Dexterra Group Inc.

Rod Graham - President and Chief Executive Officer Scott Matson - Vice President, Finance and Chief Financial Officer

Dana Benner - AltaCorp Capital Greg Colman - NBF Steve Kammermayer - Clarus Securities Ian Gillies - FirstEnergy Scott Treadwell - TD Securities

Thank you, Alan. Good morning.

I'm Rod Graham, President and Chief Executive Officer of Horizon North. Scott Matson, Senior Vice President of Finance and Chief Financial Officer is with me today to discuss our Q2 2015 operating results.

And I will turn the call over to Scott to cover off some of the formalities of today’s call.

Thanks Rod and good morning everyone. We’ll be commenting on our 2015 second quarter results assuming you’ve read the Q2 earnings release and the MD&A and financial statements, which were made public yesterday and are available on our website and on SEDAR.

We’ll be also discussing Horizon’s 2015 revised capital budget and our outlook for the remainder of the year. During this call, certain statements will be made relating to Horizon North that are based on expectations of management, as well as assumptions made by, and information currently available to Horizon North, which may constitute forward-looking statements or information under applicable securities laws, as well as certain financial measurements discussed today are not recognized measures under Generally Accepted Accounting Principles.

The cautionary statements contained in yesterday’s news release and in our annual filings which are available both on our website and on SEDAR, outline various risk factors, assumptions and cautions regarding any forward-looking statements, or information and financial outlook and also contained further info with respect to any non-GAAP measures discussed today. So with that, I’ll turn the call back over to Rod.

Thanks Scott. I will comment on our strategy and objectives and then speak to the execution of our plan to meet those objectives.

Then I will turn things over to Scott to take us through the activities of the second quarter 2015 and then I will summarize with some closing comments about the outlook for the second half of the year before we move into the Q&A portion of our call. We have made and continue to make structural changes in our business there and improving efficiency proficiencies and operations identifying new and markets in more importantly positioning us to weather for long correction in our truly traditional energy end market.

The structural changes were discussed in a conference call last quarter and include cost control, disciplined capital spending accelerated internal integration and our new business development strategy to defend our existing markets and develop new and markets by product service and geography. Pricing, in order to protect our market share and strong relationships with core customers, while maintaining high utilization of our camps we’ve negotiated realistic pricing adjustments with key customers in Q2 2015.

You will see this reflected in lower revenues on stronger utilization in the second quarter. These measures are temporary and it will be really evaluated as market conditions change over time.

In many instances we were able to have a fair and equitable discussion that has allowed for us to balance of labor reduction with firm expansions. We are also working with our suppliers to reduce costs and find efficiency proficiencies wherever possible in our core structure at the same time.

Cost controls. We discussed call last quarter that we are significantly reducing our manufacturing head count to reflect our current order book and Scott will discuss some one-time charges we booked in the second quarter for severance and restructuring of that manufacturing business as we continue to balance our work force with the current market environment.

Across our entire organization we’ve reduced our headcount and we are now just under 1500 employees compared to 1800 employees at the same time last year. We expect to see the financial benefits of this reduced overhead in the back half of 2015.

We are in the final stages of hiring a new vice president of manufacturing. Our objective was to find an individual with a track record of developing and all [indiscernible] lean manufacturing program and then delivering on key KPIs for productivity efficiency, cost reductions, all the while improving quality and maintaining best in class safety statistics.

We look forward to discussing this hire in very short order. Other cost adjustments include better coordination of supply chain management, consolidation of our manufacturing plant footprint, and a continued review of all discretionary spending within our organization.

CapEx, in late 2014 and Q1 2015 we announced a capital spending program for the year 2015 directed to maintenance activities of approximately $30 million. Year-to-date we have invested a net $22 million, mainly on maintenance of our asset base and some very limited expansion capital.

Based upon recent positive developments related to BC, LNG projects and supported by our recent equity rates the Board of Directors approved an increase to our 2015 capital budget to $50 million with an additional $10 million available subject to contract awards. We will be targeting incremental investment in 2015 to further develop our land positions and Kitimat and Prince Rupert to have these sites camp ready over the next 6 to 12 months.

Integration, one company, one branch, one vision. We continue to move towards an integrated business model, which will provide us with our strategic focus on customers and markets with more integrated processes and systems to reduce our costs and improve efficiency.

