Francisco Leon: Yes. And I guess the last point I raised, existing emitters, we have to go through the price discovery, that takes time at the end of the day. Our conditions in California are very different than the rest of the country around CCS and the incentives that we receive. So there’s really no model. We’re building it. We’re having these commercial negotiations, but that will take time, but we still focus on point source emissions. We’re also very focused on our own emissions through CalCapture. We made some really good progress on our FEED studies. I think that’s going to be a really viable project. So more to come, but we’re — like I said, we’re talking to a lot of emitters and seeing a lot of deal flow and just a matter of time before we can talk about incremental activity there.
Operator: We now have a question from Leo Mariani from ROTH MKM.
Leo Mariani: Just wanted to follow up on the kind of future of the E&P business here. You guys are obviously talking about this kind of 5% to 7% type of decline in the production. You’re going to do your best to stave it off. I just wanted to get a little bit more information around that. Do you see this as more of a long-term strategy for the company given that California hasn’t been all that friendly to oil and gas companies? You made a comment in your prepared remarks that this is the plan for ’23, but if market conditions persist, perhaps this continues. Do you see this as more of a likely long-term strategy or, for whatever reason, the permitting situation finally gets straightened out, would you guys potentially go back to kind of holding production flat in the next handful of years, I think, which was the original plan?
Francisco Leon: Leo, yes. So yes, we’re not going to get into kind of guidance for out years beyond ’23. But what I will say is, I think the market was able to see how we perform in 2022, when we ran 4 rigs, kept production flat. So that model, I think it’s clear to the market. What’s maybe not as clear, and what we’re hoping to highlight today is, in this new — the new challenge from the appeal process in terms of how we would manage the company going forward, right? So I really want to highlight the very low decline in our assets, the ability — a lot of the value for CRC is concentrated on PDP. We’re never a capital-intensive business that needs to have a lot of rigs to maintain production and to generate cash flow. And you can see that flow through our numbers, right?
In the year where we don’t have all the permits, we think we can deliver a plan for 1.5 rigs this year unless we get some — a good outcome in the near term with the appeals process, but it’s a 1.5 rig. It’s not going to be enough to hold production, but you can see the cash flow generation of the business is extremely high, and we’re going to take every dollar to buy back shares. So going beyond ’23 right now, we don’t know where this is going to end up, but I think we prove what we can do in 2022 with permits, we’re going to approve what we can do in ’23 with a more limited set of permits and doing a 1.5 rig program.
Leo Mariani: Okay. So if I — maybe just phrasing this in a different way. If you guys had unlimited permits in ’23, would you be laying the production decline?
Francisco Leon: So we had a full permit we would be doing what we did in 2022.
