Brian Ector: A bit of a financial-related question,, Eric, do we have any interest rate swaps on our floating rate debt? And if so, at what locked-in rate?
Eric Greager: We don’t.
Brian Ector: We don’t talk a little bit about the capital structure.
Eric Greager: Yes. Capital structure is very simple. It’s a great question. It’s very simple. It’s very straightforward. We’ve got two issues out. 2027 this is high-yield senior unsecured debt. We’ve got the 2027 at $410 million. We’ve got the 2030s at $800 million. And those have a coupon, the 2030s have a coupon of 8.5 and the 2027s have a coupon of 8.75. And those, of course, are fixed firm term debt, staged out nicely so we can manage them. The balance is the floating debt that the individual investor was asking about. That’s on our credit facility and we don’t have any part of that subject to interest rate swaps or other constructs. It’s really just — it floats at a SOFR plus 225, I think, Chad, and so that basically moves up and down with a slight premium to SOFR. And as benchmark rates go up or down, it moves with it. But it is our first use of debt paydown is against our credit facility.
Brian Ector: Another sort of financial-related question around the entire business and free cash flow generation. But what would be our current breakeven price, Eric, and I’m thinking in WTI terms here?
Eric Greager: Yes, in WTI terms, the way I think about this is at the asset level because we use individual asset level breakevens for capital allocation purposes. So the first call is on our lowest and your lowest breakeven and highest performing package of assets. And so we use breakevens to help us in capital allocation efficiencies. So the numbers that are in my mind range from the most defensive assets, which have breakevens in the 30s, WTI. And our least defensive or the assets that have the highest breakevens. And those have breakevens just under $60 WTI at the asset level. And so I would say — let’s just say notionally between kind of high 30s WTI and high 50s WTI and in the middle there you’ve got let’s just say kind of mid-40s is kind of where the midpoint of the assets.
And the beauty of this is because each of these steward out in Tier 1, Tier 2 and Tier 3. We don’t have to turn off capital to the selective tearing portions of the assets as defined by our kind of reservoir quality and asset quality tearing. And this allows us to be very, very flexible when prices move higher to take advantage of the torc and the upside. And when prices move lower to take advantage of the defensive nature of the assets and to turn off capital to those which have achieved a threshold level of let’s call it 15% pretax IRR. We can switch those off and we can do so on a playbook that is already well established. And so this is the way we think about thriving in a volume of price environment. And it’s also the construct you will see how this really does support the 60/100 collar structure.
Brian Ector: Eric, can you comment on. And we’ve got time for I think, I’ll give you maybe a couple questions here as we reach our limit. Can you comment on the Juniper position. [Indiscernible]?
Eric Greager: Yes, so. Juniper had three escrow whole periods, each one consisting of about 90 days and those whole periods started with the gloves on June 20th of 2023. So the first 90 days as soon as that first escrow whole period expired, Juniper was create a trade on one third of the total number of shares they had at the time. And that was let’s just call it for the sake of illustration 51 million shares. That occurred I think on September 18th it was 51 million shares. It was an overnight bought deal on the U.S. and that was a first-third of what they held. They now hold about 12%, so it was 18% some third its about 12 remining today. That means they’re deemed an insider, which is why we as a company, can’t knowingly buy directly from an insider.
And that’s not the question the investor asked, but it’s one of the reasons why we haven’t been able to participate directly in those transactions. But what I would say is the second escrow whole period expired 90 days after the first one expired, which was before Christmas of 2023. Juniper still holds that position. It’s our best understanding based on filings. They haven’t sold any. There’s been some — maybe some changes to the way it’s considered within their holding package, but I think they still hold all of those shares. They are available, and Juniper can choose when Juniper decides to, to sell those. Now the third escrow hold period will expire in March. And so that will add to the available shares for sale. And what I would say is a Juniper owns the shares just like everyone else that is a common shareholder, and they’ll decide according to their own needs and desires when they sell.
Brian Ector: Thanks, Eric. You’ve been very generous with your time here today. I do want to close. I had a number of comments and questions around the share price performance, both today and over a bit of a longer period of time. And so maybe you just reiterate your thoughts on the reaction today and maybe over a longer period of time. I mean you as a shareholder have been purchasing shares as well. What your comments as we wrap up.
Eric Greager: Yes. So I am not at all happy with the share price performance, but transformational deals like the Ranger merger acquisition by merger, it creates certain overhangs and those overhangs take time to work off. The Juniper ownership is, in fact, one of those and probably a pretty significant contributor to the overhang. There will be in March, a 102 million shares available. And Juniper may hold those shares for ever, I just don’t know, but they also might decide to sell them, and that creates a little bit of uncertainty around the shareholder community. Now in the first half of 2023, WTI languished a bit, kind of at an average WTI price of $75. And again, given the transformational nature of this transaction and its size relative to the legacy Baytex those prices weren’t enough to create a great deal of excitement.
But when prices rallied in the third quarter, we saw strong price performance, and that felt really good. It told us that there’s a fundamental kind of understanding and some pent-up demand for the shares when prices do rally. I personally believe in the stock, I believe in the company, I believe in the teams. And I think we’re demonstrating where it really counts at the cash level, at the cash cost level, at the cash making or generative capacity at the business level that this is a great business. And to believe in the business, believe in the teams, believe in the assets and the strategy. And I think the overhang will lift. The CRA matter didn’t help. It just added a little bit of additional uncertainty. It didn’t help. But we will continue delivering on our five year plan, delivering quarter-over-quarter.
And I believe we are still a great value, and this is a great entry point in a very high-quality company so.
Brian Ector: Okay. Thanks Eric. Well said. And I do think we are at our time limit for this call today. So thank you, Galen, and thank you to everyone for participating in our year-end conference call. Have a great day.
Operator: This concludes today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