This also allows Horizon North to respond more effectively to opportunities in our existing markets, as well as new markets. In addition we have recently hired an experienced VP of Business Information Systems to enhance our information technology capabilities, which will be a key for us moving forward.

We have undergone at Horizon North rebrand on a very compressed timetable. We are pleased to announce that a new Horizon North website will be complete and usable in the next couple of weeks representing a vastly improved means of communicating with all of our stakeholders.

This rebranding exercise pervades our entire organization from business cards, to brochures, to local signatures. This is the foundation for our new cross selling business development strategy.

Cross selling. We continue to drive towards full cross selling capabilities for all of our products and services and service geographies.

This has demonstrated success or in closing with our customers to mutually benefit from a bundled service and product offering. Our mission statement Horizon North is to provide superior safe fully integrated, turnkey accommodations and related ancillary infrastructure investment in Alaska.

We will continue to drive improvements to make gains in this area. Targeted balance of OpEx and CapEx.

We will extend our product and service and offering to start to balance our exposure between OpEx and CapEx budgets or our major customers. We are continuing to develop this initiative with close relationship of court customers and many cases construction camp shift to become operations and maintenance caps as the projects continue to develop.

Our new Vice President of Business Information System comes with more than a decade of creating and supporting very sophisticated scheduling software solutions. We look forward to implementing a number of these in our offering going forward.

Geographical focus. Our core competencies of designing and manufacturing robust mobile structures ideally suited for northern climates allows us to pursue opportunities in the State of Alaska.

Opportunities continue to develop in this market aided by significantly lower Canadian US exchange rate and strong relationships with various parties in the Alaska market. We can't comment today, but we continue to be very positive on the future for Horizon North in our state.

Permanent modular. This includes construction of permanent modular buildings for commercial and institutional markets.

We continue to see this segment as a growth area for Horizon North, especially as development moves forward in the north-west on and north-eastern portions of British Columbia in conjunction with potential LNG developments. We have a few early adopters on the hotel side and are working our way to a couple of formal Pos, stay tuned.

LNG. As mentioned when I discussed CapEx we are moving ahead with sidewalks at both our Kitimat and certain level of Prince Rupert locations to be camp ready for 2016.

We are very well positioned to participate in the pending LNG projects in north-west British Columbia through the combination of our BC land infrastructure. I look forward with the BC provincial government on a local [indiscernible] and relationships, a very strong support from regional government bodies in north-western British Columbia and a main manufacturing operation based in [indiscernible] British Columbia.

We believe our strong DC centric position with approximately 700 British Columbia employees will give us a competitive advantage and an edge in the key LNG megaprojects expected in the near term. Recent announcements by the BC government with respect to LNG development framework and positive steps by project proponents are providing us with the encouragement terms of driving forward with investment opportunities.

Balance sheet, our net debt position improved by $21 million in Q2 and $32.1 million compared to year-end due to improved working capital and our disciplined capital spending. Since the end of Q2 we have taken further steps to improve our balance sheet strength and liquidity and Scott will provide some additional commentary on the $80.6 billion [indiscernible] financing announced July 8.

Dividend. On July 17, the board declared a dividend for Q3 2015 of $0.08 per share for shareholders of record as of September 30, 2015 payable on October 15, 2015.

Continuing to pay shareholders dividend is a key part of our total return strategy as Horizon North managed through the current energy cycle. The culinary payment of dividend are subject to review and approval by the Board of Directors is a key focus of our overall corporate strategy.

I will talk more about the outlook for the second half of 2015 shortly. I will now turn the call over to Scott, to comment on Horizon North's financial and operating results for the second quarter of 2015.

Thanks Rod. I will go through Horizon North's results for the quarter commenting on each of four major business lines.

I will also be, I will be talking mainly about Q2 2015 as compared to Q2 2014 and I will make a few comments relative to our expectations for the remainder of the year. So, during the second quarter, consolidated revenues were reduced and compared to last year, primarily a result of the pricing accommodations made for key customers as we continue to work with them through these challenging times.

We are also seeing pricing pressure on new projects and contracts as a result of competitive pressures and we're feeling the effects of the reduce capital spending programs by our customers, due to continued weakness over our commodity pricing. However, demand remains fairly strong in the quarter particularly our large camp activity in the oil sands and in the west five, west six areas.

