Eric Seeve: Congratulations to both of you on the announcement and the title changes. My first question is, with respect to the production guidance, can you give us a sense of where, not just 2023 average production, but beyond Q1 where you’ve already given guidance, can you give us a sense of the cadence — the production cadence we should expect for Q2, Q3 and Q4 for an exit rate level?
Francisco Leon: Yes. Eric, so we are expecting, as we said, a very moderate decline as we go through the year. We went through — started the year — exited the year last year had 3 rigs. And obviously, that carries into this year. And now we’re reducing the activity to now a 1 full-time rig in Wilmington. So that step-down in activity will, I should tell you that over the next few quarters, will be declining, and we think we can add OpEx dollars. I mean, that ultimately, the most efficient dollar that we can put to work is around downhole maintenance because that means it’s an existing wellbore that we just need to be back online, followed by capital workovers, which we take a different zone using same wellbore, and then third is a new brand-new well. So by backing on the activity for new drilling, that’s the capital needed to be able to fully offset the decline, and that’s we’re, right now, looking to more of a 5% to 7% decline year-over-year.
Eric Seeve: Okay. And so you’ve given guidance for Q1, the midpoint of guidance is around 90,000 BOE a day. And I guess for the full year, the midpoint is around 88,000. That would sort of suggest that, hey, we could see production just stepping down sort of gradually maybe around 1,000 BOE per day per quarter. Is that a fair way to — and obviously, I appreciate that you don’t know for sure, and there will be unexpected twists and turns. But is that a fair way for investors to sort of think about the progression here?
Francisco Leon: Yes. I mean you quoted your numbers. We have obviously ranges, there maybe some differences there. But in terms of the way to think about it, that’s right. So we have production coming in from last year that benefits Q1, but then you would expect a very gradual decline after that.
Eric Seeve: Okay. Great. And just want to make sure I understand. You talked about a 1.5 rig program throughout the year. Does that mean 3 rigs in Q1 and then stepping down just to 1 rig for quarters 2, 3 and 4?
Francisco Leon: Yes. We exited with 3 rigs in ’22, which means we entered in Q1 of this year in 3 rigs, but now we stepped on to just 1 rig at Wilmington. So that’s right.
Eric Seeve: And I understand, obviously, the permitting issues in San Joaquin Basin now. But in the L.A. Basin, why only 1 rig there? It seems like given some of the dynamics around permitting there, it would seem like an ideal time to be more active. Why only 1 — run 1 rig there?
Francisco Leon: Yes. As we looked at — in a year like this year, we really wanted to maximize cash flow. And it’s the ability of this asset to — we’ve done this before. Sometimes you press forward and you accelerate activity and sometimes you back away. So this year, we felt the best dollars were in OpEx and downhole maintenance and capital workovers because obviously, we’re ranking the portfolio on a returns basis. So we think that’s the best use for every dollar. And it doesn’t mean that another rig at Wilmington would not be attractive, it’s just relative to where we thought we wanted to be for the year and what are the returns that we’re getting for putting dollars in OpEx and capital workovers.
