Michael Helm: Yes, Nick. This is Mike. I’ll take that one. We still have a significant amount of federal NOLs and other tax credits that will cover — we think that will cover all of our tax needs in 2023. So we don’t expect to be a taxpayer federally in 2023. We do expect to have to pay some state taxes in California based on their tax regime, but it should be probably in the $5 million to $6 million based on the current projections.
Nicholas Pope: Got it. That is all I had. Appreciate the time, everyone.
Fernando Araujo: Thank you, Nicholas.
Operator: Please hold for our next question. Our next question comes from Lloyd Byrne with Jefferies LLC. Your line is open.
Lloyd Byrne: Thank you, Fernando.
Fernando Araujo: Good morning, Lloyd. How’re you?
Lloyd Byrne: I am good. Congratulations. I just wanted to ask about maybe something that Nick and Charles were kind of getting at. But if you look forward into even ’24 and you look at the capital efficiency you guys talked about, your CapEx is down almost 30% versus expectations. Your production is only down maybe 7% versus what we thought. Can you just — are you able to replicate that in ’24? Like what’s the trajectory of capital efficiency going forward? And is that sustainable, I guess? And kind of the way Nick asked the same question.
Fernando Araujo: Okay. Yes. Let me answer this way because that’s a really good question. To begin with, Lloyd, you know we have the confidence that the courts will revert back in favor of Kern County’s EIR, and we’ll return to that process. And with that process — because, remember, this is not the first time that this has happened. So once that process is reverted, we’ve got plenty of potential opportunities to still drill new wells in the assets that we have in California. And the county, they’ve proven to the courts that they have the capability to be the leading agency for CEQA. So this is just a matter of time. And for next year, we’re hoping — and with some certainty that this is — this process is going to revert itself like it has in the past. And we should be able to drill new wells like we have in previous years and keep our production levels as we’ve talked about before.
Lloyd Byrne: Okay, that’s great. Thank you. And then just on the change in the return policy. Just your thought process on buybacks versus dividends and kind of where you’re going, going forward?
Michael Helm: Yes, Lloyd. This is Mike. I’ll take that one. Yes, as we said, we did talk to investors, owners. We talk to the investment community. It became clear that with this size of returns, we were able to generate that the appreciation would be more towards the share and debt repurchases. We did feel it’s important to leave a little bit in the variable dividend. Again, with the fixed and the variable dividend, we are targeting high single-digit cash yields based on our market cap. And the feedback we got was that, that was also an important component to our return model.
Lloyd Byrne: Okay. Thank you very much.
Operator: I would now like to turn it back over to Fernando Araujo for closing remarks.
Fernando Araujo: Yes. Once again, I want to thank everyone for listening to the call. We’re excited about the future of Berry, and we’re excited about executing our plan in 2023. Thank you very much.
Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.