And certain customers continue to spend through the cycle. Additionally, it has been a hot and dry summer in Alberta resulting in very busy forced fire season and Horizon North was very proud to support numerous firefighting crews and support workers throughout the quarter.

EBITDA was weaker in the quarter due to the pricing accommodations I mentioned previously, but also impacted by is several significant items recorded in the quarter which are not expected to recur. These include additional costs related to the final stages of a large camp installation project that we're working on, that we expect to be complete in Q3 of 2015 and severance costs related to improving our operational efficiencies, particularly in manufacturing division and provincial sales tax assessment related to some prior periods.

Total of these items was $5.6 million booked in the quarter and excluding these effects our EBITDA was essentially flat with Q2 2014 and largely as we expected. I will go through some of the details with effect to our major business lines starting with our camp rental and catering operations.

Large camps, revenues for the quarter were just over $43 million, a decrease of about $3 million or 6% compared to last year. Pricing obviously decreased as a result of concessions we negotiated with key clients.

We saw the full effect of those as we move through Q2. Revenue averaged about $97 per bed rental day down about 70% compared to last year, reflecting those pricing concessions.

We exited the quarter and we are just over 8,700 rentable beds in this category up about 17% compared to last year, mainly due to the new camps that we added through the last half of 2014. Activity wise, bed rental days were a little over 444,000 in the quarter, up about 13% over last year.

Our overall utilization in the fleet was about 56% in the quarter compared to last year at 60% and we would expect this level of utilization to hold it reasonably well as we move through the back half of the year based on what we see today. Drill camps.

This portion of our business had revenues of about $1.1 million in the quarter down about 25% from Q2 last year, essentially following the overall reduction in drilling activities through the market. However our utilization remains similar, but 11% of last year as we have less bed [indiscernible] we continue to focus on turning over the bottom 5% or 10% of our rental fleet, which including selling a number of the older style drill camps we had on our fleet and replacing them, with newest style configurations more in line with what our customers are looking in today's market.

This part of the business will continue to be challenged for the balance of the year, very much dependent on overall drilling activity levels. In catering only, saw revenues from our catering operations for the quarter about $2.2 million, down 20% compared to the same quarter last year, generally lower activity levels throughout customer owned facilities where we are doing the catering hospitality operations.

Average revenue per day however increased to about $150 a day compared to $124 last year, primarily due to the contract mix in the quarters that is helped offset some of the activity decrease. In the service side, revenues related to the camps and catering stream where about $5.1 million in the quarter down from $8.6 million last year.

This revenue stream relates primarily to transportation, installation, decommissioning of camps and projects and reflect the timing of specific contracts and the projects that were underway in each comparative period. Overall camp rental and catering operations revenue for Q2 were $51.6 million, down about $7 million or 12% compared to last year, primarily the pricing pension and the reduced activity we talked about.

On the manufacturing side, revenues for Q2 were $17.9 million essentially even with Q2 last year. Direct to hours worked in the plant where about 198,000 plant and on-site were about 198,000 in the quarter down about 30% from the same period of last year, and 18% from Q1 of 2015.

This reflects the reductions in our manufacturing and field installation head counts and we’ve implemented through the first half year based on our order book and reduced visibility at our manufacturing operations. About 67% of those hours were allocated to external projects compared to 42% in the same period last year.

External hours were pretty much focused on working through the installation of our 1250 dead camp sale project that was started in late 2014. And we anticipate finishing this project in Q3.

Re-locatable structures side, revenues from this business includes rental re-locatable office and support units and the related transport and setup. Q2 revenues were about $4.1 million, an increase of 37% compared to last year, reflecting reasonably strong utilization of a slightly larger fleet and better exposure to the Alberta market, which has helped both the utilization number and our margins.

Overall, consolidated camps and catering segments had revenues of $73.5 million for the year a decrease of about $6 million or 8% compared to last year with consolidated segment EBITDA down at $9.7 million or 12% of revenues compared to $15 million or 19% of revenues last year. As I noted, our results for the quarter were impacted by those significant non-recurring items, which mainly affected our manufacturing businesses.

As you can imagine, we are extremely disappointed with these results and as a result have undertaken a series of changes over the past few months as we work to improve how our organization functions right from RFP or bid coming through the door through to final execution and delivery. And this has resulted in some significant personnel changes in this division that we talked about earlier.

