operator

next question question. your Cunningham. announce is from coming Your then Bill Please pose your affiliations,

Unidentified Analyst

investor Alpha I'm a Seeking author. occasional and Hi, private Cunningham, Bill Mark.

Mark Harding

Bill, nice my to hear writer. favorite from Seeking Alpha

Unidentified Analyst

And at your least time. the one. favorite same all the only I'm

water. the case, water to So, you extent questions Range, of believe of correct? the I get One Lowry that have in have you Is your is to XX%. couple pay any to XX% royalty a from the on I

Mark Harding

That is correct.

delivered XX% private So, XX% public if if entity, to it's a a it's delivered to entity.

Unidentified Analyst

-- out royalties obviously, I've I -- separately. looking financials are extent your I you're And and to it they getting property, no taking broken the Is they Sky it? is Ranch so to don't see the there missing Okay. you're royalty at been small am are pay. insignificant from or that

Mark Harding

we typically, net of revenue. so that Yes, No. record

Unidentified Analyst

Okay.

Mark Harding

that. You for don't category see a separate

do lot Lost the So we water don't our and is our oil our delivering royalty price revenue Ranch three and A about pretty deliver now. we on get water our times so oil don't and only on the gas pay will pay not royalty of it and Sky that lion's right We we come a residential number royalty Not we're water, on using. and we're is pay net customers. higher that customer what delivering to it of small Water. our rate. that Creek royalty are those gas from of WISE Lowry to share has it to We

terms almost out So, revenue. of it the in washes

Unidentified Analyst

Okay.

good. Okay,

for with and at second has fees I'm The the tap looking do X. question numbers the Phase to

You're math, per with $XX,XXX showing over $XX,XXX than in I up tap home. fees do the I when per but come home, less

Now, the these you. are wanted I is equivalents, on answer that but single-family check with less than to think just that

Mark Harding

correct. is That

X.X bit acre And -- lot. are look what a at historically look smaller. at measured a for our little what single-family was would metric at that the we foot Sky lots a and average is equivalency so here, a Ranch, that -- At we be, a when

averaging opposed And so X.X. as we're to about X.X

per connections happens And same and means that same serve have we but is so portion we you you that. dollar revenue maybe at what model, fee more fixed what the recurring it the still look water when with can in that connections a foot, we does when more supply have acre that our get is of

and much So, $XX water month on charge they use a use. a based customer water pay they if how then might no consumption per

size And more and so fee do what is it lot us for basis standby that -- for that on connections has us for that more reservation what connection. a smaller for revenue customer the potential continuing of

Unidentified Analyst

Okay.

So, then pay unit builders different the a upon size of the for do fee tap amounts depending they're building? the

Mark Harding

do. They

size it individual irrigated house escaping So, the car and into the zero the each how then there square much calculating, garage out go have and portion of of lot the which house, on to is many they individual that portions it's we tap, how because number have five has going it be takes that, foot size metrics is. lot, each that of concrete of of based of

it those into and calculator they metrics go actually -- then splits out. and out our of tap So, all comes

know foot. this to that we Okay, to calculate, -- annual factored average know, on X.X this lot acre estimate demand we this then is much be and we house the

have it's they if came they it it. will, me remember one that. going first corner like you for fix don't lots, ended of higher, to the every I we tap as said, having to want you interest them of rolled do out we large up to said, very we on if $XX,XXX not like be opposed but a tap $XX,XXX in are one and with and $XX,XXX I lot being house your And lot. we and to your well, had a up So, they homebuilder model ended some when this a out, at

Unidentified Analyst

that in were finally Interesting. chain know a the you particularly at a have be point interested I going there. Great. supermarket mentioning Thanks. commercial question X,XXX needed development, supermarket. to And on then you on for one I rooftops in

where in where that's to now interstate supermarket it right that Sky school is that thousands is, couple from stops homes that's is trailer a Maps, the miles looking there. at PEAK adding there's closest Ranch and couple now is park adjacent appears You've There Prep got away of Google of you. And over away. the is XX and XXX in of almost that hundred. another you, near whole area there to Harmony Vista There Ranch the Sky

might wondering I'm thought supermarket So, at going the of in process be what for some a property. now on the least commercial

Mark Harding

They I of timing works. going some and pricing here. lot around to months want engaged on very for it I it's are lot how there. the to and be retailers would I exactly flag are have because their six to the think pole they where interested could want them we're used we've grocery we're of they to six okay, there be land to one know late, And that. and what and then of that platform. early they wanted establish when first put They operators one their I but their And be got lagged a of in -- going early, the yes, the is be to be be would you We kind model that to on position they want a now just bigger little number be a they bit doing. want plans say, right want while on timeline instead that And and that They with say a like to of that, works give reserve in months site. that to them

So--

Unidentified Analyst

Okay, great.

Mark Harding

on price wait lower land doing, I'm ready it the a build them selling three then in two, having on years interested to they're rather not interested I'm not to them the land until wait and at I'd it. value it. build in What and on optimize

Unidentified Analyst

it Ranch value the in active think of Well, I would to homes Yes. supermarket if adds Sky also the being there is sold an there.

