Michael Kennedy: Yes. I mean, good question. It’s obviously always relative to liquids but liquids does have some constraints around processing. So you could envision a scenario if there is a call on gas, which we believe could have very much occur with the build-out of the LNG during that time frame you referenced that you would need more gas, and we have the ability to deliver more gas through our dry gas acreage inventory, you could see a scenario there. But right now, we just program in maintenance capital holding these levels flat and then enjoying the higher commodity prices and the free cash flow and paying down debt and buying back shares. But there is possibility if it goes quite high. We essentially have over 1,000 locations of premium dry gas inventory held by production over in our eastern half of the field. So we have that optionality, but right now, when you model it out, we’ll just have maintenance capital.
Jacob Roberts: Appreciate it. That’s all for me.
Michael Kennedy: Yes.
Operator: The next question is from Gregg Brody of Bank of America. Please proceed with your question.
Gregg Brody: Good morning guys.
Paul Rady: Good morning, Gregg.
Gregg Brody: Just on the volume decision, whether you keep 3Q, 4Q flat or what you originally thought you would be. How do you think about that and optimizing the Antero Midstream business? What’s the – how you think through that.
Michael Kennedy: Yes. We don’t really think about Antero Midstream. We think about Antero Resources and its free cash flow profile. Antero Midstream is just a beneficiary of the growth and capital efficiencies, and that all translates to them as well because they’re getting much more production per well and it’s very contiguous acreage, so very capital efficient. But we think from an AR perspective, how do we maximize free cash flow and the commodity price environment we’re in. So if you have higher commodity prices that would and that’s what the strip suggests, then that would lead most likely to try to maintain a higher production level; if you had lower commodity prices, more like 2023 type pricing on natural gas, you would probably favor a lower capital budget. So that’s kind of what we look at. We definitely want to maximize free cash flow at AR and use it to pay down the debt and return capital.
Gregg Brody: And just moving this consolidation, obviously, has been a big theme as of late. Obviously, you have a huge inventory that you can access. So there isn’t necessarily a need to buy anything. But how are you thinking about that today? And then how does Antero Midstream fit into that discussion as well, if at all?
Michael Kennedy: Yes. Well, we’re just focused on an organic leasing strategy. That’s the best capital we can spend from an M&A perspective. And Antero Midstream gets all the acreage from AR dedicated. And when we acquired the acreage, we worked really hard and 99% of the time, it comes with free and clear from any midstream dedication. So it’s immediately dedicated to Antero Midstream. So those acreage ads really benefit AM, and that’s why they have over a 20-year life of inventory behind their midstream assets. So the acreage accrues to AM as well.
Gregg Brody: But then just maybe bigger picture, just you’re seeing a lot of peers get – there’s discussions of peers getting bigger. I’m curious if that’s making you think a little harder about M&A or status quo?
Michael Kennedy: No, we’re focused on the operational efficiencies. I mean we’ve grown 9% year-over-year without doing M&A. So we are very operationally efficient. We’ve got no constraints. We’ve got all the acreage locations, the midstream, the processing, the firm transport to the LNG corridor, the balance sheet. So if you put that all together, there’s really no need for M&A. And then when you look at our operational efficiencies, it’s really hard for us think of any play that would compete for capital compared to our future programs. So that’s why we’re focused on the organic leasing.