The Matting side, our Matt and rentals business overall revenues were $4.5 million down from little bit from last year. Activity levels were reasonably robust during the quarter with customers, mainly continuing to choose renting over buying in a tighter capital allocation market.

Rates were somewhat under pressure just generally due to the competitiveness of the market. For Matt sales revenues for the quarter were $1.2 million of the decrease fairly significantly from last quarter, from last quarter last year the overall number of Matts sold in the quarter was down significantly due to reduced capital spending by our customers.

The bulk of Matts sold in the quarter were also a huge variety, which typically command a lower price point as a result. Service revenues which include transportation installation and management services on behalf of our customer's, now that we charge for separately from the rental and sale piece although $5.8 million in the quarter or decreases about $0.6 million or 9% compared to last year.

This was driven by higher rental activity as customers actively managed their fleets to ensure they have better visibility and control over their assets, but somewhat offset by a very competitive marketplace in terms of pricing. Overall segment revenues for Matting for the quarter were about $11.6 million, down $5.1 million or about 31%, compared to the same quarter last year, but EBITDA improved slightly as a larger portion of our revenue from this segment came from rentals and services versus sales and those services carry a higher margin than typical sales do.

So EBITDA came in at about $3.9 million or 34% of revenues compared to $3.7 million or 22% of revenue last year. On the G&A side, of a business overall expenses were about $5.9 million this quarter compared to $5.2 million in the same period of last year.

Our corporate costs were up slightly and included some administrative severance costs during the quarter, while selling and administration costs increase slightly year-over-year and included some expenses associated with significant project bid that we are ultimately not successful of. Capital spending as Rod mentioned net capital spending for the first six months of the year was about $22 million compared to $66.9 million last year.

Capital spend in the first half of 2015 was split between our camps and catering division and our Matting division as we continue to execute on our maintenance plan and refresh the bottom 5% or 10% of our rental fleet as we move through the year. We’ve also allocated some capital to the management of fleet during the quarter to taking advantage of increasing rental demand this customer is generally preferred to rent Matt in this environment versus buying them given the constraints of the capital programs.

As Rod also mentioned, the board of directors recently approved an increase of our 2015 capital budget to $50 million and we will be allocating a portion of this to further develop our land positions in proximity to propose the LNG facilities in the West Coast of British Columbia. To talk a little bit about our balance sheet, overall our balance sheet position continued to improve.

We had paid a little over $20 million in debt during the quarter and paying our bank borrowings to about $140.2 million as of June 30, 2015 compared to about $146 million at year end. Today, after taking into the consideration of the net proceeds received from our recently completed equity finance that debt number sits at around $50 million.

From a leverage perspective our total debt to trailing 12-month EBITDA ratio improved to 1.8 times at the end of the quarter, compared to 1.66 times at year-end and obviously that number today is quite a bit better. Credit facilities, we mentioned in our last call and during the year we made a number of changes to our senior credit facilities to increase our available credit facility lines from $175 million to $200 million by adding an additional lending party to our syndicate.

We extended the term out to 3 years with the facility is now dealing a spring of 2018. We refreshed an upsize are courting provision to $50 million and we updated the overall covenant package to levels more in line with our piers.

A number of for commercial lenders are on the call today and we certainly appreciate their support working through these changes and improving our position going forward. With respect to our Baguio equity financing on July 8, we completed our financing issue in $21.5 million common shares for net proceeds of $76.6 million.

These funds were used initially to reduce our outstanding credit facilities, which we can then use to redraw and accelerate our plans with respect to LNG developments in the West coast and for general corporate principles. Overall, we continue to actively manage our balance sheet focusing on cost controls and are taking a disciplined approach to capital spending and managing our working capital position with the goal of continuing to manage our overall leverage as we work on the list of this year.

So with that I will conclude my comments and turn the call back over to Rod.

Thanks Scott. I will now speak to the market outlook for the remainder of 2015.

First of all, activity levels in Q2 2015 were seasonally lower due to Spring breakup of reduced customer drilling activity. For the remainder of 2015, we expect to see weaker drilling activity in the last year which will effect utilization at [indiscernible].

This will be partially offset by increased utilization by fire crews in early Q3 2015. Major capital spending by clients will be down and this will affect demands in our camps and catering segment as well as for manufactured products.

We are working with our key clients to and we ensure we maintain strong utilization of our camps and catering assets and as mentioned this as involved negotiating reduced pricing in Q2, typically exchange for additional terms and services. These new pricing levels will be monitored carefully over the near term and adjusted as conditions change.