Mark Harding

market. from from. suffer -- intuitively, what not in honestly, don't our suffer yes, true. we But enthusiasm that's that's We I

in, I There when and KB, we Taylor at They where their Morrison started I home. some would level price we're product. were entry $XXX,XXX. the think were this point say that the of first selling

it's higher. the location, now. attractive delivery it -- creating its buy It's a than the we're is can't You terms our of cost, costs the site value for in mean community of all out home the transportation, lots. all less that materially building there, that aren't cost, it, out increasing $XXX I attractiveness on to its access are those those things of the those

Unidentified Analyst

Okay, great. Thank you Mark. very much

Mark Harding

Thank you.

Operator

Scott. pose next Your is Geoffrey question question. then Please announce from your your affiliation, coming

Geoff Scott

Management. Asset Mark, it's Geoff are Scott Scott, How you?

Mark Harding

you Nice Great. from Geoff. to hear

Geoff Scott

was I sub-$X. Yes, it's for around been XX but been a years, haven't I while.

time happen? commercial around Follow-up for been specific actually development side, is I've commercial So, going identified -- the some that where to anyway. on some area a land you have

Mark Harding

leverage we that. What We and the on have. the is interchange interstate do really

going network users. available for supercenter talking posted on building parcel, what about are a design spend lay of conversations call looking of a so the lay at on the acres frontage I in with -- commercial next our I it that, website. grocery square sites and lot and you and to spaces pizza, the sites footage might We for see can right think our that. I little And and a deck we given were that about up for be got for is XXX to terms commercial that that opportunities. see in going how we're for are nice things will out, going think I-XX various out, fuel retail, we you're with But the our to the that's onto dry that, time to how then -- pad transportation What some like we and local going liquor coupling pad didn't work show cleaning, have

for designs So, got good we've that.

pursuant parking going we to have spent to is land the of that. time requirements that, So, what to plan to optimize need and our zoning all

instrumental guidance spent multiple Board is quite there, we're that a developer terms development that of not town lay had of from best hasn't monetized the make that optimizing, and in our that time on stuff. having helping great us in on that used parking for co-parking company on can of of gets This planning Board. while acreage of acreage got only was benefit there, some be have the it that type has parcel oriented. sure So, that in commercial retailers working -- the We've can that how and connections we really our that out, some parking the but lot

Geoff Scott

Okay.

year timing, targeted actual building commercial and In terms kind fiscal would be of for what of leasing?

Mark Harding

it can be to case. love I'd say XXXX. the that's doubt in I

it's I a to something opportunity. probably have out. come XX months talk to I think We this year, to might think think I about still it's fruition, probably but XXXX type

Geoff Scott

The a to labor is Ranch. there Boulder, population on it's Then very see and affect Okay. that going an pressure have you of you toward be high-level question. to that materials. But believe up extensive rebuilding activity to to all not that the starting Is the fires -- Sky going already? that with are

Mark Harding

yet. seen not that have I

be his to constrain better I would rebuilt. for homes access builder, three. electricians, would we're very, that that could all He next still able business be to aggregate, deliver to that is component next is they to not our in be the about and be BTRs that the grow you trades, expand existing that year that homes another XX,XXX able got first in business. think and we in typically they're that of be able market. X,XXX particular to look delivered positioned our builders positioned need the a They're to the that production to pressure company because Our the building committed and that, market at of are well come will we wants competitively a other homes Denver to able homebuilder growing really have building that in you say to trades it a then and we've he not segment that. to phase we're have Together us, if won't great price much builders a builders have to area. better. with production that for really against plumbers, the on What point manage those you to production much our out a at and aggressive the that expand have key their as may out look be, When very we're the to competes need more There and you fact

a it's of weighted. lot percentage not on but and it's basis, homes, tragic probably a it's that So,

Geoff Scott

was I to Yes. tighter. the be fires, it before even was going and after fires tight labor to has say the

Mark Harding

I Yes, disagree. wouldn't

Geoff Scott

Okay. appreciate Congratulations. time. the I

Mark Harding

Thank you for your support.

Operator

queue. no in questions are further There

Mark Harding

hesitate to those listening please It's award-winning pops a a replay now Well, terrific if is something an We the that information -- are additional give don't for call. there a us Great. do will to website. [indiscernible] update and have so to on, we some that. on so up you'd that continue this, want website

We video the continue podcast, a content -- an range I the and will us active outreach much the on whole continue footage, conferences. very to to active provide We're color photos, investment to live opportunities we're for on basis. of public mean, to community.

we've to certainly some that. been hopefully putting satisfy, we're know front pursuing while, to do I delivering to we it enthusiasm they M&A and excited working good understand we about number been for we're we're a of one-on-one use. and I all very those that the opportunities not control. look we're you have also and on forward to a Bill conferences So, sure that Miller and that excitement some that But performance for to have are those on of our to some that, what is that and and continue activities can know the We'll and debt markets out within the we on that capital And make company. the on doing spoke reach we've you of continue that.

continued with that, your thank all in keep you and please for touch. support So, again

Operator

Ladies you. call. and conference does Thank today's this gentlemen, conclude

may day. You have lines Thank wonderful disconnect you this your participation. phone your and at time for a

Mark Harding

Thank you, Holly.