We are not providing formal guidance. However, I will say we're still confident that we can generate EBITDA and line with analyst estimates of $70 million to $80 million for 2015.

They've already delivered just under $40 million in EBITDA for the first half of the year, so we're already halfway there. Micro, looking at the second half of 2015 lower oil price environment lower level of client activity forecast for 2015 continue to create a challenging operating environment in the services space.

As a result, we will continue our focus on cost reductions accelerate our internal integrations and focus on those markets that we talked about before in Alaska and Western Canada. LNG.

On a positive note, we are seeing developments with the BP LNG program projects which have encouraged us to begin slight preparation working our properties in Kitimat and Prince Rupert. So that we will be ready for camp facilities in 2016.

These projects provide the potential for strong growth and our investments in our land base developing strong relationships with the first Nations local governments provincial governments project components, we believe give us a competitive edge in this market. Dividends, we are starting to review an approval by our board of directors each quarter at this time.

Horizon North remains committed to our policy of paying dividends to our shareholders to the current downturn. Based on a strong balance sheet and outlook for the rest of the year we believe Horizon North will have the requisite cash flow and liquidity to accomplish this.

However, as stated earlier this is something that myself and our board of directors will be taking a hard and disciplined look at each quarter to ensure the overall sustainability for Horizon North is not compromised. That is the end of our prepared comments.

So I will turn the call back over to you Alan for the Q&A.

Good morning guys

Good morning Dana.

I wanted to start with your large camp segments looking at rental demand, which was actually up quite nicely year-over-year, I understand the pricing was down, I doubt that was a factor in that, I imagine that was just a product of the market, but the fact that your overall number of rental days was up so strongly year-over-year would be counterintuitive I think to most following this market these days, so more color on that would be helpful.

Dana, Scott here. Fundamentally there are a couple of pieces of that, one is that is we key amount of, Q2 last year we moved into the back half of the year we did turn on a number of camp facilities through the back half of the year, so that contract coverage is still helping us as we get into this period and fundamentally we’ve been breathing the success of keeping those facilities going on the open campsite.

You have kind of caught the large camp is bolstered by some additional camps coming on stream last year and reasonable activity in our open camps.

And fortunate Dana in terms of where our geographies are and are end customers.

Okay. And then I guess secondly the forest fire is obviously tragic events, but curious to know what the, is there a way to quantify, what that would have meant within the quarter?

Yes I thought I would always stay from away from specific numbers from Dana, but it would be fairly meaningful number in the quarter, probably somewhat offset offsetting some of those pricing concessions that we had to give. Realistically you are probably in $2 million to $5 million range.

Indiscernible

Yes.

Okay. Just thirdly and finally with the respect to the manufacturing sales piece the number was down meaningfully from Q1 and does that reflect, where the delays in the way that you are executing in Q2, I mean it's a major project and one would think until you get it done you would have a reasonably steady volume of business and processing that through the plan, but it looks like there were some step down in Q2, why would that happen.

Yes, so we about midway through Q1 we had completed the majority of the manufacturing components Dana, so the back half of that of Q1 and most of Q2 was clearly the installation piece, so little bit of the downward tail comes from that.

And then obviously you will be finishing that up in Q3 and that wraps up the contract.

Yes that's correct, yes.

Okay. All right I will turn it back in the queue.

Thanks Dana.

Hi gentlemen just a couple of quick ones here what is the duration of the, I suppose lower pricing levels that you finally negotiate with the customers, is it something that you revisit on a quarterly basis, is it out to the end of the year or is it out to the end of 2016?

It is Scott here Greg. Tough question to talk to, realistically it is all over the map, right, so as we work with various clients on various projects it depends on the term of the contract and how long we are looking out with that customer.

So, not to be intentionally vague to you, but it's all over the map, but certainly we will continue to monitor, like you said quarter to quarter and when we see things moving the right direction then we can reengage those conversations.

To rephrase maybe a little bit of fairer way than would it be fair to say that, like you said on a quarterly basis shall we have discussion with these customers of self market conditions, straight away there today potentially the lower pricing would be longer and if they start to improve a little bit we can see some upper moment on a quarterly basis.

Yes I think that's a fair way to look at it great. Greg

Okay. Turning gears a little bit over to the CapEx side to $20 million that you have increased from the $30 million to $50 million is that entirely associated with purchase of additional real life state and side prep or is that going to the actual construction and deployment of beds and camps.

I would say a chunk of it Greg will go to finishing of land preps, site prep et cetera both in Kitimat and Prince Rupert, but also related to somewhat of the camps set up piece. Most of the gear that will be moving there will be existing fleet and a lot of that cost will be again side prep and setup of those facilities.

So if most of the year you are moving its existing fleet than the increase in the CapEx probably is mainly to the [indiscernible] prep and mainly to do with additional real-estate purchases.

Yes.

Okay what's the nature of the potential contracts that we could see you for the incremental $10 million is there anything we should be watching specifically for?

I would make the qualified statement of [indiscernible].

Okay. Stay tuned for the next couple of weeks or next couple of months or quarters?

Stay by your phone Greg.

Well [indiscernible]. Manufacturing, I mean surprisingly good revenue coming in the quarter and also some one-time cost you guys were too happy with, but you are taking care of that, what is the current manufacturing situation look like, we've been assuming that it pretty much comes down to something approaching care of maintenance because of the lack of new builds out there, but just wondering what we would expect in the near term in Q3 and Q4 and not necessarily on a numerical basis, but just qualitatively what's happening in manufacturing right now?

Sure. We talked a little bit about permanent modular and again unfortunately from a timing perspective I couldn’t talk in more detail today.

Still feel very, very positive on what that looks like for the back half of 2015. There are some camp projects that do sit out there again premature to talk about them, but they do sit out there.

And there are still some internal fleet that we believe we can utilize from certain circumstances. I know that as Scott talked a little about our desires of Kitimat and Prince Rupert those - that might be a bigger broader opportunity that comes out of the plan in the back half of the year.

Alright. And then finally, back up to the one-time cost to $5.6 million Scott that you talked about, I believe you mentioned three categories there, one on restructuring, one on cost overruns and one of tax changes.

Without getting two granular on the call here, is the tax changes something that would have been impacted your sort of adjusted EBITDA and if not what component of the $5.6 million would be on the tax side there.

What I would say Greg is that the bulk of those three items went through operating costs. So, you are right, it goes above the line and what I probably give you is in order of magnitude, I would rank them in number one would be the cost overrun piece.

Number two would be the tax piece, and number three would be the severance and restructuring chunk.

And on that last severance and restructuring chunk is that all behind this or should we expect to see some more trial and say Q3 and beyond?

Largely we are still working through that. Largely Greg.

Largely in Q2, largely behind us.

Yes.

Alright, great. That’s it from me.

Thanks very much.

Hi guys. On the one-time cost in the quarter just following up on Greg here, of the manufacturing installation charges I know that is still growing through your plant now, is there going to be some spill over on that as well into Q3?

We’ve taken the effect of that into account, Steve. So, fundamentally no.

Okay and then just on the increased CapEx, of the bed your moving - the existing bed you are moving into BC here, are they currently on contract and will be rolling off contract or are these ones already just sort of sitting around and you are going to move them?

It will be a combination Steve. So there is some specific pieces that will move as they roll off and there is some un utilized gear that we can push out there now as we move forward.

So we are confident that we have got enough internal fleet that we can support that development.

And how many beds are you actually moving out there?

We will probably be a little bit vague on you for now Steve, but we’ve talked a little bit about putting 200 to 500 beds in the ground in Kitimat and the same number in Price Rupert to start with and then we can accordion it up or build it out from there.

Okay. Maybe just moving to the dividends here, obviously you mentioned you are comfortable with it currently, what would need to change, I mean if activity levels stay where they are now and assuming no upside from LNG are you still comfortable with that dividend with your cash flow that you can support that dividend going forward or do you expect to need some LNG opportunities to continue that dividend?

Again I will just stick with the kind of the standard line, we will take a hard and disciplined look at the end of each quarter to ensure sustainability for us and [indiscernible].

Okay, that’s great. That’s all I had guys.

Thanks.

Good morning guys.

Good morning Ian.

When you look at the LNG demand today, given that it is a bit uncertain, what percentage do you think can be filled by your existing beds in your fleet versus new builds that will have to be built?

I think we have two rounds here. Scott talked us some numbers that would be able to be to moved relatively quickly.

The residual balance Ian will be new build.

Okay. And when we think about new build let’s say given what [indiscernible] pricing in the quarter and the prospects for lower pricing into the future how are pay backs looking today compared to say the 2010 to 2012 period?

Have you, do you just have to take a lower payback at this point in time?

Well I think what we are to do these and trying to balance length of contracts, solidity of customer, how the opportunity is with that payback figure. The other side of things is we are obviously managing and pushing on our own cost structure to try to be more efficient there.

So it’s not just a pure dollar for dollar loss, so we are recovering pieces on the other side. So certainly there is some payback effect there as we work there, but it varies project by project.

Fair enough. And then with respect to the oil sands, how the conversation has changed with your customers over the last few years given the decline in oil prices?

Has talks slowed down or can you give any additional color there?

I don’t think there has been a massive change last couple of weeks, I think it’s the general trend that are – certainly there is not a lot of new capital projects being undertaken by our customers these days. But on the places where we are on the ground and existing and have contracts out in place, we will largely have those discussions.

So I think those pricing concessions etc are in place, the contracts are still in place and we are moving forward.

It was [indiscernible] customers, they wanted to have a longer term time horizon, countercyclical in terms of what commodity prices are [indiscernible] have a longer term view, but fair question.

Perfect. Thanks for the color guys.

That’s all I need today. Thanks very much.

Thanks. Morning, guys.

Just a couple of maybe housekeeping questions, I don’t know if you disclosed this for competitive reasons. Can you give me a sense of how many beds of the right caliber you have available to move to be BC within say a six month to 12 month timeframe?

I guess the way I’d response Scott is that, I think we’ve got the mixture of – pretty good mixture in our fleet. Our fleet is relatively young in nature and in that five to seven year range, and everything we built in the last three or four years has been on the newer style and newer scale.

So I think we’ve got a pretty good view in terms of – we got the rights beds in the ground that we can move today to especially or at least to start first round of the initial round of bed development that we put on the ground in both locations to start with.

Shorter lead time, dramatical.

Okay. And that’s just get the contracts, that’s 200 to 500 beds in each location.

You guys can kind of cover that in-house, is that what your thoughts?

Yes, roughly.

Okay. No, that’s good.

And then secondly in BC, I know there has been discussions and chatter on the street about tenders on. Do you guys have a sense yet of the mix of open camps and dedicated who is going to be the owners in you guys is going to be the customer.

Do you have any sense of how that develops or is it still sort of an evolving discussion.

Yes, it’s evolving. At this time, they want to engage in conversation regarding that.

Okay. No, fully understand that.

On the plant five, just wanted to get a sense where you are maybe in a percentage terms in of capacity relative to six months or a year ago with the headcount reduction. What that reduction to capacity looks like?

Which is name play capacity this year over last year?

That means obviously you can rank back up with people, but just write now with the people you’ve got relative to last year what that looks like.

You know Scott, probably the best way for me to answer is that to the numbers and get back to you on that. I just don’t want to give ballpark and not have it correct.

Okay. That’s nice.

This last for me, again do you may want to [indiscernible] competitive reasons, the land base you have today at least that you’ve publicly talked about, what sort of maximum bed count do you think could get on the west coast of BC in the two and five year timeframe.

Sure. We talked about today.

Scott, feel free to use your terms. With the scope and scale for 1000 personal lodge in Chita mach that would on 16 years and camp in the city of Prince on 41 acres.

Okay.

Okay. That’s why you talk about it today.

Right. And then just maybe an addition follow up to that.

Any sort of optionality you guys have the land site in terms of pipeline KMC there sort of mobile ones or annual constriction basis.

We are looking at all three parts of the LIG opportunity northeastern BC being the resource side, the convince being the pipeline and the outlooks on the west coast. So we are looking at participating in all three components, part of that 6&J.

But you just don’t want to say anything or you are just looking at this at this point.

We are working with the high performance along the way.

Okay. perfect.

I appreciate the guys color. Thanks very much.

Thank you.

Just one follow-up on the one-time cost there. Scott, was the entirety of that 5.6 million cash cost or is there non-cash component there.

It will be all cash, Greg.

Great. That’s it.

Thanks guys.

Yes, thank you and thanks very much, and to all thank you for participating with us in this call. We will update you with our Q3 release in early November.

In the meanwhile, if you have any further questions, please don’t hesitate to call either Scott or myself. Thanks, Eric.